Traditional hiring is an expensive endeavor, especially for small businesses and startups. With the cost of recruitment, onboarding, benefits, and salaries, it can be hard to justify the additional expense. That’s why many businesses are now turning to a staff augmentation pricing model to supplement their existing teams on various software development projects.
What Is Staff Augmentation and How Does It Compare to Other Business Models?
Staff augmentation is a resource augmentation model that supplements an organization’s existing workforce with additional employees, usually temporarily. This can be done to fill a skill gap or to provide technical expertise during a peak period.
How does outsourcing differ from staff augmentation?
Outsourcing involves hiring an outside company to perform tasks or provide services that would otherwise be done in-house. Outsourcing is usually done to cut costs, access specialized skills, and focus on core competencies.
How does consulting differ from staff augmentation?
Consulting provides expert advice to organizations to help them achieve their goals. Consulting is typically done on a project basis, and the consultant may be brought in to provide specialized knowledge or to help develop strategies and plans.
How do managed services differ from staff augmentation?
Managed services outsource the management of certain IT functions, such as network and application management, to a third-party provider. Managed services are typically used to help organizations improve efficiency and reduce costs.
What Are the Different Staff Augmentation Pricing Models and How Do They Work?
All projects are unique and have different needs; there is no one-size-fits-all approach. Any respectable IT staff augmentation company will provide customers with as much flexibility as possible regarding the pricing of software development services.
Here are some of the most common staff augmentation pricing models:
Hourly rate model
The hourly rate model is usually used for short-term projects where the project cost is determined by the number of hours of labor needed. The client pays the hourly rate for each hour the contracted employee works. The project cost can be estimated by multiplying the hourly rate by the required hours.
- Pros: The client only pays for the actual hours worked, which can be beneficial if the project takes a shorter amount of time.
- Cons: In most cases, the client can only be sure of the project’s total cost once it is completed.
Fixed price model
The fixed price model could involve a single payment for the entire project or a plan based on milestones. The client will usually be required to pay in advance for the whole project, so the contractor will work to complete it in the specified time frame. The client will not be charged extra hours beyond the agreed-upon payment.
- Pros: The client can be sure of the exact cost of the project in advance.
- Cons: The client may be required to pay a large sum upfront, which can be a disadvantage.
The retainer model is based on the client paying a fixed monthly fee for the services. This model is usually used for longer-term projects or projects requiring the contractor to provide ongoing support. The contractor will usually be required to provide regular updates and reports to the client to ensure the project is progressing as expected.
- Pros: This model offers predictability and certainty as the project’s cost is known upfront.
- Cons: The provider may need more motivation to finish the project on time since they are guaranteed a fixed amount of money regardless of the completion of the project.
The hybrid model is a combination of the other pricing models. This model is used for projects that require a variety of different models. For example, a project could involve an hourly rate for one part of the project and a fixed price for the other. The client will be charged for the services according to the agreed-upon terms.
- Pros: It can be tailored to the specific needs of the project. The client can choose the most appropriate pricing model for each part of the project.
- Cons: It can be complicated to manage, and the client may only be sure of the exact cost of the project once it is completed.
How Can Staff Augmentation Pricing Models Save Your Business Money?
Staff augmentation services cost exponentially less than traditional recruiting. Traditional hiring involves so many costs that it can be challenging to keep track of and justify to stakeholders. Staff augmentation pricing models can help you save money by eliminating some of those costs.
Here are some great examples of how staff augmentation pricing models can save your business money:
Cost comparison with traditional employment models
When using staff augmentation pricing models, companies do not need to pay for office space, equipment, supplies, and other overhead costs associated with hiring a full-time employee.
With a top staff augmentation firm like WillDom, the costs will always be competitive, and the quality of work will always be high. Here at WillDom, we consider your business needs and customize the pricing to provide the best value for your money.
Scalability and flexibility in resourcing
Working with an IT staffing company with flexible pricing models allows businesses to stay nimble and agile while hiring resources and scaling up or down as needed.
Streamlined hiring and lower HR costs
Staff augmentation providers take care of your entire hiring process, from screening to onboarding, eliminating augmented staff costs like hiring an expensive in-house recruitment team.
Access to a global talent pool and reduced training costs
You won’t have to worry about wasting resources on training since you’re already getting the most experienced and dedicated IT professionals in the world to supplement the existing in-house team.
Avoiding the cost of under or overstaffing
You can avoid the costly mistake of overstaffing or understaffing by bringing in the exact number of professionals you need for as long as you need them.
How to Choose the Right Staff Augmentation Pricing Model for Your Business
There are various factors to consider when deciding which staff augmentation model fits your budget. It is helpful to ask yourself questions to pinpoint what model would best fit.
- Understand your business needs and project requirements: What are the project’s goals? What are the essential features that must be included? What are the desired outcomes?
- Evaluate the complexity and duration of your project: How long will the project take to complete? What level of complexity is involved? What are the necessary resources and skill sets required?
- Consider your budget and financial constraints: What is the available budget for the project? What is the expected return on investment? What are the potential risks and rewards associated with the project?
- Balance cost, quality, and time: What is the desired quality of the final product? What is the timeline for the project? How can the project be completed within budget?
- Consult with staff augmentation specialists: How experienced are the staff augmentation specialists? What pricing models do they offer? What are their terms and conditions?
Why You Should Partner With a Staff Augmentation Company
Experienced staff augmentation companies will be able to provide staff augmentation solutions that include both appropriate candidates and flexible pricing.
WillDom is a top-rated staff augmentation vendor with a network of highly experienced professionals and a track record of delivering successful projects. We offer flexible staff augmentation pricing models tailored to suit your business needs.
Contact WillDom today to supplement your team with our custom team augmentation services.