Staff Augmentation Trends

Staff Augmentation Trends

The Top Staff Augmentation Trends for 2022

Staff augmentation has steadily become one of the go-to solutions for overcoming operational challenges, especially within IT. The outsourcing service’s flexibility makes it an ideal answer to myriad challenges. However, the pandemic’s shadow will undoubtedly continue to loom over staff augmentation trends in the coming year.

In 2022, the staff augmentation trends to keep an eye on are:

  • An increasingly complex job market to navigate
  • Remote work preferences and infrastructure
  • Organizational flexibility and “all-weather” resilience

Each of these trends reflects broader employment and hiring challenges throughout the entire workforce, and will impact how organizations prioritize staff augmentation services when strategically aligning and assigning projects to their teams.

#1 The Most Challenging Job Market in a Decade

Initially, the pandemic resulted in an unemployment spike and a flood of job seekers as organizations temporarily shut down operations or furloughed employees.

Over roughly the past 80 years, the US unemployment rate (the percent of the active labor force currently unemployed) has averaged around 5.76%. But at the beginning of the pandemic, unemployment surged to about 15%. For context, the 2008 recession brought the unemployment rate to about 10% at its highest point. 

Although the unemployment rate has returned to about the pre-pandemic levels of 4%, the global uncertainty around the last few years has had substantial impacts on the way both organizations and working professionals approach their jobs.

Shifting recruiting and hiring dynamics contribute towards the complex job market’s position as the top staff augmentation trend to monitor in 2022.

New Technology Implementations In Response to Workforce Challenges

To cope with production requirements or goals amidst social distancing and other workplace restrictions, many businesses have turned towards automation, artificial intelligence, and similar technology implementations. While the pursuit of technology-based efficiencies has remained a constant aim across all industries for some time, many organizations were forced to escalate or add new implementations to manage these recent workforce challenges.

According to the World Economic Forum’s The Future of Jobs Report 2020, which compiled extensive data through the pandemic’s early stages, businesses self-reported that:

  • About 43% intended to implement technologies that would reduce their personnel
  • About 41% sought to increase their reliance on contracted labor for specific projects and initiatives (for example, outsourcing to staff augmentation firms)
  • Only 34% expressed plans to leverage technology implementations to grow their employment numbers

Contending with Widespread Talent Gaps, With Staff Augmentation As A Potential Bridge

According to a recent report by global management consulting firm McKinsey & Company, 87% of organizations are currently challenged or expect to be challenged with skill shortages in the next few years.

Numerous factors contribute to this pressing issue, as the large “Baby Boomer” generation progresses towards retirement age and the recruitment pool lacks skilled and specialized workers. Unfortunately, replacing jobs with automation and technology implementations only increases the ratio of unskilled job seekers among the unemployed.

The technology field may be most affected by the talent gap, as evidenced by data from McKinsey and Company and the Society of Human Resource Managers (SHRM): 

  • 43% and 26% among those surveyed listed “data analytics” and “IT, mobile and/or web design and management,” respectively, as the highest areas of concern 

  • 73% of organizations will have difficulties with “recruiting technologists and filling open tech positions”

The staff augmentation market provides a solution ready to plug in for positions and responsibilities that can be outsourced. Organizations that prefer to hire full-time, in-house employees will have to determine new answers to the skills shortage problem.

Navigating A Job-Seekers Market and the Associated Challenges

While high unemployment rates, technology implementations, and talent gaps seem to present a triple threat to the workforce, the reality is significantly more complicated. Contrary to expectations, labor and recruiting experts have begun characterizing current hiring conditions as a "job-seekers market."

As pandemic restrictions ease and companies seek to expand their workforce beyond essential staff, experts naturally expected jobs to reopen and the unemployment rate to fall.

However, the sheer amount of roles to fill was not accurately forecasted.

The US Bureau of Labor Statistics has reported that its 2021 job growth projections for Q3 resulted in the largest underestimation in more than 40 years—626,000 below reported numbers. By the end of last year, employers were contending with 10 million openings but only 7.4 million unemployed professionals.

There simply aren’t enough people in the workforce to address current needs, and employers are competing amidst a highly competitive marketplace and highly favorable conditions for experienced talent.

Contending With The “Right Fit” Conundrum

Organizations have increasingly recognized just how unequal their hiring decisions have been.

They've found that applicants who best fit company operations and culture is one of the most critical factors for new employees' and their own success. The challenge for organizations is remaining patient during recruitment and evaluation processes despite the urge to address personnel gaps and hire immediately.

Waiting for the “right fit” can leave your organization with severe role absences that hinder operations, but hiring “any fit” often creates cascading workplace challenges and stress if new employees don’t address critical needs or create friction.

Estimates already place recruitment, evaluation, and hiring process costs at roughly $4,000 before your chosen applicant signs on. And this figure is an average across all US employers and positions; it’s not specific to roles requiring substantial experience and technical knowledge that will take longer to fill. Not spending the time to find the “right fit” will also increase costs due to drawn-out onboarding and higher turnover rates.

Factoring In the Job Seeker Side of the Equation

This “right fit” trend is not unique to the organizational side of hiring dynamics. Job seekers are also placing greater priority on factors outside of stated position requirements and expectations, such as:

  • Company culture
  • Organization-wide values
  • Personal fulfillment and growth opportunities
  • Work-life balance
  • In-person vs. hybrid requirements

Navigating the pandemic proved remote work’s viability in many circumstances where the option had never been provided, and workers have become attached to the tangential benefits (reduced commute times, for example). Further, the broad consumer trend of holding organizations responsible for their environmental, social, and governance (ESG) practices has now transferred into job seekers’ requirements.

Put simply, job seekers want their employer to be the right fit for them, too.

Both organizations and individuals are now significantly pickier about who they work for, not only what they do.

