The global business consulting industry is valued at around USD $824 billion, while the global staffing market is already a trillion-dollar industry.
But just because something is bigger, doesn’t mean it’s better.
When you’re looking to fill a role or complete a major project...you quickly come to an important question. Should I opt for a staffing or a consulting company?
There are so many factors to consider, and in this guide to staff augmentation versus consulting, we help you weigh them all.
Keep reading for a comparison of both options against 20 different factors, as well as a condensed version of the main advantages and disadvantages for each.
What is staff augmentation?
Staff augmentation refers to using external personnel to fill gaps in your workforce, when you can’t hire quickly enough using direct job listing and hiring methods.
Whether it’s to fill an important role fast or source specialized talent, staff augmentation is a common strategy for businesses of all sizes.
Unlike staffing agencies and recruitment companies that source employees that you can legally hire in-house, staff augmentation services provide access to talent—but you continuously pay that company, and it is typically outside of the terms of service to attempt to hire talent in-house.
Main advantages of staff augmentation
Fast access to talent: You can source the talent you need within days.
Vetted talent network: Staff augmentation companies usually vet talent, whether through technical interviews or skills tests.
Reasonably priced: Because no management or strategy is provided, there’s not a massive upcharge on the staff’s hourly rate or salary.
Main disadvantages of staff augmentation
Management, onboarding, and training fall on you: Once the staff augmentation company matches you with the right personnel, everything else falls on your shoulders.
Can’t convert personnel into full-time hires: It’s usually against the contract terms to hire the people you find, so you have to continue to pay via the staff augmentation company, and you can’t welcome someone to your company as an in-house employee.
Your company doesn’t access new processes: Without strategy or project management, you don’t get to peek inside of optimized business processes the way you would when working with a consulting firm.
What is consulting?
Consulting firms, on the other hand, offer comprehensive services from strategy through execution. Common consulting firms include product development firms, UX design firms, operations consultants, marketing firms, outbound sales companies, IT firms, and other managed services.
When you hire a consulting firm, you’re not only hiring the people you need to get something done, but their signature approach and processes as well.
Main advantages of consulting companies
Learn better ways of doing things: Consulting firms give you a front-row seat to processes optimized from dozens or even hundreds of client engagements.
Focus is on projects and outcomes: You hire consultants to complete certain projects or achieve certain outcomes, and you can part ways at the end.
Management is done for you: You don’t have to pretend to know how to manage all of the moving parts required for project success.
Main disadvantages of consulting companies
Expensive (if you don’t really need strategy or management): If you’re already a pro at planning this type of work, you’ll be paying higher fees unnecessarily.
No control over the work being performed: Because the firm offers management, you don’t usually have the ability to control everything collaborators do.
Lack of access to individual talent: You also can’t even talk with many people working on your project. Unless you’re a pro at managing this sort of work, that might not be a bad thing, but if you want to work with talent directly, you won’t be able to.
Staff augmentation VS consulting: side-by-side comparison for 20 elements
Let’s dive into our side-by-side comparison of staff augmentation and consulting.
This quick overview of 20 essential elements will make it easy to decide which option is right for you.
1. Management
Staff augmentation: No management services are provided. You must assign and review tasks and keep the workflow moving seamlessly between collaborators.
Consulting: The consulting firm will manage all the talent and moving parts.
2. Speed
Staff augmentation: You can quickly hire the staff you need, often in under a week.
Consulting: Some consulting firms might have a waitlist, or might only start projects at the beginning of the month.
3. Cost
Staff augmentation: You won’t pay a big upcharge on top of the staff’s wages.
Consulting: You’ll pay a larger upcharge on top of what it would cost to hire the talent individually, because you’re also accessing strategy, management, and proven processes.
4. Customization
Staff augmentation: You can hire employees part-time or full-time, based on your staffing gaps.
Consulting: Depending on the type of consulting firm, you can get a project pitch customized to your company’s needs in terms of scope, length, etc.
5. Specialization
Staff augmentation: You can hire vetted talent with certain special skills.
Consulting: Consulting firms offer access to multiple specializations, all working together as a team.
6. Strategy
Staff augmentation: No strategy work will be provided. It’s up to you to ensure that staff are working towards strategic aims.
Consulting: The firm will help you strategize what you need to do, and how you need to do it.
7. Infrastructure
Staff augmentation: No infrastructure is provided in terms of the employee, the project, or business operations.
Consulting: The consulting firm will typically handle infrastructure like cloud computing, DevOps platforms, or whatever else is needed.
8. Onboarding
Staff augmentation: You need to successfully onboard new hires, welcome them to your team, and get them up and running.
Consulting: The consulting company is in charge of onboarding talent behind the scenes, and you don’t have to worry about this at all.
9. Ongoing Training
Staff augmentation: As best practices and technologies change, you will need to provide training and pay staff to complete the training.
Consulting: The firm must up-skill their own employees, and this is usually done at their cost and not charged to your project.
10. Processes
Staff augmentation: When hiring vetted staff, you only acquire their professional experience, whether or not their former employers had good work processes.
