Why staff augmentation outsourcing is right for small and medium-size businesses.

August 28, 2018

 

 

 

For many years enterprise companies have been successfully using staff augmentation outsourcing strategies to deliver business services.  While cost savings is one of the reasons for staff augmentation, it is more commonly chosen due to the flexibility it provides to scale up and down as business requirements change and to fill staff skill shortages. This strategy is not new HP, CISCO, NetAPP, American Express and even Microsoft utilise outsourced solutions.

 

What is staff augmentation outsourcing?

 

Staff augmentation outsourcing is where the outsource partner is handling the recruitment process, office space, payroll and HR, while the client remains in control of the management of the resource.

 

Advantages of staff augmentation outsourcing

 

In June 2018, The Independent reported nine in 10 UK employers struggle to recruit the skilled staff they need. The reasons behind the skill shortages are many and complex, forcing companies to look at new and innovative recruitment strategies. Of course, those prove to be time consuming and very costly, leading to businesses turning their attention to outsourcing companies that can solve the challenge for them quickly and cost efficiently.

 

Total Jobs in March 2018 reported that 62% of companies in the UK are using temporary or contract workers to fill skills gap shortages. Although this could be a short term solution, it does not remove the added cost of maintaining this type of work force.

 

With the skill shortage challenges being faced in the UK and other major European countries, many small and medium sized companies have changed their views on having staff, based in their own location. Many have turned to Nearshore outsourcing partners to utilise staff augmentation models in order to remain competitive and flexible.

 

Cost Savings

 

The current average salary in the UK is £27,600 per annum. The true cost of an employee is be between 1.5 and 1.8 times this, based on the company benefits provided to the employee, with the added cost of office space, HR, payroll etc.

 

Nearshoring staff to locations such as Bulgaria offers not only highly talented work force but also huge flexibility, cost efficiency and savings.

 

Utilising a staff augmentation partner delivers not only substantial cost savings but also the time efficiency from the recruitment process to maintaining and managing the right amount of work force.

 

Your partner will:

  • Source the right candidates based on agreed criteria

  • Perform all the pre-screening and interview process

  • Provide you with candidates for you to make the final decision on

  • Handle all the offer and enrollment procedure

  • Manage the payroll

  • Provide the office space for them to work in

  • Handle local employment law requirements

 

Maintaining Control

 

Unlike other outsourcing models, staff augmentation outsourcing allows you to remain in control. While you Nearshore partner, manages the recruitment and HR function responsibilities, you are responsible for managing the employees work. 

 

Today with so many collaboration tools such as Trello, SlackAsana or simply Skype and employee engagement tools such as VibeCatch, Honestly, Gtmhub or TINYpulse  managing remote workers has become increasingly easy.

 

Fresh Ideas & Perspective

 

New ideas and perspective from a person not involved in day to day office politics is a huge advantage. These employees see a different perspective and can contribute overall to the company culture and direction, given the right support and management.

 

Flexibility

 

Whether you are trying to solve a skills shortage, launching into a new market, counteracting attrition or creating an incubation team for a new project, staff augmentation outsourcing can provide the flexibility and speed based on length of service required for the project or business need.

 

Nearshoring

 

One of the biggest benefits to nearshoring is geographical proximity. Being close to your partner makes it easier for you or your employee to travel and integrate into the team better. Being close to the team also allows you to have more control over the process which improves  collaboration and facilitates faster response times than traditional offshoring.

 

Benefits for Small & Medium Size Businesses

 

Whether you are a startup or a growing business outsourcing functions can provide you with benefits such as: 

  • Controlling capital costs

  • Increasing efficiency

  • Reducing labour costs

  • Start new projects or incubation teams quickly

  • Reducing risk

  • Focus on core business

  • Leveling the playing field

  • Easing the process of market expansion

 

Other Outsourcing Models

 

Managed Service

 

The managed service model is an outsourcing model with the aim of driving operational efficiencies and delivering cost saving. The service provider is responsible for delivering the whole service based on agreed terms and success is determined by agreed performance and quality results. 

 

Project-based outsourcing

 

Project based outsourcing is, as the name suggests, where you outsource the entire project. Your partner is responsible end to end to deliver the entire service or project until the agreed result or deliverable is received.

 

Out-tasking

 

Out-tasking is transferring a specific task, service or process to an outsourcing partner. This works well where the business has a specific process that they want to maintain control over and utilise a partner to perform the process driving efficiency and reducing costs.

 

About MGSDPro
 
MGSD Pro specialises in providing outsourced/nearshore business development, customer service and back office teams, specifically designed with you, to fit your goals, objectives and culture. Supporting small, medium and enterprise businesses to drive growth, deliver efficiencies and increase operating performance.  From launching a team in Europe, extending your operation or solving your recruitment skill challenges we can tailor a solution to deliver your requirements.

 

 

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