At Expertise Accelerated, we have often encountered the question of staff augmentation vs. consulting services over the years and whether clients should opt for one or the other. Many clients do not know if they are the same or entirely different services.
Such a question is, of course, not so easily answered. There are many variables to consider, and each service has strengths and weaknesses. So, we figured it was high time somebody sat down and broke down the two services for any curious minds out there. Words like staff augmentation and consulting services get thrown around in the business community quite often, but relatively few people understand precisely what separates the two.
Let’s remedy that, shall we?
Table of Contents
What Are Staff Augmentation Services?
Staff augmentation services are a staffing solution businesses can leverage to fill in professional skill gaps and staffing needs without starting a new hiring cycle and spending 20-40 days finding the right candidate.
What staff augmentation services provide is access. Access to professionals who will be augmented into the business’ existing staff and help out as needed. Staff augmentation is typically a short-term arrangement but can also be long-term. On top of that, staff augmentation services typically operate offshore and are thus very much like outsourcing. The key difference is that in staff augmentation, you pay a firm to find you the right person for the job and hire them directly on your team rather than hand over your workload to the firm itself.
More often than not, you opt for staff augmentation when you have a temporary staff requirement or want to save costs and hand over everyday tasks to a remote professional. Since they are hired directly to your team, they are on your business’s payroll and are functionally entirely your employees, just managed and administrated by a third-party mediator firm.
What Are Consulting Services?
Consulting services are like staff augmentation but more of a niche, specialized version. While with staff augmentation, you are onboarding professionals to do some tasks for you for a project or just as a regular duty, consulting is more concerned with decision-making. As the word implies, consulting services provide access to specialists and experts in a given field whose knowledge and experience businesses can leverage to help in decision-making.
Consulting services are like a big red button you press when you need good advice regarding a project or business move, and they usually charge on a per-project basis or hourly basis. You could even hire a consultant for just two hours to help you plan a project decision and then let them go, which would be considered the norm.
Staff Augmentation vs. Consulting Services
Staff augmentation services provide professionals who work for you, while consulting services provide professionals who work with you.
Accounting is a great business function to demonstrate staff augmentation vs. consulting. When you hire an accountant through staff augmentation services, you are onboarding a professional to do the daily accounting tasks such as managing accounts payable and receivables, bookkeeping, financial statement analysis, etc.
When you hire an accounting consultant, however, you are getting a professional who is a veteran accountant with the special expertise you require. Say you run a clothing store, and your profits have steadily declined. In this case, rather than get an accounting professional onboard to manage the work, you contact a consulting service to find a professional accountant familiar with the clothing industry. They can help strategize and plan a project to build the business back up and get revenue back on track.
Staff Augmentation vs. Consulting Services: More Similar Than Different
There is also the case where a business may onboard a consultant onto their team through a staff augmentation services provider, which muddies the discussion a bit. Basically, the two services are not entirely different business models, but rather, consulting services come under the umbrella of staff augmentation services. Take a fractional CFO, for example, someone who can handle the day-to-day accounting workload, give financial advice and help in strategic decision-making.
The difference is usually a discussion topic because not many firms provide consulting experts through staff augmentation. While it is possible, most staff augmentation firms provide generalized services to fill skill gaps. Consultancy firms have high-level professionals like CFOs and highly reputable lawyers who can bring a new set of eyes to the team and help the higher-ups with management and planning.
Hybrid firms also provide consultancy and staff augmentation services depending on the client’s needs. So, as you can see, the question is not about staff augmentation vs. consulting but rather when it is appropriate to leverage one over the other.
Leveraging Staff Augmentation vs. Consulting Services
How and When to Leverage Staff Augmentation Services
When You Need Affordable Professionals
According to Forbes, small businesses in the US account for 99.9% of businesses, and 80% of have no employees, while 16% have a team of 1-19.
A core reason that so many businesses do not have employees is that they cannot bear the cost of hiring a full-time professional. Just look at the average salary of an IT programmer or accountant, and you will find that some of these professionals’ yearly salaries exceed what some small businesses make in a year.
If a small business owner in a similar situation where you need a regular professional employee like a bookkeeper or supply chain manager but cannot afford to hire one in-house, staff augmentation or outsourcing is the best choice. You can achieve big savings on professionals while receiving professional help in matters that demand that level of investment if the business is to survive in the long term.
When You Need Staff Urgently
If your business has reached a growth period, with sales skyrocketing and the workload consequently doubling, if not tripling, then staff augmentation services are the perfect solution to this issue. You can simply call a service provider of choice, set up terms for temporary staffing, and have as many helping hands as you need the very next day. This is especially potent for e-commerce business owners since their workload can drastically rise and fall at a moment’s notice, and having emergency staff at your fingertips can be a lifesaver.
Complementing In-House Team:
Sometimes, your in-house team may have the core skills required for a project, but you need additional expertise to augment their capabilities. Staff augmentation can help strengthen your internal team for specific tasks or projects. For example, you may launch a new website but need someone well-versed in a specific programming language to help support your existing IT function. Or maybe it’s tax season, and your regular bookkeeper needs a CPA to support them and assist with tax filing. Any number of such scenarios can pop up over regular business, and staff augmentation services are the quickest and most affordable way to get the job done without disruptions.
How and When to Leverage Consulting Services
Planning and Strategic Decision-Making
The main instance where you will benefit the most from consulting services is when you are planning and strategizing for the business’s future. This could entail any number of strategic moves, such as launching a new project, entering a new market, developing a new product, etc.
There are a number of different types of consultants as well, so you could hire a project management consulting service for a new project or a financial consulting service if you need opinions on how to spend your resources best. A marketing consultant can advise on whether entering a new market is a good idea and, if so, how to do the job best. In all of these cases, consulting services can be the voice of reason that might save you a lot of trouble from a bad decision or give you confidence in a good decision.
In the face of unexpected crises, such as natural disasters, cybersecurity breaches, or public relations crises, consulting services can help organizations develop crisis management plans and strategies to mitigate damage and recover effectively.
Maybe your business unintentionally offended some of the consumer base, or your supply chain encountered an unexpected breakdown in peak season. Any number of things can happen to put a stick in your wheels, and a consultant can make the difference in a sink-or-swim situation.
Sometimes, you might just end up with a problem that seems unsolvable. Of course, consultants will tell you that there is no such thing. When the business runs into complex, multi-faceted problems that grind the wheels to a halt, consulting services can really save your hide. Maybe your IT professionals just can’t get something working right, or your financial performance is declining, and you cannot figure out why. A consultant can swoop in and lend their years of experience on the job to finding an actionable solution and just as quickly bow out when their work is done. Sometimes, all you need is an extra set of expert eyes to get you over a rut.
Staff Augmentation vs Consulting Services: Ending the Debate
Hopefully, this breakdown of the two types of services proved an enlightening read. There are many more different angles to this topic, which we will rest assured cover in future publications. For now, we hope that we have helped entrepreneurs learn the fundamental differences in the question of staff augmentation vs. consulting services.
Ultimately, both staff augmentation and consulting services are important for business, and knowing when to leverage what can make all the difference.