Accounting for the Importance of Soft Skills

Part of the challenge with finding the "right fit" among applicants is the increasing demand for "soft skills." Soft skills refer to qualities outside of position-specific or technical proficiencies. They're skills transferable across any role and essential to healthy operations. Unfortunately, they're also tricky to measure empirically.

Soft skills generally comprise abilities such as:

  • Relationship-building
  • Interpersonal or communication skills
  • Problem-solving and critical thinking
  • Leadership ability

Extensive applicant evaluations can uncover projects and instances that exemplify soft skills, but an “unproven” element to these abilities often remains. Regardless of whether organizations pursue full-time hires or staff augmentation, they need to ensure that their workforce brings the appropriate soft skills to their roles and responsibilities.

#2 Remote Work and Work From Home’s (WFH) Viability

If the pandemic has helped prove one positive thing across most workplaces, it’s that remote work is definitively viable. With the shutdowns and restrictions impacting the ability to continue working in-office, the PEW Research Center determined that 71% of employees that could work from home did so most or all of the time by December 2020.

Despite all of the other pandemic complications (supply chain disruptions among them), a study that began before and continued during COVID-19 demonstrated that remote work proved beneficial for most employees:

  • About 60% of employees indicated that they were more productive than they had expected compared to the 14% that indicated their productivity was below expectations.

  • About 40% of employees reported being more productive compared to pre-pandemic, in-office conditions compared to the 15% that reported productivity decline.

The effect of widespread remote work has employees emphasizing that the supporting structures remain in place long after the pandemic and its aftershocks have fully concluded. If your organization intends to do away with remote full-time employees or hybrid options, your recruitment challenges and the difficulties of a job seeker’s market will be tougher to overcome.

Enhancing Remote Work Infrastructure with Technical Staff Augmentation 

To facilitate remote work and maintain business continuity over the past couple of years, employers have invested significant resources in establishing the necessary communications and technology infrastructure.

Those infrastructure investments haven’t disappeared overnight.

Fortunately for organizations managing job market challenges, remote work infrastructure readily supports staff augmentation practices as short- or long-term solutions. Especially for IT roles that can primarily be performed remotely, implemented infrastructure enables organizations to fill positions via technical staff augmentation on an ad-hoc basis.

#3 The Importance of Flexibility and “All-Weather” Resilience

The fastest, best-designed cars require perfect pavement to achieve their top speeds. Before COVID-19, most organizations placed an unassailable priority on optimizing efficiency.

Everything was aimed at faster, streamlined operations.

But what happens when a vehicle capable of record-breaking speeds encounters a stretch of road filled with potholes?

With the pandemic, organizations worldwide rapidly learned the dangers of sacrificing resiliency to achieve further efficiencies. Personnel and operations weren’t set up with the appropriate insulation and fail-safes, and any difficulties quickly compounded.

As a result, flexibility and resiliency have become new organizational priorities.

Achieving Flexibility Through Staff Augmentation Companies

Staff augmentation provides organizations with the workforce flexibility to accommodate any circumstances. If your workforce needs to change, you can scale and adjust your staffing accordingly—and much more easily than with full-time hires.

The staff augmentation process brings in skilled experts as needed to help complete responsibilities and tasks that your current employees can’t manage due to bandwidth and talent restrictions.

Staff augmentation acts like a portable pit crew for your organization.

Suppose you need to outfit your racecar with off-road tires and a more robust suspension to smoothly glide over potholes without breaking pace. In that case, the necessary adjustments will be in place as quickly as the "vvrrt vvrrts" of an air-powered ratchet.

Stay Ahead of Employment and Staff Augmentation Trends in 2022

The current workforce and staffing trends go hand-in-hand: present recruitment, hiring, and employment challenges will continue to experience pandemic aftershocks, while the overall reliance on staff augmentation provides a new solution to overcoming these obstacles.

With remote work infrastructure already in place, more and more organizations realize that they can readily support staff augmentation that provides flexibility and resiliency.

However, staff augmentation requires similar considerations to making a full-time hire. Your outsourced capabilities need to be performed by individuals and a staff augmentation firm that provides the “right fit” between expertise, role-specific talent, and soft skills. You need a staff augmentation solution where empathetic collaboration is the norm, not a “nice-to-have.”

And that’s exactly what we provide here at ScaleTech Consulting.

Contact us to learn more.

Sources: 

Chicago Booth Review. Are We Really More Productive Working from Home? https://www.chicagobooth.edu/review/are-we-really-more-productive-working-home 

McKinsey & Company. Beyond hiring: How companies are reskilling to address talent gaps. https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/beyond-hiring-how-companies-are-reskilling-to-address-talent-gaps 

SHRM. IT Workers Will Be Hard to Find and Keep in 2022. https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/it-workers-will-be-hard-find-keep-2022.aspx 

Trading Economics. United States Unemployment Rate. https://tradingeconomics.com/united-states/unemployment-rate#:~:text=Unemployment%20Rate%20in%20the%20United,percent%20in%20May%20of%201953

Glassdoor. How To Calculate Cost-Per-Hirehttps://www.glassdoor.com/employers/blog/calculate-cost-per-hire/ 

Washington Post. The govenment drastically underestimated job growth this summer. https://www.washingtonpost.com/business/2021/11/16/government-underestimated-job-growth/ 

Washington Post. Why millions of job seekers aren’t getting hired in this hot job market. https://www.washingtonpost.com/business/2021/11/08/job-search-not-getting-hired/ 

World Economic Forum. The Future of Jobs Report 2020 Executive Summary. https://www.weforum.org/reports/the-future-of-jobs-report-2020/in-full/executive-summary 

Y Charts. US Unemployment Rate. https://ycharts.com/indicators/us_unemployment_rate