Staff augmentation vs in-house recruitment what are the differences? What are the similarities? How much does each of these staffing options cost? But most importantly which recruitment process is the right one for your business? Let’s dig into all these questions and more.
- Critical differences between staff augmentation vs traditional employment?
- Similarities of both in-house recruitment & staff augmentation
- Why does each company need an in-house recruitment process?
- Why does staff augmentation cost more than the in-house hiring process?
- Why should my company try staff augmentation? Why is it worth considering?
- TL;DR: Summary: What is better staff augmentation vs. in-house recruitment?
As a company owner, you may be wondering whether in-house recruitment vs staff augmentation is the best option for hiring new developers. Each hiring process has its unique benefits and challenges.
Let us dive into more detail about each of these hiring processes to help you decide when to choose which solution.
Critical differences between staff augmentation vs traditional employment?
There are some key differences between the traditional hiring process vs staff augmentation services. Let us first explain each of these hiring models and then we can look at the major differences between them.
What is In-house recruitment?
In-house recruitment is a process that involves hiring outside candidates for a job role. This involves potential candidates going through the usual job application process. Then if their skills and experience are a good fit they will be hired.
Also, in-house recruitment provides the organization with a way to retain its most talented software developers. Additionally, they can offer them promotions or new roles within the organization as time goes on. This can help create a positive work environment and foster loyalty among employees. Both of which can result in improving productivity and morale.
When should a tech company hire tech talent internally?
Each company should have an in-house recruitment process. Regardless of whether you want to try out staff augmentation services or not.
Hiring tech talent internally will help you build a core team of individuals who can manage day-to-day tasks and projects. Most tech companies will have permanent employees. Employees such as software developers, QA testers, project managers, product owners, etc.
Plus, you need an existing team to make trying staff augmentation services possible. This team should have developers, QA testers, project managers etc.
How does staff augmentation work?
The 👉 staff augmentation model works 👈 by providing companies with temporary workers to fill skill gaps on a project basis. You hire tech talent that you need for a specific project and keep them for as long as needed. Once the project has ended, and you do not have that developer anymore, they leave your company and move on to the next thing.
Here at Swyply, we can lend you a developer to help with your project for a minimum of 3 months. The longer the project the better but we understand that certain software development tasks do not take that long.
How the staff augmentation model works can be explained in as little as 5 steps:
- First, off you tell the staff augmentation vendor what technical skills you need to extend your team. Do you need front-end developers? Back-end developers? Mobile developers? Also, are you looking for a particular tech stack? You should also mention do you need one developer or perhaps a whole development team
- Next, they will search for the right developers to match your needs.
- You will receive Blind CVs for each candidate that is a suitable match. Based on these CVs you will pick which candidates you would like to interview.
- The staff augmentation company will schedule interviews and technical skill tests for you to carry out virtually.
- After you have interviewed each developer, you can pick which one you would like to hire. Then you sign a contract with the company. This contract should include things like the start of cooperation, duration, date of completion, and daily rate.
Trying our staff augmentation is really easy and most of the work is on the vendor, not on you.
Disparities between hiring permanently vs team augmentation services
Let’s take a closer look at some of the differences between traditional recruitment and team augmentation services.
|Staff Augmentation||Traditional recruitment|
|Hiring is done by the staff aug. vendor||Hiring must be done by your hiring manager|
|Add developers to join your team on a project basis||Hire developers to join your team permanently|
|Find an expert in as little as one week||It can take 3 to 6 weeks to find the right developer|
|Do not have to pay a developer for sitting on the bench||Cover costs of keeping developer on the bench|
|Pays for health insurance, taxes, employee perks, laptops sick leave, vacation, etc.||You have to cover the salary, taxes, health insurance, sick leave, vacation, laptops, employee perks, etc.|
Difference #1: Hiring for your in-house development team using internal recruiters vs staff augmentation model
So when you are looking to hire developers to join your in-house development team. You have two options:
- hiring internally
- hiring via staff augmentation
Hiring internally means that your human resources department has to carry the burden of the whole recruitment process. Your hr department has to source new hires, verify CVs, interview candidates, and then hire the right person. Once they choose to hire someone they have to deal with all the paperwork such as contracts, vacation leave, and sick leave.
