IT staff augmentation contract: What to expect?

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When looking to partner with a staff augmentation company you will need to sign a contract. Let’s go over some details that you should expect to find in your IT staff augmentation contract.

Man signing digital IT staff augmentation contract

Are you considering IT staff augmentation for your business, but unsure of what to expect from the contract? Look no further! IT staff augmentation is a popular solution for businesses looking to expand their IT capabilities. They can do so simply without the hassle of hiring full-time employees.

By partnering with an IT staff augmentation provider, businesses can access a pool of highly skilled and experienced IT professionals who are ready to tackle any project. Moreover, they will have a proven track record that they are experts in their field.

Let’s dive into the key aspects of an IT staff augmentation contract and what you need to know before signing on the dotted line. From the scope of work to pricing, we’ve got you covered. So, let’s get started and discover what you can expect in your contract during a staff augmentation arrangement.

What is an IT staff augmentation service agreement?

An 👉 IT staff augmentation services 👈 agreement is a contract between an organization and a third-party provider to provide additional IT personnel to the organization. This arrangement allows organizations to access specialized skillsets or expertise that they may not have in-house, while still maintaining control of the project.

The staff augmentation model also allows organizations to scale up or down quickly as needed, without having to commit long-term resources. With this agreement, organizations can focus on their core competencies and delegate non-core tasks to external providers.

Types of staff augmentation agreements:

There are two types of IT staff augmentation agreements. The first one is time and material while the second is a fixed price. Let’s dive into the differences, so you can gain a better idea of which is more suitable for your budget.

Time & Material

Time and material are where the customer pays for the time spent by the temporary staff working on the project. This can be an hourly or daily rate. The longer the project, the more you have to pay for the work being done.

Fixed Price

Fixed price is very rare in staff augmentation services. Contracts with fixed prices have a pre-defined cost that doesn’t change even if the project requires more hours or materials than initially expected. So what you agree upon at the start is what you can expect to pay at the very end.

Colorful tabs on different sections on master agreement

Key components of an IT staff augmentation services contract

Let’s go over some key components that you may want to include in your staff augmentation agreement. Some of these include project scope, payment terms, termination clause and so much more. Let’s glimpse into these sections and more below.

Project scope

The project scope is a very important component of the IT staff augmentation agreement. The statement of work will include the developers you hired and the responsibilities that will have when working on your project. Moreover, the project scope should include the start of cooperation, the duration, and the end date.

Hiring changes

In the IT industry, it is very common for projects to change, so you need to make sure that your contract has room for flexibility. Therefore, another key section in your IT staff augmentation agreement is what needs to happen in case of employee changes.

Here at Swyply, we have a 👉 14-day guarantee 👈 in which customers can switch developers if need be or end our cooperation. If they decide they are unhappy within the first two weeks they do not pay a cent and can walk away.

Moreover, during the course of our cooperation, you can ask to switch, add or remove developers as your software development project changes.

Closeup of staffing agency going over payment terms with customer

Payment terms

Another crucial aspect of your IT staff augmentation agreement is payment terms. You want to know how much you will pay for augmented staff working on an as-needed basis. Moreover, you want to know the payment schedule, and whether you need to pay the invoice in 7 days or 14 days.

Here at Swyply, you will receive an invoice at the end of the month that you have 14 days to pay. The 👉 cost of the staff augmentation service 👈 is the daily rate of the developer multiplied by the number of days worked throughout the month.

Non compete clause

So depending on the staff augmentation company, you may sign a non-compete clause. This clause can take on various forms. Here at Swyply, tech companies can hire developers from other staff augmentation companies while also borrowing our coders. But they cannot steel a developer for us, and hire them bypassing us.

The software development company cannot steal a developer from us after they work with him or her on a contract basis for let’s say a month. We sign a non-compete with the client, but also our developers sign a loyalty clause with Swyply as well. Breaking these agreements would result in huge fines.

Non-disclosure agreement

A great way to protect confidential information and trade secrets is to sign a non-disclosure agreement. Here at Swyply, we sign an NDA with all our customers and our developers. This way you don’t have to worry about company secrets being leaked. Or that your company data will be sold and used elsewhere.

A clause about intellectual property rights

Intellectual property rights (IP rights) refer to the legal ownership and control over original creations of the mind. This way you have exclusive rights to ideas. Moreover, you have control of their distribution. Thereby protecting their financial interests and preventing others from profiting from your work without permission.

Here at Swyply, our developers sign over the rights to any code they write for us. And we have no problem with our developers signing our intellectual property rights of their code to the customers they are working for.

This way you can rest easy knowing that the developer you hired temporarily who helped develop a new software program, doesn’t have the IP rights to it. IP rights are an essential aspect of modern tech business because you rely heavily on innovation and unique ideas to stay competitive.

Termination clause

So as we mentioned before, here at Swyply we do have a 14-day risk-free period where you can end our cooperation if something is not right. But after that, if at any time you want to break our contract, we require a one-month notice period.

Businessperson's checking over contracts

TL;DR: Summary of what to expect from a staff augmentation agreement

There are two different two types of staff augmentation service agreements one is based on time and material. While the other is a fixed-price contract. The first one is more popular among staffing agencies, whereas the other option is rather rare. A staff augmentation service agreement should include some of the following sections:

  • Project scope
  • Hiring changes
  • Payment terms
  • Non-compete clause
  • Non-disclosure agreement
  • A clause about intellectual property rights
  • Termination clause

Are you interested in learning more about working with a staff augmentation vendor and how the cooperation works? 👉 Drop us a line 👈, and let’s chat about extending your team with the help of a staff aug contract.

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