how staff augmentation can reduce costs for your company and tips on managing them successfully image

In earlier articles, we’ve explained staff augmentation and what its numerous benefits are. So here we will only be touching upon one of the major benefits enjoyed by companies who choose to hire remote employees through staff augmentation firms - the cost-saving factor. 

There has been a boost in this kind of work culture, especially in the current scenario, with companies preferring to have their employees work from their own homes. When new projects come in and the existing team becomes insufficient, companies prefer to hire remote workers through staff augmentation agencies. 

Staff Augmentation

Here are some ways in which you can reduce costs for your company by choosing a remote augmented team.

1. Recruitment for the company happens within a limited time-frame 

There are costs involved in every process of recruitment and selection, some could be internal and some external. Charting out the costs could also be a painstaking and time-consuming process, and you have to consider the salary of the recruitment team, selection team, the advertising costs involved in the job listings, the software that helps in recruiting and hiring, and so on. And the number crunching doesn’t end there. You still have to consider the benefits, taxes, office spaces, insurance policies, etc. 

According to the Society for Human Resource Management, the cost of hiring a software developer is $4,129 per hire and it takes an average of 42 days to hire one. This, of course, varies from company to company, but one thing is sure - you have to spend thousands of dollars for a skilled developer, and then prepare them for onboarding before they can turn productive. This means the company loses a lot of time and money on a single person. 

With staff augmentation, you can not only bridge the skill gap in your company at a short notice, but you can also get them ready-made from a reliable, third-party service provider.

2. Need to spend time in training or acquiring skills

Normally, augmented team members are provided by third-party service providers and they are hired by other companies based on their skills and expertise. The remote employees don't have to go through any training programs, but they would still need to be brought into the team through a process known as virtual onboarding. However, this isn’t a costly issue because the onboarding can be done virtually, with absolutely zero travel and no extra equipment.

3. Less money is spent on continuity of operations

Businesses must have emergency contingency plans that would help them with continuity after a break or slow down. In the current scenario, the COVID 19 pandemic compelled employees to start working from home. You can cut costs when you have augmented teams as you don’t have to spend thousands of dollars on insurance, getting the building earthquake-ready, hurricane-proof, and so on. 

4. Hiring the right candidate

Hiring the wrong person can cost your company thousands of dollars in wastage, and a shortage of talent is an ongoing problem. 

With a remote working strategy, you have plentiful options to hire the right candidate as you can expand your talent pool and distance is not a problem anymore. When the talent pool grows, there is greater productivity and no dearth of innovative thinking. Thankfully, when you are hiring through a staff augmentation agency, the chances of getting the right team is much higher.

5. You can save on rent

When you have a full-fledged office building, the rent can easily come up to thousands of dollars, and of course, this varies according to location and other factors. Rent, utilities, electricity, parking facilities, maintenance systems, security, furniture, equipment, office decor - the list will never end when you have a building with staff working in it. 

Imagine having at least 50% of the staff working from their homes (or in their own offices provided by the staff augmentation agencies), and do the math. The amount of money you can save on all these aspects is certainly tempting and several companies are actually considering asking their permanent employees to continue working from home post-COVID 19.

6. Save on cafeteria and other food expenses

Working from home, or working from away your offices makes it possible for companies to cut down on expenses incurred through refreshments and food. There is no need to run a cafeteria or a canteen because the staff are all at home, and even if you need to have a small office setup, just having a coffee, drinks and snacks machine would suffice.

7. Save on travel expenses

Several businesses provide transportation allowance to their people. A lot of money can be saved when the staff doesn’t have to commute and fro. This means they can stay at home, and use that time productively, rather than tackling the early morning rush. Unless there are important face-to-face meetings to be conducted, all meetings and conferences can be held virtually, which is a huge time and money saver. 

