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What is staff augmentation and why is it more critical than ever?

Posted by Dave Kravitt

What is staff augmentation and why is it more critical than everMore and more IT leaders recognize that the industry is dealing with an acute talent crunch. Information Week reported on a recent survey from Mulesoft suggesting that “IT and business leaders are re-examining their tech stack during the economic slowdown to prioritize solutions that deliver maximum value to employees, not complexity and burnout.” 98% of the 1,000 IT executives surveyed indicated that their technology choices are influenced by the need to find the right talent.

This talent crunch may be particularly challenging for organizations running legacy applications that require expertise in older technologies. We explore this issue in a bit more depth in our article on the retirement crisis for legacy applications running on Power i/IBM i. 

In this blog, we:

  • Outline the main strategic dilemmas that stem from an overstretched IT talent base.
  • Explore how staff augmentation offers an efficient, flexible solution.
  • Explain why staff augmentation is more than a band-aid, but potentially a long-term piece of a cost-effective IT strategy.

Why is IT staff augmentation a critical pillar of a more flexible long-term support strategy?

Of course, overburdened IT staff directly leads to one clear-cut business problem: the inability to keep up with the projects required by best practices for the organization’s applications and infrastructure. As IT projects fall further and further behind, corners are cut, and postponed projects are forgotten entirely. It is important to recognize that the full costs and risks associated with falling behind may not be manifested immediately.

For example, an under-staffed IT team can lead directly to:

  • Organizational knowledge becoming siloed into an ever-shrinking set of individual experts. One or two IT staffers with deep personal knowledge of existing systems (including their customizations and modifications) may be able to keep the organization afloat for years. But a sudden, unexpected retirement can leave the business with virtually zero knowledge of its own business-critical systems.
  • The IT team is losing its capacity for implementing new features and capabilities. As IT staff fall further and further behind on critical administrative tasks, development work for adding new, value-added capabilities to applications is likely to fall by the wayside.

    Our team has observed that this issue was exacerbated by the pandemic. As they transitioned to remote work, many IT teams focused on either keeping up with their long-term strategy (at the expense of important day-to-day IT maintenance work) or keeping up with day-to-day tactical management (with long-term feature enhancements set aside indefinitely). But as more and more organizations adjust to the new normal established by the COVID pandemic, long-term IT strategy is coming back into focus.
  • A spiral of burnout. The more IT teams are overburdened, the more likely they are to experience burnout–potentially leaving the organization and leaving the organization even more under-staffed than it was in the first place. Taking proactive steps to alleviate staff shortages is the best way to preempt burnout before it exacerbates the situation.

These challenges illustrate why present issues with an over-stretched IT staff may only be the tip of the iceberg. If your IT team is already stretched close to the breaking point, the true costs of this issue may not become apparent for years. And the growing IT talent crunch makes hiring more costly and difficult than ever. That’s precisely why staff augmentation has emerged as a central pillar of IT strategy for more and more businesses. 

Staff augmentation is simply the use of outside personnel to augment internal teams. The term of a staff augmentation contract might be temporary (ie. the length of a major project) or indefinite (for example, renewed annually depending on IT work needs). By addressing the strategic challenges outlined above, staff augmentation can offer not just a band-aid for sudden skill gaps, but a key enabler for more efficient, flexible, and cost-effective long-term IT talent usage.

Strategic Benefits of IT Staff Augmentation

Because an external staff augmentation provider will need to earn a reasonable rate, it may be easy to assume that external talent will always come at a cost premium. But, with a more holistic accounting of costs and benefits, this is not necessarily the case. While an internal hire may be cheaper on a pure salary basis, it is important to consider:

  • The direct costs and additional costs associated with hiring a new employee.
  • Employee benefits can be as high as 40% of salary.
  • Cost uncertainty in terms of future salary, benefits, etc. needed to retain the new hire.
  • Cost of severance if required skills change in the future.
  • The indirect costs related to an under-staffed IT team, are outlined above.

While these costs may be difficult to quantify directly, they clearly demonstrate why staff augmentation (even with a small additional top-line cost margin) can offer outstanding value to the prototypical IT organization. More broadly, an effective staff augmentation strategy can provide:

  1. More efficient, specialized capabilities. A specialized external resource can handle specific areas of expertise like security more efficiently, saving time while freeing up internal resources to focus on more value-added work.
  2. More formalized documentation and knowledge retention. A quality staff augmentation provider should have established processes for documenting IT work, issues, and fixes. If IT know-how is becoming increasingly confined to a small handful of individuals, external talent can be a great way to begin systematizing this organizational knowledge for the long term. A well-integrated staff augmentation plan can dramatically improve organizational resilience to unexpected staff departures.
  3. A flexible mix of services and support. A support provider should offer a variety of different subject domain experts, allowing staff augmentation to be mixed and matched with both the existing base of in-house talent and other third-party support services. For example, an organization could bring on a full or part-time external or third-party professional for day-to-day administrative work, freeing up internal staff for new development, while relying on a third-party support contract for security.

Learn More About Flexible Support and Staff Augmentation from PSGi

With a flexible, remote roster, PSGi has experience providing services, support, and staff augmentation for a variety of different manufacturing and distribution companies. We take pride in functioning as an extension of your own team. PSGi can help augment your team on larger projects, or even when a key employee is on leave or extended vacation. And longer term, we can stand ready to step in seamlessly when key personnel retire, separate, or are required elsewhere in the business.

Our recent work with Nicholas and Company, a food service distribution company in the Mountain West, provides a great example of our services in action. The client found itself facing the sudden unavailability of the sole internal resource for warehouse management software that had been extensively customized for a decade. PSGi was able to step in, stabilize the situation, and eventually pivot back to long-term enhancement projects in addition to critical maintenance and support. 

Or, if you would like to discuss your staffing challenges with the PSGi team, please reach out to us.

Read the IPG Case Study

Tags: Managed Services, Business Process Optimization, Enterprise Application Support