HR agency vs. IT staff augmentation – which is better?

HR agency vs IT staff augmentation services which one can better help you fill the capacity of your in-house development team? Well, let us help you explore both options. We will explain the key differences between these staffing strategies, and the pros and cons of both models. Moreover, we will look at which option is more cost-effective and so much more. Let’s dive right in.

How does a Human Resource Agency work?

A Human Resources (HR) agency, is also known as a recruitment agency or staffing agency. This is a company that specializes in assisting organizations in finding and hiring suitable candidates for job positions. Usually, it helps companies hire full-time employees.

How does an IT staff augmentation work?

The IT staff augmentation model allows companies to fill employee slots on a project-by-project basis. Using this hiring process you can hire developers on a temporary basis to meet the demands of your business objectives. Tech companies are able to gain additional programmers on a short-term or long-term basis to help with the completion of the project. Moreover, they are able to hire individuals with specific skills that their project demands, without the hassle of in-house recruitment.

Key differences between HR agencies vs IT staff augmentation services

Let’s explore the difference between HR agencies vs 👉 IT staff augmentation services 👈. Some of these key differences can be found in the hiring process, the quality of talent, and the duration of the hiring solution.

The hiring process

The hiring process of a recruitment agency and a staff augmentation agency varies. Hiring developers via an HR agency can take longer, whereas using team augmentation can enable you to hire someone in as little as one week.

HR agency hiring model:

Here’s a general overview of how a typical HR agency works:

1. Understanding Client Needs: The agency’s HR professionals meet with the client representatives to gain a thorough understanding of their specific requirements. This includes understanding the job descriptions, qualifications, experience, and any other relevant details.

2. Sourcing Candidates: Once the agency has a clear understanding of the client’s needs, they begin the candidate sourcing process. This involves searching for potential candidates through various channels. Channels such as their internal database, job boards, online platforms, and networking.

3. Screening and Evaluation: The HR agency conducts initial screenings and evaluations of the candidates to assess their suitability for the positions.

4. Candidate Selection: Based on the screening and evaluation process, the agency presents a shortlist of the most qualified candidates to the client.

5. Interview Coordination: The HR agency facilitates the interview process by coordinating schedules between the client and the candidates. They may arrange initial interviews, follow-up interviews, and assessments. This all depends on the client’s requirements.

6. Offer Negotiation: If the client decides to hire a candidate, the HR agency assists in negotiating. And finalizing the job offer.

7. Payment and Contractual Agreements: HR agencies typically have contractual agreements with their clients. The contract outlines the terms of their services, including fees and payment structures.

Now this process may take a few weeks not to mention, you as the customer internally will also have your own procedures when it comes to new hires.

IT staff augmentation hiring process:

The IT staff augmentation hiring process is much simpler and generally faster than those of other extension models. Here at Swyply 👉 hiring a developer via staff augmentation 👈looks a little like this:

• You tell us what set of technical skills you are looking for in a developer
• Then we search for developers with those specifications and send you a shortlist along with Blind CVs for review.
• After reviewing the Blind CVs, we will coordinate your interviews. You will interview the top developers who you are most interested in. During this time you can also request that our developers take part in a skills test.
• Once the interviews are complete, let us know which developer(s) you would like to rent. We will draw up the paperwork and they will join your team on the agreed-upon start date.

Quality of talent being hired

When it comes to hiring software developers, there are differences in the quality of candidates you may find through an HR agency compared to IT staff augmentation.

Qualified professionals from HR agencies

HR agencies specialize in recruiting and screening candidates for various positions, including software developers. They typically have a broad pool of candidates from diverse backgrounds and experiences. The quality of developers you hire through an HR agency can vary. It depends on factors such as the agency’s expertise, its screening processes, and the specific requirements you provide.

HR agencies may lack the in-depth technical knowledge required to thoroughly evaluate software development skills. They may rely on generic evaluation methods that don’t adequately assess a candidate’s technical capabilities. There is a possibility of HR agencies not fully understanding your specific technical requirements. This will lead to the presentation of candidates who may not be the best fit for your project or organization.

