Offshore Staff Augmentation: An Expert Guide for Business

The shortage of skilled talents is one of the main factors that make doing business so challenging in 2023. With only 65 potential candidates available for every 100 job openings in the USA, the traditional hiring process is now longer and more expensive. Data from the US Chamber of Commerce reveals that the healthcare, transportation, accommodation, and food industries are among the most affected.

offshore team

However, this shortage is not limited to the US or any specific industry. Sweden, for example, also faces a talent gap of 80% in the IT and technology niche. To overcome this problem, most companies must explore alternative approaches to staffing. This is where offshore staff augmentation comes in.

Leveraging offshore teams enables cost savings, grants access to skilled professionals, and offers the flexibility to adapt to changing project needs. Hiring people only when you need them also protects against the uncertainty of layoffs caused by the economic downturn. For example, there have already been 1,180 rounds of tech company layoffs so far in 2023, affecting 311,628 people worldwide.

In this article, we will explore how offshore staff augmentation services effectively address talent scarcity while helping to ensure project deadlines and quality.

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What is Offshore Staff Augmentation?

Offshore staff augmentation is a business strategy that involves hiring remote workers or teams from other countries to augment and support in-house staff. In simple terms, it means outsourcing specific tasks or roles to individuals or teams located in offshore locations. These professionals work remotely and become an integral part of the client’s team, collaborating on tasks, and projects, or handling specific roles within the organization.

This approach revolves around the idea of leveraging the skills offered by different countries. For example, a US-based tech company may choose to augment its workforce with a software development team from Ukraine, known for its technical proficiency.

Benefits and Challenges of Offshore Staff Augmentation

Staff augmentation offshore outsourcing offers several benefits that can greatly improve the success of your project. However, it does have a few drawbacks. Let’s look at a bit of both here.

Benefits of Offshore Staff Augmentation

Here are some of the top benefits of this work model.

  • Access to a Global Pool of Talent

Offshore staffing offers a broader talent search beyond your local area, unlocking access to highly skilled individuals worldwide. By tapping into an international talent pool, you increase the likelihood of finding experts with specialized skills and valuable expertise. This diversity in talent brings fresh perspectives and innovative problem-solving approaches, ultimately enhancing business outcomes.

  • Cost Savings

By tapping into the global market and hiring talent from countries with lower labor costs, you can find skilled professionals at a fraction of the cost compared to local hires. You can then allocate the money saved to critical areas like research, development, and marketing. Moreover, as a temporary arrangement, it avoids long-term commitments and overhead costs associated with full-time employees.

  • Improved Productivity

With a global team working around the clock, businesses can achieve faster turnaround times and meet tight deadlines. The distributed nature of remote work also encourages employees to work autonomously, resulting in more focused and efficient output. In the quick-paced business world of today, this can give businesses a competitive edge.

  • Lower Overhead

When you hire offshore staff, you eliminate the demand for additional office space, equipment, and utilities. Offshore staffing can also reduce expenses related to employee benefits, taxes, and insurance. This can result in substantial savings for your business.

  • Scalability

A larger and more diverse talent pool provides you with the flexibility to rapidly expand your workforce as needed. Whether you face a sudden increase in workload or require specific skills for a project, this approach enables you to swiftly fill those gaps, so that your projects remain on track and deadlines are met efficiently.

Challenges of Offshore Staff Augmentation

While it is true that IT staff augmentation trends are growing, this approach also brings a unique set of challenges that you should know about. They include:

  • Communication Barriers

With teams spread across different geographical locations, language barriers can hinder effective communication leading to misunderstandings and misinterpretations, delays, and project inefficiencies. To address this challenge, businesses should prioritize clear and consistent communication channels.

  • Cross-cultural Differences

Each country has its own unique work culture and practices, which may clash with an organization’s existing processes. It is crucial to invest time and effort in understanding and adapting to the cultural nuances of the offshore team. Encouraging open dialogue and promoting cultural exchange can also help.

  • Data Security

Entrusting sensitive data and information to external teams can raise concerns about confidentiality and data breaches. To address these concerns, businesses must establish strong data security protocols. This involves implementing effective data encryption, regularly conducting security audits, and employing non-disclosure agreements (NDAs) to uphold compliance with data protection regulations.

  • Time Zone Constraints

With teams operating in different time zones, coordination and real-time communication can be challenging. However, businesses can turn this obstacle into an advantage by leveraging the time differences. For instance, organizations can assign tasks to offshore teams during their working hours, ensuring round-the-clock productivity.

  • Safeguarding Intellectual Property

Sharing proprietary knowledge and intellectual property can expose organizations to potential risks. To mitigate these risks, businesses must establish legal frameworks, such as non-compete agreements and intellectual property rights agreements. Conducting thorough due diligence and selecting reputable offshore staff augmentation companies can also help here.

How to Select an Offshore Staff Augmentation Partner?

To ensure that your offshore staff outsourcing experience is successful, you need to find the perfect partner. But how do you do that? These considerations can help you know how to hire offshore developers.

