Tech Updates

Staff Augmentation Cost | Staff augmentation might be cheaper than you think

Depending on the position, hiring an employee typically costs roughly $4,000.

Written by Niel Patel · 4 min read >
Staff Augmentation Cost

Staff augmentation has many benefits for companies but one benefit is most highlighted: savings. The savings factor is the focus of this article and in the following paragraphs, we will discuss why staff augmentation is cheaper than you might think. For information, the augmentation service method is one of the best methods at this time to save a significant amount of operational costs.

In many scenarios, especially in the last one or two years, companies tend to prioritize workers who are able to work remotely (work online). Normal hiring tends to be laborious and convoluted, opening up opportunities for staff augmentation agencies to offer their services. But one thing is for sure, staff augmentation can be cheaper than you think. Curious? Keep reading!

Staff augmentation service is a limited service.

There is one key word here: limited. That means the service has a timeframe and once that is over, you can get the workforce back on “their base.” In other words, you don’t have to pay too much for times when you don’t need them. You pay them for a period of time during which they can work for you. No more and no less. As the end result, efficiency can be maximized and waste can be reduced.

You can skip several stages of recruiting and maybe save your money

The Society gives one conclusion for Human Resource Management. The average cost for recruiting ordinary employees is 4 thousand dollars per recruit. For most people and start-ups, that’s a pretty big number and from an efficiency perspective, it’s not worth the price because you can’t maximize the full potential of your hired workforce within the timeframe you’ve set before. You have to do the orientation, make him adapt to the real work environment, and take care of some permissions and a few other things before making sure he is ready to do the job.

With staff augmentation services, you instantly get a truly professional and experienced employee without having to do orientation and all the other hassles. And often, the fees you have to pay are lower! If you need qualified IT workers, you really need a good IT staffing agency capable of providing just about anything you need for the workforce. And if possible, you can pay less than if you hired regular employees.

Average Training Cost per Employee
How Much Does It Cost To Hire a New Employee?

Hiring a new employee costs more than just their salary. Suppose you are hiring an employee having $1500 per month. The cost to hire this employee will be around $2250. This cost includes basic training cost.

How Do You Calculate the Cost to hire an Employee?

It is easy to calculate the cost to hire an employee. Monthly salary * 1.5 = Hiring cost.

How to reduce hiring costs?

1. Create an internal referral program.
2. Get professional help.
3. Build an effective careers portal.
4. Recruit over social media.
5. Curate a talent pool.

What cost included hiring an employees

Depending on the position, hiring an employee typically costs roughly $4,000.
Multiple resources are required during hiring a new employee’s recruiting, interviewing, onboarding, and training phases.
Although there are several strategies to lower hiring costs, the best strategy is to increase staff retention and maintain low turnover.

  • Job posting cost
  • Calling and interview scheduling cost
  • Candidate screening
  • Background checks
  • Interview
  • Sorting and wait to join.

Sometimes virtual orientation is more than enough.

Most of the employees provided by staff augmentation services are professionals with at least 5 years of experience in their field. That way you don’t have to prepare them in great detail through grueling face-to-face orientations. You may be able to prepare a virtual orientation that is easy to understand and they will immediately be able to adapt to the work environment in your company.

This point is a rehash of point number two but emphasizes “orientation efficiency.” It is common knowledge that work orientations are often a source of considerable waste. With virtual orientation, you can save most of your money. You don’t have to pay for their transportation to your place or accommodation. But make sure you’re dealing with the right people; otherwise, instead of saving, you might waste more money hiring the wrong people (incompetent people).

Hiring the right people is sure to save

Hiring the right people is the ultimate savings. Okay, you may need to pay more upfront but if you hire competent people, all the money you have to pay upfront will be paid off when your company reaches profits faster than your expectations. There is a difference between a skilled employee and an amateur employee. If you double the number of qualified employees, the effect on your company will be multiplied. You may be able to reach your target faster than you would have to deal with those who are of average or even poor quality.

All expenses related to normal human needs can be reduced.

Every employee needs food and shelter. If you have IT employees in your physical office, it is your responsibility to ensure they are not neglected inside and outside the office. Most staff augmentation services for IT jobs provide employees who can work remotely, so you don’t have to worry about your employees’ basic needs (beyond the technicalities of the job).

In many cases, you can lower the tax burden.

When hiring employees directly, you may incur a tax burden that you sometimes don’t even know about. There is a link between three general factors such as taxes- payroll, sales, and property. If you hire employees remotely, tax costs can be minimized or even eliminated in some situations.

You tend to reduce your budget to pay salaries.

There are many studies that reveal that most employees would prefer to get a pay cut (to some degree) rather than having to spend long hours in the office. This of course, has something to do with the office atmosphere which is sometimes boring for some people, and the cost of living in the area where the office is located. Departing from this, some companies often employ professional employees from third-world countries where the cost of living there is lower than in North America and Western Europe. Differences in the cost of living result in different salary standards.

Making a Case for Hiring Remote Engineers in 2022

Staff augmentation usually eliminates the obligation to provide health insurance.

When hiring employees remotely, you can avoid paying for health insurance costs. In some states, the cost of health insurance for employees can be very high. It is an advantage if you as the company owner can avoid the obligation to pay for health insurance while still providing a decent salary for “your remote employees” according to the standard of living in the area where they are and work.

Staff augmentation services can provide tremendous savings for your company’s operations. Did you find this post informative? We hope so. Have a good day!

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