Fixed vs. Elastic Staffing: How to Improve Development Costs and Speed with Dynamic Teams

May 9, 2023
Fixed vs. Elastic Staffing_ How to Improve Development Costs and Speed with Dynamic Teams

Software developers previously relied on fixed staff contingents for their projects. However, the looming economic crisis has seen most companies struggling to cut costs while still staying competitive. As labor expenses have continued to rise, hiring teams debate the viability of retaining and maintaining a traditional in-house workforce vs. introducing an elastic staffing model.

If you’re looking to ramp up your development efforts during these uncertain times, check out the pros and cons of fixed vs. elastic staffing. 

A Growing Need for Workplace Flexibility 

The effect of the COVID-19 pandemic, the ongoing Great Resignation, and the looming economic crisis is the trifarious demon making retaining talent to maintain peak performance difficult among tech companies. It’s becoming increasingly expensive and inefficient to rely on traditional methods for getting fixed hourly workers to manage new and ongoing projects. Statistics from the World Economic Forum show that at least 4.53 million people resigned in November 2021 alone, and the trend continues unabated.

The demand for top talent among tech organizations is rarely static year-round. Companies routinely make the tough decision of letting go of staff whenever the demand for their services falls. However, when the demand picks up due to pressure to meet consumer needs, hiring isn’t as seamless or as fast as they would like, and companies are left scrambling to locate the right talent despite high unemployment rates. Even when they find the right fit, the time and resources taken to train the new hire could slow down the project. If you find it hard to cope when demand falls off a cliff and surges again later, consider adopting workforce flexibility via the emerging improved workforce management strategy known as elastic staffing.

Elastic Workforce to the Rescue 

Elastic employee management refers to the ability to scale up your workforce based on your company’s short and long-term needs. An elastic workforce provides the flexibility to scale talent up and down based on the fluctuating market while sustaining productivity and keeping pace with ongoing projects. Also referred to as workforce-as-a-service, the model replaces the traditional idea of hiring hourly workers with a simple, transparent, and accessible process. The model involves service providers who give tech organizations access to the right talent and advanced tools and technologies to meet their demands in time and only for the time they’re needed.

Fixed vs. Elastic Staffing

While most companies are still stuck with the traditional organizational staffing model that assumes a fixed amount of top talent they can lock up as full-time salaried employees, this model is only half agile. The strict hierarchical and waterfall project structure creates a culture that focuses on individual accomplishment and upward mobility instead of concentrating on external customer satisfaction. Besides making experimentation too expensive, the model boomerangs and reduces employee mobility and happiness. 

Elastic staffing, on the other hand, allocates resources according to the existing workload for each project phase. Gigster’s research has shown that elastic staffing potentially reduces project failure rates from 70% to just below 10% and improves cost efficiency by over 30% while increasing project satisfaction 3.6 times. The disadvantages of the fixed staffing model include: 

  • Fixed staffing is less efficient as it locks in developers to a single project rather than staffing on time and as needed.
  • Talented workers locked in by fixed staffing are rarely available to peer review deliverables from other projects. 
  • Fixed staffing results in employee turnover as workers who feel trapped in long projects opt-out to seek opportunities to grow their skills and careers. 

The Benefits of Using an Elastic Workforce for Your Company 

Workforce elasticity gives IT organizations the freedom to review the size and composition of their teams during each project milestone. As a result, you can drop talent you no longer need and reassemble with a new team of full-time or part-time professionals for the next project phase, often creating fantastic results. Some benefits of the elastic staffing model are as follows: 

Freedom to Scale Workforce as Need Arises 

Determining the number of workers you need to keep pace with development needs and maintain efficiency can become tricky during this period of uncertainty caused by a looming economic downturn. Utilizing a scalable workforce gives you the freedom to employ talent as needed. Moreover, the model places the management of your workforce at your fingertips, allowing you to quickly scale project team members besides getting improved observability throughout the entire project process.

Working with managed development teams like Gigster also provides greater development speed compared to fixed staff. Because teams can be assembled in as little as a week - compared to the months it takes to hire an in-house team - software projects can be completed much faster.  

Access to a Global Talent Pool 

Being elastic opens you up to opportunities for remote and distributed teams of talented workers worldwide. Advanced platforms like Gigster are chock-full of pre-screened, reliable, and highly qualified experts you can easily access. 

Access to a global talent pool results in much higher-quality talent compared to companies that are forced to recruit only from their geographical area. What matters with elastic organizations is not your location but the skills, knowledge, and experience you can take advantage of that you may have yet to explore previously.   

Save on Recruiting and Labor Costs

According to research, the average cost per hire in the software industry is $4,425, making it not only an expensive but also time-consuming exercise as it can take up to 42 days to fill a vacant position in the U.S. With up to 15% of H.R. budgets going towards recruitment processes, I.T. organizations can avoid this costly aspect of finding and recruiting new talent by adopting the elastic staffing model.

Utilizing an elastic workforce eliminates the obvious overheads associated with full-time in-house employees like salaries, employee benefits, and health insurance coverage, among others. This makes it a constructive way to reduce labor and operational costs related to your projects. 

Enhanced Loyalty and Productivity 

During such uncertain times, undertaking large or urgent IT projects with your lean team almost always translates to longer working hours among team members so they can keep up with the demands. Increased working hours among in-house teams will easily translate to employee burnout for full-time workers who could feel exploited and overworked, eventually affecting their productivity and loyalty. 

Augmenting your in-house team with a suitable flexible workforce could help manage excess workloads, improve morale, and provide long-term royalty for your lean in-house team. This results in greater development speed and efficiency, higher-quality software, and improved employee morale.

As technological developments reshape jobs and the quality of IT projects delivered by people and teams, transitioning from static to elastic work models is becoming a much sought-after trait. Since priorities in the tech sector are increasingly driven by business and customer demands and a looming economic downturn, it’s incumbent upon tech organization executives to redirect resources. 

The future of work demands that IT firms adopt elastic staffing, the cultural shift that makes them more customer-centered and able to tap the best talent pools with the least risk. Elastic staffing ensures you only deploy when and where experts are needed most.

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