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Why Is Staff Augmentation Vital for US Companies Today?

Staff augmentation is the process of augmenting a company’s workforce using manhours and/or expertise hired from third-party service providers and its use has increased in the post-COVID-19 era. Staff augmentation can help US companies gain competitiveness amid growing inflation and labor market crunch. Expertise Accelerated (EA) leverages high-quality staff augmentation solutions to deliver quality-assured 60 percent payroll savings to US companies.

Defining Staff Augmentation in an Organizational Context

According to Law Insider,

     “Staff Augmentation means Work performed by Contractor Personnel who are employed and paid by the Contractor or a Subcontractor where Buyer may direct the Contractor Personnel’s work and the methods for completing the Work.”

In an organizational context, this implies organizations hiring human resources and/or expertise from third parties offering outsourcing or staff augmentation services.

Toptal article titled “Harnessing Global Power – What Is Staff Augmentation?” defines staff augmentation as “… the use of outside personnel on a temporary basis to augment the capacity of your organization.”

Similarly, 10bits, which is a US-based staff augmentation agency, defines it as “… a flexible and scalable outsourcing tactic that enables businesses to hire tech talent globally and manage them directly. It is a special service designed to beef up your team on an on-demand basis. This enables businesses to immediately find the best and most suitable candidates to fill in temporary positions that boost the efficiency of project development.”

This means that staff augmentation essentially has the following features:

  1. Comes from third-party service providers.
  2. Is for a defined period.
  3. Is ad hoc and temporary in nature
  4. Feeds capacity and skills deficit

Staff Augmentation in Practice

The general perception is that companies use staff augmentation when they need to overcome capacity or skills shortage. However, in practice, companies also leverage staff augmentation to achieve objectives of a tactical and strategic nature.

Some of the key reasons why staff augmentation is used are as follows:

Importing Manhours And/or Expertise

A key reason to use staff augmentation is obviously feeding the manhour or skills deficiency, which can occur for reasons, such as winning a major bid, unexpected increase in customer demand, seasonal fluctuations, etc. It is pertinent to mention here how staff augmentation gained immense relevance to the organizational context from the developments that unfolded during and after the pandemic: social distancing, layoffs, WFH, remote/virtual/teleworking, globally distributed teams, the Great Resignation, supply chain disruptions and growing inflation.

Team Expansion or Contraction

Staff augmentation is a flexible way to expand or contract the size of the workforce without committing huge amounts of organizational resources into the recruitment or layoffs. Companies augment their workforce usually by hiring third-party service providers that specialize in delivering or withdrawing human resources.

Niche Skills

There may be instances where companies face a dearth of niche skills/expertise within their existing workforce and recruiting full-time staffers with the required skills/expertise is not feasible due to financial, administrative, or time constraints. Staff augmentation can fill in the skills deficiency without the company having to take the pain of hiring a specialist.

Strategic flexibility

Although full-time employees have their own advantages, staff augmentation offer strategic flexibility to an organization. The ability to bring onboard top talent from virtually any part of the world at flexible terms and competitive cost is bring tremendous strategic advantage to an organization.

Cost Optimization

Labor market becomes more competitive as it expands beyond the national borders. This enables companies to recruit comparable talent at a relatively lower cost.

Staff Augmentation in the Post-covid-19 Era

Even though the concept of staff augmentation is not novel, its use grew phenomenally in the post COVID-19 era, simultaneous to the growth in remote and globally distributed teams.

Saffron Tech’s article titled “Why Is Staff Augmentation Becoming More Popular After COVID-19? maintains that staff augmentation is the service to hire to fill in the gap created by layoffs and resignations during and after the pandemic. Further, it is a great way to grow a business. With your workforce duly augmented, companies can cater to the increased demand in the post-COVID-19 era.

Why staff augmentation is vital for US companies today?

While staff augmentation has proven strategic advantages, the prevailing economic scenario makes it vital for US companies today since it can turn out to be instrumental for cost and process optimization. Below are some of the factors that create a compelling need for the US companies to leverage staff augmentation amid the prevailing challenges.

Inflationary Pressure

According to Trading Economics, the annual inflation rate has soared to an astonishing 9.1% in June of 2022, the highest since November of 1981, a major contributor to which is the increase in the fuel prices.

Labor crunch

According to the US Chamber of Commerce, the Great Resignation following the pandemic led to 47.4 million people quitting their jobs, which left some companies struggling with labor surplus and others deficit. Food service, including retail, and hospitality sectors have suffered quit rates exceeding 4.5 percent since November 2020. However, simultaneous to these resignations came even higher recruitment rates. Leisure and hospitality hired 1.2 million staffers against a million acquittals. However, the situation emerging from the Great Resignation was redefined into a Great reshuffle by remote work in which finance and IT sectors bear the highest potential. Companies are increasingly embracing remote or hybrid work models to attract and retain talent through remote channels.

Decelerated Economic Growth

Factors such as political instability, pandemic and the war in Ukraine has led to decelerated growth in certain parts of the world, particularly South Asia, that have abundant professional resources to offer. According to the World Bank, the South Asian region is expected to grow by just 6.6 percent in 2022 and this forecast has been revised downward by 1 percent compared to the January projection. This creates an opportunity for the US SMEs to recruit professionally superior talent at a relatively lower cost.

Expertise Accelerated as your staff augmentation partner

Expertise Accelerated (EA) – Connecticut-based outsourcing and staff augmentation specialist for accounting & finance services – is committed to delivering 60 percent quality-assured payroll savings to its US clients.

EA’s service methodology is quality-centric, and this reflects in its rigorous recruitment processes and the US CPA team training the offshore remote professionals for client-specific roles so they become a strategic fit for the client company.

Expertise Accelerated provides high-quality remote professionals for a range of accounting and finance roles to help US SMEs achieve efficiency and value in their business operations.

A word about EA CEO Haroon Jafree (CPA)

Haroon is a turnaround expert with 20+ years of experience in the US CPG industry, half of which is at the C-suite level. He has a proven track record of delivering phenomenal payroll savings to notable US CPG brands. His areas of specialization include trade spend management business process reengineering, and cost optimization, among others.

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