8. Tax burdens can be eased

Depending on where your company is located, there will be tax burdens that you may be unaware of. There could be complexity depending on the state you reside in, as different states have different tax measures. There are three factors that determine the tax nexus - payroll, property, and sales. Hiring a tax professional can be an expensive affair, so you can outsource this work to an accountant or a payroll agency. As this is an entirely new angle to consider with remote working, they would also be able to find innovative ways to reduce your company taxes. 

9. Reduce payroll costs according to location

Whether it is a staff augmentation team or a remote employee scenario, employers are pondering the idea of trimming pay. Research has shown that employees are willing to take a pay cut if given the option to work from home. Facebook even warned its employees that if they are relocating to a place where the cost of living is lower, then they should expect a pay cut. Similarly, if your augmented team is located in a country where the cost of living is lower, then that could be beneficial for your company too. 

10. Employees can be asked to BYOD

Setting up a home office can be expensive for both the employees and the company. To mitigate the cost, you can enforce a BYOD (Bring Your Own Devices) scenario where the employees use their own devices for work. If required, you can provide them a standard allowance for a few basics, like mobile phones and laptops, and a dedicated internet connection. There can also be a reimbursement policy to fit the situation. 

11. Reduced healthcare costs

Working from offices can increase the chance of infection exposure, so employees tend to get sick more often which leads to stress, and this in turn affects morale. With an augmented team working remotely, employees don’t have to worry about risking infection or spreading the disease to other people, so there is a lesser chance of absenteeism. 

With less chance of getting sick, employees are healthier and can work more productively. So when you are investing in a good employee team, you get the results to show for it. 

12. Low turnover rate is definitely a plus

People working from their own homes are more engaged in their work when compared to office goers. They tend to take fewer days off. They are also likely to spend more time in front of the computer. After all, they are saving on commute time, and so they can afford to do that. 

Remote working is also a valuable retention tool for companies, thanks to the low turnover rate. The turnover rate is lower because the employees get the freedom to work from their convenient locations, leading to better productivity. Your projects will be completed faster, so you can take on more projects and complete them with the same team, as opposed to hiring a new team. In the long run, this is a cost-saving measure.

13. Pick and choose talent from anywhere in the world

With the remote working scenario, the whole world is your field, so you have the option of looking for a good mix of talent and low remuneration when you are hiring. The diverse talent pool offered by the staff augmentation agency does indeed give you the best!

How to manage your virtual teams better

Managing Virtual Team

Having remote augmented teams is cost-saving, but managing the teams must be done professionally and optimally so there is real benefit from having teams working away from your office. 

And there are other aspects where your attention must be centered on. For example, the staff might still need to travel to your main offices, have meetings with clients and so on. You might also have to give them virtual credit cards so they can pay for all their travel expenses online. Other points to note are outlined below.

1. Choosing the communication tool

There must be seamless communication and collaboration among team members even if they are geographically separated. This would help them to learn from one another and encourage each other. Additionally, your employees can use communication tools to communicate with the company, keep up with the latest updates, and have access to all the tools for their projects. However, to make this effective, you have to ensure that the right updates are shared with the right employees, and that they are done on time. 

Google Hangouts, Slack, Trello, Dropbox, Skype, Google Meet, Zoom, ez Talks Cloud Meeting are just a few tools of communication used by companies to keep in touch with their virtual teams. Using these tools on a regular basis would create a connection with your team, and this would help them perform their tasks and reach goals. 

2. Hire a good manager to lead the team

A good manager is a good investment. While hiring the person acting as manager, make sure it's a person with excellent interpersonal skills so there is motivation, collaboration, trust, and satisfaction in the air. With a good manager, a majority of the problems can be solved before they reach a stage where work progress is affected.

3. Virtual teams must have casual meets and get-togethers

It is important for all the team members to have a couple of meetings where they indulge in leisure-based activities that build team rapport. People tend to work more effectively with each other when their geographically dispersed teams actually get to meet. Some good ideas of online activities for virtual teams could be games like: ‘Know your virtual partner’, ‘Do your favorite dance number or song’, ‘Online puzzles, riddles, trivia’, ‘Treasure Hunt’, and 'Virtual ice-breaker quiz’. These activities would be perfect when you feel your employees are feeling bored, when their attention is slipping away or when they complain of feeling isolated or unsupported. 

