Staff Augmentation vs. Outsourcing: What Should You Know? 

In today’s globalized economy, it’s become the new norm for companies to engage third-party providers to complete software development tasks. This approach ensures high-quality results while significantly reducing costs.

The key question is: Which model – staff augmentation vs. outsourcing – is the best fit for your company?

Both staff augmentation and outsourcing come with pros and cons, and the goal now is to determine which will deliver the ultimate results for your project.

In this post, we’ll break down both approaches, review their pros and cons, compare them against each other, and explore scenarios where each one makes the most sense.

What is IT staff augmentation?

Staff augmentation is the process of increasing your software development capacity by adding skilled developers or effectively enhancing the quality of your internal tech staff.

The main idea behind this approach is that you retain control over the entire development process. The developers will work on your tasks, following your lead and your roadmap exactly as it’s laid out. They will be reporting directly to you or a representative that you select from your company.

Ultimately this approach promotes a more collaborative teamwork environment, where internal and external teams work closely.

Pros and cons of staff augmentation

As with anything, there are pros and cons to this solution. Among the most common are the following:

Pros:

Complete control

Working with IT staff augmentation services, you are closer to an employer than you are to a client. This means that you are the one who is in complete control of pretty much every facet of a project and developers simply take cues from you. You can delegate but you can still oversee the teams to make sure that everything is done as needed.

Smoother integration

Adding developers on the spot who already have the necessary skills and experience will make it much easier to integrate them into the company’s existing system. Processes are easier to adapt, and changes are easier to make.

Easier filling of specialist and expertise gaps

One of the biggest advantages of this solution is the number of development specialists and experts in any given field you can find to fill the roles that lack personnel. If you need to access developers with specialized expertise, you can easily do so with staff augmentation, thus plugging any weak points in your existing team.

More flexibility

It can be quite easy to change things in any division because you can easily add or subtract developers as needed. This is particularly useful in the IT industry that’s constantly in flux.

Cost reduction

It’s simply a fact that staff augmentation is cheaper than hiring full-time developers with all the requisite overhead such as taxes, administration, health benefits, and more.

Faster progression

A large team does not necessarily mean you can finish a project faster, but it can happen if you fill the necessary roles with the right people.

Workload reduction

There’s less work for everyone to do if there are more people on the team fulfilling their roles, which benefits all workers across the board.

More workplace harmony

With staff augmentation, in-house team members will feel less threatened by temporary staff, which allows them to accept the new additions with fewer worries. This could then promote a smoother, more harmonious workflow that does not add to the competition that is common in office workplaces.

Cons:

Training requirement

Regardless of how skilled developers are, they will still need effective onboarding. Depending on how complicated the company’s internal systems are, the required onboarding program might be extensive.

Vulnerability to internal flaws

No company is perfect, and these imperfections can translate to issues in the external team. Thus, it’s a good idea to fine-tune your processes before you add developers via staff augmentation.

Management responsibility

With more developers naturally more responsibility falls on the team leaders, supervisors, and other executives since contractors are not often entrusted with such responsibilities.

The burden of success rests on the company

No matter how skilled the developers are, you can’t delegate the responsibility for the success of your project when picking staff augmentation vs. outsourcing.

Employee vs. contractor division

Sometimes, there’s a division between contractors and employees in the arrangement. Although many companies treat contractors as part of their own team, a lot of effort goes into building trust and connection between units, especially in a remote environment.

What is project outsourcing?

Moving on from there, we have project outsourcing, which is an arrangement where you are entrusting jobs to third-party providers of outsourcing services, leaving your project outside of your direct sphere of influence. That’s the main difference in the context of augmentation vs. outsourcing.

Pros and cons of project outsourcing

As with staff augmentation services, project outsourcing comes with its share of benefits and shortcomings. For the most common pros and cons of this arrangement, check out the following:

Pros:

Less onboarding

When you outsource your project to another firm, you typically get a skilled IT team who already knows what they are doing and reports to a project manager. Thus, they require minimal onboarding.

Ease of scaling

Multiple projects can be assigned to multiple outsourced teams for a lower cost. This significantly improves the prospects of scaling.

Fewer management responsibilities

Project outsourcing (vs. staff augmentation arrangements) typically involves outside teams with their own supervisors and project managers, which eases the burden of responsibility of company executives.

Quality results

The main conditions for outsourcing software development projects will always hinge on the quality of output and if this is diminished, the contract can always be terminated.

Fewer legal liabilities

Project outsourcing involves fewer legal responsibilities to the developers, with the option of also having limited liabilities with clients.

