The Fate of Staff Augmentation

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Is Staff Augmentation Dying? 

From the second I asked this question, I instantly felt the backlash from my internal team about the subject. I can totally understand their perspective, because our internal pipeline certainly didn’t support my hypothesis. After all, we have at least a 50/50 split between SFDC contract and perm requirements and we have successfully grown our contract business by 35% YTD.  As my colleagues spew success stories and facts about how they successfully support their clients by providing cloud resources, I agreed (partially under co-worker duress) to withdraw my conclusion.  The only issue is that I meant it.

Staff Aug itself is highly profitable. Integrators have been providing resources at double the cost in the IT staff augmentation arena for years, and they are in a full court press to become the same trusted stakeholders in the cloud arena. They are working to box out the competition by becoming a one stop shop for the Fortune 1000, but if they can’t grow organically they will buy (merger) their way to the top by purchasing the intellectual capital that they lacked.

In doing so, integrators have filled their benches with layers of talent and need to keep these resources billing. It seems like a sound argument, but only partially in my opinion. The real truth is, many smaller consulting firms can compete and provide the services that the “Big Six” used to only do – thanks to innovation and technology.

Smaller firms leverage specialized talent in a specific segment, which makes them formidable force without the overhead or bureaucracy. Therefore, integrators are left with only two other options. They can use the offshore/onshore pitch to get the work down at a discount, or move into staff augmentation blended model, which works better. Companies looking for new implementations or upgrades can look at either option, but will benefit greatly from a solutions-driven approach, regardless of the size of the provider.

So, is staff augmentation dying? 

Essentially, no – it is just transforming.  Many organizations are relying on SFDC architects and functional (PM/BA) consultants to work with the business, while outsourcing the development and administrative. Our pie might have appeared to get smaller, but in fact it might have grown 5x because we are now competing on projects from the big industry players.  We are competing because we are doing something unique. We listen. We are flexible, and we are less expensive and offer a true advantage besides bodies in the workplace.

Where does that leave you as a business leader?

Owning a project cradle to grave isn’t the holy grail anymore for a staff augmentation firm, it is a necessity and the norm to differentiate from the pack and truly deliver the solution we have been flirting with for years. The results have been fabulous not only from a relationship perspective but from a true consultative approach. May the cloud wars begin!

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Follow Jason Raclaw:

Jason has a magnetic personality with a passion and energy for learning. He possesses a strong business acumen, and is a strategic thinker in the recruitment market. Jason's leadership style creates a culture that develops and empowers his employees, and he believes that is the key to unlocking strategic growth. His hands on approach to coaching is part of his DNA that makes him a true success in the industry. Jason previously owned his own staffing firm, and has been in the IT solutions and recruitment industry since 1995.