In the absence of in-house specialists, choosing the right model of interacting with the third-party technical team becomes a much more serious task than staying within the budget – in particular, it affects the speed of entering the market, the product quality, the interaction flexibility, and the sustainability of the project in crisis situations.
Over the years of working at WEZOM, we have helped many clients – from startups to corporations and government agencies – fully staff project teams in the full correspondence to their requirements. Therefore, we decided to share our experience in this article and, in particular, consider the nearshore outsourcing vs team augmentation difference in detail.
What Is Staff Augmentation?
Staff augmentation is a format of interaction with remote specialists, according to which they are hired to fill scarce roles in the in-house team. This can be one backend developer, several QAs, or even an entire DevOps department – the main thing is that they are all fully integrated into your processes, which means you retain full control over the project without bothering yourself with resource-intensive HR tasks.
This hiring model is optimal when you have a strong internal team, but do not have enough resources to solve specific tasks (for example, you need a specialist who can work with Vue or your full-time UX/UI designer cannot cope with the tasks assigned to him or her alone). Staff augmentation is also relevant for cases when you need a quick replacement of departed employees.
We at WEZOM often join projects under this model when the client already has a CTO and a team, but needs seasoned specialists for clearly defined roles.
What Is Software Outsourcing?
Software outsourcing involves delegating all or part of the responsibility for a project to a third-party contractor. For example, at WEZOM, we work in two formats: turnkey project development (when you set a task, and we undertake its implementation, from business analysis to launch and support), and a dedicated development team (when you receive a team at your disposal, whose management will be carried out on our side, but in full compliance with your priorities and goals).
After assessing outsourcing pros and cons, we can conclude that this model is ideal for cases when you don’t have an internal team or technical leader, as well as when there is a need to quickly test a hypothesis through the implementation of PoC/MVP, while your in-house team will continue to be busy with their regular tasks.
In general, this model is great due to its speed and cost-efficiency, but it requires a strong and trusting relationship with the contractor. If we talk about us, we ensure this through the introduction of transparent reporting and active involvement of the client in the development process.
What Is a Hybrid Development Team?
The hybrid model combines the advantages of the previous two ones, augmentation and outsourcing. According to it, one part of the team is in-house, while the other part is on the contractor's side. At the same time, they all work as a single unit.
The choice in favor of this model is justified when you have strong product expertise, but don’t have enough technical resources, or when you are looking for scalable software delivery, but don’t want to waste time on hiring the right people.
As for our experience, we often resort to such IT staffing solutions with projects at the scaling stage, when the business has grown from a startup and needs well-structured development. In such cases, we don’t replace the client's team, but strengthen it so that it can work more efficiently.
Pros and Cons Comparison Table
To choose an approach to staffing a team, it is important to understand how each team extension model differs in practice. Here is a detailed comparison of the three models described above in table format.
| The model | Staff augmentation | Outsourcing | Hybrid model |
| Control | High, as you fully manage all tasks, sprints, and priorities | Poor, since although you define the goals, you don’t manage the process directly | Balanced – you retain strategic management, and partially delegate execution |
| Cost | Average as you pay for the hours of work of specialists | Low – in general, this is one of the most cost-effective options at the start | Depends on the team structure, tasks, and distribution of roles |
| Speed to start the project | High – you can find the needed specialists in 1-2 weeks | Very high – the team can start working on a project in a matter of days | The model allows you to scale both on your side and on the contractor's side as you grow |
| Best suited for | Companies with an existing internal core (CTO, team leads, etc.), who need additional specialists for a specific project | Startups, companies without their in-house tech team, as well as MVP projects with a fixed budget and deadlines | Scalable products and projects with a strong product expertise within the company |
| Pros | Flexibility, transparency, and the ability to integrate into your culture and processes | Fast, inexpensive, and doesn’t require to hire full-time specialists | The best balance between control, speed, and adaptability |
| Cons | You take on all the management; also, new specialists will need some time for onboarding | Less flexibility, risks of hiring an inexperienced contractor, as well as insufficient transparency | Requires maturity in team management, thoughtful communication, and competent project management |
How to Choose the Right Model for Your Business
In general, the staff augmentation vs outsourcing vs hybrid model choice depends not only on the budget or deadlines but also on the implementation strategy of your project. Here are the key factors to consider when choosing the right one.
