What are the KPIs in IT Staff Augmentation Service?

In today’s evolving business landscape, organizations face several challenges to staying ahead in the technology race. The demand for skilled IT professionals has increased, as companies seek to optimize their operations, innovate ideas, and navigate digital transformation. However, the growing need for IT expertise has made businesses turn to IT staff augmentation services as their strategy to overcome the challenge.

IT staff augmentation allows organizations to augment their internal IT teams by temporarily bringing highly skilled professionals. The flexible approach offers numerous benefits, including increased agility, accelerated project delivery, and access to global talent. However, to ensure the success of IT staff augmentation, it is important to establish and monitor key performance indicators (KPIs) that will effectively analyze the effectiveness and efficiency of the service.

The comprehensive report “Staffing Industry Metric Benchmarking Report” provides invaluable insights on benchmarks for staffing industry metrics, including crucial KPIs, such as bill rate, gross margin, and revenue per employee. Aligning their performance against these benchmarks can help organizations to assess their efficiency, profitability, and overall competitiveness in the IT staff augmentation landscape.

To gain deeper insights into the state of the IT augmentation industry, the “State of IT Staffing Industry” report by Talent Tech Labs offers an exclusive overview. The data provides insights into KPIs such as time-to-fill, candidate quality, and retention rates. Furthermore, “Global Staffing Trends 2021” delves into the latest insights and market dynamics. It offers data on essential KPIs like revenue, market share, and other staffing metrics that can help analyze the performance.

In this article, we will explore key performance indicators (KPIs) of IT staff augmentation and why measuring the KPIs and the impact of the service is important.

10 KPIs in the IT Staff Augmentation Process

Companies focus on staff augmentation as a reliable solution to meet staffing requirements. The process includes strategically hiring external staff to fill temporary or permanent roles, enabling organizations to adapt to increasing demands and access diverse skills swiftly.

The KPIs provide essential insights to analyze the effectiveness of IT staff augmentation and make an informed decision ahead. We have listed down some of the KPIs that helped shape this essential strategy’s success.

1. Attrition Rate

Attrition rates are simply the percentages at which employees leave a company. The concept of attrition rate is simple, but its significance to a company is more complex.

Attrition affects your bottom line in more ways than just the expense of recruiting and training new personnel. The loss of operational experience and associated productivity declines harms the company’s profits.

Calculating the attrition rate involves dividing the number of employees who left the company during a given period by the average number of employees during the same period. The result is then multiplied by 100 to obtain the attrition rate percentage.

Determining the ideal attrition rate for IT staff augmentation can be subjective and depend on factors such as industry norms, business goals, and company culture. Usually, lower attrition rates are desirable as they indicate higher employee retention and stability within the organization. The key is to strike a balance that ensures high turnover while minimizing the negative impact on the project and stakeholder relationships.

Understanding the impact, and effectively calculating and monitoring attrition can be crucial for IT staff augmentation service.

2. Productivity Index

The Productivity Index aids in selecting workers who are cooperative, productive, and likely to stay on the job. It provides an insight into the output or results generated relative to the inputs or resources utilized.

The productivity index allows companies to assess their overall performance and compare it against industry standards or competitors. The companies can set realistic goals, track progress, and identify the latest trends in the market.

The productivity index calculation depends on the organization’s specific context and goals. It includes dividing the output achieved by the input or resources utilized and expressing the result as a ratio or percentage. For instance, in IT staff augmentation, the productivity index can be calculated by dividing the number of project completions or deliverables by the total hours or the cost of resources.

The IT staff augmentation companies can implement various strategies to optimize resource allocation, streamline processes, and enhance collaboration by determining the productivity index. It requires ongoing monitoring, analysis of productivity trends, and continuous improvement initiatives.

3. Cost of IT Staff Training

Divides an organization’s training spend by the total number of employees to get the per-employee training cost.

But how exactly are a company’s learning expenses calculated? According to ATD Research, which creates the annual State of the Business Talent Development Method allows and Patterns report, it is as follows:

This sum is made up of the salaries (taxes and benefits included) of the talent development (TD) staff, travel expenses for TD staff, administrative costs, non-salary capital costs, delivery costs (which include the cost of classroom space and online learning infrastructure), learning vendor costs, and tuition reimbursement. It excludes the travel price or any lost wages incurred by the learner while participating in learning activities.

Related Read: How to Reduce Cost using IT Staff Augmentation & Grow Business?

4. Time to Fill a Position

The time taken to fill a position refers to the time period it takes for an organization to hire a suitable candidate.

The metric is used to measure the efficiency and effectiveness of the hiring process. Measuring the number of days between the job requirement and the time a candidate is hired provides valuable insights into the recruitment timeline.

A longer time to fill a position often indicates the organization’s inefficiency. Delaying in filling the position can hurt the organization, particularly in the context of IT staff augmentation. As it creates an absence of a skilled professional, it can hamper the progress and hinder the project timeline.

The longer time to fill a position can raise challenges such as a direct impact on productivity, increased costs, and a temporary resource gap. Companies can involve optimizing recruitment strategies, leveraging technology and automation, and implementing effective candidate screening and selection approaches.

5. Candidate Quality

Evaluating candidates’ experience, skill, and cultural fit is a crucial aspect of the hiring process of IT staff augmentation.

Assessing these factors helps ensure that selected candidates possess the necessary qualifications and attributes to excel in the roles and contribute to the organization’s success.

Skill assessment includes evaluating the candidate’s technical skills and expertise relevant to the job requirement. Companies can ensure that the candidate has the skills needed to perform the assigned task. Looking for experience can help gauge their familiarity with industry practices, tools, and techniques.

Apart from professional expertise, cultural fit assessment is equally important to ensure that candidates align with the organizational values, work environment, and team dynamics. Cultural fit encompasses communication style, collaboration approach, and compatibility with the company’s values and missions.

Selecting candidates with the right skills, experience, and cultural fit develops a foundation for success in IT staff augmentation.