According to TNation’s experience as an IT outsourcing company, many organisations have difficulty completing software development projects on time. At some point, many hit the roadblock and decide to hire a software outsourcing company alongside their more than capable in-house developers. Staff augmentation is the easiest and the most cost-effective solution. As a result, businesses opt for IT team augmentation to reach the desired outcome quickly and without a significant blow to the budget.
In today’s digitally oriented world, the foundation of business success is software. Each organisation aspires to improve their productivity. While some companies have talented in-house teams, others do not have room for employing full-time software developers. Primarily because building a super team is sometimes overwhelming and costly.
Recruiting the right team members takes time, resources and a great responsibility. Unfortunately, finding the right candidate that fulfils these needs and fits the character is often beyond the skills of a good recruiter:
- The candidate has to have the suitable skill set needed for the project
- The person selected has to be free to start working immediately
- An applicant able to adjust to the cultural values and methods of the particular firm
- The selected candidate has a salary expectation that fits the current budget
Finding the perfect candidate is even more complex in the current market when worldwide pandemics caused a sudden increase in software requirements. In addition, the availability of software developers is a global challenge, and current demand surpasses the actual number of developers. According to some predictions, Sweden alone will have a deficit of 70,000 developers and other digital specialists by 2022.
Staff Augmentation – Expanding Software Development Team
Staff augmentation, in plain words, is a sort of outsourcing where a software company provides developers expertise as external hires. As a result, the client can add staff to their teams to address existing skill gaps and complete the project. So, when is the right moment to consider if IT staff augmentation is the right solution for the company?
- Extension of Current In-house Team
The staff augmentation model is also a cost reduction benefit. In other words, whether the business is scaling the existing team or building an entirely new one, outsourcing is one of the best solutions without additional expenses.
- Particular Technical Skill Set Needs
Regardless of their talent pool, none of the well-known software development companies has a developer specialised in every technology. Extending staff with particular skills is a better option. The right candidate can speed up the process, optimise the workflow and present the best solutions.
- Flexibility with Team Member Expertise
Not all projects are long-term, and hiring in-house staff for a short-term task is not a wise business option. In comparison, the staff augmentation strategy enables any organisation to change team members according to project specifications.
- Finding Specific Skill Expertise
Skills differ from one developer to another, and it is frequently hard finding the right talent. Team augmentation can fill a void in the skill set. In turn, the company can have new team members with less expense and focus on its core business.
Reasons why Companies use Staff Augmentation – Statistics
As expected, the main reason why companies choose to partner with software outsourcing companies is cost-effectiveness. As mentioned, hiring developers full time surpasses the needs of many organisations. Therefore, their best choice is to turn to companies that provide software development services. According to Deloitte research, 70% of companies outsource only to reduce costs.
In the last couple of years, software outsourcing has experienced a surge in clients since more organisations opt for custom software. To be more specific, 64% of managers claim they need to build new digital businesses to help their companies achieve economic success.
On the other hand, organisations that already employ developers have a momentary skill gap in the company workforce. Hence they decide on hiring software development companies to help them finish specific projects. According to McKinsey global research, 58% of companies establish skill gaps as a high priority since pandemics.
On the other hand, before the pandemic, larger companies were 66% more likely to outsource their projects than small businesses. In addition, the World Economic Forum reports that average outsourcing among midsize organisations surged from 9.1% to 11.8%.
There is no doubt that outsourcing has its benefits, even for small businesses. It can, in turn, generate profit and grow revenue in the long run. So far, the USA is leading in partnering with offshore outsourcing companies across the world. In 2017 alone, the country made 84% of outsourcing deals. However, more companies from the UK and Australia choose to outsource their projects.
European Market for IT Staff Augmentation
There is no exact indication of the European market size and IT staff augmentation trends. Although, according to the research of the State of European Tech, there are 6.1 million people in Europe celebrating Programmers’ Day on September the 13th, 2021. According to some research companies, if we follow up on this information, the European software developer population is increasing by 7% each year.
Nonetheless, the demand for tech staff is constantly growing. In 2014 the European Commission prognosticated a shortage of 900,000 qualified IT workers by 2021. The fact that 58% of EU companies are experiencing problems filling vacant positions further supports the deficit in the workforce.
The largest markets are Germany, United Kingdom and France. However, the biggest importers of IT staff augmentation services are:
- United Kingdom,
Serbia, like any other country in the EU, is struggling for an IT workforce. Especially significant that it has become visible in the global IT market in the last five years. According to the latest analysis of the Statistical Office of the Republic of Serbia (SORS), the country has 64,000 people employed in the information and communication sector. This year, SORS states that computer programming is one of the highest-paid jobs in Serbia.
Due to the pandemic, the outsourcing industry is rapidly growing, especially in Europe. The number of developers increased by 400,000 within the last year. These numbers lean on the data of Eurostat, which shows that the IT industry is developing five times quicker than any other sector in Europe. By the end of the year, the IT outsourcing market is to reach 348,9 billion euros.
IT outsourcing is uncertain and changing business environments. Within it, the demand for IT experts is growing by the day. At the same time, the lack of skilled software developers is a grim reality, and nowadays, the market has to adapt to it.
TNation is a Serbian provider of experienced nearshore software developers and engineers. We complement our talent with your team. If you want to discover more about how TNation can help your project, see our blog post.