In the ever-evolving landscape of business operations, companies constantly seek ways to optimise their workforce strategies. Two popular approaches that have gained prominence are Managed Resourcing Services (MRS) and traditional staff augmentation. Both methods involve using a third party to bring in skilled staff to enhance a company’s workforce capabilities over a fixed period, but they differ in their approach, benefits, and outcomes.
In essence, MRS offers a comprehensive and strategic solution by outsourcing the entire contingent staffing process to a third party, while traditional staff augmentation is often used to cover more specific, short-term needs, where the client retains a higher degree of control. The choice between the two depends on the overall goals and priorities of the business.
What is Traditional Staff Augmentation?
New projects often put pressure on businesses. The increased workload and tight deadlines can prompt the need for project managers and business analysts to supplement existing teams for a limited period with external technical or business resources. These additional team members need to have strong skill sets and work to a high level to deliver value within the existing, permanent team. They often bring specific technical expertise that may not be readily available in the client team or would represent too great a challenge to hire on a permanent basis.
Traditional Staff Augmentation, usually using one or more third-party recruiters, is one solution to address these immediate skill gaps, by insourcing highly skilled professionals for a predetermined period of time. It is commonly used in the technology and software development industries to cover short-term projects, but it can be applied in various fields, where niche skills are required, like MS .Net., Dynamics CRM, Oracle, SAP, or other ERP systems.
For example, if a healthcare business is looking to roll out a new health scheme and needs five more people to support their helpdesk and customers – the third party that supplies the temporary skilled staff – would find a selection of appropriately skilled people to fill the roles for the necessary period of time, and provide options for the client to choose the correct balance for their team needs.
Benefits and Weaknesses
Essentially, staff augmentation acts as a temporary skill injection that allows organisations to complete a particular project whilst retaining complete control over how the project is managed. Hiring staff on this basis cuts the administrative burden of full-time recruits and as well as having the specific and necessary skills, there are no major overheads involved. Nonetheless, selecting and overseeing the temporary staff does create additional work for managers, particularly during the interview & screening process, contract negotiations, onboarding, and finance requirements.
From the perspective of the vendor, they are usually not invested in their client’s project, their priority is to beat the competition and fill the role, or roles, after which, their responsibility ends, apart from the management and payment of the contractor. For the client, it is also a reasonably risk-free approach. However, there is a chance that the outsourced team member may lack commitment, and if for any reason they do not work out, the business must return to the market to search for another skilled worker to fill that particular role, which takes time.
Furthermore, using one-off contractors can interfere with team spirit and cause cultural issues as well as create more work for managers, who have to manage their existing team as well as additional contractors.
How does the Managed Resourcing Service compare?
Managed resourcing services, by comparison, are a comprehensive workforce solution that goes beyond traditional staffing. In an MRS model, a third-party provider takes on the responsibility of managing an organisation’s entire contingent workforce. Consultants will take control of the recruitment and onboarding of new staff members and they will oversee compliance and performance management to ensure the people they introduce to the business bring value. End-to-end management is a key benefit, as vendors will take charge of the entire lifecycle.
This solution is for businesses looking to staff a whole project, but with an additional management layer to take away the pain of selecting and managing a team. Generally, there is one single point of client contact from an account management perspective and one single point of contact from the vendor. The vendor will source the talent with a final sign-off from the business client – although trusted vendors often find suitable members for the project directly.
Should something go wrong with a member of the contingent workforce, then it is the responsibility of the vendor to find a new developer very quickly. The staffing and HR elements of the team provision are entirely taken care of.
How does MRS benefit the business?
A key advantage of the MRS model is the time-saving element. Managers may otherwise need to spend a significant amount of time interviewing a selection of candidates for different roles and departments. Another advantage is financial. Methods such as the nearshore model can be explored for delivering services at a lower rate. The typical day rate for developers can be lower in countries such as Portugal and Poland so clients get to see the cost benefits of outsourcing talent. Larger MRS providers choose a blend of onshore and nearshore resources to maximise cost benefits for the client and address any skills shortages or market conditions to increase quality and value.
How would a business know which service to choose?
Deciding which strategy is most suitable for a particular project is very much down to understanding the brief of the unique customer and the scale of the project.
If a business wanted to build a team of 20 people to work on a financial services project in Frankfurt, for example, an MRS vendor could leverage nearshore services in different locations to find and hire the right candidates for the job. The company might need multiple Java Developers, Testers, Project Managers, and Business Analysts to ensure the project runs smoothly, and in this approach, the contingent workforce would be overseen and managed entirely by the vendor. If a client was running the same project but only needed one Java Developer and a Tester, staff augmentation would be sufficient as the requirements are much smaller.
Another consideration is the time it can take temporary talent to bed in with new systems and applications, which can be a challenge. If time is crucial, MRS vendors often provide initial training to ensure these employee(s) are up to speed and can deliver successfully from the beginning. The level of partnership and engagement is traditionally much stronger when an MRS is employed, but as we have discussed, it can be overkill when only one or two people need to be sourced.
Russell Moore has 30 years of experience of having provided these services in different European countries, and would happily provide case studies and examples to allow Aspira, part of emagine clients to decide on the best strategy for them.