But, if you use staff augmentation to add software engineers to your software development team then the hiring process is on the vendor, not you. The staff augmentation company will provide you with CVs of pre-vetted software developers to preview. You can pick from the CVs suitable options. Then interview candidates to see who best suits your needs. Your HR department does not have to take on those responsibilities and any costs that are associated with recruiting new hires.
Difference #2: Temporary workers vs permanent employees
When you use traditional hiring any software developer that you add to your team will become a permanent member of your staff. This is a great option if, in fact, you will have ongoing work for him or her.
However, if you choose staff augmentation to hire a programmer, they will join your team on a project basis. Any coder hired via team augmentation is available to you on demand and for a limited time only. You decide for how long you need the programmer and after that time frame has passed, your cooperation ends.
An example of an augmented staff member:
Let’s say you have a web application development project. And to create the back-end of this web app you 👉 need a Python developer 👈. But you only need this coder for 9 months because after that you have no need for the Python tech stack.
You contact a staff augmentation firm like Swyply and explain your needs. They will be able to provide you with a Python developer for that project within those time constraints. No questions asked. No problem. No fuss.
You pick from the list of candidates, interview developers, and hire one or more by signing a contract. It’s that easy.
Difference #3: Adding developers from the talent pool using team augmentation vs in-house recruitment
Recruiting top talent in the IT industry can be a challenge. Many businesses when running traditional recruitment limit themselves to local developers. This makes their search for the right match even more frustrating.
Traditional employment can be a long process for most companies. The average recruitment time is around 3 to 6 weeks before someone can join your team.
When hiring developers using team augmentation services you broaden your talent pool. You gain access to global experts. Most developers who work via team augmentation will work remotely so they can collaborate with you from anywhere in the world.
Difference #4: Developer Sitting on the bench in-house vs. staff augmentation
When you hire a developer as a permanent member of your existing staff you have to pay them regardless of whether they are working on a project or not.
If you add developers to your team with the help of staff augmentation you only pay them when they are working on a project. Once the project is complete, the developer or developers moves on to the next software development company. And if they do not have another project lined up then the staff augmentation vendor will pay for his or her time on the bench. You no longer have to cover that cost.
Difference #5: Employment costs such as health insurance, taxes, etc.
When you hire a software developer internally you have to account for more than just the salary you will pay him or her. There are other costs that fall on your head with permanent employees.
Some of these costs include health insurance, taxes, retirement funds, sick leave, and vacation leave. Additionally costs that you may cover include things like laptops & employee perks. You may also pay for ongoing job training, professional development courses, etc.
When you start to add up all these costs, you may realize just how much it costs to hire someone internally. In some cases, this cost is worth it but there is always the option of staff augmentation.
Many staffing agencies when lending out a developer to join your in-house team will cover the cost of a lot of things mentioned above. The only thing you cover is the daily rate that is agreed upon at the start of the arrangement.
Similarities of both in-house recruitment & staff augmentation
So while the way you add new team members varies between these two recruitment processes. They still have some similarities and benefits you can gain regardless of which route you pick.
Filling the skill gap
A similarity between in-house recruitment and staff augmentation is they are both used to fill the gap. They can help you bring on additional software developers to fill the gap. You should have a good idea of the talent gap that exists on your development team. Or what technical skills you need to carry out your next tech project.
Scaling your team
In-house recruitment and staff augmentation can help you grow the number of employees you have on your team. Also, they can help you grow the number of projects that you can take on because you have more employees.
Completing tech projects
When you hire a developer as a permanent full-time employee they can help complete your software development project. The same is true if you hire a coder via staff augmentation. They join your team specifically to complete a project.
Why does each company need an in-house recruitment process?
Most hiring procedures do include hiring in-house. This is accomplished through the use of internal recruiters and in some cases headhunters. Typically both are called to action when new roles need to be filled.
Recruiters and headhunters will seek qualified IT professionals to join the organization. Once that’s done the recruitment manager will verify if the developer is capable of performing the tasks needed to fill that particular job opening.
