Managed services vs staff augmentation: How to choose them for your organization

Over the last decade, outsourcing has become nothing less than a norm when it comes to IT operations. It allows companies to find new talents from around the world, leverage the potential of the internet. Moreover, its allied services leads to get the job done, employees and workers be more productive and creative. Let’s not forget that outsourcing also helps cut down costs. So, if you’re a company looking to work with the best of the talent from across the world, there are two IT outsourcing models you could look into – staff augmentation vs managed services. In this article, we will help you get a right choice.

What are Managed Services?

At the other end of the spectrum is the managed services model of outsourcing. To clarify, a Managed Solutions Provider or an MSP takes complete charge of crucial processes like recruitment, management and training of staff and guides you in achieving your long-term visions and goals.

staff augmentation vs managed services

They gain control of your projects, their deliveries and take responsibility of delivering pre-decided outputs. Moreover, they don’t simply manage staff but entire projects, meaning

  1. They define the scope of a project.
  2. And they check the level of expertise required for the project
  3. They hire appropriate personnel
  4. They train them
  5. Recommend and implement the best tools (and even setup tech infrastructure) to foster a productive environment and do more.

Top Advantages of Managed Services

1. Flexible Pricing

Managed services involve tying the pricing of collaboration with a project’s output. This means if the scope of your project increases, you will be charged accordingly and vice versa.

2. Documented Approach

You also sign a Service Level Agreement with your managed services provider, where crucial details like the scope of delivery, timeframe and others are mentioned. This ensures your goals are met regardless of scenarios.

3. Access to Versatile Skills

Unlike staff augmentation, where a very niche job role is identified and recruited, managed services involves a larger bubble with a myriad of skill sets and knowledge. The point here is to keep the engagement levels and customer satisfaction at optimum levels at all times.

Top Disadvantages of Managed Services

  1. The availability of personnel with the right skills is always a challenge in managed services. And the ones they find have to work well within the budgeted expenses as it’s a binding contract at the end of the day.
  2. Besides, you could end up spending more if the managed services provider fails to pull off the development process.

What Does Staff Augmentation Mean?

Between staff augmentation vs managed services, staff augmentation involves the identification of a very niche talent gap in the company and filling it with a highly skilled expert for a short period of time. This is not a permanent position but a temporary filling up of a job role that is required for a particular project or task.

staff augmentation vs managed services

For instance, if you are a mobile app development company and one of the major projects that has come in requires blockchain implementation, staff augmentation will let you hire a dedicated developer for the project. This is also applicable to project managers and other job roles that a company requires.

To further understand staff augmentation, let’s break down its advantages and disadvantages.

Top Advantages

1. Cost-Effective

Because we are talking about niche experts, hiring them for a full-time role will only prove to be expensive. Staff augmentation lets you avoid that situation and hire the developer for one or two projects depending on requirements.

2. Offers Better Control

Staff augmentation lets you have a holistic view of a software development process or a workflow by giving you more control of the operations. If you’re a project manager, you know who is working on the most crucial tasks of the project, who is working on regular tasks and more.

3. Prevents Attrition

Attrition is one of the plaguing concerns in the IT industry today. Meanwhile, a lot of companies spend too much time, money and energy on recruiting people and training them only to witness them joining a different organization. They have to repeat this cycle until they hire that professional who settles down for a significant amount of time. With staff augmentation, you can avoid it because you identify your staffing needs and hire on a temporary basis.

4. Augmented Staff Management

Also, the augmented staff is managed by the parent/outsourcing company. This means you don’t have to worry about them quitting your tasks or any operational concerns associated with them.

Top Disadvantages

  1. Because of the same reason that the recruited staff is temporary, you have to spend time orienting the professional to your company, its operating procedures, processes and workflows, culture and more.
  2. Despite being a highly-skilled professional, the additional staff might require some training or education with regard to the project you’re working on.
  3. If your processes are not airtight, there may be vibes of discomfort between the augmented staff and the in-house team.
  4. Remember that you’re only hiring a resource. How you utilize the resource for maximum productivity and output is still on you.

Should we choose staff augmentation vs managed services?

Staff Augmentation

If you run a small-medium enterprise, staff augmentation works best for your requirements. This is because you don’t have to invest in operational expenses. Also, you could save on your infrastructural expenses as most augmented professionals work remotely or from their confined workspaces. Besides, you could also add or remove professionals depending on your requirements, ensuring your permanent team members always get paid even during the lean periods of your organization.

Managed Services

Managed services are ideal if you only have the idea of starting a business in mind. If you have a lack of domain expertise, unsure of how the particular industry works, have no clue about delivery models or staffing and more, managed services can run the entire operations for your business. Moreover, you can move away from micromanaging your resources and focus on what really matters to your business.


That is all about two IT outsourcing models: staff augmentation vs managed services. Hopefully, after reading completely this article, you will have a smart decision when choosing the perfect IT outsourcing model for your business. In case, you need the assistance to support you in your business. So ArrowHiTech is always ready to do that. Therefore, let’s fill your information at CONTACT FORM. The experts of ArrowHiTech will contact you as soon as possible. Moreover, don’t forget to explore more necessary services for your business at ArrowHiTech Website.