Which Option is Better for Your Enterprise: IT Staff Augmentation or Project-Based Consulting?

The IT industry changes quickly and requires constant updates to security and software so that your enterprise stays safe and efficient. It can be accomplished through either IT staff augmentation or project-based consulting, but which one is right for you?

Hiring software developers for your enterprise may seem like an easy task, but deciding between IT staff augmentation and project-based consulting can be tricky. 

For this reason, you need to consider which option fits your company’s specific needs, including the available budget, timeline, and time frame of completion. Read on to learn more about how to figure out whether you’ll get better results with IT staff augmentation or project-based consulting services!

Also, Read – What Does Staff Augmentation Mean? Benefits, Examples

What is Staff Augmentation?

IT staff augmentation, also known as managed services, is a way to outsource your IT needs. You can either buy, lease or rent the software and/or hardware you need. The main benefit of staff augmentation is that it frees up your own company’s resources so they can focus on other areas like customer service, marketing or product development.  

 The approach allows you to bring on specialized talent—software developers, marketing gurus, accountants, etc.—without having to hire them full-time or outsource your entire company’s IT needs. 

As a bonus, if your project requires specific skills (for example, if you need new software built), some freelancers and agencies specialize in each field; finding someone who can do exactly what you need can be faster and easier than taking months to train up someone internally. 

That said, freelance workers don’t come cheap; unless they’re actively looking for extra work (and many aren’t), they have just as much availability as full-time staff members of large companies.

According to the market projections, IT staffing augmentation will grow at a compound annual growth rate of 3.53% and reach a total expenditure of $81.87 billion by 2025.

There are a number of Top IT Staff augmentation companies available globally who can help you to build your software project successfully.

What is Project-Based Consulting? 

Project-based consulting is a type of consulting that provides businesses with a team of experts to work on their specific project. The advantage to this type of consulting is that the client can focus on their own business while the consultants take care of all the details.

They generally don’t have their own developers on staff, so you must choose between hiring permanent employees or outsourcing work. 

Project-based consulting may not be right for everyone, but it might just be what your company needs.

Some firms have more consulting services than others; if that works best for your business, then project-based consulting can be a great option. Ultimately, whether you should outsource your development will depend on how technical your business needs are and what type of development approach works best with your goals. 

Benefits of Staff Augmentation

Staff augmentation can be a useful approach, whether you’re a startup looking to grow or an established organization trying to save costs without sacrificing quality. 

Here are eight of the most useful benefits of staff augmentation that you may not have considered before.

Flexibility – Hiring a project-based consulting firm gives your company flexibility over staffing requirements and needs. When you hire a consulting firm, they bring on additional resources as your project demands them. They manage their own scheduling and staffing plans, allowing you to focus on your core business.

Expertise – Hiring a dedicated team of experts gives you access to high-level expertise that may not be available in-house or can be costly to maintain long term. Your consulting firm will provide you with an exceptional talent for both short-term projects and ongoing engagements.

High-Quality Talent – High-quality, skilled resources are invaluable to your company’s success. Consulting firms recruit the most sought-after professionals in the marketplace while offering excellent benefits packages that allow high performers to choose their jobs.

Cost Savings – Project-based consulting firms save your company money because there is no need to hire and maintain full-time staff when you have a project that requires outside resources. Hiring a firm can reduce hourly rates, recruitment and retention costs, and the associated overhead of full-time employment.

Increased Productivity – Increased productivity is one of the best benefits to staff augmentation. With a larger workforce, your organization can produce more work in less time. It means you will be able to produce higher quality work and respond to customer demands faster than ever before. 

Access to Specialized Skills – Firms provide access to the most sought-after talent in the knowledge economy; highly skilled professionals who would be difficult for your company to attract and retain on an ongoing basis. For example, if you need to bring on expertise in an area like CRM or Business Intelligence, consulting firms can deliver these resources quickly and at a fraction of the cost of hiring full-time staff.

Minimal Risk – Staff augmentation allows companies to try before buying on key positions that are hard to fill or crucial to a project. It allows for rapid deployment and provides an easy exit strategy if resources are not a fit.

