5 Key Benefits of Staff Augmentation For CPG Startups

In a publication titled “The US CPG Industry amid Inflationary and Recessionary Spell: Challenges And Remedies”. Notable staff augmentation specialists at Expertise Accelerated highlighted the state of the. United States CPG industry in the aftermath of the Covid-19 pandemic and the long-term damage the industry sustained. Among the remedies suggested for helping entrepreneurs navigate the business landscape as they struggled through the recessionary spell. Staff augmentation stood out as the best solution for start-ups for a variety of reasons.

What is Staff Augmentation?

As defined by Toptal, “Staff augmentation is the use of outside personnel on a temporary basis to augment the capacity of your organization.”

Similarly, Expertise Accelerated in their publication titled “Staffing Augmentation Made Simple. The Ultimate Guide for 2022”, highlights the following as the defining features of the staff augmentation model:

• Comes from third-party service providers.
• Is for a defined period.
• Are ad hoc and temporary in nature
• Feeds capacity and skills deficit

In the prevailing business landscape, accounting and IT are the two business functions. Where companies tend to implement staff augmentation solutions. For start-ups in the CPG industry, having competent and cost-efficient accounting services can make all the difference. Amid rapid inflation, staff augmentation is the most effective way to achieve this goal.

The benefits of staff augmentation for CPG start-ups

The US CPG industry took a particularly hard hit during the Covid-19 pandemic. Leaving budding start-ups and even established corporations in a state of panic. The primary issues faced by the CPG industry currently are the dearth of labor and financial uncertainty for the future. In November of 2021,food services industry saw 6.9% of the workforce quitting according a report by Business Insider. These numbers only continue to worsen now as inflation soars higher by the day.

Start-ups in the US CPG industry have a much better chance of weathering these difficult times. Thanks to the following major benefits provided by the staff-augmentation model of outsourcing.

Cost savings

To put it bluntly, the cost of hiring in-house in the US has skyrocketed in the past three years. It is just not feasible for start-ups to afford the skilled workforce they need to be successful today. The sheer cost of the idea leaves many start-ups with no choice but to abandon the ship.

Staff augmentation is a tremendously effective way to deal with this bottleneck in the workforce. While start-ups may not be able to afford the quality of talent they need hiring in-house. Hiring similarly qualified remote offshore talent is very much in the cards. Staff augmentation specialists like EA provide similarly qualified remote talent to US businesses at 40% of the US cost. With a solution like this, even the smallest start-up stands a fighting chance in the ring. It can build a solid foundation with minimal expense.

The 2020 Global Outsourcing Survey by Deloitte concluded that 70% of businesses opted. Outsourcing and staff augmentation due to the immense cost savings provided. The cost savings offered by staff augmentation services cannot be understated. this is the main reason even established corporations in the US make use of such services.

Simplifying the hiring process

The hiring process while not the most frequent topic of discussion.This is one of the most prevalent issues start-ups face as they try to establish themselves. Hiring is a difficult process, requiring time and money. As well as a lot of patience while trying to find the right fit for the job. Oftentimes this process can be severely damaging to a start-up As they wait days and weeks to hire employees. Who are likely to move to a different job within a year and force the company to start the hiring process again. The time and money spent on hiring can be much better spent on growing the business. It can begin generating a profit and transition into a full-fledged competitor in the market.

One of the ways that staff augmentation saves businesses money is by subverting the hiring process entirely. Essentially, for a nominal fee, the staff augmentation provider will handle the hiring process, leaving entrepreneurs with the freedom to invest time and money into the start-up and propel it forward into the business landscape. All entrepreneurs will have to do is make the final decision on whom they want to hire out of the candidates vetted and shortlisted by the staff augmentation provider.

Flexibility

Businesses are very dynamic, and the current tumultuous business landscape and constantly changing economic situation means that businesses must be prepared to act fast and be flexible. The business may have to downsize very quickly to endure an off-season or scale rapidly if a product takes off. Augmented staff that is with the business on a contractual basis can seamlessly be integrated into the team, or strategically withdrawn from the business without any of the associated complexities to slow the business down.

This flexibility and speed are necessary for all businesses, but especially for start-ups, as they are not yet firmly planted in the market and need all the advantages they can access to keep up with the everchanging demands of business in 2022.

Access to niche skills and expertise

Running a business has grown more and more complex as the years go by, with every business function requiring a variety of niche skill sets and expertise to adequately handle the matters at hand. Accounting remains one of the most outsourced functions precisely because of the many different niche skills required. For example, a simple bookkeeper may be enough to handle the mundane part of the accounting work, but when it comes to forecasting cash flow or drawing financial projections for the business a skilled Certified Public Accountant (CPA) is required. Similarly, during tax or audit season, businesses require the skills of accountants specializing in these areas.  One person simply cannot handle every need in a business function.

Meeting this requirement is a herculean trial for start-ups, that lack the resources and connections to get the job done. Staff augmentation once again swoops in to save the say for start-ups. Alongside cost-savings and flexibility, what staff augmentation offers is a gateway into the global talent pool. Not only that, but staff augmentation firms also act as a guiding hand, leading entrepreneurs to the best fit among the sea of candidates for their niche business requirements.

To build on the previous example, consider a CPG start-up that hires Expertise Accelerated, a dedicated accounting staff augmentation service provider, to help meet their needs. They can expect EA’s upper echelon of CPG industry experts to vet out bookkeepers, CPA’s, tax accountants and audit specialists as required by the business; seamlessly integrating and withdrawing them from the start-up as directed by the entrepreneur. The point is that niche skill sets with temporary use can be strategically implemented into the business when required thanks to outsourcing.

Transparency and control

While traditional outsourcing entails delegating control of an entire business function to a third party, staff augmentation simply provides professional resources and talent to businesses, who can then direct that talent however they please. The business remains in control of the business function, directly communicating and monitoring the augmented talent. This level of transparency is what seals the deal for entrepreneurs who shy away from the prospect of outsourcing due to the loss of direct control.

Conclusion

In a nutshell, the US CPG industry is looking at an uphill climb moving forward. Start-ups entering the market now more than ever need every tool possible in their toolbelt to keep up. Staff augmentation is one such tool, and every entrepreneur going forward must make use of the advantages it provides if they want the best possible chance at succeeding in the current business climate. Staff augmentation is the ladder that will help businesses climb out of the abyss of recession and forward into a prosperous future.