4. Measuring productivity

Since your team is working from different locations and you are paying them on the basis of time, tracking their work-hours and attendance would keep a note of their productivity. This would help people work up at their optimal level, keep track of their work hours, and avoid distractions, even in a virtual environment. There are software programs that you can download to track employee productivity and monitor the work they do. 

There are some really good employee monitoring software in the market like Teramind, Time Doctor, VeriClock, ActivTrack, DeskTime Pro, and so on. Through software like this, you can perform Remote Desktop monitoring, track their files and documents, and stealth monitoring along with other features. 

5. Having a remote workspace

Co-working spaces are getting really popular, and once the pandemic situation is over, the employees can use a remote workspace so they can all work together rather than working from home, or go all the way to the company offices. This would be a great strategy for employees who work from a particular geographical location. 

6. Don’t rely on just emails to communicate

Emailing your employees about company announcements and policies is no longer the best method. Since there are other communication tools in the market, most employees may not even open their emails regularly. So if you are sending out an official email, follow it up through other communication tools to make sure they have received the information. 

7. Implement a standardized way of working

Without proper systems, a business can fall apart. It is natural for people to have their own work patterns when they work from their own homes, especially since they don’t have anyone looking over their shoulders from time to time. To make sure this doesn’t hamper productivity in any way, companies can incorporate a documented, standardized work culture, so everyone is actively involved, and they can tweak their schedules to make the project go smoothly. 

Yes, you do need to allow a certain degree of flexibility, but you can also set up a collaboration time when all the employees are available online to discuss different aspects of the project. Even if the employees are geographically dispersed, you can have daily scrum meetings to discuss the progress of the work, and follow it up with timely reports on a weekly and monthly basis. You can set up monthly virtual gatherings to break the ice. 

In a virtual environment, it is also important for the different team members (especially those geographically separated) to be informal with one another, so they need to bump into each other from time to time and even have some fun chats and non-business related talks.

8. Manage the security systems of your team

The security of the systems used by the staff is another factor to consider. If your business deals with confidential information and critical data, then the company has to take steps in protecting their data. The security challenges must be addressed seriously. An easy way to do this would be to have IT tech experts and system admins to remotely monitor the security status of your employee systems and devices, so they can install updates and virus protection, etc. This way they can catch hacks and loopholes before they occur. 

9. What costs you need to consider

Though you can considerably reduce the costs, teleworkers need access to software, data, computer systems, and other infrastructure. It is also important to have technical help on the standby to provide 24/7 support. Solutions are galore, so you need to make informed decisions. To have an efficient team working from their own homes calls for collaboration tools, video conferencing software, and there are both free and paid versions depending on the level of security required. 

10. Make those remote employees representatives of your company

To increase the engagement and involvement of your virtual team, you can let them be brand ambassadors of the company. Promote this thought, and they will have a sense of belonging, thereby encouraging employee advocacy. 

For example, if your employee is happy working virtually for your projects, the person is likely to talk about the company with peers and friends, and might share how flexibility within the company allows him to perform other chores. Employees being the most trusted source of truth about your company, tweets about team events, online conferences are likely to get more attention.


It is completely possible for a company to work remotely, ensure staff productivity, enjoy the flexibility of work timings, and still save a lot of money in the process. One good example of this kind of work scenario would be GitLab. The $2.75 billion company doesn't even operate from a centralized location, and yet they have achieved so much. They have channeled their resources to promote business. 

Hiring a reliable company to provide you with the best remote team would be the key. Compare your requirements with that of the skills provided by Cabot Technology Solutions and hire an experienced remote augmented team, so you can enjoy your projects, achieve your business goals, and attain success. 



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