Keeping nimble and flexible in today’s world, which is punctuated by its fast-paced nature, is a massive challenge.
With forever-changing deadlines for deliverables, incredibly competitive markets, and the hustle to entice top global talent, it’s tough to juggle every aspect of modern business.
This is particularly true when a business is expanding and taking on new projects, because it is likely to require extra staff to get the job done.
And this extra staff can come from outsourcing, or it could come from staff augmentation. The two approaches can seem quite similar. But what are the actual differences between the two?
In general, outsourcing is a hands-off solution in which businesses contract another business or team to take full control over a project. The ideal is that this simplifies business as the business doesn’t have to manage extra tasks. They set the requirements for a task or a project and that’s it.
Yet that implies a loss of control over a certain aspect of the business.
Let’s dive a little bit into the strengths and weaknesses of outsourcing.
Core business focus. Like we mentioned, outsourcing a part of business means that you can focus more on what your company does best, meaning you won’t be distracted by tasks that lie outside of the core elements.
Lower overhead costs. With a defined timeframe and budget, overhead costs can be cut down to size. This is particularly true if the core of your business isn’t directly tied to a project – such as the need for a website redesign yet your business has no design department or IT department.
And some of the weaknesses include:
Risk of quality. It would be normal, especially for those that have little to no experience with outsourcing, to be nervous about handing over responsibility to a perceived group of outsiders. And if they’re new, you don’t have a clear sense of the group’s quality, communication, and reliability.
Sensitive data. Handing over a project often involves handing over sensitive data, too. Business may not feel entirely comfortable with sharing intellectual property and other data.
This staffing model involves a business that extends their team temporarily with a specialized group of workers to come in and carry out specific tasks or projects.
For example, a company is rewarded with a big project from a client. The problem is that is requires a programming language that your current crop of staff is illiterate. So the company hires a couple of external team members to join, having the expertise already to help complete the project.
Think of it as temporarily filling in a company’s gaps with talented staff. Its benefits are broad and deep, with staff augmentation being ideal for shifting project requirements, so a company can provide the flexibility to complete tasks and projects.
Keep in mind that there are different types of staff augmentation: onshore, offshore, and nearshore.
Onshore. This is when an outside team is located within the same country as the business that is hiring. The strongest advantage here is that team members will have a lot in common, such as national regulations, language, and culture. However, onshore staff augmentation tends to be more expensive and as such can limit your talent pool.
Offshore. This is when an outside team is located in a different country than the business that is hiring. And while it shares a lot of the benefits of nearshore staff augmentation, it does present issues and potential problems in terms of time zones, varying levels of communication standards, and divergences in culture.
Nearshore. This is when an outside team is located in a different yet close country as the business that is hiring. Generally, this means that for businesses located in the US and Canada, they work with nearshoring teams in Latin America – where they share similar time zones, cultures, and communication styles yet are typically more affordable than onshore staff augmentation.