- Project complexity and scope. If you are developing a product with sophisticated architecture, non-standard logic, or complex integrations, you should consider hybrid team software development. In this case, internal experts will control the system core, while the external team will help speed up the implementation of functionality without the risk of losing quality. At the same time, a small project with clear logic such as a landing page or MVP can be outsourced. If we are talking about a medium-complexity project with constant improvements, the staff augmentation format will be the best option, where external developers will be integrated into your process.
- In-house technical leadership. If your team doesn’t have a CTO, tech architects, or team leads, full outsourcing may be a risky choice, because without the right task setting and control, you will face technical debt and low code quality. Thus, in the absence of a technical leader, it’s better to choose a project-based outsourcing model with project management on the contractor’s side. If you have an experienced CTO or engineering leader, you can use staff augmentation, by integrating developers into your pipeline without delegating management. A hybrid, in turn, is suitable for those who want to strengthen expertise in critical areas, while maintaining their own team as a decision-making hub.
- Time-to-market pressure. The higher the competition in the market, the more critical the release time. So, if you need to quickly test a hypothesis, create a basic product version, and launch it, outsourcing will provide the most benefits. However, if your product implies rapid scaling, constant iterations, and releases, one external team may not be enough. In this regard, it is better to choose a hybrid model, according to which some of the tasks will go to the contractor, and you will leave some to your team.
- Budget flexibility. If you have a limited budget and don’t have the opportunity to expand your team, outsourcing will help you avoid overhead costs. According to this model, you pay only for work, without taxes, vacations, and social packages. If the budget is more flexible, and you need to integrate specialists into existing processes, staff augmentation will be the best option. At the same time, the hybrid talent management will be effective if you are ready to invest in an internal team, but want to optimize costs for some secondary tasks.
If you still have doubts about choosing the optimal cooperation model, feel free to contact us, and we will help you make the right decision.
Real-World Examples
To help you resolve the in-house vs remote developers dilemma, let's consider two well-known examples with different software team extension models.
GitLab: speeding up the development process through staff augmentation
GitLab is one of the largest open-source DevOps products, which was initially presented to the public as a startup. At an early stage, the team actively followed the staff augmentation model, hiring external contract developers to accelerate backend development. This gave the project flexibility – its team was able to scale as it grew without losing control over the architecture and processes.
At the same time, the GitLab team initially had a strong internal engineering core, as well as well-established CI/CD and code review processes. This made it possible for external specialists to quickly integrate into the workflow without reducing the quality of the final product and the speed of work on it.
Revolut: from outsourcing to a hybrid model
The British fintech project Revolut started with a minimal team and an MVP developed with the participation of outsourcing contractors. This allowed the team to test the idea as quickly and cheaply as possible and attract the first investments.
After a successful release, Revolut switched to a hybrid model: they left some contractors on the backend, but began to actively build up the internal team, especially in the areas of security, payments, and analytics. Now, they have more than 600 developers, some of whom are hired thanks to the external vendor collaboration. They get tasks of secondary importance that are not critical to the core.
In short, there’s no one-size-fits-all – all these agile team models have their own strengths and weaknesses. Therefore, we at WEZOM always approach the issue of choosing a particular model individually and don’t offer ready-made “packages”.
Conclusion
Now, you understand that the outsourcing vs in-house dilemma is much more complex than just deciding whether you have the money and time for one model or another. So, if you are still unsure which approach to choose, let's discuss your project together to build a solution that will stimulate your business to grow.