Staff Augmentation vs. Managed Services: Key Differences

Staff Augmentation services help business owners accommodate immediate needs in hiring, and meet any unexpected demands in any team, regardless of the domain and the size of the team. It helps ensure that you find the best candidates too. Of course, you can always take the alternate route of having a third-party act as a managed services partner, offloading the work to them. So, you do not need to hire fresh talent either. Each approach has its pros and cons. In this article, we will be discussing staff augmentation vs. managed services and the pros and cons too.

What Is Staff Augmentation?

The process of adding resources to your existing team to meet project deliverables on time is called staff augmentation. There are several IT staff augmentation models based on the nature of the contract and the time to be taken. Each model works differently and is most useful in a particular scenario.

What Are Managed Services?

A managed services provider is a third-party organization that remotely manages your end-to-end IT services such as network applications, infrastructure and security, ongoing support and administration. They also provide end-to-end management services for a non-IT company, undertaking critical functions like payroll, HRM, workforce solutions, Procurement and Sourcing etc.

Why Choose the Managed Services Model?

1. Cost Control Effectiveness

A fixed monthly charge is presented to the client that will include all your typical cost components including training, equipment and personnel. This will help you budget your expenses effectively, depending on the future requirement while allowing you to scale up or scale down as per business dynamics.

2. Effective Risk Management

By contributing our proprietary methodologies and access to modern infrastructure and software we help with effective risk management. We will also help manage the risk around security and compliance issues.

3. Expertise Access

Provides access to a team of specialized staff who have been working on similar problems for a very long time, are trustworthy, and well managed too. They will be very useful in reducing the turnaround time in delivering the solution for your business.

4. High efficiency & productivity

We ensure maximum uptime and minimal service interruptions by undertaking all critical IT and HR operations of your organization. We consider all the mission-critical applications involving multiple technologies that need to be fully operational and integrated.

5. Future-proofing HR and IT services

Our staff is trained in upcoming and new technologies with the ability to lock in costs for a multi-year period, which will help create more predictability, reducing your business’ operational risk and challenges to minimize service disruption.

Key Differences Between Staff Augmentation and Managed Services

1. Control Level

In staff augmentation, the new talent integrates into the existing workplace and therefore the client has more control over the final outcomes. In the case of managed services, the entire process is being managed by a third party and the client will need to relinquish control.

2. Flexibility

In staff augmentation, there is more flexibility. The reason is that the client can hire members depending on the requirement. In managed services, there is a fixed service level agreement, which can complicate things if the client is looking for flexibility.

3. Scope of Work

Staff augmentation services are more task-focused whereas managed services are more outcome-focused. This means that in staff augmentation, it is always one task at a time, whereas in managed services, the client hands over the responsibility of the project itself to a third party.

4. Responsibility

In staff augmentation, the client must manage the staff that is hired on a temporary basis, though they can go back to the provider for any clarifications or changes but in managed services, the entire service, either IT or HR, is taken over by the managed services provider.

Staff Augmentation vs. Managed Services Pros & Cons

Both staff augmentation and managed services have their pros and cons. On the one hand, staff augmentation is flexible and scalable and cost-effective for short-term projects while on the other hand, managed services are more useful when you need predictability in costs, have access to deeper expertise, and require scalability for long-term needs. The pros and cons of the two approaches are summarized in the table below.

Staff Augmentation vs Managed Services Best Use Cases

When to use Staff Augmentation:

• You need temporary workers for a specific project.
• You want the workers in very little time.
• You want to maintain management of day-to-day activities of the hires.

When to use Managed Services:

• The whole process itself is time-consuming and difficult.
• You want the work done in a specific period, not less or more.
• You appreciate that the work is bound by an agreement even though there is no scalability.

Choosing the Right Model for Your Business

Choosing the right model for your business comes down to asking the right questions. The questions you must ask are what is the extent of responsibility that can be shared, is there a need for fresh talent, and whether the business is okay with higher upfront costs? Are you looking for a staff augmentation or managed services provider you can trust? Talk to Alp Consulting today, an HR consulting company with over 25 years of staffing and recruitment experience and let us help you.

Frequently Asked Questions (FAQs)

1. How does staff augmentation provide increased flexibility?

Staff augmentation provides increased flexibility. This is because the hires in staff augmentation can be easily added or removed from a project. It also provides flexibility in the sense that the same hires can be assigned different responsibilities even without discussing with the provider.

2. Which is more cost-effective, staff augmentation vs. managed services?

Staff augmentation is more cost-effective initially. Managed services generally have a higher setup cost and are also generally executed as a fixed process. It is difficult to say between staff augmentation and managed services, which is more cost-effective in the long term.

3. What is the difference between staff augmentation and outsourcing?

Both staff augmentation and managed services have their pros and cons. On the one hand, staff augmentation is flexible and scalable and cost-effective for short-term projects, managed services are more useful when you need to predict costs, have access to deeper expertise and scalability for long-term needs.

4. How can I ensure data is secure when using any outsourcing model?

No matter what outsourcing model you pick, be it staff augmentation or another, you must be sure that you are only outsourcing the tasks you will not be able to do or those that are difficult to do. To ensure the security of data, make sure that the contract mentions this responsibility clearly, read reviews of the outsourcing partner, and understand how good their infrastructure is.

5. Which is less time-consuming, managed services vs staff augmentation?

Both managed services and staff augmentation can take time. Managed services are executed through a fixed process, so you will have an idea of the turnaround time initially, but with staff augmentation, you will not know this. The biggest benefit of staff augmentation services is that you have more control, which might reduce the total time.