Managed services vs Staff augmentation? Both hiring models have potential, but which one suits your company’s needs better? In this blog, we’ve covered everything you need to know – differences, benefits, and considerations that will help you make smart decisions about your IT hiring needs.
According to Grand View Research, the global IT services outsourcing market size reached a valuation of USD 639.59 billion in 2022 and is projected to grow at a CAGR of 8% from 2023 to 2030. Owing to this substantial demand for IT hiring needs, organizations are looking for ways to hire exceptional talent and reduce operational costs.
Hiring and sustaining experienced in-house teams is usually a long process, and consumes a lot of time, money, and effort. Plus, various bottlenecks impede the process. A better way is to outsource the current IT hiring needs to a third-party service provider. There are three models – staff augmentation, managed services, and project outsourcing. Each comes with its perks and drawbacks. In this blog, we will draw a comparison between managed services model vs staff augmentation to help you choose the best one for your organization.
Staff augmentation is a hiring model that allows organizations to add professionals to their in-house teams for a specific project or address skill gaps. This flexible hiring model helps them to get access to the best brains without promising any long-term commitment.
The IT staff augmentation companies offer services to help you hire experts who can handle large projects with relevant skills for a limited duration. This approach is useful for businesses that have to have a global pool of talent and still have control over their projects.
Project-Based Staff Augmentation: Recruiting IT experts to work on a specific project for a definite time duration.
Skill-Based Staff Augmentation: Hiring IT professionals with specific skill sets, such as writing, design to address skill gaps.
Time-Based Staff Augmentation: Engaging IT staff to work for a set period. It could be long-term or short-term.
Hybrid Staff Augmentation: Combines multiple IT staff augmentation types to address skill needs.
Onshore Staff Augmentation: Hiring IT professionals within the organization’s country when frequent communication and collaboration are needed.
Nearshore Staff Augmentation: Hiring IT experts from neighboring, usually with similar time zones and cultural backgrounds.
Offshore Staff Augmentation: Employing IT professionals from various countries, with a considerable time difference.
Dedicated Team Augmentation: Hiring a specialized development team with extensive experience and expertise that works dedicatedly for the organization.
Managed services enable organizations to outsource their business processes to third-party service providers for a longer period. Some of the main processes include backup recovery, cloud infrastructure maintenance, migration, security, and much more.
The managed services model is an appropriate choice if you are looking for support and maintenance for a longer period. While the MPS is controlling the outsourced functions, organizations can focus on their core business functions.
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Determining which outsourcing model is right for your organization depends on your goals and objectives. Here’s a quick table that summarizes the differences between the two:
| Aspect | Managed Services | Staff Augmentation |
| Ideal for | Long-term projects | Short-term projects with low cost |
| Control | The MSP takes control over the entire IT operations. | The staff augmentation company is responsible for offering specific resources for a decided time interval. |
| Billing | Billing is done on the basis of time spent on the project. | Billing is done on a retainer basis. |
| Risk | Company or the client. | Service Provider |
| Engagement Model | Fulltime. Service delivery is agreed upon according to Service levels. | Full-time or part-time. No service levels. |
| Cost | According to service levels and outputs. | According to availability and number of hours worked. |
| Administration | Service Provider | Client |
Now let’s understand managed services vs staff augmentation in detail.
Imagine your organization needs to expand your team. Which model will best align with your needs?
This depends on your business goals and focus area. Both staff augmentation and managed services have their virtues. Let’s explore them.
Staff augmentation is ideal for situations when you need immediate assistance or temporary support for an upcoming or ongoing project. It gives you entire control of the development process along with a strong sense of responsibility and accountability that managed services don’t offer when it comes to making crucial decisions. Ensure the resources you hire are experienced and hold extensive expertise.
Staff augmentation is the preferred option when:
If you are looking for highly experienced professionals who will take 100% responsibility for your all operations, hire a managed services provider. It is a viable option when:
Managed services and staff augmentation enable organizations to scale their operations by availing expertise from trained professionals. Thus, it is essential to assess organizational needs, project duration, and level of control to decide between managed services vs staff augmentation. Since both models have their advantages and disadvantages, it is essential to consider them to select the best outsourcing approach.
Managed services refer to outsourcing IT-related tasks such as data backup and recovery, security, and help desk support to a third-party service provider. The service provider is responsible for ensuring the smooth operation of all the processes, allowing the organization to focus on core activities.
Staff augmentation services involve hiring temporary resources to fill short-term or contractual positions in an organization. It helps the companies to partner with IT staff augmentation companies to procure the top talent to accomplish their projects.
A managed team is all about hiring an external service provider to manage specific functions or processes in an organization. Staff augmentation refers to hiring additional resources to assist the in-house teams to complete a project or address a skill gap.
Staff augmentation helps companies to hire temporary employees to supplement existing staff to handle the increased workloads. Consulting services include hiring external resources to seek their expertise and guidance for informed decision-making in the organization. To choose between staff augmentation and consulting, analyze your business goals, IT hiring needs, internal resources, and budget.
Staff augmentation refers to addressing the skill shortage in the company by hiring employees for a specific period. Staffing services means providing a panel of IT specialists who are recruited and managed externally for a particular project.
Staff augmentation and recruitment process outsourcing (RPO) differ according to their scope, hiring mode, duration, control, and integration. Some key differences are:
Staff augmentation involves hiring external staff while ROP spans across the entire recruitment process. Staff augmentation is short-term (varies according to projects or skill-specific needs), while RPO is long-term and helps with regular IT hiring needs. The client has more control over the augmented staff while the RPO outsources the complete recruitment process.
Consider the project duration, level of control, organizational needs, and budget to decide between the two. Managed services offer long-term support and manage specific functions, helping businesses to focus on core activities, while staff augmentation delivers flexibility and access to specialized skills for short-term projects or fulfill skill gaps.
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