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Costs Saved Using a Staff Augmentation Strategy

Posted on Mon, Oct 10, 2011

Enterprises choosing to use a staff augmentation strategy to generate and implement IT solutions are generally aware that this strategy allows them to contract with IT consulting firms that employ staff with highly specialized skills.  Most are also aware that a staff augmentation or project work strategy represents a cost savings over hiring an individual to be directly employed by the enterprise. 

Enterprises may not be aware, however, of the many ways in which staff augmentation saves an enterprise money.  The most obvious part of this equation relates to the mandatory fixed costs that come along with a direct hire, including federal unemployment and social security benefits as well as state unemployment and worker's compensation benefits.  

Less obvious cost savings are found in a multitude of enterprise functions that do not need to be performed for workers who are part of a staff augmentation rather than a direct hire strategy.  These include costs associated with recruiting and hiring individuals with the specific areas of expertise needed and expenses involved in training them to understand the enterprise's specific procedures and culture. 

Other cost savings come from the fact that employees in the payroll, accounting, and human resources areas do not need to use their time to support or assist workers that are on site due to a staff augmentation strategy.  Such workers also do not cost an enterprise any money when it comes to such issues as sick time or vacation pay; these functions are typically handled by the IT consulting firm that supplies the staff augmentation workers.

                                     

Tags: IT Consulting, Staff Augmentation, Cost Effectiveness

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