Scalability – Since your staffing needs are based on projects, you can scale up your staff as each project requires. This also provides the flexibility of scaling down your workforce if necessary without significant disruption.

Disadvantages of Staff Augmentation

Staff augmentation also has its disadvantages, which can be difficult for many business owners to recognize. Here are five disadvantages of staff augmentation you didn’t know about.

Loss of Control – Generally, the client maintains less control over resources employed through consulting firms than full-time staff members dedicated to their organization, especially regarding work ethics.

Costs Money – The cost for access to consulting resources is usually higher than what you would pay for full-time employees since the demand for their services is high.

Short-term Commitment – Your staff augmentation resources are usually under contract for a short time frame, limiting the ability to work long-term with dedicated staff members.

Lack of Commitment – There can be a lack of commitment from the staff augmentation team because they know that the job isn’t permanent. It means that they may not put as much effort into their work as if it was a full-time job for them. They also may not take on responsibilities such as training or mentoring new employees, and they are more likely to leave the company before their contract is up.

Potential Lack of Knowledge/Expertise – Unless your consulting firm has established an in-depth recruitment process or you have specific needs that require highly skilled resources, employees may lack the skills and expertise needed to complete your project.

Benefits of Project-Based Consulting

Here are nine benefits of project-based consulting to help you understand why it may be beneficial for your business.

Access to Highly Skilled Resources – Firms recruit top-notch professionals who are challenging to attract and retain while providing them with the type of flexible job structure that allows them to work on several engagements simultaneously.

Pay for Performance Culture – In addition to a competitive compensation package, consulting firms offer an environment where individual contributors regularly exceed objectives. This pay-for-performance philosophy is attractive to high achievers, giving them the opportunity to be rewarded for their hard work.

Partnerships – Project-based consulting allows companies and clients to form long-term partnerships with consulting firms that develop close relationships with clients over time. These relationships can better understand client business needs and propose solutions that provide optimal value rather than just executing a project.

Improved Quality – Project-based consulting offers the advantages of both contracting and consulting. You get all the benefits of the project team’s collective expertise, but without committing to any long-term contract.

Enhanced Flexibility – Consulting firms offer companies an easy-to-use staffing model that enables your company to respond quickly to changing business demands without the significant investment in internal resources. This lets your team be extra agile and responsive than if you had full-time staff.

Focus on Business Outcomes – Project-based consulting provides the freedom to work with firms focused solely on your success. Typically you can choose from a menu of options when selecting a consulting firm, allowing you to work with a team and an organization that aligns best with your needs and objectives.

Help to Achieve Results – A consulting firm’s top management is committed to meeting client objectives, which allows you to focus on your own organization’s goals better.

Save Time and Effort – Consulting firms carry out projects quickly and efficiently, giving you access to the appropriate knowledge and expertise without the time and cost of having your full-time staff.

Also Read: Everything You Need to Know About IT Consulting Hourly Rates

Disadvantages of Project-Based Consulting

Here are some of the most significant disadvantages that often come with working on projects instead of accepting full-time employment. 

Temporary Solution – You do not have access to resources that are assigned to your project on an ongoing basis, which means you cannot rely on them for work that goes beyond the scope of their contract.

Limited Experience – Since consultants usually only work on one engagement at a time, they may not be familiar with other projects or processes that your organization may regularly use.

Limited Commitment – Since consultants are usually only on assignment for a short period, you cannot count on them to be an ongoing resource after they finish their role.

Requires a Diverse Skill Set – You will need to have a diverse skill set in order to successfully handle all the different aspects that are necessary for project success. In addition, you will need to be able to think quickly on your own in order to respond appropriately when problems arise.

Costly – As mentioned above, it will cost more since the demand for consulting resources is high and companies do not require the long term.

IT Staff Augmentation vs. Project-Based Consulting in Tabular Form

When to Employ Project-Based Consulting? 

If you’re ready to take your business to the next level, consulting can be a great way to do it. Here are the six situations stating your business is ready for project-based consulting.

