Last Updated on 2024-10-21
Offshore outsourcing is now a popular business strategy to reduce costs, access global talent, and scale operations.
So, what is offshore outsourcing? Itโs a strategy where an organization recruits a third-party supplier in another country to conduct some of its operations or projects.
Companies can tap into highly skilled workers at lower costs than hiring locally.
However, traditional offshore outsourcing also comes with significant challenges.
Communication issues, cultural differences, time zone gaps, and a lack of control can lead to missed deadlines, quality problems, and frustration on both sides.
Many outsourcing relationships end up feeling impersonal and disconnected, making it difficult to achieve the close collaboration required for the best results.
This is where staff augmentation offers a better approach.
Staff augmentation is an outsourcing model where, instead of handing off projects to be done independently by the vendor, companies integrate remote staff directly into their existing teams.
These augmented team members work side-by-side with full-time employees, joining the same meetings, using the same tools, and contributing to the same deliverables.
There are several reasons why staff augmentation produces better outcomes than conventional project-based offshoring:
#1. Deeper integration and alignment
The augmented staff operates as a seamless extension of the in-house team.
They participate in the same standups, communicate through channels, and adhere to the same processes as local employees.
This enables tighter alignment, faster feedback loops, and a stronger sense of ownership and investment in the work product.
#2. Increased efficiency and speed
By collaborating in lockstep with the core team, augmented resources can move faster and accomplish more than they would work in isolation on delegated projects.
Leveraging institutional knowledge, existing assets, and subject matter experts allows them to quickly get up to speed. Real-time collaboration makes problem-solving more efficient.
#3. Higher quality and consistency
Staff augmentation makes immersing offshore talent in the company’s culture, values, and quality standards easier.
Access to internal docs, style guides, and code review practices helps ensure their output aligns with the in-house team. Issues can be spotted and resolved early through close interaction.
#4. Greater flexibility and scalability
The staff augmentation model simplifies ramping offshore support up or down based on your project needs and business conditions. Team members can be redeployed quickly as priorities shift.
New talent can be added on-demand to inject specialized skills or increase capacity.
#5. Cost efficiency without sacrificing quality
While conventional offshoring focuses heavily on cost reduction, often at the expense of results, staff augmentation emphasizes enhancing output and performance.
Companies still gain access to cost-effective global talent. Still, the emphasis on close partnership and seamless integration enables outsourced work to meet the same high standards as in-house efforts.
#6. Stronger relationships and cohesion
Collaborating intensively daily, even virtually, allows augmented staff to forge deeper bonds with their onshore peers.
Closer interaction fosters mutual learning and cultural exchange, making the engagement feel more like a unified team than merely farming out tasks.
#7. More control and transparency
With staff augmentation, companies retain much more visibility and control over their offshore resources than black-box outsourcing.ย
Augmented team members work on company systems, follow company practices, and answer directly to company managers. The work process is transparent and directly overseen, not hidden behind vendor walls.
At my company, Full Scale, we’ve seen the power of staff augmentation firsthand. We’ve repeatedly helped tech firms, especially high-growth startups.
We bolster their in-house teams with exceptional offshore talent who work efficiently with US staff.
Our clients rave about the quality of work, speed of delivery, and strength of relationships they achieve through this model.
By taking a staff augmentation approach, we deliver all the economic and flexibility benefits of classic offshoring while providing tight integration, easy collaboration, and high standards of in-house operation.
Our clients get the best of both worldsโa distributed team that feels like a natural extension of their own organization.
If you’re considering leveraging offshore talent, I highly recommend exploring staff augmentation as an alternative to old-school project-based outsourcing.
Don’t settle for a disconnected vendor cranking out work in a silo. Find a partner to provide dedicated remote staff that seamlessly mesh with your team and process.
You’ll unlock the full promise of your offshore investment and see the difference in your results.
