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Staff Augmentation vs Independent Contractor: Which is Best for Your Project?

We are here to give you some insights into this choice, focusing on two of the top options – staff augmentation and independent contractor. Let’s dive in!
Nov 30, 2021
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Today, there are so many options for cooperative work available to businesses, especially in the field of software development. Companies operating in this field had the easiest time adapting to WFH (work from home), and also tend to be the most open to delegating work to external specialists.

But what cooperation model is best? Some companies go for full outsourcing, and some for staff augmentation or a whole team of dedicated software developers. We are here to give you some insights into this choice, focusing on two of the top options – staff augmentation and independent contractor. Let’s dive in!

Comparing staff augmentation vs independent contractor

Both of these models are great in their own ways, and well-suited for different settings.

Staff augmentation

Staff augmentation involves hiring external specialists to add to and complete your existing team. However, unlike traditional hiring, these specialists will not make it onto your payroll and permanent staff and usually won’t be working in your office. In most cases, they are provided by a development partner and stay on the team for just as long as you need them.

Pros

  • Faster recruitment
  • Fills team skill gaps
  • Reduced material expenses
  • Flexible duration of work
  • Pulls from a large talent pool
  • Easy team upscaling/downscaling

Cons

  • Possible communication difficulties
  • Onboarding can be longer than usual
  • Complicated oversight

What is the cost of staff augmentation?

There are several popular approaches to compensation for staff augmentation services. Some companies prefer to pay based on every hour of work done, while others prefer to set a specific budget and a set amount of work that should be done. You can also find providers willing to offer more flexible and mixed cooperation models. Thus, the cost of augmentation will be based on this model, as well as other factors (including developer rates, the number of specialists, project duration, etc.)

Find dedicated software developers here

Independent contractor

This is what many people call a freelancer – an independent person offering their services on a part-time basis. Oftentimes, they offer their services on platforms like Upwork or Toptal and wait for companies to offer them a project, or proactively contact companies looking for talent on these sites. It’s not uncommon for contractors to work on several projects at the same time.

Pros

  • Usually very quick to hire
  • Stable rates
  • Easy to find the most skilled specialists
  • Relatively flexible

Cons

  • Usually not available long-term
  • Contracts are hard to enforce
  • May not be motivated to work fast
  • Harder to manage
  • Additional fees when hiring from networks

What is the cost of hiring an independent contractor?

Contractors are usually hired on the basis of a flat hourly rate or a fixed cost for a specified amount of work. For example, the average hourly rate for amateur developers on Upwork is $15-30, while more experienced specialists charge much more. Another consideration many people make is which country to hire from.

Companies tend to find that specialists in western countries have the highest rates, while those countries with a very low price of labor also tend to have fewer well-educated specialists. For these reasons, hiring from Eastern Europe (with a relatively low cost and a great talent market) is a popular choice for both contractors and team extension providers.

Is staff augmentation better than hiring a contractor?

Generally, yes. The only circumstances when a contractor is a preferred choice is when you need to hire and get work started on this very day, and when you only need one person. On the other hand, working with a partner will give you access to many specialists at once, and you might even hire a whole team that will be under your management. You will also have greater peace of mind in terms of management, since specialists from a partner will have two authorities to answer to and it will be much easier to monitor and control progress.

Is the location of your provider important?

As we have mentioned, tech and IT companies have recently become much more open to their teams working remotely, but this is not true for everyone. And not every company is ready to hire from a country on the other side of the globe, so there are geographic considerations as well. Let’s examine the 3 main options in this regard.

  • Offshore

    This is the traditional and most common approach to team augmentation, based on hiring from another company, regardless of location. You may encounter some challenges if your partner is thousands of miles away because their work hours will not line up with yours, but they can be overcome. Usually, a communication and organizational flow are established to keep both parties in sync.

  • Nearshore

    Nearshore hiring means that your partner is located in the same time zone or pretty close by (at most, with a 3-4 hour difference). Thus, most of your work hours coincide and teams can communicate and resolve issues in real time, instead of sending messages and waiting for the specialists to come online. For example, many companies hire within the Americas and within Europe.

  • In-country

    This is the strictest form of staff augmentation and also the most demanding in terms of resources. With this approach, workers join your team in the most direct sense, relocating to your country and office for the duration of the project. This approach is mostly chosen when a project demands constant face-to-face contact and physical interaction between team members.

Where can you find experts for your team and project?

We have already brushed up on some of the places where contractors reside and can be hired from, but things are a bit more complex when it comes to development partners. One basic approach is to use a targeted search in Google for the specific type of development service (by language, platform, software type, etc.) you need.

However, the results you get at the top won’t really be indicative of the best options. If you want an unbiased look at which companies have proven their excellence and earned the praise of their customers, you can check out reviews and ratings on services like Clutch and Goodfirms.

As another option, you won’t have to go anywhere, since we have everything you need at Program-Ace. Our company offers a wide variety of development services and modes of cooperation, including team augmentation, dedicated teams, and project outsourcing. We have decades of experience in creating amazing software, 3D content, and digital solutions with the experts to match.

You are welcome to check out our portfolio and contact us when you are ready to discuss cooperation.

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