  1. Do Your Due Diligence: Research and investigate potential partners thoroughly, considering their reputation, track record, and finances. Take the time to read about their success stories and discover any red flags that might raise concerns.
  2. Check Industry Expertise: Look for a partner who understands your industry inside out. They should have a deep understanding of the specific challenges and requirements that your business faces.
  3. Technology Stack: Ensure that the offshore staff augmentation company has professionals with the skills and experience required to work with your preferred technologies or has the relevant expertise to hire them for you. This will save you time and effort in training remote team members and minimize any potential inefficiencies.
  4. Ask For Client Testimonials: Reach out to the partner’s existing or previous customers to gather insights about their experiences. Authentic clients’ testimonials can provide a realistic glimpse into what you can expect from a potential partner, allowing you to make a more informed decision.
  5. Check Pricing Models: Hiring staff offshore can be a cost-effective solution for businesses, but it is crucial to understand how the partner structures their pricing. Look for transparency and clarity in pricing models to avoid any surprises down the road.
  6. Service-level Agreements (SLAs): SLAs outline the scope of work, expected deliverables, and performance metrics. Reviewing and negotiating SLAs can help establish clear expectations and hold both parties accountable for meeting agreed-upon standards.

By adhering to these considerations, you can increase your chances of finding the perfect offshore staffing partner.

How to Choose the Right Cooperation Model for Offshore Staff Augmentation?

Before getting started with an outsourcing company, it is essential to choose a collaboration model that aligns seamlessly with your project objectives. There are three distinct models available, each varying in terms of client involvement, initial requirements, project scope, flexibility, and other pertinent factors. They are:

  1. Extended Team Model: The extended team model offers a dedicated team of professionals for your specific project. You retain complete control over their composition, workflow, and processes. They integrate closely with your in-house team to achieve shared goals.
  2. Managed Team Model: The managed team model suits businesses preferring a hands-off approach. You delegate the onboarding, management, and coordination of the offshore team to a third-party vendor. This model facilitates easy expansion and is ideal for short, quick projects.
  3. Custom Solution Development: This model enables you to construct a team tailored to your project and business needs. You have flexibility in selecting skill sets, experience levels, and cultural compatibility. It suits companies with unique project specifications or operating in niche industries requiring specialized knowledge for success.

Your choice of cooperation model will depend on your unique needs and the skillset of your in-house team. Go for the extended model if you have the resources to handle this team remotely. But if you’d rather use a hands-off approach, then the managed model is your best choice.

Not still sure how to make a choice? Newxel can help.

Tips and Tricks to Manage Staff Augmentation Process and Win Perks For Your Business

Offshore staff augmentation can be a game-changer for companies looking to scale efficiently but managing the process effectively is crucial. The following tips will show you how to manage offshore development team effectively.

  1. Coordination of the Hiring Process

Communication and coordination are key to a successful augmentation process. Ensure clear lines of communication with your offshore team, and establish regular check-ins to keep everyone on the same page.

  1. Taxes

Understand the tax implications of hiring offshore employees. Consult with legal and accounting professionals to ensure compliance with local laws and regulations.

  1. Legal Agreement and NDA

Protect your interests with a well-drafted agreement and non-disclosure agreement (NDA) to safeguard sensitive information.

  1. Set Clear Expectations

Clearly define the roles, responsibilities, and objectives for your offshore team. Set clear expectations regarding work hours, deadlines, and quality standards to avoid any misunderstandings.

  1. Continuous Feedback

Provide regular feedback to your offshore team to foster growth and improvement. This will help maintain a positive working relationship and ensure that expectations are being met.

By implementing these strategies, you can make the most of this approach and maximize the benefits.

How Can Newxel Help with Offshore Staff Augmentation?

Newxel is a full-service company that can help you unlock the full potential of offshore staffing. With our industry expertise and vast network of skilled professionals, we offer personalized staffing solutions tailored to your precise needs. Whether you need proficient IT specialists, a dedicated developers team, or expert support staff, we have you covered. In 3 to 5 weeks, we can assemble a team that perfectly aligns with your software development objectives and requirements.

Contact us today to get started.

Conclusion

In today’s competitive tech environment, local skill shortages can be a significant obstacle. Fortunately, IT staff augmentation services offer a solution to this problem. Hopefully, this article has provided you with the information you need to get started. Would you like more information on this creative approach to staffing?

Get our experts’ advice.

FAQ

What Is The Major Benefit of Offshore Staff Augmentation Compared to an In-House Team?
A major benefit of this approach is its ability to bring new skills and perspectives to your team. By leveraging professionals worldwide, you can access specialized expertise that may be unavailable locally.
What is the Difference Between Offshore Staff Augmentation and Outsourcing?
While both involve hiring external resources and their tools to complete tasks, outsourcing typically involves handing over entire projects or business processes to a third-party vendor, who handles everything from start to finish. On the other hand, offshore staff/ resource augmentation involves hiring individual professionals or teams to work directly with your in-house team to complement their skills and expertise.
How Much Does a Professional Offshore Staff Augmentation Team Cost?
The cost to build an offshore mobile development staff augmentation team varies based on team size, professionals' location, and expertise. It's, however, more cost-effective than maintaining in-house staff. Feel free to contact us if you need an estimate.
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