When your business needs talent to quickly meet a short-term objective – For example, you may need an expert in supply chain management to help develop a plan for entering new markets or someone who can help with analyzing data and creating reports that highlight trends within your organization’s performance. Consulting firms will bring the appropriate knowledge and expertise at minimal additional cost.

When your needs are temporary or strategic in nature – Let’s say you need to provide some training to employees on how to use a new, complex piece of software quickly before they go out into the field for an important meeting. You don’t want the headache of bringing the employees in-house and trying to find their desk space. Instead, you can outsource the responsibility to a consulting firm that has the appropriate knowledge and expertise.

When you need time to focus on or pursue other initiatives – Sometimes, companies only have the bandwidth to complete one project at a time because they’re spread too thin with their daily operations. Consulting firms will execute projects quickly and efficiently, letting you focus on other initiatives.

When your team is overworked – If your team has been working hard to meet deadlines and they’re not able to do anything else, you may need to consider project-based consulting. Such an arrangement allows you to hire someone who will be dedicated to a particular project and then move on once the work is done.

When your organization needs to explore options or strategies before making a decision – You might need help determining the best course of action for growing your business in the next few years so you can invest accordingly. Consulting firms allow you to learn about different strategies and their potential impact while not committing your full-time team.

When you need a fresh perspective – Consulting firms will bring an external viewpoint to the table that’s outside your usual corporate environment, which allows teams to explore new opportunities and innovative approaches they might not have considered before.

When to Employ IT Staff Augmentation?

Today, most companies rely on IT staff augmentation through staffing agencies to supplement their current IT team with on-demand resources. But, when should you bring on an IT staff augmentation provider to help you with your IT projects? 

Let’s check out!

When your business needs to implement a large-scale software solution – If you need someone to assist with implementing an enterprise resource planning system or are just getting started with cloud computing, IT staff augmentation is what you need. It lets you work at scale, which is more cost-efficient than full-time resources.

When you have temporary technical needs – An extensive social media campaign with lots of data collection and analysis may require an engineer to help manage the process. IT staff augmentation can bring in the appropriate knowledge and expertise quickly when you need it most.

When a project requires specialized skill sets that your organization doesn’t have – You might need a team to upgrade systems, implement a new accounting application, or carry out an upgrade project. IT staff augmentation can provide the necessary expertise when you need it most.

When you need time to pursue other initiatives – Sometimes, a company just isn’t able to complete a large-scale project due to their daily operations and needs help getting it done quickly. IT staff augmentation can carry out projects more efficiently and rapidly than your own team.

When you need a fresh perspective – IT staff augmentation provides an external viewpoint outside your usual corporate environment, allowing teams to explore new opportunities and innovative approaches they might not have considered before.

Staff Augmentation vs. Project-Based Consulting: A Deadly Combination for Your Business 

Staff augmentation and project-based consulting go hand in hand, with benefits that can’t be realized if they’re used independently. When combined, they offer the best of both worlds. Companies get access to dedicated resources when their business needs them most without incurring long-term costs associated with full-time employment. 

Besides, they gain an external perspective outside their usual corporate environment, allowing teams to explore new opportunities and innovative approaches they might not have considered before. Staff augmentation and project-based consulting bring you closer to your business goals through the following predictive advantages:

1. They help you to quickly enhance your HR function, making it more flexible and efficient.
2. They provide access to specific skill sets that are difficult or expensive to develop in-house.
3. They let you try different technologies, which helps you determine what works best for your company before investing in full-time resources.
4. They allow you to expand your team quickly, which can be helpful when you need to complete a large-scale project fast.
5. They let you create a flexible workforce that can ramp up or down as needed, allowing you to optimize costs.
6. They help keep your business agile and well-positioned for the future.
7. They let you make the most of new technologies, such as application development and business process automation.
8. They allow you to invest in IT resources that will help develop your company’s long-term technology roadmap.
9. They give you access to new ideas and opportunities to improve your business by bringing in a fresh perspective on problems and challenges.

How to Pick the Right Staff Augmentation Team?

Staff augmentation can be a cost-effective way to scale your workforce without the hassle of having to bring people on board. This model has grown in popularity today because it allows companies to meet short-term, project-based demand at a much lower cost than hiring full-time workers. 

