What Is the Difference Between Staff Augmentation and Outsourcing?

What Is the Difference Between Staff Augmentation and Outsourcing?

Staff augmentation is a business strategy involving external talent to work alongside an organization’s core team as employees or contractors. This approach expands the existing team’s capabilities and introduces flexibility and expertise, often crucial for the project’s success.

Companies often have specific, immediate needs that their core teams might not be equipped to handle. These gaps could be in technical skills, project management, or domain expertise. Staff augmentation allows organizations to quickly onboard experts in the field, ensuring that projects can grow and gain knowledge.

When the core team needs additional help, augmentation is necessary to adhere to internal processes, follow protocol, sit in scheduled meetings, and ensure that the entire internal and external team acts as one.

Outsourcing is an external function operating on a specific module, system, or workflow in the organization with minimal internal resources. Even when a product manager (or another manager) is assigned to coordinate the work of the outsourced team, most operations follow the outsourcing team’s processes and best practices.

This ensures consistent and predictable velocity since the team (or set of individuals) operates most efficiently—with tools, systems, and processes that are tried and tested.

In augmentation, blending an external team often leads to some overhead such as moving tasks back and forth between external and internal project management systems, duplicating some retro meetings across both teams, or using tools that are foreign to the team.

Factors to Consider When Choosing Between Staff Augmentation and Outsourcing

When deciding between staff augmentation and outsourcing, several factors come into play that can significantly impact the effectiveness of either approach. Understanding these factors will allow businesses to make informed decisions aligned with their goals and operational needs.

  1. Control and Integration: If maintaining a high level of control and seamless integration with internal teams is a priority, staff augmentation may be the preferred route. This model facilitates a direct collaboration between the augmented staff and the core team, allowing for better alignment with the organization’s culture and processes. Conversely, if an organization is comfortable relinquishing some control over operations in favor of efficiency, outsourcing may be beneficial.
  2. Cost Considerations: While staff augmentation typically incurs expenses related to the on-boarded talents’ salaries as well as potential overhead, outsourcing can sometimes be more cost-effective, especially for non-core functions. It’s crucial for organizations to evaluate the long-term cost implications of each model, considering not just immediate budget constraints but also quality and productivity over time.
  3. Project Duration and Scope: The length and complexity of the project should also guide the decision. For short-term projects or specific, temporary needs, staff augmentation might be more suitable, offering the flexibility to scale up or down as necessary. On the other hand, outsourcing makes sense for long-term projects where the outsourced team can take full ownership of a specific function, providing consistency and dedicated focus.
  4. Skill Requirements: Assessing specific skill requirements is also essential. If a project demands unique expertise not readily available in-house, staff augmentation allows for quick access to specialized talent. Alternatively, if the objective is to maintain operational efficiency in routine tasks with minimal disruption, outsourcing can provide access to teams with established capabilities.

By carefully considering these factors, businesses can strategically choose the approach that best aligns with their operational needs, ensuring both immediate and long-term success.

It is important to be able to distinguish the two and make business decisions based on and with the help of the right solutions. Here is the recruitment guide you need to check for a solid recruitment strategy this year.

Plus, improve your management strategy with this management guide for business leaders and executives.

Do you have questions on how to scale your business? Don’t hesitate to reach out and let us help you.


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My name is Mario Peshev, a global SME Business Advisor running digital businesses for 20 the past years.

Born in Bulgaria, Europe, I gained diverse management experience through my training work across Europe, North America, and the Arab world. With 10,000+ hours in consulting and training for organizations like SAP, VMware, CERN, I’ve dedicated a huge amount of my time to helping hundreds of SMEs growing in different stages of the business lifecycle.

My martech agency DevriX grew past 50 people and ranks as a top 10 WordPress global agency and Growth Blueprint, my advisory firm, has served 400+ SME founders and executives with monthly ongoing strategy sessions.


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