Many European and US-based businesses have been outsourcing different processes and projects in order to improve operational efficiencies. Outsourcing allows them to employ the benefits of the digital transformation to optimize business expenses without sacrificing the quality.
It’s no surprise that the difference in the level of salaries in different countries paired with the excellent talent makes it possible for companies to outsource IT projects, as well as customer support and sales processes to such regions as Eastern Europe, South-East Asia, and South America.
Lower operational and labor costs are the driving decision-making factors for those deciding to outsource. But it’s definitely not the only one. Other most common reasons why companies outsource their business functions may include:
Increased efficiency and company focus
A lot of business owners and C-level executives leverage the opportunity to delegate management responsibilities, office operations, and HR to the outsourcing company. This way they make more time and internal resources for business growth purposes and value-adding activities.
World class talent pool
Outsourcing is the way to gain access to the globe’s best talent and global knowledge base instead of limiting yourself to the local workforce.
Risk management
Outsourcing often means sharing operational and business risks with the company providing the service which puts less weight on the business owner’s shoulders and equips them with more risk management tools.
Competitive advantage
Due to the extreme competition on the outsourcing market, companies providing these services generally try to offer the industry’s best practices to their clients. Businesses that partner with them experience the benefit of gaining access to these best practices, strategic approaches, top-level technologies and modern solutions without increasing marketing, IT, HR or administrative costs. This competitive advantage was recognized by enterprises first. Now, mid-size and even small businesses enjoy its fruits.
Cooperation between businesses and outsourcing companies is built on a few models/approaches. Project outsourcing (also known as managed services) and staff augmentation are the most popular ones. In different scenarios, both models provide the platform with quality performance, timely delivery, and long-lasting results.
Staff augmentation and project outsourcing compared
Here at WiserBrand we use both approaches to accommodate client’s needs as well as the specifics of each project. Staff augmentation or outstaffing works best for businesses who need and want to work with dedicated team members. Those could be dedicated developers, customer service specialists, sales reps, data entry specialists, designers, project managers, etc.
As a company, we make sure that the client who’s willing to choose this model understand the benefits and responsibilities that come with it.
Benefits of staff augmentation model:
You get a dedicated team. These people work with your project only. The tasks you assign to them either directly or with the help of a dedicated project manager (if you choose to have one) are their first and only priority. And if you have a big project that requires more than 160 hours of work from one type of specialists, staff augmentation is the most efficient outsourcing model to go for.
These people are integrated into your onshore team. They work as a united mechanism with your office staff. They become invested in your business not only on a professional but personal level which improves their motivation and increases their desire to achieve better results for the sake of your company’s success.
Expenses reduction. Even though it feels like it, these team members are never considered as your company’s official employees. Therefore, as a business owner, you don’t have to deal with the following issues and expenses:
Employee overhead – the cost of having a person working for you at your physical office.
Health insurance, taxes, and other benefits – the responsibility of the BPO agency.
HR expenses, onboarding and offboarding in case of high turnover, which is an issue in case of IT staff in North America.
No skill development expenses. You don’t have to take over the issues related to staff education except for the industry-specific one, thus, you save up some budget.
More flexibility. Staff augmentation is a much more flexible model than hiring people to work for a business at its physical office – you may always add more to the team whenever you feel the need for it, as well as adapt remote team members to the current business conditions.
One business model. Dedicated team members adjust to your internal business processes. Thus, you don’t have to make your onshore and offshore teams align their separate processes as you would do if you chose project outsourcing (time and material) model of cooperation with the BPO agency.
Fixed monthly fee. Yes, you have a fixed fee for staff augmentation services, just as you would pay a fixed salary to your employees.
Employee overhead – the cost of having a person working for you at your physical office.
Tech setup and basic software – should be provided by the business process outsourcing agency you cooperate with.
Health insurance, taxes, and other benefits – the responsibility of the BPO agency.
HR expenses, onboarding and offboarding in case of high turnover, which is an issue in case of IT staff in North America.
No skill development expenses. You don’t have to take over the issues related to staff education except for the industry-specific one, thus, you save up some budget.
More flexibility. Staff augmentation is a much more flexible model than hiring people to work for a business at its physical office – you may always add more to the team whenever you feel the need for it, as well as adapt remote team members to the current business conditions.
One business model. Dedicated team members adjust to your internal business processes. Thus, you don’t have to make your onshore and offshore teams align their separate processes as you would do if you chose project outsourcing (time and material) model of cooperation with the BPO agency.
Fixed monthly fee. Yes, you have a fixed fee for staff augmentation services, just as you would pay a fixed salary to your employees.
Client’s responsibilities related to staff augmentation:
Training for new specialists. Staff augmentation model implies that the client is responsible for the industry-specific training required for a team member to perform duties related to their sphere. At the same time, it’s a responsibility of a BPO agency to provide contractors who have relevant experience to be able to integrate into the project and serve as its independently functioning unit quickly.
Remote management. You still have to dedicate some time to the outstaffed employees’ management. It may be difficult at times but if you hire a really professional staff, there is no problem monitoring their work and it usually does not require many efforts from your side.
Clear tasks. Taking into account the above mentioned, you have to be crystal clear on what you want from your employees, otherwise you can get the results you never expected to see.
Always in touch. Not only you have to be crystal clear on your intentions and wants but also available on the phone, via email, or in any other way so that the team you have overseas could have a chance to direct you their concerns, needs, or just reports on the work done.
Wrap up
When doing business, you, first of all, look for the ways to optimize your efforts, time, and budget allocation. And staff outsourcing and augmentation can be great options to settle on and get professional assistance from experts you want to work with.
Denis Khorolsky
Chief Operating Officer
As a multi-skilled business development executive, I like to share my insights and the latest trends in ecommerce. I produce research-driven and clear copy to unlock new opportunities for your business and keep it competitive. If you want to connect, follow me on LinkedIn.
06/11/2018 7 min read
