Staff Augmentation Vs. Managed Services: What's the Difference?
Deep dive into the pros and cons of staff augmentation & managed services and determine the right outsourcing model for your team.
The demand for IT experts has been roughly increasing over the years. Meanwhile, the world of IT industry is facing a rising scarcity of software developers. It is projected that the global tech talent gap will soon reach 85.2 million by 2030, which means tracking down the right IT talent with specialized skills, experience, and affordable rates is getting more and more challenging over time.
Soon, businesses in tech will run out of resources for hiring full-time employees and building and maintaining their own teams of in-house staff. They may suffer from the internal shortage of tech talent. Fortunately, there is still a way out for such a suffocating scenario. Most companies cope with talent shortages by outsourcing their complete projects to the full-fledged workforce from service firms. Meanwhile, a majority take another path to complement their in-house team with additional manpower provided by an external agency whose forte is in IT staff or team augmentation - which is one of the most popular managed services.
Briefly, the IT staff augmentation service is a sort of staffing outsourcing solution that allows a company or project to fill its deficit of skilled professionals. In this outsourcing model, businesses hire external talent as augmented staff working along with their existing teams. As the team extension, these additional members take part in different stages in the entire development process as per the project requirements.
In contrast to project outsourcing, in which the dedicated team is completely assembled and managed by the service provider, staff augmentation enables you to personally pick and decide on each and every candidate in the same way you select members for your in-house team.
Like in other managed services, you, as the service users, can decide whether to travel overseas for outstaffing (offshore) or ship their demands of IT professionals to the local pool (Nearshore or onshore). In reality, perhaps you might want to go offshore for outsourced staff or teams due to many benefits, and we will find out in the following section.
With many IT-specific outsourcing destinations dispersing across the globe, business owners like you can enjoy the privilege of picking and choosing the most appropriate tech hub for staff outsourcing. The decision is often made based on the many benefits, namely considerable cost advantage or abundance of the IT workforce, that a region or country can offer compared to the local market.
Standing at the crossroads of so many good choices available, more and more business owners choose staff augmentation services in Vietnam but not anywhere else. Why outsource to Vietnam? We won’t keep you waiting any longer; let’s take a tour through all the surprising benefits of utilizing staffing services in Vietnam – which is recognized as the new IT outsourcing powerhouse of the world.
First and foremost, choosing the augmented staffing model over traditional hiring methods benefits you with a larger, more comprehensive talent pool. You are no longer limited to recruiting within your city or country. The outsourcing service provider or staff augmentation company will do the job of hunting down the right talent for you based on the requirements of your specific project.
It is even better when it comes to staffing in Vietnam since the country boasts a wealthy and sustainable pool of software developers and tech talent. In particular, there are currently over 430,000 experienced professionals and more than a million individuals working in the ICT industry of Vietnam. Each year, Vietnamese academies and institutions generate more than 50,000 new tech graduates, enriching the IT workforce. Hence, you can have peace of mind when staffing your project in Vietnam, knowing your problem of software engineer shortage is no longer a big deal.
In addition to the quantity, the Vietnamese workforce is also renowned for its excellence in tech industry expertise, proficiency in foreign languages (typically English), and a sense of advanced technologies (e.g., artificial intelligence, machine learning, blockchain, etc.).
A core team of full-time/internal employees usually incurs different types of costs, ranging from staff wages, equipment, office space rental, and tax expenses to employee benefits (E.g., health insurance, paid leaves, bonuses, training costs, etc.). The total spending can be much or less, depending on each particular project or business size. But fortunately, the staff augmentation model enables you to shift those operational and infrastructural costs to the service provider.
Additionally, since you do not have to bear the costs of hiring permanent staff, you can save quite a considerable amount of money to invest in more value-added areas. In the meantime, traditional hiring methods are not only costly but also time-consuming. It requires you to post job ads, screen through CVs, conduct interviews, and run background checks - all of which take up valuable resources that can be used for other, more important business goals.
Thanks to the cost disparity, this advantage can be doubled when you leverage the IT staff augmentation recruits in Vietnam, where doing business and running a tech team can be much more cost-effective than in other locations. The development cost in Vietnam is estimated to be 90%, 50%, and 30% lower than in the U.S., India, and China, respectively.
Moreover, Vietnam is topping the global IT labor market thanks to its cost savings derived from the competitive rates compared to other tech hubs. In particular, the average rate of a Vietnamese software developer ranges from $15 to $45 per hour, which is appealing enough for business owners and investors to consider. Guess what? You can maximize cost effectiveness twice when you leverage staff augmentation services and when you outsource to Vietnam.
Next, staff augmentation presents the flexibility to scale up or down your team as required on a project basis or the firm’s ability. The best thing here is that you do not need to expand the number of in-house employees. Instead, you can request the vendor to offer additional resources whenever needed.
This facilitates a quick response to sudden changes in project timelines, requirements, budget capacity, and business objectives or in case of unforeseen circumstances. For example, when there is a need for short-term hiring, you can always ramp up with more temporary staff to supplement your current team and fill the skill gaps. Afterward, you can cut down on the temporary hires any time the project comes to an end, or you can no longer entail additional hands. This way, businesses do not worry about overstaffing or bearing overhead costs, allowing parent firms to retain control over their team composition per project basis.
