Staff augmentation refers to a specific outsourcing strategy wherein a certain number of resources or a single entity is added in to the business process for project completion that aids in fulfilling a business strategy. This initiative is generally taken up when a project requires additional skills than what the current workforce has. It is an outsourcing mechanism. The resources are provided by a third party service provider who after understanding the key skill requirements provides a list of selected candidates who can be a best addition to the scenario for completion of the task. This service segment has gained tremendous popularity is the past couple of years. The global staff augmentation industry stood at USD 45 billion in 2015 which depicts that it is a fast growing service segment in the corporate environment. This has been fuelled by a number of reasons. Due to abundance of IT resources, declining rates and narrowing margins, this segment is on the high rise in recent times. However, there is a key pointer to this service. Even if the third party service provider supplies the required resources, the client company is responsible for managing the resource and its productivity. The benefits of this service as follows:
- It helps in gaining control and management of resources.
- It results in integration of external resources within the existing processes which marks better adoption levels. Usually a limited number of professionals are required to work within a specific team for certain period which does not disrupt the existing process.
- It is helpful towards meeting up with the changing staffing needs within a short period of time.
- The cost of acquiring skills on a permanent basis is reduced to a great extent which also brings down the liabilities of the employer.
- It helps in meeting strict deadlines with efficiency. The duration of work hours is fixed on prior commitment through agreement which makes it clear and simple at the same time.
However, this concept is often confused with certain other labor categories such as contractual labor and consultant recruitment. But it is quite different from these two in many areas.
Contractual labor is a person or business that provides necessary products and services that has been bound under a written or verbal agreement. The working span of a contractual labor or independent contractor may not be fixed or continuous. The payment of such type of resources occurs on a freelance basis.
A consultant is a different genre of resource all together. This type of resource is approached for seeking professional or expert advice on business processes. It can be related to security, management, legal affairs, human resources, marketing and such like. Such professionals usually have many years of experience in a particular field and have worked towards building a reputation for themselves in the industry.
So, staff augmentation, contractual labor and consultants and completely different categories of services available in the market. The companies need to appoint one of the following depending on their business needs.