What to Consider when Choosing a Staff Augmentation Provider in 2021
The current state of IT staff augmentation
While many industries around the world saw demand dip throughout 2020 and into 2021 in response to the COVID pandemic, one sector has boomed: IT staff augmentation. According to a report from Statista, the IT staffing industry in 2019 was worth $92.5 billion. As of 2021, it is now a booming $132.9 billion dollar industry.
Part of IT staff augmentation’s appeal is its remote-first approach. It’s clearly easier to augment a software development team if the members that make it up can be located anywhere in the world (including their own homes). However, IT or software development staffing companies offer a wide variety of engagement models and options, some of which may better suit your company’s needs than others. If you are considering hiring a staffing company for the first time, or if you’re looking to switch providers, here are three key points to consider when selecting a staffing partner.
1. First and foremost, you must identify what your staffing needs are. Do you need a single developer to help push a product launch over the finish line? Do you need an experienced lead developer to manage your distributed team? Do you need a team of five experienced developers who can serve as your in-house team? Depending on what you’re looking for, some staffing service providers will make more sense than others.
Companies like X-Team specialize in finding very senior developers, but the price tag can be cost prohibitive if you need to bring on multiple developers at once. There are also plenty of low-cost options out there, but if developing quality software on the first try is important, a low-cost staffing company may not be the right solution for you. Define your needs, and come to introductory conversations prepared to ask whether the staff augmentation provider can meet them.
2. Next, determine what type of engagement works best for you. Some companies offer flexible engagements, while others have more rigid structures. For example, if you know you will have a steady stream of full-time work for at least six months, you will likely be able to work with a staffing company with fixed contracts of 40 hours per week. However, if you need a more freelance-style engagement (like having a developer on an as-needed basis), it will be important to discuss this with any potential providers up front. Keep in mind that staff augmentation providers will often charge more to accommodate irregular, freelance-style contracts, so budget accordingly. Conversely, some companies offer discounts and other incentives for longer-term contracts. In any case, be sure to come away from any discovery conversations with a clear understanding of what they do (and don’t) offer in terms of contract structure.
3. Finally, decide whether you want the option to hire your developer(s) directly. It may sound counterintuitive, but when a staffing company has done their job correctly, you may end up wanting to hire your developer(s) directly. Once you have worked with a developer for several months, it’s likely that they’ve gained valuable institutional knowledge and an intimate understanding of how your product and business works. If you and your developer are content with your working relationship, it can be a great next step to hire them directly.
Some staff augmentation providers simply do not offer the option to buy developers out, as it results in a loss of recurring revenue for them. Other providers do not necessarily stand behind the quality of their recruitment process and developers, and therefore buying developers out is not generally a good option. However, a company with a strong recruiting and vetting process recognizes that, if they’ve done their job correctly, their clients may eventually want to hire their programmers directly. As a rule of thumb, contract “buyouts” should be approached as you would a recruiting firm. If you think you may be interested in hiring a developer directly down the road, be sure to ask about buyout fees and other details before selecting a provider.
As the world continues to shift towards the remote and digital, IT staff augmentation and hiring software developers remotely is likely to continue growing in popularity. With so many options for providers out there, it’s critical to do your homework and come to conversations prepared with your must-haves so you can choose the right provider for your business.
Have more questions about how to select the right staffing company for you? Drop us a line and we’ll be happy to help.