The recruitment department has the purpose of helping tech companies achieve their business goals. They do so by providing the company with the required software engineers. While also promoting an excellent corporate culture through communicating with current staff. Along with leading talks with all potential future employees.
Why does staff augmentation cost more than the in-house hiring process?
So we briefly mentioned how the cost associated with employing someone stacks up when comparing the two hiring models. Now you have this image in your mind that staff augmentation costs more. The hourly rate may be slightly higher than what you would offer a developer that you are hiring permanently. This is most definitely a possibility.
But let’s look at it a little more closely to see if in-house recruitment vs staff augmentation which option is more cost-effective.
According to Glassdoor.com, the average software developer in the United States will make anywhere from 76k year to 120k a year. This depends on experience, skills, etc. This is salary alone! You are missing the cost your business has to cover in terms of health insurance, taxes, sick leave, and vacation. Those are just the bare minimum costs that you have to cover as an employer hiring an individual.
Now, if you want to offer your software engineers more than just the basics then the cost of hiring goes up even further. Let’s say you want to offer them professional development workshops. This costs money. If you want to provide your coders with laptops or home office furniture, again this is another expense. Add this on top of what you are paying them just for their work. Your costs of hiring in-house skyrocket.
How do you save costs with augmented teams?
Now our 👉 staffing pricing model 👈 covers all these types of costs under one pretty little number. There are no hidden costs or fees.
So let’s say you borrow from Swyply senior engineers this will cost you between $60 to $90 per hour. This covers everything from the work they do for you to all those employment costs we mentioned. Plus it provides software developers with ongoing training & laptops. Along with co-financing for home office furniture, and many other employee perks.
You don’t have to cover associated costs. Also, remember that 76k to 120k yearly salary, you don’t even have to pay that. This is because augmented staff work for as long as you need them and then they leave. Once they are gone, you no longer pay for their services. So you have more money in your pocket.
Why should my company try staff augmentation? Why is it worth considering?
Here are three reasons why your company should consider staff augmentation services to hire new developers to extend your team.
1. Only pay for the developers you need
When you use staff augmentation you only pay the developers that you need and for as long as you need them. You hire developers that meet your project needs and keep them as part of your in-house team for the duration of the project.
You for their services during this time, once the project is over you no longer have to pay for those additional developers.
2. Save time on recruiting new developers
IT staff augmentation can reduce the time it takes to recruit and staff new developers. It takes time to prepare a detailed job description and verify resumes. Also, a big chunk of your time is taken up by interviewing candidates. Not to mention the paperwork that is required to hire a new software engineer.
When you use staff augmentation you can add a programmer in as little as one week. Verifying CVs and interviewing candidates is strictly a formality. Also, you only need to sign one contract with us and that’s it.
3. Simplified exit strategy
A company’s biggest challenge in hiring employees is when it’s time to close their employment relationship. Terminating an employee is never an easy task. These conversations are uncomfortable but usually necessary.
IT staff augmentation is typically project-based. So when you hire a Software developer this way they are a temporary worker who leaves the partnership once they are longer needed. The onboarding and offboarding of an augmented developer is made easier because it is already stated in the contract. Both sides know how long they will be working together.
TL;DR: Summary: What is better staff augmentation vs. in-house recruitment?
Staff augmentation is an increasingly popular way to add resources to a team without having to go through the hassle of in-house recruitment. It offers companies the ability to quickly scale up or down their workforce as needed. They can do so depending on their project’s requirements. Also, depending on market needs.
In-house recruitment is not always necessary. Especially if you are not looking to add developers permanently to your in-house development team. Your company should still have in-house hiring to build the core of your team. It does not need to be the solution to every staffing problem.
IT Staff augmentation services provide access to IT experts in various tech stacks. It allows companies to get the best talent for their projects without having to commit long-term. This flexibility makes it a great option for businesses. It provides them with specialized skill sets on a project basis.
Overall, staff augmentation is a great way for companies to quickly and easily access specialized talent when they need it. Do you want to discuss more in-house recruitment vs staff augmentation? 👉 Drop us a line 👈 and let’s have a free no-obligation chat about how staff augmentation can help you.