The challenge, however, often comes when it’s time for you to hire the right company to augment your workforce. With so many staffing companies in the market, how do you know which one is best for your business? Here are five tips to help you find the right fit when screening potential teams:

Find Out How They Work First

Before hiring any team, check if the companies you are considering have a transparent working model. Staffing companies often charge their clients based on an hourly rate for each worker they deploy to your business. This means that, in principle, there may be some potential for overcharging if you don’t set the right expectations (e.g., how many hours per day or days per week the staff will be working with you).

Ideally, look for teams willing to help you draft an agreement or contract so there are no surprises during or after deployment. This ensures both parties are on the same page about their expectations and responsibilities throughout the engagement.

Check Their Availability & Capacity First

Staffing companies differ in how they structure their teams. Some will deploy entire teams to your business, with managers and workers of different specializations. Others may choose to send just one worker for a specific task, while others may assign the same manager to work across multiple engagements simultaneously.

Different models hold their pros and cons, so find out which pairing or triad of options work best for the demands of your business. For example, if you expect to need a lot of staff augmentation but in different locations or disciplines, it may be better to go with an agency that only deploys whole teams. On the other hand, if you need help on short notice and can’t commit to a long-term engagement, a staffing company that deploys single specialists may be your best option.

Find Out Their Pricing Methodology

Depending on the labor market conditions in your area, you may have to pay a premium for hiring staff augmentation experts from top companies. The challenge with cheaper alternatives is that their employees’ skills and experience may not be on par with their pricier counterparts.

Look for teams that are transparent about their pricing model. Some companies charge by the hour, while others bill you on a weekly or monthly basis. If your business needs to hire professionals for short-term engagements (e.g., staff augmentation for critical projects), fixed price billing may be better for your budget.

Ask about Their Quality Assurance Processes

When you hire talented staff augmentation professionals, you typically get what you pay for. The challenge is that many companies don’t invest in quality training and assessment to ensure their workers are top-notch. As a result, there may be some variability in the quality of their staff augmentation experts.

Look for companies that invest in training and assessment programs to ensure their workers are well prepared to meet your needs. This not only helps you identify high-quality talent, it also helps improve morale among workers by arming them with the right skills and knowledge to be successful on the job.

Ask About Their Safety Standards

When you need to hire staff augmentation experts, chances are safety is one of your top concerns. After all, these professionals will be working on-site at your office or manufacturing plant. A team’s commitment to safety shouldn’t end with pre-employment training; it needs to extend throughout the worker’s term of employment and reflect the team and company culture.

Look for teams that go above and beyond with their safety standards. For example, some companies will put travel restrictions on customers’ workers until proper site assessment is complete or require customers to provide safe work permits (e.g., fall protection equipment) before deployment.

How to Pick the Right IT Consulting Team?

IT consulting services come in many forms, and it’s becoming harder to tell the good from the bad. This is particularly true when it comes to staff augmentation, a service that involves sending IT consultants or contractors to work on-site at your business for an agreed-upon period (e.g.30 days).

Unfortunately, some companies today that offer staff augmentation services don’t conduct proper quality assurance and training to ensure their workers are well prepared to meet your needs. As a result, you might end up paying for talent that falls short of your expectations. To avoid such issues, here are five tips on hiring staff augmentation teams from top-notch providers:

Make Sure The Team Can Provide Efficient Deployment Services

In many cases, staff augmentation is a hands-on service that requires IT consultants to work with your business “shoulder-to-shoulder” for the duration of their assignment. This means that if you need to hire a team of business intelligence consultants, they need to be both qualified and experienced with reporting and analytics tools such as Business Objects or MicroStrategy.

Of course, not every provider can meet your expectations, and this is why it’s essential to look at their portfolio and test them out first hand by engaging one of their team members for a proof of concept.

Look For Companies That Take Ownership Of Their Workers

When you hire staff augmentation experts, your provider must assume responsibility for the quality and productivity of these workers. Unfortunately, this is not always the case as some companies are happy to play middleman between their teams and clients, leading to communication breakdowns and unmet expectations.