When utilizing staff outsourcing services in Vietnam, you can get all the benefits of staff augmentation as you are promised elsewhere but at an even higher level. This is because staffing outsourcing is an all-inclusive solution that not only helps you supplement your team with the required skills but also offers a series of project management, consultation, and support services to ensure your success. Vietnam is one of the ideal destinations for carrying out your staff outsourcing plan.
Vietnam has a great advantage over other rivals in the labor market of its youthful and dynamic workforce, who are more willing to learn and challenge themselves with projects that require domain expertise and experience rather than undertaking traditional jobs.
Moreover, Vietnamese engineers are known for their proactive working attitude and a strong sense of responsibility. They are familiar with project management tools, collaboration tools, and methodologies, so they can mingle well with foreign members and their company culture. You certainly can expect higher commitment and productivity, further resulting in faster time to market and improved project management.
A big plus about Vietnamese talent is that they are open-minded and always stay updated with the latest technology trends so as to provide recommendations on how the application can be further improved. Moreover, they tend to deliver more than what is required and are always willing to lend a hand whenever needed. That is the privilege you get when hiring and working with developers from Vietnam. Also, the staff augmentation firms endorse efficiency by implementing flexible working platforms and practices that encourage open communication, collaboration, and knowledge-sharing among team members.
In the age of globalization, clear communication in English is crucial, especially for the success of an outsourced project development process. Businesses always have high expectations for a talented team they hire across the sea, not only in terms of skill sets or experience but also of English proficiency. Therefore, such criteria are carried all the way to Vietnam as well when it comes to outsourcing software development or staff augmentation services.
Fortunately, Vietnam makes it a natural fit for global businesses, especially those from English-speaking countries like the U.S., Australia, Singapore, etc. Perhaps you might not know that Vietnam was ranked 13th (out of 23) in Asia and 58th (out of 113) worldwide, according to the EF Education First English Proficiency Index.
Reliable staff augmentation providers, like Orient Software, can ensure that each and every member coming out from our hiring process has an excellent command of English and can communicate seamlessly with clients and their teams from around the world. Also, our augmented personnel are immersing themselves in English-speaking work environments and cultures, so they have no difficulty dealing with cultural diversity or language barriers. So, you are promised seamless collaboration and a smooth working relationship. You can always count on our talent for timely updates about project execution progress, as well as honest feedback and recommendations.
For many specialized projects, particularly those on large scales, in-house teams usually find themselves overwhelmed with spikes in workloads and wearing multiple hats. If this goes on, sooner or later, it could disrupt the entire project, leading to delays and budget overruns. Eventually, team members face burnout and decreased productivity.
At this point, staff augmentation not only brings in diverse skills and resources but also fills in and takes over or shares some of the existing responsibilities of your staff. This is truly a relief to in-house teams. With support from extended hands, you can reduce the pressure on your members as well as improve operational efficiency, paving the way for completing the project successfully.
Staff augmentation services help to lower risks. How can? Since you entrust a service provider to handle the staffing processes of your project, you may worry less about project-related risks, typically turnover.
Just imagine what it might be like when key members leave your team at the critical moment of delivery or upon completion. When the project is on track, any change in team composition or headcounts - for example, employees quitting in the middle of a project - may disrupt the flow, leave you short-handed, and result in delays.
With a force of augmented staff around until the project comes to an end, you do not have to worry about talent attrition or critical skill gaps. Right when you need additional resources, you can make requests with staff augmentation vendors to replace staff or scale up your team as planned without putting the project on hold for even a single day.
Declared an “IT outsourcing hotspot”, Vietnam has seized a good reputation for provisioning quality services in the IT industry. According to the Vietnam IT Market Report by TopDev in 2021, Vietnam was ranked 5th in the best global service locations, 13th in the top 50 digital countries, and 18th in the top 100 IT outsourcing destinations in the world.
Are these indexes persuasive enough to you? In addition to the reputable quality services, the Vietnamese government has promulgated a number of policies to encourage abroad businesses to invest in the country, giving these companies and corporations several privileged rights and perks, such as a reduced corporate income tax rate and land lease incentives.
Why Orient Software but not any other staff augmentation companies in Vietnam? Plenty of good reasons.
Would you like to work with a broad-spectrum service provider whose expertise and services range from staff augmentation to custom software development, QA testing, and many more? Yes, that’s us, Orient Software.
Nearly two decades of experience, a pool of 350+ talent, a good reputation, a track record of 200+ successful projects, and a collection of awards and trophies acknowledged by the tech industry. We are currently a leading software outsourcing company based in Vietnam that is globally recognized for quality and reliability.
All things considered, Orient Software is your best choice for staff augmentation services.
We can tailor-make a cost-effective solution for your specific projects. Within a few weeks, our recruitment team can wrap up and deliver a squad of tech talent hand-picked based on your specifications and project requirements. Our short-listed candidates are surely well-equipped with the latest skill sets and experience you desire.
Do not let limited resources hinder your success. Instead, let us be your extended team and empower you all the way toward greatness. Contact us today and walk away with a team of competent and committed talent at your disposal.
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