The Growing Popularity of Offshore Outsourcing
Offshoring has grown steadily over recent decades as companies seek to capitalize on labor arbitrage opportunities and access skills in constrained markets. By some estimates, the global IT outsourcing market alone is expected to reach $425 billion by 2026.
Offshoring began primarily in the manufacturing sector but expanded into services and knowledge work in the 1980s.
Initially a niche practice, offshoring gained mainstream corporate adoption in the 1990s and 2000s with the rise of IT and business process outsourcing to countries like India and the Philippines.
Today, companies of all sizes are outsourcing a broader range of industries and functions.
Small and mid-sized firms, not just large enterprises, frequently augment their teams with offshore talent.
The motivations have expanded beyond pure cost reduction to accessing specialized skills, increasing flexibility, and tapping new markets.
Several converging trends have enabled this growth:
- Improvement of collaboration technologies and remote work processes
- Maturation of offshore talent markets with deeper skill sets
- Increasing global fluency in the English language and Western business practices
- Growing emphasis on workforce flexibility and scalability vs. fixed capacity
- Increasing openness of smaller firms to incorporate offshore resources
The 2020-21 COVID pandemic has only accelerated these shifts. With remote and hybrid work becoming ubiquitous, companies are more comfortable collaborating with offshore team members.
Many are doubling down on staff augmentation to fulfill needs in the face of surging employee turnover and chronic hiring challenges.
How to Maximize Success with Offshore Staff Augmentation
To harness the full benefits of the staff augmentation model, companies should embrace several best practices:
Invest in robust screening and onboarding. Work with a partner that carefully vets technical skills, communication ability, work style, and culture fit.
Treat augmented staff like full team members with proper onboarding, training, and access.
- Implement disciplined communication rhythms. Establish a regular cadence of video standups, 1:1 check-ins, and performance reviews. Include augmented team members in critical meetings and decisions. Actively solicit their input and feedback.
- Use integrated collaboration tools. Provide offshore staff access to the systems your in-house developers use (project management software, code repos, etc.). Standardize the team on a common set of communication channels and protocols.
- Foster team-building and trust. Create opportunities for augmented staff to build relationships with the wider teamโvirtual coffees, team-building games, etc. Celebrate their contributions and make them feel valued in the organization.
- Set clear expectations and targets. Define concrete goals, success metrics, and quality standards up-front. Make the augmented team jointly accountable to the in-house staff’s objectives and deadlines. Provide specific, timely feedback on their work output.
- Treat augmented staff as long-term partners. Invest in the growth and development of your augmented team members, not just near-term project delivery. Over time, give them stretch assignments and expanded responsibilities. You’ll build deeper institutional knowledge and loyalty.
- Start with a pilot and iterate. Begin your augmentation journey with a small pilot project and iron out any kinks. Solicit candid feedback from in-house and offshore staff on what works well and what can be improved. Scale up progressively as you refine your model.
With the right partner and operating model, offshore staff augmentation can fuel your company’s growth.
But like any new capability, harnessing its full potential requires focus and commitment. Don’t just dabble in it reactively.
Treat it as a strategic priority and proactively optimize your systems and culture to make your augmented staff shine.
The future belongs to nimble, blended teams that combine the best talent from around the globe, not monolithic organizations limited by geography.
By embracing offshore staff augmentation today, you’ll position your company to win in tomorrow’s more fluid, diverse, and dispersed workplace.
Build Your Offshore Development Team
Matt Watson is a serial tech entrepreneur who has started four companies and had a nine-figure exit. He was the founder and CTO of VinSolutions, the #1 CRM software used in today’s automotive industry. He has over twenty years of experience working as a tech CTO and building cutting-edge SaaS solutions.
As the CEO of Full Scale, he has helped over 100 tech companies build their software services and development teams. Full Scale specializes in helping tech companies grow by augmenting their in-house teams with software development talent from the Philippines.
Matt hosts Startup Hustle, a top podcast about entrepreneurship with over 6 million downloads. He has a wealth of knowledge about startups and business from his personal experience and from interviewing hundreds of other entrepreneurs.