Specialized high-performing developers from staff augmentation

IT staff augmentation involves hiring individual software developers or entire teams through specialized agencies or firms. These agencies focus specifically on providing skilled IT professionals to meet your project requirements. They often have a more in-depth understanding of the technical skills needed for software development roles.

An 👉 IT staff augmentation agency 👈 typically has a strong technical background. This allows them to better evaluate candidates’ programming skills. Along with knowledge of specific technologies, and industry experience. Moreover, team augmentation providers aim to understand your project’s specific needs. They will find developers with the right skill set, experience, and cultural fit.

Lastly, Staff augmentation allows you to quickly scale your development team based on project requirements and timelines. You have more control over the selection and management of developers.

Short-term, long-term, or permanent hiring solutions

When using an HR agency you are usually looking for a permanent full-time employee. Most people view this as a permanent and one-time solution. But it’s important to know that the length of time a developer from an HR agency will work for you, depends on numerous factors. No one can truly predict how long someone will work for their company. The IT industry in particular has a reputation for struggling with 👉 developer retention 👈. Developers like to switch projects and jobs often.

Now, IT staff augmentation can be a short-term or long-term solution. You are able to hire a developer for as long as you need. Moreover, if this developer has to leave your project due to unforeseen circumstances we will replace him or her ASAP. That way you are not inconvenienced and the project can move on.

Cons of using a recruitment agency vs IT staff augmentation

Let’s look at the disadvantages of using a recruitment company vs an IT staff augmentation agency.

Cons of HR firms

There are some disadvantages when working with an HR agency. Some of these include long recruitment processes, an expensive service, hiring inflated egos and so much more.

Long recruitment process

The hiring process using a recruitment company can be a long one, almost like your in-house conventional hiring model. There are various processes on the side of the HR agency that need to take place before they offer you, clients. Moreover, you as the customer will want to run some of your screening processes. This is all very time-consuming and you could be stuck waiting a few weeks before someone joins your team.

Additionally, you may find throughout the screening process that the candidate has been misinformed about the company. Or perhaps you were misinformed about the talent level of the developer. These types of misunderstandings can also drag out the recruitment process. Lastly, you may also find that a candidate may drop off during the recruitment process and take a different offer.

Hiring a developer via an agency is expensive

A hiring company will charge an arm and a leg for helping you hire a software engineer. They will charge you 1x or 2x the monthly of the developer. So if you are hiring a developer that makes $6000 a month, then the HR firm will take anywhere from $6000 to $12000. While this is a one-time rate, it can take a toll on your budget. In many circumstances, you may find that money can be better spent elsewhere.

Reach candidates that may not be looking for work

For many HR agencies, standard practice is reaching out to software developers who are not looking for work. They may be currently working at a company and not actually interested in switching. This type of developer may only switch if they are given more money. Typically this is the only incentive that will get them to leave their current job.

You don’t want someone who is only willing to work with you because their salary will increase. While we all can agree that money is important, you also want someone who likes their job and is passionate about the project. A person who enjoys their project is much easier to cooperate with, than someone who is only in it for the money.

Developers whose egos are bigger than their talent

Perhaps you have experienced hiring a ‘celebrity’ developer, whose ego is inflated but their talent is not exactly what you would expect. Unfortunately, this is a common occurrence when hiring software engineers from an HR agency. You get someone who thinks there are the greatest thing since sliced bread but the reality is they may not be as talented as their ego lets you believe.

Not to mention the fact that individuals who have egos big enough for two people to carry can be hard to work with. You may find that they are not open to feedback, or are difficult in just day-to-day communication. Plus if their technical skills are not that great, you find the existing team members are stuck picking up the slack. Moreover, you are paying for someone who doesn’t meet your expectations.

As a customer of an HR agency, you are not their only priority

So HR agencies have numerous customers and most likely neither of them is their top priority. And if you are fastidious about the employee you are trying to hire they may eventually tell you that you are not the right fit. The HR agency is looking for a quick transaction so that they can have their money. Whereas, you may be searching for the right candidate, not just anyone to fill the slot.

