BLOG #0003

STAFF AUGMENTATION VS. HIRING AN ENGINEER IN AN UNCERTAIN ECONOMY

This is every director of engineering’s nightmare….going to the VP or CFO and sharing the fact that the project is 85% complete and the project is at 142% of budget. 

Staffing is tough.  It’s even tougher when there is such uncertainty in the global economy.  As projects have unexpected circumstances arise, how do you make sure you have the human capital and expertise to accommodate these variances. The answer is not always hiring.   The cost of hiring a engineer varies by type and location and ranges from $60,750 to $136,201 according to the bureau of labor statistics (Mechanical Engineers).  There is also an estimated cost to the employer of 50% of the salary that is composed of taxes, benefits and retirement.  This also does not account for the HR costs, loss of time for onboarding and the costs to find new talent if the engineer is not a good fit with the culture and needs to be replaced.  https://www.bls.gov/oes/current/oes172141.htm  

Many organizations are utilizing staff augmentation companies to assist when project staffing needs exceed current internal talent. 

Here are several guidelines that successful and profitable manufacturing companies use in determining which route to go:

Have you seen this movie before?  — If you are consistently running into staffing issues on projects, there is a need for an employee.  Bite the bullet and hire one! 

Get the right people on the bus! — In Jim Collins book, “Good to Great: Why Some Companies Make the Leap and Others Don't”, he discusses the need to have the right “type” of people in your organization.  This is true with engineers as well as leadership.    

Fear of the unknown — Company culture is very important to align with your hiring practices.  Mitigating risk through staff augmentation is a great way to have the expertise and talent without being locked in a long-term fixed cost.  If your organization is risk adverse it’s a great way to go.  Also, it’s a test drive of the engineering talent as many project based engineers end up being full time employees. 

You don’t know what you don’t know — Staff Augmentation is a great way to add to the talent of your organization when projects arise where your current team does not have expertise in a particular subject matter.   Since these individuals work with and collaborate with your current team, often times, knowledge and expertise is transferred over time. 

1+1=5 — No, its not the new math! Often partnerships can have the unexpected benefits of bringing in new lines of business to your company.  Since the companies that specialize in staff augmentation or helping with “one off” projects work with numerous companies in the industry, they often see partnership opportunities where two companies can compliment each other to win a bid, enhance a product or strengthen a relationship.  

Spend time in the zone-most successful companies are best of breed providers, have found a niche in the market and are very efficient at delivering those results.  When unique projects appear, it often times kills momentum to have existing engineering talent stop profitable activities, switch gears (and potentially spend time learning new processes) to accommodate projects outside of their current capabilities and workflow.  Own best of breed and stick to it. 

At UNSPACE, we have expertise in testing, design and implementation, CAD, Prototyping and systems integration.   If you have projects we can help with, please visit our what we do page to learn more.