Look for providers that take responsibility for their workers, including pre-screening candidates, providing standardized training programs, and offering dedicated team members who will work with you during your assignment. This not only helps improve quality control but also ensures accountability among all parties involved if something should go wrong.

Ask About Their Quality Assurance Policies and Procedures

Any time you hire a new worker, it’s crucial to find out more about their qualifications and experience. But this is especially true when dealing with IT consultants and contractors since technology changes so fast that previous skills can quickly become irrelevant or outdated.

Look for providers that consider this and conduct regular skills assessments to ensure their workers are up to date on the latest industry trends. This is an easy way to help improve worker productivity and avoid costly mistakes.

Hire Providers That Offer Ongoing Education And Training Programs

When you hire staff augmentation experts, you should look at their training and development policies to improve their productivity. Unfortunately, not every provider can meet your expectations in this area. Some companies will only provide limited introductory training before sending workers to you. In contrast, others may require that you pay for ongoing education courses if you want your workers to maintain specific certifications.

Look for providers that conduct ongoing education and training with their workers, including offering team members up-to-date certifications in the latest technologies. This will help ensure your staff is always at the top of their game.

Check Their Communication Skills

One of the most significant issues you’ll face when hiring staff augmentation experts is ensuring they can communicate effectively with your team. After all, communication is one of the main areas where staff augmentation skills are measured since communication breakdowns can lead to productivity problems and low worker morale.

Look for providers that conduct regular communication reviews as part of their quality assurance processes. This helps improve internal and external communications among workers, so they always know what’s expected.

Ask About Their Payment Policies, Procedures, And Processes

When you hire staff augmentation experts, it’s vital to avoid hidden costs that can take the form of worker misclassification, invoicing disputes, or non-payment issues (i.e., payment terms). The most effective way to do this is to learn more about how your provider manages these scenarios.

Look for providers that offer fixed payment terms and processes to avoid any confusion or disputes later on. This ensures workers get paid while protecting you from any unintentional billing errors, including worker misclassification.

Final Thoughts 

Both IT staff augmentation and project-based consulting have their pros and cons, but one may be better suited to your enterprise than the other. It all comes down to what your company needs in the long run. 

If you need someone who will be there on an ongoing basis, then IT staff augmentation is right for you. 

And, if you want to bring in another team member, but don’t need them all the time, then project-based consulting would be better for your enterprise.

However, if you are struggling with your software project, you can go for IT consulting services to leverage the best business solution through the right technology.

If you think I have missed anything, mention it in the comment section below. 

Frequently Asked Questions 

Q: Are there Different Types of Staff Augmentation?

Ans: There are three main types of staffing augmentation: traditional, managed, and project-based service. Conventional hiring typically involves direct hiring for short-term projects or temporary needs. Managed service providers provide supplemental resources to the client’s permanent workforce. They may be used to train or supplement staff or provide temporary assistance when an increased demand arises.

Project-based services are typically used for longer-term engagements. 

This model is ideal for providing continuity of services throughout the life cycle of a project. The lifespan may vary depending on the type of engagement and the client’s needs. The company might be used in an early stage engagement to bring employees on board quickly, or it might be hired at a later phase to provide essential skills that are difficult for the client organization to recruit.

Q: What Does Staff Augmentation Cost?

Ans: Staff augmentation is more expensive than traditional hiring in that you’re paying an agency to provide its employees, but it’s generally much cheaper than hiring permanent employees.

While the cost of traditional hiring can vary depending on factors such as geographical location and industry, the average salary for a technical professional is $95,000 per year. By contrast, staff augmentation costs an estimated 40 percent to 50 percent more than traditional staffing.

Q: What is the Difference Between Consulting and Staff Augmentation?

Ans: Most companies use these two types of resources in tandem to help them grow their businesses and improve their bottom line. Staff augmentation allows clients to hire additional employees quickly, which allows for increased capacity or special projects that require specific expertise. Consulting firms often contribute best practices, methods, and ideas that can be used to improve client operations moving forward.

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