Pressure to hire a developer for the sake of hiring

Often times HR agencies will push customers into hiring a developer as soon as possible to gain money. Plus the longer and more picky you are, the more they will start ignoring you as they are not making any money.

Paying more for a developer because the HR company needs to make more money

HR agencies will provide you with candidates that have a higher salary so that they make more money. They don’t want you to hire someone who has a smaller salary as they won’t make as much money. Their commission is based on the salary of the coder.

Or they will convince you that the salary that they are suggesting for the developer, is more appropriate. And that yours is too low and no one will work for you at this rate. The truth is if you used a conventional hiring process you would probably find someone who will work for that rate. But the HR agency will convince you otherwise, as their commission is based on the developer’s salary.

Hidden fees & additional costs

In some cases, if you are working with an HR agency for a long period of time, and you are struggling to hire the right match. They will start charging you extra for various things. The HR company may charge you for things like interviews to make a profit. This is not always something they disclose at the beginning of your cooperation.

Cons of IT staff augmentation

Now that we have covered the disadvantages of HR agencies, let’s dive into some of the cons associated with HR agencies.

Project management can be tricky

When combing a remote augmented team with your in-house team, there are certain things that your project manager needs to take care of. The key is to integrate all members to encourage better cooperation. They also need to make sure that they build relationships with the temporary developers, so they don’t feel like lonely islands.

Introducing new team members to in-house team knowledge

Introducing temporary coders to in-house knowledge can be time-consuming. But this process is unavoidable regardless of how you hire. The only difference is when you are hiring a temporary developer, you only introduce them to as much as they need to know to work in your company for that specific period of time. You may not need to introduce them to everything, as not all information will be useful.

Pros of using IT staff augmentation vs HR agencies

Since we have covered the cons of both hiring models, let’s take a look at the benefits of using IT staff augmentation vs an HR agency.

Advantages of IT staff augmentation

There are numerous 👉 benefits of IT staff augmentation 👈 some of those include not paying additional employment costs. Moreover, you have predictable contracts, rates, and terms of cooperation. Additionally, this hiring solution gives you more flexibility and a risk-free trial period.

No additional employment costs

The beauty of using staff augmentation, especially with Swyply, you don’t have to pay for additional employment costs. You only pay the daily rate of the developer, whereas we cover the rest. We pay for things such as health insurance, taxes, vacation time, and sick leave. Moreover, we cover various 👉 employee perks 👈 such as professional development courses and e-learning. Also, we give our developers laptops and cofinance office furniture.

Predictable contracts, rates, and terms of cooperation

Staff augmentation gives companies predictability in terms of contracts and rates. You have the flexibility to hire someone for as long or as little as you need. Here at Swyply, we do have a minimum of 3-month cooperation. But we do love long-term projects and cooperation that last for example 6 months, 8 months, 1 year, 2 years, etc. You decide and all parties are clear on this partnership. Moreover, you have a one-month notice period, if you need to end our cooperation due to project changes or other circumstances.

Renting developers with the help of IT staff augmentation services you also know where your money is going. Moreover, how you will pay. We agree on a daily rate for the developer you are looking to rent. At the end of the month, we multiply this rate by the number of days worked and then send you an invoice. It’s that easy. With the 👉 staff augmentation pricing model 👈, there are no surprises, no start-up fees, and no additional costs.

Hiring flexibility to adjust to project changes

Staff augmentation gives you a lot of hiring flexibility. This is especially important when the software development process can quickly change. Your customer may request a new feature, and suddenly you realize that you need a set of skills to add to your existing team. With Swyply, you can hire coders to join your team in as little as one week.

Moreover, this hiring solution enables you to switch, add or remove augmented team members as your project changes. Also, you can do this to help your company survive during market changes as well.

Risk-free trial period

When you work with Swyply, you gain a 👉 14-day risk-free trial period 👈. During this time you can test out the developer you hired and if something is not right you can switch him or her for someone else. You typically don’t get this option with an HR agency, managed services, project outsourcing, or in-house recruitment.

Advantages of HR agencies

Let’s visit the advantages of using an HR agency to help hire the right programmer for your software development team.

