Q&A: Staff Augmentation with Levan Kobakhidze
By05 Apr 2023
As companies face layoffs and others struggle to get the talent they need, the staff augmentation sector is seeing increased interest in skilled talent and temporary outsourced solutions. While some are looking to self-service platforms, others are reaching out to agencies that provide these services and offer vetted, skilled, and readily available talent to onboard quickly and efficiently.
One company, Making Science Sweeft, is making a splash in the US market. To learn more about staff augmentation and how it works, we spoke with a U.S. representative for Making Science Sweeft, Levan Kobakhidze.
What are some of the key challenges for companies in the US market right now?
Right now, we are seeing companies in three sectors struggling to identify and hire talent to fill talent gaps and complete short-term and urgent IT projects.
One sector feeling the pain is financial services. One of their biggest challenges is the depth and breadth of cybersecurity risks. With increasing amounts of sensitive data being stored and transmitted online, financial companies must remain vigilant in protecting their systems and data from cyber-attacks, which could compromise their customers’ personal and financial information.
Additionally, EBITDA pressure, particularly for startups, is a significant challenge. Investors and shareholders are increasingly focused on short-term financial performance, which can create a challenging environment for startups. IT development costs are a major driver of these costs, particularly for companies heavily reliant on technology.
For the telecom industry, increased competition is a key challenge. With new players entering the market and new technologies emerging, telecom companies must remain agile and innovative to remain competitive and meet the changing needs of their customers. Staffing and completing IT projects also pose a challenge. Delays are occurring due to IT staff turnover, slow IT onboarding processes, and a combination of other factors, which can ultimately hamper innovation and delay the rollout of new products and services.
For retailers, the COVID-19 pandemic accelerated the shift to digital sales and e-commerce, which presented a significant challenge for retailers not well-positioned to make the transition. Now, retailers must continue investing in building effective e-commerce platforms and finding ways to engage with customers digitally.
Similar to financial and telecom companies, retailers are facing IT project delays due to IT staff turnover and slow onboarding processes. These bottlenecks can impede their ability to adapt to changing market conditions and consumer preferences.
Companies that can effectively address these challenges through innovation, investment, and strategic planning will be best positioned for long-term success.
From a business perspective, how do you explain staff augmentation?
Staff augmentation is a business strategy that builds on the foundation of an organization’s existing staff with highly-skilled professionals on a temporary basis. This approach provides various benefits, including contract flexibility, the ability to scale up or down quickly, access to experienced and knowledgeable global talent, and the ability to leverage white-label solutions for faster go-to-market efforts.
One of the immediate benefits of staff augmentation is contract flexibility. This approach allows companies to hire additional staff on an “as needed” basis without long-term commitments or financial risks associated with hiring full-time employees. This flexibility can be especially valuable for companies that need to respond quickly to changing market conditions or project needs.
Staff augmentation also provides companies access to experienced and knowledgeable global talent at a reasonable cost. Companies can tap into a global talent pool of highly skilled professionals without investing in expensive recruitment or lengthy training programs.
Also, staff augmentation enables companies to leverage “shortcuts” through white-label, ready-made solutions for faster go-to-market strategies. These shortcuts are available for a range of applications, including e-commerce platforms for retailers and wallets and online verification solutions for financial and telecom companies. This is valuable for companies that need to move quickly to capture market share or respond to changing customer demands.
What are the most frequent use cases for companies seeking staff augmentation services?
From a business perspective, staff augmentation is an attractive solution for companies looking to achieve business goals in a timely and cost-effective manner. For example, companies can leverage staff augmentation to scale IT resources quickly when they want to accelerate digital transformation.
Staff augmentation can also serve as a highly effective solution for managing short-term projects without the daunting cycle of hiring and firing. Companies can quickly deploy expert resources to complete projects bypassing lengthy recruitment and onboarding processes. This way, companies can avoid the risks and costs associated with hiring and laying off employees while still achieving project objectives in a timely and cost-effective manner.
Which companies are most likely to benefit from staff augmentation?
Companies across various industries and of different sizes can benefit from staff augmentation. However, industries currently undergoing significant digital transformation, such as banks, insurance, and telecom companies, may be more likely to benefit from staff augmentation.
These companies are under pressure to shift their services from physical to digital channels, which requires significant IT expertise and resources.
Fintech startups can also benefit from staff augmentation. These startups often face pressure from investors to quickly achieve profitability while efficiently managing costs. Staff augmentation can offer necessary IT resources and expertise without significant upfront investments.
Retail brands building their marketplaces may also benefit from staff augmentation. With the shift in customer behavior to more online shopping, retail brands are building their e-commerce platforms and marketplaces but do not have the in-house expertise to get this up and running.
How can a company leverage staff augmentation for business growth, especially during times of uncertainty and a rapidly changing global economy?
In addition to the points already mentioned, here are a few more.
Focus on the core business: By outsourcing non-core functions to external experts, staff augmentation allows companies to focus on their core business. For example, a bank may outsource IT functions so leadership can focus on core banking operations.
Enhanced innovation: By tapping into a global pool of highly skilled talent, staff augmentation can bring fresh ideas and perspectives to a company and lead to improved innovation. This can lead to new products, services, and business models, which can help drive growth in uncertain times.