Today, more businesses than ever view remote hiring as a way to achieve cost efficiency and access global talent. This trend is particularly powerful in the tech field, with the IT outsourcing market expected to reach US$541.10 billion in revenue in 2024, according to Statista.
But what remote hiring model should you choose based on your core business needs?
Staff augmentation vs. outsourcing are the two most popular options for providing software engineering or tech team scaling services. Keep reading to learn how these approaches work, which to choose, and when.
When to Consider Hiring External Tech Talents
Before choosing between staff augmentation vs. outsourcing, you need to ensure that outstaffing suits you better than hiring in-house. Below are the main factors that signify you should consider hiring remotely, whether through team extension or outsourcing.
The competition in the local market is too high
The tech pool is finite, which feels particularly strong in the US and Western European countries where you have to compete for engineers with FAANG companies. Cooperation with a staff augmentation or outsourcing vendor is a great way out for businesses that suffer from a talent shortage locally.
No recruitment experience or resources
If you have just attracted significant investments, plan to open a new office, or have escalating hiring needs for any other reason, chances are your requirement team cannot manage the load. An external recruitment or outsourcing agency can quickly help you find the necessary specialists in the desired location.
Need for a quick project start
Companies that don’t have time to build an internal recruitment funnel, invest in brand awareness, and manage the hiring process can considerably benefit from staff augmentation vs. outsourcing. Both approaches let you build or extend a software engineering team in weeks.
What is Staff Augmentation?
IT staff augmentation is an outstaffing approach when you hire additional personnel to extend your in-house team. Such collaboration is usually temporary and lasts until the end of the project or as long as you need additional help.
The remote software development specialists work as part of your team integrated into core processes, and you fully manage their workload.
Characteristics of staff augmentation
- You hire external tech talent to extend your in-house team
- You have more control over remote specialists and their work
- You independently define and manage the tasks of the hired specialists
- You pay the vendor a fixed amount per employee, which includes salary, commission, and taxes.
Pros of staff augmentation
- Control over the workload
- Direct communication with remote employees
- Hired tech specialists use the same tools as your in-house team
- More flexible terms of cooperation
- Keeping the knowledge and expertise within the team
Cons of staff augmentation
- Increased workload for in-house project managers
- Time zone differences, especially if you hire in several remote locations
- Team integration issues and additional training required.
What is Outsourcing?
IT outsourcing is when you transfer a part of tasks or an entire software development process to a third-party company. Comparing staff augmentation vs outsourcing, software development outsourcing implies that the hired tech talents work independently and don’t join your internal team.
The provider manages the software development cycle and holds the responsibility for the result. Meanwhile, you get regular deliverables and stay in touch with a vendor’s project manager or designated developer.
Characteristics of outsourcing
- You partially or fully delegate software or app development to a remote team
- You discuss overall project requirements with the vendor and afterward, hand over project management to them
- You cooperate with a project manager on the vendor’s side and make critical decisions only
- You pay for the scope of outsourcing software development services provided
Pros of outsourcing
- No project management involvement
- No onboarding or direct communication required
Cons of outsourcing
- Less control over what is happening with your project
- Quality may considerably suffer if you choose an unreliable provider
- Vendor may sell you junior-level software engineers for middle- or senior-level rates
- Specified scope of work with less flexibility
Staff Augmentation vs Outsourcing: Which to Choose and When
To hire cost-effectively and get tangible benefits from the selected model, you must analyze your business needs first. Are you interested in long-term cooperation or brief involvement? Do you want to hire locally or internationally? What level of control over the project would you like to retain? Are you willing to take the risk of full project outsourcing? These questions should help you choose between staff augmentation vs. outsourcing.
Check out the core differences between staff augmentation and outsourcing models.
| Staff Augmentation | Outsourcing | |
| Control | More control over the team and their work | Less control as the external vendor is responsible for the outcome |
| Management | Your in-house team manages the hired specialists | External vendor and PM manage the hired specialists |
| Hiring speed | Quick to hire, and the team is built by hiring separate experts | Longer to hire, and the entire team is hired as a whole |
| Flexibility | High flexibility of resource allocation | Less flexibility in terms of project scope and team composition |
| Transparency | You have a better visibility of the hired specialists’ work | You get regular deliverables with less involvement |
| Cost | Fixed amount per employee | Payment for the provided outsourcing services |
| Risk | Lower risk as you keep controlling core processes | Higher risk as the vendor is responsible for the outcome |
| Knowledge retention | Gained expertise stays within your team for future projects | Gained expertise remains within the vendor’s team |
Overall, staff augmentation is better for businesses that have unstable workloads, need tech talents with specific expertise, and want to mitigate risks. It allows you to hire skilled software engineers remotely as a part of your team without giving away control to an external vendor. This way, you can cut expenses and access unique expertise while keeping the gained know-how within your company. Besides, staff augmentation ensures a faster time-to-market since you expand already existing resources.
Outsourcing is generally more efficient for companies that seek cost savings and want to fully delegate software development so they can focus on sales, marketing, and other business activities. This model is also suitable for businesses with limited tech expertise that need an external vendor to build, release, and support a software product for them.
Still cannot decide which approach to use? Sunvery IT recruitment & staffing agency can run a free consulting session to help.
Key Concerns Associated with Staff Augmentation vs. Outsourcing
The quality and reliability of services are the main concerns when collaborating with an external recruitment or outsourcing vendor. To avoid risks and invite truly experienced specialists into your development team, you must pick a partner with a well-established recruitment funnel who offers guarantees and specific hiring deadlines.
You should also note that staff augmentation is generally more transparent and risk-free than outsourcing since you retain control over the process. Besides, outsourcing often comes with hidden charges, and the final result may be unpredictable. Therefore, it may be safer to collaborate with a recruitment agency that will hire augmented staff or build a team for you than to outsource the whole project.
Sunvery Recruitment & Staffing for Tech Companies
Sunvery is a global recruitment and IT staffing agency that helps tech companies grow their in-house staff or build a remote team with a buy-out option. Choose our classic recruitment services to meet the first candidates in 2 days, or select staff augmentation to let us build a remote team for you. Unlike outsourcing vendors, we do not manage the software development process, which means no hidden charges or risks. Sunvery will gather a team of the required specialists and manage operational chores like payroll, equipment, and taxes, allowing you to orchestrate all critical engineering processes.