You hire someone permanently full-time

With an HR agency, you are hiring a software developer on a permanent full-time basis. This is not a project-based contract. Your main goal when partnering with an HR company is to hire someone who will stay and grow with your company long-term.

Gain diverse software engineers

HR agencies can help you gain access to a diverse talent pool of coders. HR agencies tend to have their own database of talent that they can access to help you find the right developer. You may struggle to find this type of talent via 👉 traditional recruitment 👈 or they simply will not apply to your job ad. An HR agency can provide you with another source for hiring diverse software developers.

One time cost

Hiring via an HR company is associated with a one-time cost. Your hire a developer, pay the HR agency their commission and that’s it. After that, you only pay for the developer’s salary, taxes, health insurance, and more.

They screen the candidate & provide them with information about your company

Another beautiful thing about working with an HR company is they do a lot of screening and passing on the information before, you get to interview the client yourself.

What are the costs when comparing IT staff augmentation vs. HR employment agency

The cost of hiring through IT staff augmentation or an HR agency can vary depending on several factors such as location, skill requirements, duration of the engagement, and specific terms of the agreement. However, we can provide you with a general understanding of the cost considerations associated with each option.

The cost of IT staff augmentation typically includes the daily or monthly rates of the hired developer. These rates can vary based on factors like skill level, experience, and demand in the market. Moreover, you can negotiate rates directly with the IT professionals or the service provider. However, hiring through an agency can be more expensive due to the fees charged, which are usually a percentage of the employee’s salary.

But we also need to consider the long-term accumulation of costs. For example, if you decide to hire a developer from an HR agency but they only work for 6 months as opposed to a couple of years. You may find the cost of hiring, training, etc. wasn’t worth it, because the developer didn’t work long enough to give you a 👉 better return on your investment 👈. In this case, staff augmentation may have been the better option and boosted your ROI as well.

On the other hand, if you know that you need a developer for let’s say 2 years, using IT staff augmentation be more expensive in the long run than hiring via an HR agency. This is of course under the impression that a coder from an HR agency will stay put in your company for that long-term period, and not leave.

Overall, the cost comparison between IT staff augmentation and hiring via an HR agency depends on your specific requirements and circumstances. It is advisable to evaluate the cost-effectiveness of each option based on factors such as project duration, skill requirements, availability of resources, and budgetary constraints.

Summary: HR Agency vs IT staff augmentation – which one is best for my business?

Trying to decide whether to use an HR agency or IT staff augmentation to hire developers can be tricky. Each of these options has its own unique hiring process. When choosing an HR agency this process can be particularly long and is meant to provide you with a mass of amount of candidates. Whereas with IT staff augmentation the goal is to hire the right developer for the job. The recruitment process is accelerated and can be done in a few days, not to mention these developers have already been pre-vetted.

The quality of talent that you will get from each of these hiring models will vary. IT staff augmentation can provide you with highly skilled developers because that is what we specialize in. When it comes to an HR agency you may get a skills mismatch simply due to lack of technical knowledge or miscommunication. Plus an HR agency may not necessarily have someone to test the technical skills of a developer.

Moreover, IT staff augmentation is a great solution for project-based needs, this includes short-term and long-term projects. Generally, an HR agency is seen as a more permanent hiring solution. But the truth is you can never be sure how long someone will work for you.

Some pros and cons of IT staff augmentation:

• Pros: No additional employment costs. Hiring flexibility to adjust to project changes
• Cons: Project management can be tricky.

Some pros and cons of HR agency:

• Pros: Gain diverse software engineers. Hire someone permanently.
• Cons: It’s expensive to hire developers

What about the money? What’s worth it?

There are many factors to consider when trying to find the most cost-effective option. The first thing you need to take into consideration is whether the new hire is a temporary or permanent solution. Also, if you need a temporary developer, consider the time frame that he or she will be working with your team. You should also consider things like project duration, skill requirements, availability of resources, and budgetary constraints.

So have you decided which one is better for you?

So are you closer to deciding which one is better for you? HR agency vs IT staff augmentation? If you want to chat more about this conundrum, 👉 drop us a line 👈. Let’s have a free no obligation chat. We can further dispel any queries you might have about these hiring solutions.