Why Companies Are Using Digital Staff Augmentation

Why Companies Are Using Digital Staff Augmentation

Businesses are in a pandemic-era staffing dilemma: They urgently need skilled talent to help digitize operations and shift offerings to stay competitive. But they’re also cutting back staff and freezing hiring to ride out the recession. So, if you need help but can’t hire anyone, what do you do?

The traditional answer was to call a staffing agency for short-term help. But the staff augmentation model was developed decades ago when business was predictable, change happened slowly, and pockets were deeper—a world opposite of today. 

Changing times require an updated solution that allows companies to access quality talent quickly and cost-effectively. 

Here’s how growth-focused businesses are doing it now.

What is staff augmentation?

Let’s begin by reviewing what staff augmentation is: an outsourcing model where a business fills skills gaps with external talent. Businesses engage talent on a project basis to do things like ramp up and down quickly during volume spikes and access niche skills to support special initiatives.

Staff augmentation is often used in IT staffing. But it’s becoming increasingly popular across all functions as skills become more specialized and businesses seek to operate with greater agility.

Why traditional staff augmentation falls short

The traditional staff augmentation process usually goes something like this: identify a project need, call a staffing agency, wait long periods for them to serve up a shortlist of talent, interview the candidates, onboard the top choice and then, finally, start the project. It’s a time-consuming process that takes three weeks on average—longer if you’re looking for in-demand and niche skills. 

Before the pandemic hit, a majority (61%) of hiring managers said they were dissatisfied with their staffing agencies. Mostly due to cost, talent quality, and time to fill. 

Businesses feel their staffing agency shortcomings more acutely now as survival is tied to agility. Being agile requires teams to have the right people at the right time to complete critical projects faster and pivot swiftly when demands change. What’s more, they must do it now with a tighter budget.

Operating in an unpredictable world also underscores how the strength of a company’s agility, and therefore its resilience, is heavily influenced by how far along a company is in its digital transformation (DT) initiatives. When the country began closing up months ago, the more digitized companies were better prepared to transform onsite operations to remote, change business models on the fly, and adjust products and services to meet customer needs.

There’s a lot of work ahead. Work, by the way, that must be done remotely while offices remain closed. The reality is, remote work may be preferred for the long-haul as workplace safety concerns may severely limit access to corporate offices. Another sticking point for staffing agencies whose talent is set up to work onsite.

The traditional staff augmentation model may be falling short, but an updated talent solution exists—one that’s seeing rapid adoption as it enables hiring managers to avoid staffing agency shortcomings by going directly to the talent.

Boost efficiencies by removing the staffing middleman

Before the pandemic, a growing number of businesses filled talent gaps by direct-sourcing independent professionals online. Technological advances in online talent platforms, such as Upwork, make the process easier and faster, enabling hiring managers to act as their own staffing agency.

Companies benefit by using talent clouds

A major advantage of online talent platforms is they cut out the staffing middleman, which helps businesses stretch budgets and improve talent quality. 

What’s more, the benefits are scalable. An Oxford study of Fortune 500s found sourcing talent through online platforms resulted in more accurate matches, higher quality work, and significantly lower costs than staffing agencies.

The better quality matches are attributed to the freedom online platforms provide. Hiring managers usually make better talent choices as they know a project’s requirements better than an outside agency. And hiring managers can select from a larger, even global, talent pool as independent talent work remotely, and are thus not limited by geography. Whereas staffing agencies are usually confined to a smaller, local talent pool.

Why hiring managers prefer independent talent vs. staffing firm

Augmenting staff through online platforms enable businesses to affordably create infinite capacity when they need it. And scale back when they don’t. Not just in terms of individual skills, but also for entire functions, as Nasdaq did to build out its award-winning social media capabilities.

It’s easy to think that self-sourcing talent means more work for hiring managers, but digitization increases efficiencies. The same Oxford study found that compared to staffing agencies, online platforms provide better service and require less work by hiring managers.

Online talent solutions are so efficient and cost-effective that pre-COVID-19, 84% of teams said without independent talent, projects would be delayed, canceled, or extended. Now due to COVID-19, nearly half (47%) of managers intend to work with independent talent even more.

Today’s workforce must be remote-ready

Facing threats of a second COVID outbreak, no one knows when the economy will reopen or once it does, how many employees will feel comfortable returning to their offices. The longer buildings remain closed, the more businesses question whether they need centralized workplaces at all. 

These last few months working from home proved that remote work works. 

It works so well that several businesses adopted a hybrid model where some positions will remain virtual. Others, including Twitter, Shopify, and Upwork, transitioned to a remote-first model where employees can work from home permanently.

Increasingly, the future workplace is virtual. If more employees are working remotely, it makes sense that the people supporting them work remotely too. 

Independent professionals are the workforce of the future. They don’t just provide the skill sets and experience teams require, but they’re also set up to operate virtually and are experienced at working with distributed teams.

[See also: How Thumbtack Lowers Costs by 5X with Independent Talent]

Flexible is agile

During a time when it seems the world is functioning with one arm tied behind its back, teams can still operate at full capacity. More hiring managers are viewing their workforce—internal and external—holistically, so that employees are doing work that best optimizes their skills and getting the right help on time with everything else by sourcing independent talent.

Demand for this agile model is so serious that Upwork teamed with Citrix, the global digital workspace leader, to create a talent solution that enables Upwork customers, who use the Citrix back-end, to access independent talent through their secure company networks. Considering that 99% of Fortune 500s and 400,000 businesses utilize Citrix, the partnership may indicate a growing trend that flexible talent is how growth-minded businesses get stuff done.

Projects related to this article:
No items found.

Author Spotlight

Why Companies Are Using Digital Staff Augmentation
Brenda Do

Brenda Do is a direct-response copywriter who loves to create content that helps businesses engage their target audience—whether that’s through enticing packaging copy to a painstakingly researched thought leadership piece. Brenda is the author of "It's Okay Not to Know"—a book helping kids grow up confident and compassionate.

Get This Article as a PDF

For easy printing, reading, and sharing.

Download PDF

Latest articles

X Icon