10 Factors to Consider When Selecting Between Staff Augmentation vs. Services

When business needs arise, how should owners and construction managers evaluate the choice between using a staff augmentation (staff aug) model versus engaging with a services company? In this first post, in a series looking at the tradeoffs between staff aug and services, I provide ten points of comparison, and ten factors to consider.

Before diving into the topic, I’d like to share why I’m writing about it in the first place. I’ve been in construction for over twenty years. During this time, I’ve worked for owners, construction managers, contractors, and as co-founder and president of Lydon Solutions, an IT construction consulting firm. I want to say I’ve seen it all, but I am surprised every day by the decisions that people make, particularly at large owner organizations. For any owners reading this that haven’t done consulting, I hope that sharing my perspective is helpful the next time you consider staff aug versus services. 

As a consulting company, we are here to solve problems for our clients. I want to do work for an owner who has a vision, builds a winning team of responsible people, and seeks to deliver world-class solutions. The more educated an owner is about the consequences of their decisions, the better the solutions that we can all deliver as a team. 

Comparing Staff Aug vs. Services

Let’s start by looking at what factors the average owner might consider when making the staff augmentation versus services decision. Below is a table listing ten points of comparison between staff aug and services.

You may look at the “easy” vs. “hard” level of owner effort in the summary row of the table above and assume that the better choice seems like a no brainer. If you’re an owner, you should push the easy button and go with staff aug, right? Not necessarily because the choice isn’t as simple if you take a longer and more holistic view. Read on to find out why.

10 Things to Consider Before Using Staff Aug

Before you airdrop your new contractors onto a project, there are a few critical things you should consider first.

1. Staff aug contractors do not warrant their work. Unfortunately, if you are looking to assign ownership of scope, you better look elsewhere. With staff aug, you get a body, not a deliverable. So poor performance is a cost to you and not something that can you can charge back to the contracting agency.
2. Contractor experience is person-specific. If the contractor you onboard does not have the experience to perform a task, you will need to onboard another contractor. There is no bench of resources they can reach out to solve a problem or offer a solution. What you get is what you get. 
3. Contractor availability is a variable. If a contractor cannot be available or travel for whatever reason, you are out of a resource. You will need to onboard another contractor to backfill.
4. Contractors will need training. Staff aug contractors do not come with any job training before they start. Plan to include your time as well as that of your team to train the contractors before you can expect them to be productive.
5. Someone needs to manage the contractors. Staff aug contractors are going to require direction from you. Make sure you have the time to spend providing that direction and maybe have additional special projects for them when there is a lull in their day-to-day tasks.
6. Beware of co-employment and other legal issues. With staff augmentation, the level of effort to onboard and offboard is so easy that some companies feel it is a way around hiring. At the same time, companies also often treat contractors like their employees because they want to build and manage a cohesive team. However, as with anything that sounds too good to be true, there is a downside to using contractors in this way. As the percentage of contract workers in the workforce grows, so does the number of co-employment cases. If you are not careful to follow labor laws for contractors, you run the risk that a court or labor authority could deem them as your employees. In this situation, you could be liable for back pay, benefits, and other costs. So, make sure you read or take a class on hiring employees and contractors to learn how to avoid the risk of co-employment before moving forward with staff aug.  
7. Vendor selection and management. Are you going to use one or multiple staffing companies for your contracting needs? If you use more than one vendor, consider the process for how you will work with each of them to manage contractors. You, or someone you assign, will need to be the primary contact and follow the vendor’s workflow for recruiting, onboarding, and offboarding resources.
8. Do you need to hire staff to manage your staff aug? Related to #7 above, if you expect your contract work to grow, you may need dedicated personnel at your organization to manage the process. Many organizations end up building a staff aug team to efficiently and appropriately manage vendors and contractors.
9. Are you confident you know what skillsets you need? Staff aug makes it easy to get people on board, but getting the right people with the appropriate skills is much more difficult. If you don’t have time to prepare a scope of work, how can you be sure that the contractors you bring on have the right skills to accommodate your future needs? Yes, you can get contractors with other skills later, but remember that doing so will entail the management and training overhead covered above. 
10. What are you trying to accomplish? This item is probably the most fundamental one on the list. Everything comes back to how the owner frames their requirement to either “I need to deliver X” or “I need a body.” Most likely, you are evaluating staff aug versus services because you have a specific business challenge, and you are looking for the best way to solve it. Staff aug may seem like the quickest way to do that; However, given all of the above, the quickest option might not be the best. Worse, it might just be a bandaid that leaves your underlying business challenges unaddressed.  

Hopefully, I’ve shared some perspectives that are helpful to any owners or construction managers that are choosing between staff aug and services. In future posts, I will have more to say on this topic, so stay tuned. Also, sign up for our newsletter is you would like to find out more about Lydon Solutions' services and/or Construction Viz solution for Office 365/SharePoint.