Every IT company needs to work on its budget to lower the overall costs of the company. Whether it is through outsourcing additional tasks or by hiring a small but skilled team, there are many ways in which the overall budget can be significantly lowered. According to studies, the staff augmentation market is worth $92.5 billion. So, it is one of the most effective ways to reduce the overall budget and ensure the funds are being appropriately utilized.

In this article, we have shared the fundamentals of staff augmentation in IT companies and how it can lower costs significantly.

What is staff augmentation in IT companies?

Before we understand the benefits of staff augmentation in reducing costs for IT companies, it’s important to know what this term means. So, staff augmentation helps to form a collaboration between your in-house employees and members from another company.

For example, let’s say you have outsourced accounting and financial services to another third-party firm. Here, you can form a joint team with accountants and financial advisors from your in-house group and professionals from the third-party accounting firm. This process is known as staff augmentation. The best part is it is not just limited to the accounting or sales department as an IT company can augment staff with technical knowledge to handle the projects based on the requirements.

Staff Augmentation in IT Startups

How staff augmentation saves money for IT businesses?

Understanding staff augmentation’s importance in reducing IT business costs is crucial. Keeping this in mind, we have shared some important facts that will help you realize how augmenting staff and forming a dedicated development team will significantly bring down the financial budget for a fiscal year.

No need to spend money on training and skill enhancement

First and foremost, the professionals with whom you want to form a new team already have the required skills and experience. So, you won’t have to invest in arranging training classes and workshops for the new members.

Furthermore, you won’t even have to worry about skill enhancement because they already have worked on several such projects for which you have hired these professionals. They can even teach your in-house team members and ensure that future training and skill enhancement expenses can be reduced significantly.

The recruitment process is not expensive

When you want to recruit new employees for your in-house team, the entire recruitment process is expensive and requires a lot of effort. As a result, the overall budget for any IT company will increase in case of regular recruitment.

But if we consider recruiting skilled professionals from any other software development company for staff augmentation, the process is easier and smoother and helps save lots of money. You don’t need to arrange a special HR team for interviews and scanning of the candidates.

It is possible to wind up the entire process within a single day. One of the best things about staff augmentation is that companies don’t have to spend a huge sum of money on employee onboarding and satisfaction.

Staff augmentation is highly scalable and flexible

Staff augmentation is a scalable and flexible process. It means you can hire the exact number of employees you need to handle a business requirement or project. For example, let’s say your company gets three new projects for which you require a team of 50 new developers.

So, you can hire 50 professionals at the beginning and then change the number based on future project requirements. In other words, you have to pay only for what you want and nothing extra or less. That’s why staff augmentation is one of the great ways to complete projects and deliver work on time without worrying about an increased budget.

Offshore staff augmentation reduces payroll expenses

Even though staff augmentation means forming a joint team, the additional members will work under the third-party company from which you acquire the resources. Therefore, you won’t have to give them a separate salary every month.

You will pay the service amount to the third-party company, and it is their headache how they will manage the salaries for their employees. With reduced expenses in terms of payroll, you can easily optimize the budget and save a lot through staff augmentation.

No need to provide insurance, and healthcare covers

Apart from the payroll, you won’t have to worry about providing insurance and healthcare coverage to the augmented members. They will be under the jurisdiction of the third-party company from where you hired these resources temporarily.

As the hiring process will be based on the contract following a model of B2B, the payments won’t be for individual employees. You have to pay the insurance and healthcare costs for your in-house team members, not the additional resources.

In what ways IT staff augmentation can be made successful?

Although we have discussed the benefits of IT staff augmentation in reducing the overall budget, you do need to make this process successful. For this, planning and implementation of appropriate actionable strategies are crucial.

You should have a list of professionals with the exact skills your business needs to deliver the work on time and meet the client’s expectations. Apart from this, you also need clarity about the company from where you will be temporarily hiring the resources. After all, if you do not get the scope of hiring professionals with the exact skills required for completing the projects, there is no point in investing in staff augmentation.


Since we have shed light on some of the major aspects of staff augmentation and its relationship with appropriate budget planning, you won’t have to speculate much. Understand your business needs and hire the best company with skilled and experienced professionals. This can easily take the success rate of staff augmentation up by several notches in one go.

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