Straight out of the gate, I can say that dedicated teams aren’t for everyone. If you’re looking to start a larger long-term project, then yes, they could be the right solution. However, using a dedicated team might be a worse choice for you. This is where staff augmentation comes into it. Adding external engineers into your team to fill skill gaps might just be a better fit. It’s a hot topic as 45% of organizations in the US are planning to increase their staffing levels.
So how do you know which is best for you?
Today, I will look at the difference between dedicated teams and staff augmentation services and a guide to the type of project they are better suited to. This will give you a better idea of which service is right for your project.
What’s the main difference between a dedicated team and staff augmentation?
Put side by side, let’s start by showing how the two models are different.
Aspect | Dedicated Team | Staff Augmentation |
What is it? | A team is provided by an outside company to work solely on a specific client project. | Brings in extra hands or specific skills to bolster an existing in-house team. |
Who’s in charge? | The client calls the shots on project direction but might share day-to-day management with the team. | The client manages these extra team members alongside their own staff. |
What skills? | A versatile mix of skills tailored to what the project needs. | Offers targeted skills to plug any gaps, with specialists available if needed. |
How flexible? | Pretty adaptable; the team can shift focus within the project’s scope. | High flexibility; clients can adjust team size based on need. |
What does it cost? | Usually cost-efficient for longer projects. Pricing options include fixed rates or hourly rates. | Costs can be higher as it often depends on the specialist’s expertise. Typically billed by the hour. |
How do they fit in? | Integration might take some time since this team operates a bit independently. | Usually, slots in easily with the existing team, filling specific roles as needed. |
Ideal project length | Works best for projects that are longer term. | Great for short-term needs but can adjust for longer projects if necessary. |
Best for … | Perfect for large-scale projects where a self-contained team is needed, like developing a new product. | Ideal for projects that need specific skills or temporary help, such as updating or expanding an app. |
When Are These Models a Good Fit?
When deciding between a dedicated software development team or IT staff augmentation often depends on the project’s specifics. How big is it? What skills do you need? How might it evolve? Both models have their advantages and applications. Below is a breakdown of when each option works best, along with some insights on market size and usage trends to give you a better sense of their relevance.
Staff Augmentation Model
When is staff augmentation a great match?
- Short-term needs, where you just need specific skills temporarily to fill gaps without making a long-term commitment.
- Dynamic projects that might need team changes based on new requirements.
- Scaling up or down quickly to avoid the costs and commitment of hiring full-time staff.
Why is staff augmentation a great fit?
Staff augmentation is particularly well-suited for companies that need the flexibility to adjust their team size and skill sets as project demands change. This model offers scalability, allowing you to bring in specialized skills as needed, which is great for projects with changing requirements. Additionally, it can be more cost-effective for shorter projects, as it avoids the overhead costs tied to hiring your own employees. By integrating skilled professionals directly into existing teams, it can help in knowledge transfer. This means your team can learn from the outside engineer. Staff augmentation gives you the support needed without managing a separate team.
Usage and market size:
- The global staff augmentation market is booming, valued at $132.9 billion in 2020 and expected to grow at a 5.1% CAGR until 2028. By 2023, it hit $460.9 billion, with a projected growth rate of 4.5% annually through 2028.
- In the U.S., the IT staffing industry alone was projected to reach $26.8 billion by 2023.
- North America dominated, holding over 32% of the market in 2020, while Asia Pacific is expected to see the highest growth at 7.3% CAGR through 2028.
- 38% of U.S. IT leaders and 34% of companies in North America and Western Europe currently use staff augmentation services, with 45% of organizations planning to increase staffing in 2022.
- Top sectors using staff augmentation include Information Technology and Medical Staffing.
Dedicated team model
When is a dedicated team model staff a great match?
- Large-scale projects require a full development approach from start to finish.
- Long-term goals need dedicated attention and deep involvement in the project.
- When specific expertise is missing in-house, particularly for projects needing continuity and a strategic approach.
Why is a dedicated team model a great fit?
The dedicated team model offers a fully committed and stable workforce, making it ideal for projects that require long-term focus. These teams are assembled with a customized skill set specifically tailored to your project, which can eliminate the need for additional outsourcing. For long-term projects, dedicated teams become more efficient over time as they get a better understanding, leading to cost savings. These teams provide a solid foundation for ongoing development and can adapt more closely to the project’s unique requirements. This means that all efforts are aligned with your objectives. This approach is particularly great for complex projects that require both strategic insight and a wide range of specialized skills.
Usage and market insights:
- The global IT outsourcing market, which includes dedicated teams, was valued at $565.43 billion in 2023 and is expected to reach $609.53 billion by 2024, growing annually at about 8%. This reflects a growing reliance on outsourced IT services globally.
- In the U.S., the IT staffing market is projected to reach $185.5 billion by 2024, with dedicated teams playing a significant role as companies seek specialized talent for long-term projects. This market is expected to grow at a CAGR of 10.71% through 2028.
- North America leads in IT staffing, while Asia-Pacific, particularly countries like India and China, is anticipated to see rapid growth due to their large tech talent pools.
- Over 56% of global companies now employ remote or distributed teams, a trend supported by the growth of team collaboration software, projected to rise from $16.1 billion in 2023 to $49.25 billion by 2032.
- Key sectors utilizing dedicated teams include Technology, Healthcare, and Financial Services, which demand specialized expertise for digital transformation and cybersecurity needs.
Conclusion
Both staff augmentation and dedicated teams offer unique benefits tailored to different project requirements. Staff augmentation is ideal for short-term, dynamic needs and offers flexibility and cost-efficiency, particularly in IT and healthcare. Meanwhile, dedicated teams are better suited for large, long-term projects where continuity, deep integration, and a diverse skill set are essential. If you are still unsure then Inspeerity software company can help you in either case.
Understanding these models and their strengths can help you choose the right one to match your project needs and company goals. Whether you need agility for a temporary task or a dedicated focus for a complex, long-term venture, either model can help you set your project up for success.