Flexibility of cost

Since costs often depend on the projects, it is always possible to change the firms you will outsource to, for more affordable development staff.

Cons:

Limited control

Unfortunately, project outsourcing (as opposed to staff augmentation) offers very limited control on a practical basis due to the disconnected nature of the arrangement.

Quality and reliability

It can be difficult to be sure about the quality of the output when you have no control over the development process.

Size reliance

Outsourcing smaller projects to trusted providers can be problematic, given that prominent outsourcing providers aren’t always willing to take something up unless it brings in money for years.

Poor integration

Integrating third-party vendors into company systems, business operations, communications and practices can be quite challenging.

IT staff augmentation vs project outsourcing: Key differences

So, with the pros and cons of both models all laid out, you’re one step closer to solving the staff augmentation vs IT outsourcing dilemma. The question now is which one to choose for your project. Below, we’ve compared these approaches head-to-head, so you can pick the one that best suits your requirements.

	Staff Augmentation	Outsourcing
Ownership over the project	The client retains control and responsibility for the project, tasks, and outcomes.	The provider assumes responsibility for managing the team and processes.
Purpose	To add missing expertise or scale a team for specific needs.	To offload a project to be completed by a vendor’s team.
Management/Control	The client makes all hiring and management decisions, integrating external team members into existing business processes.	The vendor handles project management without bringing the client into the loop.
Cost	Flexible and transparent pricing model for each team member’s time invested in the project per month.	A fixed pricing model based on project requirements and predefined before contract signing.
Scalability	High flexibility to add or remove resources quickly based on project demands.	Scalability depends on the vendor’s capacity and often requires contract adjustments.
Team integration	In-depth integration into operations and collaboration with the client’s in-house team.	A software development team works independently from the client’s internal processes.
Time-to-launch	Quick team formation, typically 2-6 weeks.	Longer start times due to extensive negotiations and planning.
Expertise access	Wide access to specialized skills in the global IT market.	The teams are pre-assembled by the vendor.
Risk/Security	Direct oversight on the side of the client reduces risks.	Higher risk due to unfamiliar vendor’s policies.
Communication	Possibility for real-time communication with the team members.	Communication typically occurs via appointed project managers.
Suitability	Suits short-term projects or ones with evolving requirements.	Suits projects with a well-defined scope with clear deliverables/milestones.

How to choose between staff augmentation and outsourcing?

As we highlighted above, there are clear distinctions between staff augmentation vs. IT outsourcing when it comes to access to the team, project control, communication, and other aspects. Let’s explore when going with augmentation and when opting for outsourcing is more suitable for your project:

When to choose staff augmentation

1. Short-term skill gaps:

If your existing team requires specialized skills or expertise, staff augmentation tackles this challenge head-on and gives you wide access to the talent who aligns well with your project, goals, and culture. It ensures you keep your project on track – without the hassle or commitment of permanent staffing.

2. Direct control:

If keeping direct control over your project in-house is essential for you, it’s best to pick staff augmentation vs. outsourcing. It lets you embed new team members directly into your existing workflows and stick to your company culture and management approach.

3. Agile team scaling:

Staff augmentation excels in scaling your existing team on-demand as well as eases the process of dissolving the workforce you no longer need. When projects sprout unexpectedly and demand extra expertise, this model enables you to fine-tune your team size for faster time-to-market.

4. Cultural alignment:

Augmented staff seamlessly integrates into your company culture, working just like your in-house team. In this model, a crucial step is conducting culture-fit interviews to ensure the candidates are in tune with the client’s goals and vision.

5. Specialized expertise:

With staff augmentation, you can source talent directly from a wide and diverse pool of technologists. For instance, staff augmentation in Eastern Europe and LATAM boasts over 2 million IT specialists, which is much more than you can access with local staffing. In these regions, you can find experts across various programming languages, industries, and domains, as well as specialists in high-demand areas like AI/ML, Data, IoT, Blockchain, and more talent ready to join your project.

When to choose outsourcing  

1. End-to-end project management:  

When you want to offload the entire software development project to an external provider, outsourcing is the best bet, as staff augmentation takes the opposite approach. The vendor will handle the lifecycle from start to finish, including planning, design, development, QA, deployment, and maintenance. The team gathered by the outsourcing company will execute the project based on your requirements, without bringing you into the loop. 

2. Cost efficiency:  

Project outsourcing can be a great cost-saving tool for long-term projects. It eliminates overhead expenses, including office, permanent salaries, IT infrastructure, employee perks, and other expenses associated with in-house development.

