Most economists are now warning that a recession is on the horizon. Higher interest rates, spiraling inflation, and volatile public markets are clear harbingers of an oncoming downturn, with nearly 70% of economists polled by the Financial Times saying they believe the U.S. economy will slip into a recession by next year.
This is why smart businesses are bracing for tight times. Many are already cutting costs, and one of the first places they’re looking for efficiencies is their staff. They’re rethinking the way they hire and retain employees—and a lot of them are considering staff augmentation.
Starting more than a decade ago, in response to the Great Recession, companies turned to outsourcing to strategically cut staffing costs. A significant part of those efforts was offshore staff augmentation, especially in the areas of IT and software development.
Companies are attracted to staff augmentation because it enables them to improve their performance with quality, affordable talent from a global pool. Staff augmentation provides companies large and small with easy, cost-effective access to competent professionals in a variety of areas, from data analytics and cybersecurity to digital marketing and Web/app development.
In addition, tapping global resources not only reduces costs but also enables businesses to expand globally and reduce company risk by implementing a “follow the sun” model without the significant capital investment usually required by leveraging outsourced specialists with decades of experience in staff augmentation.
Today, we’re on the cusp of a new staff augmentation wave due to a number of converging factors, including the impact of the pandemic, the acceleration of digital transformation, and an overall business environment that has grown increasingly precarious.
At ibex, we’ve seen demand for staff augmentation grow by 40% over the last 2 years. Companies that 24 months ago would never have considered staff augmentation are now more comfortable with the idea. They understand that it can be a very effective way to strategically fill open positions at a reasonable rate without sacrificing on talent.
Here are three reasons your company should think about staff augmentation to survive and thrive in times of economic instability.
You Can Hire Qualified People at Lower Cost
Let’s take software development as an example. Currently, a company in Denver must pay around $150,000 a year to hire one local software developer. In Silicon Valley, a company must pay around $250,000. Forward-looking organizations are starting to rethink this expenditure. They’re starting to wonder if the IT talent they hire really does have to be on-site and earning up to a quarter-million dollars.
The answer is no. There are high-level technologists around the world who do good work for far less than the going rate in U.S. tech centers. The hard part is finding them. This is why many companies are turning to staff augmentation providers. These providers have the knowledge, experience, and connections needed to source great talent from around the globe. Better still, they do it on demand.
Staff augmentation providers will help you fill an open chair or expand your team with workers who not only have the skills you require but also fit your company culture and share your goals and values. This will also enable you to grow your business and meet emerging needs in real time. You can take on projects in new areas and gain new customers because you can immediately hire people with the knowledge and experience to do the job.
You Can Find Experts in Emerging Technologies
Staying competitive in today’s economy means staying up to date with all the new technologies that can increase efficiency and productivity. Cloud services, artificial intelligence—if you don’t use tools like these, you’ll fall behind your competitors that do. But to use these tools well, you need people who know how. And, with the tight market for IT professionals, those people are scarce and expensive in the United States. This is another reason more organizations are leaning on staff augmentation.
In the past, this was a reach, but it’s not anymore. Staff augmentation providers can deliver people who have myriad skills that match your company’s needs. With today’s staff augmentation options, you can onboard new workers who will interact seamlessly with all team members to get projects done successfully and quickly.
You Can Avoid Staff Burnout
When a tough economy squeezes companies, many respond by trimming their workforce. Even firms that are growing may hesitate to hire new people, just in case business turns bad. In both scenarios, workers get asked to do more. This can result in stressed-out and eventually burnt-out employees. McKinsey reports that almost half of employees now say they’re burnt out, with the proviso that this number is probably an undercount.
You can address the problem of overtaxed employees with staff augmentation, which enables you to grow or shrink your staff to match the amount of work you have at any given time. You can quickly ramp up with temporary, cost-efficient people to support your staff when you’re busy, which will protect your staff from stress.
There are even augmentation providers that will hire your current staff members, which enables you to shift them—and the operating costs that go with them—off your books while you hold onto their talent and experience. You’ll also minimize deployment and commitment uncertainties and bring predictability to your budget.
A recession is almost certainly on the way. When it arrives, you can’t afford to be caught unprepared. Now is the time to assess your workforce costs and consider staff augmentation. It will pay dividends during the recession and far into the future, giving you the flexibility to adjust your staff to meet downturns, as well as upturns and new lines of business that may open for you—all in real time. That’s the capability and agility you need to survive and thrive in today’s uncertain world.