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To meet today’s challenges in the global marketplace, many companies have adopted staff augmentation or outsourcing for their IT and software development needs. Particularly in this post-pandemic period, there has been an increase in staff augmentation as a means of increasing productivity.
The pandemic proved that the physical location of a workforce isn’t as important as was thought. According to a PwC survey released in January of 2021, 83% of all employers questioned replied that the shift to remote work had been successful. While only 13% of the executives responded that they were willing to let go of the traditional office structure, the remote work model has become a respected standard.
With companies now effectively managing remote teams, staff augmentation is more accepted — not everyone involved in a project needs to be under one roof. To bring products to market through a faster and more streamlined pipeline, companies — many of which have never outsourced their work before — are willing to support their staff through augmentation.
The benefits of staff augmentation are obvious: it is possible for a company to bring in highly skilled, short-term talent in a scalable fashion that can ebb and flow with demand. This flexibility allows for savings in operating costs, as well as higher efficiency and the ability to stay ahead of the competitive corporate curve.
However, despite all the advantages inherent in staff augmentation, the strategy also comes with a variety of challenges. Here are the five main challenges of staff augmentation and strategies to best avoid the issues before they become problems.
Finding the right talent: IT staff augmentation
As the IT industry continues to grow and expand, the skill gap is becoming more of a problem. Finding staff with the necessary talents, experience and backgrounds becomes an extraordinary challenge. Other companies, many of which are competitors, are all searching the same talent pools at the same time.
There are a few solutions to keep in mind.
- Make sure to do a thorough background check on any potential hires. Check their experience and their references; assess their talents and skills; and take a good, long look at their past works. If the company is planning a great deal of augmentation, the establishment of a structured evaluation index might help in future hiring decisions. There is a lot of data to parse in the hiring process, and the faster the data can be sorted, the sooner you can see results,
- It might be a better strategy to partner with an established and reliable IT vendor. This is especially true if the wading through all the additional information from new hires seems like it might defeat the purpose of streamlining the process. With an established vendor, you will find an already-developed talent pool. Once you have established cultural compatibility as well as expertise and the size of the talent pool available, you will be able to utilize a constant stream of staff from a reliable resource.
- If you decide to go with a vendor, compile a list of potential groups and arrange for introductory calls. Outline what service you would need provided. Assess reviews of the company including both success stories and negative evaluations. Most importantly, look for a vendor who has had success in situations like the one your company is bringing to the table.
Clear and effective communication is a key building block in any new practice within the corporate structure. Any company considering staff augmentation from offshore resources should pay particular attention to the problems that can arise. Time zones, language barriers and cultural differences can all play a role in poor communication, and the results can be detrimental to productivity. Additionally, conflicting and unclear expectations between the company team and the augmented staff can lead to many problems, not the least of which is lost time, lost money and a loss in productivity.
The solution is to improve communication from the outset so that problems are immediately identified and resolved. Tools for better communication include collaborative systems like Slack, Zoom, Github and Microsoft Teams. Also, make sure to implement a system of regular reviews, again, so that problems may be avoided down the road. Be certain to have regular virtual meetings — business and/or social — to insure the sense of community among the in-house and augmented staff.
IT staff project knowledge transfer
The transfer of knowledge is important at regular intervals throughout the timeline of the project. The combination of company staff and augmented staff creates cracks in the informational structure — cracks through which necessary information might slip. From first steps through implementation to final closure on the project, there is a tremendous potential for waste. Plans must be established, understood, communicated and adhered to. As part of those plans, there must be a definitive understanding of the information that will be collected and how that information — and the project — will be organized to help create and maintain momentum.
Again, like finding the proper talent, the best way to ensure proper project knowledge transfer is to rely on a vendor who has established industry best practices and has a long history of successful delivery on projects.
The vendor should be aware and able to take of:
- The knowledge items that need to be transferred
- The people responsible for the transfer
- Creation of measurements to assess the success (or failure) of the knowledge transfer
- The availability of tech documentation
- Conducting meetings with the right stakeholders on the corporate side to assess and communicate information in a timely manner.
A key element of the process is the negotiating and implementation of a contract that provides both transparency and security in the customer-vendor relationship. A contract that fails to consider specifics and is poorly structured can lead to devastating issues for your business in the long run. Loss of quality control, ballooning expenses and information security can all become problems within the staff augmentation process. Because staff augmentation automatically implies third-party intervention, it is necessary that your company have precautions in place to ensure that those risks are mitigated.
The best means of providing coverage over any possible legal or security issues is a contract that takes into consideration the specifics of the between the service provider (vendor) and the company. A win-win contract between company and vendor should include:
- Penalties in place for non-compliance by any of the parties
- Liability clauses that limit corporate responsibilities as well as a warrantee to safeguard service quality
- A schedule indicating invoicing, payment, and scale up/scale down periods
- The terms for invoicing and payment
- Data protection rules
- Any international governing laws if the contract is to serve foreign vendors
- A non-solicitation clause that prohibits both sides from soliciting each other’s IT specialists
A quality, professional vendor should have no trouble with a win-win contract. If you sense any sort of hesitancy, or if the vendor is unwilling to agree to any of the principles that are laid out, be willing to find another vendor. It is better to trust your instinct at the outset than to be proven right at some point in the future.
The main purpose behind staff augmentation is facilitating completion times and lessening time-to-market. Building out the company’s team through traditional methods will only serve to slow down the process, while staff augmentation allows for the quick placement of the necessary resources to drive timelines and arrive at market before the competition. This is especially true if your company is working on multiple projects simultaneously. Likewise, when the contract is completed and the project is winding down, staff augmentation also allows for the augmented staff to move on to new projects for other companies.
Again, the solution is the partnership with a qualified vendor. Timetables and expectations should be discussed at the outset, along with:
- Find out about the vendor’s attrition rate. The industry average is 10-15%. You don’t want to discover that many of their staff tend to leave quickly
- Check the vendor’s brand recognition and respect. If the vendor has a poor reputation, it is more likely that their IT staff will leave
- Make sure the vendor has employed many recruiters so that the number of potential staff can always remain high
- Find out how deep and talented the vendor’s available IT staff is. Make sure that there will be available for further, unforeseen upscaling if it becomes necessary
- Communicate and agree on a mutually beneficial scale-up and scale-down period with the vendor
If you are considering staff augmentation for any long- or short-term projects, the major considerations are primarily time and money spent. You want people in place as quickly as possible to ensure that you don’t lose any steps on the way to bringing your product to market. Similarly, the expense should be in proportion to the ease with which the staff or the vendor brings results. With an eye on maintaining excellence as the standard, and communication as the key to success, a company can be served well through staff augmentation. Planning and preparing means finding the right people and communicating throughout the process. Follow the steps above and staff augmentation can be your next steps to success.
Biren Zaverchand is the CEO and cofounder of Sigma Solve.