3. Focus on core competencies:  

Is your team overwhelmed with day-to-day routine tasks? An outsourcing company will take on the ones your internal team lacks the time or resources to handle. This leaves you and your home-based squad focused on where they are needed most – core business needs like company growth and innovation.

4. Resource constraints:  

Project outsourcing can be a lifesaver when it comes to expanding your in-house development capacity. You can meet deadlines and milestones, without adding new hires to your internal team. The outsourcing company will take care of all development work, keeping your project on track. 

5. Predictable deliverables:  

Outsourcing is for you if your project has a fixed scope and clearly defined milestones. Your vendor’s team will work within an agreed-upon framework, whereas you’ll monitor the progress via an appointed point of contact – without the hassle of managing and hiring full-time employees. 

Your decision-making checklist

Control: Do you want direct oversight of the team and processes?

With staff augmentation, you retain direct control over the augmented staff members, integrating them seamlessly into the existing workflows. This model highlights close collaboration with your local team and company management oversight.

Outsourcing transfers control to the provider, who assumes responsibility for end-to-end project delivery and general project success. While this setup gives you access to skilled resources, it eliminates direct oversight over the project.

Scope: Is the project scope flexible or fixed?

Staff augmentation fits projects with flexible scopes, where requirements or priorities may shift over time.

Outsourcing is best suited for projects with a fixed scope, where deliverables, timelines, and milestones are clearly defined upfront.

Budget: Are you optimizing for cost efficiency or operational agility?

Staff augmentation is a cost-effective approach where you pay a monthly salary per full-time employee, plus the vendor’s fee. It works best when you need to scale your team based on your project’s changing requirements.

In an outsourcing arrangement, you agree on a fixed price for the entire project upfront. It works for projects with a clearly defined scope, timeline, and deliverables, which can also be as cost-effective as staff augmentation.

Timeline: Do you need rapid deployment, or can you afford longer planning?

Staff augmentation excels in rapid development when you need to quickly build a dedicated team and launch the project without lengthy staffing processes.

Outsourcing is a better approach for projects with detailed planning. Since this model involves defining a scope upfront, it requires more time in the initial stages to draft contracts, align goals, and finalize requirements.

Integration: Does cultural alignment with your team matter?

Software team augmentation assumes tight cultural integration where augmented teams adopt your company culture and values.

In an outsourcing setup, cultural alignment with the client’s team isn’t emphasized, as the outsourced team operates following the vendor’s culture.

Conclusion

Choosing between staff augmentation vs. outsourcing depends on a business strategy and specific goals. Ultimately, it all comes down to what works best for you, the client. Both models have their benefits and shortcomings, but as there is no one-size-fits-all solution, the decision must be made based on your needs.

Any vendor, whether they work with staff augmentation or IT outsourcing, should be ready to listen and offer services that fit your specific development needs. For effective results, it’s best to partner with a trusted company like nCube. Here’s what we offer as an experienced provider of staff augmentation services.

nCube’s IT staff augmentation model

In-depth internal screening

While outsourcing partners provide you with resources sitting on their bench, we strive to find the perfect fit for your project. During our multi-step screening process, we handpick the top 1% of tech talent who align perfectly with your requirements. It includes tech competence, domain experience, communication skills, culture fit, and English proficiency.

Extensive pools of tech talent

Based on your strategy, we can help you source skilled professionals from a location close to your HQ, keeping in mind minimizing the time zone difference. For instance, if you’re located in North America, LATAM countries are a reliable choice.

European companies can add IT experts from the Eastern European pool of talent. With an office presence in both regions and a network of 125,000 software engineers, we can help you build a perfect team for your tech needs.

Focus on retention

Our partnership doesn’t end after the team launch. We’re dedicated to keeping your talent around for as long as you need it. Throughout our cooperation, we aim to achieve a 100% retention rate – thanks to a comfortable work environment, competitive compensation, and attractive bonus packages.

Fast team creation

We share your sense of urgency, which is why we dedicated all the resources needed to find and integrate team members in a matter of 2-6 weeks. In fact, the first CVs of relevant candidates will reach your inbox within 24-48 hours after our kick-off call.

Domain expertise

With us, you can augment your team with experts in your business niche and the right combination of tech skills. For instance, we recently helped a company find and integrate a professional specializing in Delphi and experience in the aircraft domain.

Full integration

While we as a provider handle the staffing, overhead, and retention, you’ll have full control and transparency over augmented staff members. These professionals will be integrated into your company culture, workflow, communications, and reporting to you directly.

Contact us today, share your project requirements, and let’s start augmenting your team with the talent you need!