Is IT Staff Augmentation the Solution for Companies Facing Tech Talent Layoffs?


There has been a growing increase in tech layoffs and workforce reduction since 2022. Big name companies like Google, Amazon, Microsoft, LinkedIn, Meta, and Salesforce have downsized their employee workforce in preparation for the economic recession. A Bloomberg report highlights that 70% of surveyed economists predict a recession in 2023. To survive the economic downturn, many businesses have implemented cost-cutting measures, including hiring freezes, layoffs, and rescinding job offers.

According to TechCrunch, over 168,243 employees have been laid off so far in 2023. With the recent trend of workforce reduction, many companies are looking to hire contractors instead of full-time employees. This will help businesses save costs by forgoing employee benefits like paid time off, health insurance, stocks, and other competitive incentives. In the wake of the pandemic and amidst the ongoing job market fluctuations, it is difficult to hire tech talent with the right skill set at a reasonable cost. Outsourcing has proven to be a remarkable solution for companies who want to save costs while maintaining high-quality service delivery. Employers have the opportunity to outsource to IT staff augmentation companies like Devsu, which has over a decade of experience working on projects for tech companies. Leveraging staff augmentation services will help companies navigate this economic downturn and let go of expensive internal talent and low performers.

What is Staff Augmentation?

Staff Augmentation is the hiring of external workers to fill the talent gap in an organization on a contractual basis to meet business needs. The IT staff augmentation market is projected to increase to multimillion USD by 2029. Staff augmentation is one of the easiest and most affordable ways for companies to extend their team with world-class talent from nearshore staff augmentation services, speeding up projects and streamlining workflows. Many businesses struggle with tech staff shortages while spending excessive time on the recruitment process. With IT staff augmentation, companies can concentrate on core business objectives and expand their team with the talent they need from staffing agencies.

The primary goal of staff augmentation is to fill positions quickly for long or short-term projects. For instance, if your company is building a new software product and you find yourself in need of a project manager, software developer, full stack developer, and UI/UX specialist, staff augmentation can be a lifesaver. By hiring individuals who meet the requirements of these roles, you not only fill your talent gaps but also significantly boost your company's productivity.

Opting to supplement your team through the staff augmentation model allows you to access a broad pool of tech experts who can serve as guides for your software project at a cost-effective rate. Importantly, it can help you scale your team according to project needs.

What Is The Difference Between Staff Augmentation vs. Project Outsourcing

Staff Augmentation allows companies to hire external personnel to work on projects internally, helping manage workload and increase project speed. Project Outsourcing, on the other hand, involves granting autonomy to outsourcing companies to work on projects and deliver results. In this case, project management and accountability are handed over to the outsourcing company. The main difference between staff augmentation and project outsourcing lies in who is responsible for the results and projects. While staff augmentation involves the company bringing in skilled individuals to work on projects internally, project outsourcing allows companies to entrust the project to a third party for result management.

Companies that need to launch digital products quickly and boost their team to meet up to competing demands can use the staff augmentation model. With this approach, businesses can secure highly skilled software engineers that might be difficult to hire in the market. Most times, the need to hire tech talent can arise at any stage of development, and this model gives you the opportunity to staff your company at will and keep up with the competition in the industry.

In project outsourcing, you delegate the entirety of a project to an external team, thereby eliminating the need to handle administrative and project management tasks in-house. This model is broader than staff augmentation because it encompasses all aspects of a project, not just addressing a specific need. The outsourcing company assumes responsibility for the project's outcomes, challenges, and the quality of the final product. Businesses seeking to develop new features, products, or services that need expertise beyond their internal capability should go for the project outsourcing model.

If considering project outsourcing, it's recommended to partner with a team that employs an agile methodology. This approach ensures continuous feedback and iteration, fostering rapid project progression.

Benefits of IT Staff Augmentation

In light of the recent surge in tech layoffs, staff augmentation is transforming the way businesses expand their teams and hire in 2023 to fill talent gaps. There are numerous advantages to staff augmentation, like increasing profitability for businesses and accessing the right skill set. However, if software is a core part of your business, you may have one individual with a specialized skill set or a few individuals filling different roles. In some instances, you might still encounter technical roadblocks during the development phase of your project. Hiring to address these issues is crucial and can save significant time.