Consulting: One of the big pros of consulting firms is getting to see and learn from their optimized work processes, which you can later use when hiring in-house staff.
11. Collaboration
Staff augmentation: Staff that you hire via vetted networks can easily be added to your in-house team and collaborate inside of Slack, Asana, or whatever tools you use.
Consulting: Your consulting firm will have their own platforms for collaboration, and you may or may not see what’s happening behind the scenes. Usually, it’s just your main manager or point of contact that interfaces with the consultants, not your entire team.
12. Communication
Staff augmentation: You can communicate with staff on your terms, and set expectations and requirements.
Consulting: The consulting firm will usually work on their terms, and only communicate during working hours for their timezone.
13. Control
Staff augmentation: You get complete control over the work your staff does, and how they do it.
Consulting: The consulting firm takes control over individual collaborators, which is usually a good thing, especially when you’re not experienced in the type of work.
14. Flexibility
Staff augmentation: There are usually no long term contracts, and you can let go of staff you no longer need.
Consulting: Flexibility really depends on the firm. Some firms require lengthy contracts, but at DevSquad we believe in what we’re doing so much, that we have no long-term contracts and clients pay us month to month.
15. Focus on Outcomes
Staff augmentation: Staffing companies just want to connect you with vetted talent, they don’t care about project outcomes.
Consulting: Consulting firms should be laser focused on delivering specific outcomes using the path of least resistance.
16. Accountability
Staff augmentation: Staff hired in this way are only accountable to doing the work you give them at the designated times. There’s typically no accountability to certain best practices or goals.
Consulting: Consulting firms are accountable to the terms of the contract. You can pay for specific project-based work and they have to fulfill all requirements.
17. Knowledge Transfer
Staff augmentation: It’s up to you to ensure that knowledge is being transferred between external staff and internal hires.
Consulting: A good consulting firm should have processes in place for transferring project knowledge and best practices to your team.
18. Handover
Staff augmentation: Staff hired through augmentation services can leave or quit at any time, with or without handing over their work in an organized, helpful way.
Consulting: A consulting firm is accountable to the handover process they promised you, and they should offer some way of handing over a project to your internal team and teaching your team how to take charge.
19. Security
Staff augmentation: Because staff work using your processes and infrastructure, you can usually control the cybersecurity risks a bit better.
Consulting: Consulting firms will have numerous people working on your project, so check with them to gauge any potential security risks.
20. Administrative Work
Staff augmentation: You usually pay the staff augmentation company directly, meaning there’s no HR or payroll requirements.
Consulting: The consulting firm hires employees and freelancers, and you don’t have to worry about W2s or W9s. You just pay the firm.
Managed services versus staff augmentation or consulting
Are you wondering how managed services fits into all of this? Is managed services more similar to staff augmentation or consulting? Short answer: consulting.
Managed services include end-to-end project management so you don’t have to worry about coordinating all of the different moving parts.
The only differences between managed services and consulting are customization and strategy. While managed services companies might not offer a big variety of services and might only focus on a few core projects, a consulting company will typically offer a wider variety of services and customize the approach to each client. Similarly, managed services companies may or may not provide much upfront strategy, while consulting companies will almost certainly provide a comprehensive audit or strategy process.
When to use staff augmentation or consulting firms for your SaaS company
Ready to make your final decision?
Here’s our hot take on which to choose when it comes to launching a software company.
New SaaS launches and startups
If you’re launching a brand new company, you’re better off working with a consulting firm to help you clarify, validate, and build your SaaS product.
The vast majority of founders haven’t worked on a product during it’s earliest days, that path is lined with failure. You can avoid wasting your money on a product destined to fail by teaming up with a consulting firm that offers proven product validation services like...
Strategy workshops
Product prototyping
User testing to validate the concept with real target users
You can also save money during development by working with a firm that offers end-to-end management. Launching a SaaS product requires managing developers, DevOps engineers, QA testers, UX designers, and more. You’re better off letting an expert handle that so you can launch your MVP quickly.
Established companies and scaleups
On the other hand, established businesses might want to choose staff augmentation companies. So long as you have an internal employee with the time and skills to provide the relevant strategy and management, you can save money by adding external hires.
But if you need to learn new processes and don’t have experience managing these types of hires, you’re better off going with a consulting firm you will handle everything required for project success, while teaching your internal team new skills.
Why DevSquad takes the consulting approach: launch or improve your SaaS with us
Through launching over 100 SaaS products, we’ve honed our processes for product validation and development.
Founders launch their businesses faster and cheaper when they utilize our consulting approach.
Take advantage of our offerings:
New idea validation (strategy, prototyping, and real user testing)
MVP and product development (product management, UX design, development, deployment, and QA testing)
Month to month pricing with no long term contracts
Access to our pre-built library of basic features and elements so we can launch your unique product in just 3-6 months
Development processes and playbooks that you can make your own, and helpful product handover and training when you’re ready to take over
Work with us to revitalize your digital product or launch a SaaS from scratch.
