The growth and consolidation of any business is a remarkable achievement, yet expanding businesses often encounter growing pains. One of the most common obstacles is the difficulty of hiring qualified candidates within a limited timeframe, which leads to missed opportunities and work delays.

In addition, the costs associated with traditional recruitment can be prohibitively expensive, particularly for small and medium-sized businesses with limited budgets. As a result, companies turn to cost-effective solutions such as staff augmentation. This staffing alternative helps them increase their workforce while retaining current workers.  

In the 426th episode of the Outsource Accelerator Podcast, Andy Schachtel, the President and CEO of Sourcefit, shares his insights into the company’s origins and expansion. Schachtel delves into the staff augmentation model and shares the essential components for establishing a thriving offshore team.

Table of Contents

What is Staff Augmentation
Staff augmentation Step-by-step Guide
Staff Augmentation vs. Managed Services
Types of Staff Augmentation
Is Staff Augmentation the Right Solution for Your Staffing Needs?

What is Staff Augmentation?

Staff augmentation is a staffing strategy in which a company hires additional employees on a temporary or project basis to supplement its existing workforce. These employees work under the direction of the company’s management and are paid by the company.

According to Sourcefit’s CEO, staff augmentation is “a great way for [companies] to ensure more business continuity and lower costs.” This method is used “to fill in the gaps and then provide the service that [the client] needs.”

Staff augmentation is often used by companies in the technology, engineering, and creative industries, as well as in project-based businesses that require specialized skills for a finite period of time. This model allows the company to retain control over the work of the outsourced staff, while also benefiting from the expertise and flexibility of the outsourced team.

According to Schachtel, it is important for businesses to proceed cautiously when recruiting workers from another country. This is especially true for companies that are new to outsourcing, as they may be unfamiliar with the process and its potential risks. Sourcefit’s CEO stressed the importance of taking a slow and deliberate approach in order to ensure a successful outcome.

Staff augmentation Step-by-step Guide

The three steps of the staff augmentation model are as follows:

1. Identifying Business Needs

The first step is for the business to identify its staffing needs. This involves assessing the performance of its current employees and identifying the areas that require staffing. This could include temporary or project-based work, or a need for specialized skills that are not available within the existing workforce.

The organization also has the responsibility to ensure that the augmented employee meets the standards set by the company. This “[is] a very sensitive area because, you know, of course people take the rights of employees and the local labor laws very seriously in each market.”

2. Sourcing Candidates

The outsourcing company then uses its resources to source and identify candidates who meet the job requirements. This could include searching their database of pre-screened candidates, posting the job on job boards, and reaching out to their network of industry contacts.

Once a pool of candidates has been identified, the outsourcing company screens and interviews them to ensure they meet the job requirements and are a good fit for the company. This includes verifying their skills, experience, and references.

Finally, the outsourcing company presents a shortlist of candidates to the business for review. The business then selects the candidates they wish to move forward with.

3. Onboarding and Management

Once the candidates have been selected, the outsourcing company manages the onboarding process, including handling all HR-related tasks such as payroll, benefits, and taxes.

It’s understandable that some outsourced employees may take longer to adjust to the company’s culture, but in the words of Schachtel, “as long as they’re engaged and that [companies are] putting clear expectations in place for their outsourced staff then, they can be successful using [this] approach.”

Staff Augmentation vs. Managed Services

Determining whether your company would benefit more from staff augmentation or managed services depends on the unique and specific needs of your organization.

With staff augmentation, you expand your current workforce by adding personnel who possess the same skills as your current employees. In this model, the outsourcing company is responsible for recruiting and onboarding the staff and managing HR-related tasks, such as payroll and benefits, but the client remains responsible for managing the outsourced staff and their work.

Managed services, on the other hand, involves outsourcing the comprehensive management of a specific business function, such as IT infrastructure or customer service, to a third-party provider. The outsourcing company takes full responsibility for managing the function, including the staffing, technology, and processes needed to deliver the service.

Schachtel notes that even when management is delegated to a third-party service provider, clients still want to have a clear understanding of specific details, such as the composition of the team and related salaries. As in the words of Schachtel, “A unique proposition in managed services is to have a high level of transparency,” which offers a unique advantage to clients.

Types of Staff Augmentation

There are several types of staff augmentation, but the most significant are as follows:

Commodity Staff Augmentation

Commodity staff augmentation is a staffing strategy in which a company hires temporary workers to complete a specific project or set of tasks. This approach is suitable for projects or tasks that require specific skills that the existing staff may not possess, or where the current workforce is unable to manage the extra workload. 

Skill-based Staff Augmentation

Skill-based staff augmentation is a staffing strategy where a company identifies the specific skills and expertise required for a short-term or long-term project and hires temporary workers to fill those skill gaps. Three essential factors to consider while selecting the skill-based staff augmentation approach include determining the necessary abilities and expertise, finding specialists with these skills, and managing the relationship with an expert in your team.

Highly-skilled Staff Augmentation

Highly-skilled staff augmentation is a staffing model in which an organization hires a third-party provider with a specialized skill set and expertise to manage a specific aspect of the business. As in the words of Schachtel, “Some clients need more help. They need us to be more involved and they need more from us.” As such, the provider must exceed the client’s expectations by providing the required assistance and expertise to meet the project’s demands and to help the company gain a competitive edge.

Is Staff Augmentation the Right Solution for Your Staffing Needs?

Ultimately, the decision to pursue staff augmentation should be based on a thorough analysis of your organization’s needs and resources. By carefully considering the specific requirements of your project and evaluating the costs and benefits of various staffing options, you can make an informed decision about whether staff augmentation is the right choice for your company.

If you’re interested in discovering more about staff augmentation, you can get in touch with Andy Schachtel, who would be more than pleased to connect with you. You may also check out episode 426 of the OA podcast for more information.

To learn more about outsourcing, you can read our 7 Benefits of Outsourcing Digital Marketing article. We invite you to follow us on social media and to visit our website to learn more about our services.

About Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

Latest Awards

Sourcefit’s commitment to excellence has been recognized through numerous industry awards and certifications.

We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth Champion,  HR Asia Awards, among others.

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