Let's explore some of the key benefits of staff augmentation:

Access a Pool of Tech Talent

By 2023, it's projected that 71% of the US workforce will be either fully remote or hybrid workers. This trend has significantly influenced staff augmentation, with most projects now carried out remotely. This has not only expanded the pool of potential talent, but also broken down geographical barriers, making it easier than ever for businesses to source the skills they need.

The staff augmentation model allows you to hire a skilled software engineer or project manager on demand for your project. Consequently, it enables the seamless onboarding of tech teams with your existing IT team. Devsu has a team of over 200 technology professionals who can expand your team and help with existing or new software projects. Accessing various talents can improve the quality of your product and help your scale up or down according to business needs.

The collaboration of your internal team with the augmented team allows your in-house staff to grow and learn from other experts in the field, exposing them to unique ideas and a faster approach to work.

Save Cost

A great way to cut down on hiring is by expanding your team with the necessary skill set. Many companies spend a large portion of their budget on recruitment processes and staff retention. The inclusion of employee benefits and utilities can consume a lot of resources that could be allocated to other critical company expenses. Utilizing the staff augmentation model can help your company reduce the need to hire permanent employees, enabling you to focus more on developing your product. Expenses such as work tools, health insurance, and vacation time will be covered by the outsourcing company, and payment will only be made for the period of time worked on the project.

High Flexibility & Productivity

Businesses can scale their teams easily with the augmentation approach. As your software development project progresses, you might need to add or remove more tech talent to the team, depending on the phase of the project. Staff augmentation gives you the opportunity to hire temporarily or cover for an employee who may be on leave. This flexibility of hiring when the need arises, can be a great boost to business outcomes.

Save Time Spent on Recruitment Process

A significant advantage of expanding your team using the augmentation model is saving time spent on the lengthy recruitment process. Your human resources team will save cost and time when the staff augmentation company handles the burden of sourcing, interviewing, and training potential candidates. These companies have access to the tech talent you need and can provide you with these skill sets fast. Some well-known staff augmentation companies provide hires in 14 days, while others take longer.

Data Protection

When you partner with a reputable staff augmentation company for your projects, your data can be secured through a Non-Disclosure Agreement (NDA) signed at the onset of the contract. This ensures that both parties understand and commit to preserving the confidentiality of shared information. This approach is typically safer than using freelancers who may not be as inclined to sign an NDA or could potentially breach the agreement due to unforeseen circumstances. Most staff augmentation companies have robust procedures and processes in place specifically designed to protect their clients' data from breaches, ensuring your sensitive information remains secure throughout the project duration.

Safe Solution In The Midst Of Layoffs

The trend of layoffs in 2023 has proven that it can be demoralizing to employees and alter the structures of the company. Employees become unproductive with the fear of workforce cuts and some might even resign from the company, affecting project continuity. Augmentation can help companies maintain innovation at a good pace by hiring personnel at different intervals.

It also offers a cost-saving measure during economic recessions, allowing companies to expand their teams easily on a contractual basis and at a reduced cost. This method ensures the continuity of projects and maintains employee morale, positioning your company for resilience and growth even during challenging times.

Project Deadlines

The technological evolution of the world can make it challenging for companies to keep up with trends, especially during economic fluctuations. The staff augmentation model can serve as a valuable resource for companies that want to keep pace with this fast-moving industry. It allows them to release features based on customer demands, meet tight project deadlines, and ensure that products are launched swiftly to the market.

In conclusion, whether you're looking to scale your team, improve flexibility, cut costs, or enhance efficiency, staff augmentation offers substantial benefits to you as an employer. Amidst the tech layoffs in 2023, it's crucial to find ways to keep your business ahead and avoid stagnation due to a lack of skilled talent and a competent tech team. Having a resourceful staff augmentation company that can readily provide you with top-notch talent can significantly improve your business outcomes.

Devsu, your Technology Partner

Devsu is a staff augmentation company with over 10 years of experience in helping businesses scale up their products and deliver high-quality software. If you're interested in expanding your team with top-tier tech talent that aligns with your time zone, contact us today to get started.


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