staff augmentation pricing model cover

Staff Augmentation Pricing Model – 2024 Updated

In the middle of Silicon Valley, two people who started their own companies sat at a café. One was upset about how expensive it was to hire full-time workers, while the other had a new idea: the Staff Augmentation Model. It’s like a jazz band that hires an extra saxophone player just for a single show.


Now, businesses can add temporary workers to their teams without spending a lot of money. Let’s explore this modern way of doing business in 2024.

Table of contents

What Is Staff Augmentation Pricing Model?

The Staff Augmentation pricing model offers a tailored approach to hiring skilled professionals, either locally or internationally, utilizing hourly, monthly, or fixed-rate structures. It serves as an efficient solution, addressing two crucial project aspects simultaneously: expediting project progression while significantly reducing costs at nearly twice the rate.

The Staff Augmentation pricing model typically operates on an hourly or monthly basis. 


  1. Hourly Rate Model: In this model, clients pay for the number of hours worked by the augmented staff on the project. Hourly rates vary based on the expertise level of the hired professionals (junior, mid-level, senior). Clients are billed for the actual time spent on tasks or projects.
  2. Monthly Rate Model: Alternatively, some clients opt for a monthly rate, where they pay a fixed amount for the services of the augmented staff members for a set number of hours per month. This model offers predictability in budgeting as the cost remains constant irrespective of the actual hours worked.
  3. Fixed Price Model: In certain cases, especially for well-defined projects with clear deliverables, a fixed-price model might be used. Here, the client and the service provider agree on a set price for the entire project or a specific phase, regardless of the hours worked by the augmented staff.

Each pricing model has its advantages and suitability based on the nature of the project, the client’s preferences, and the level of flexibility required in the engagement. Staff Augmentation pricing models aim to provide transparency, flexibility, and cost-effectiveness to clients seeking additional talent for their projects.

Outsourcing VS Staff augmentation

Major difference between outsourcing involves delegating tasks to external parties while staff augmentation involves hiring additional talent to work alongside an existing team.


Outsourcing entails contracting external parties to perform specific tasks or projects. It often includes transferring the responsibility for these tasks entirely to the external team or company.


Staff augmentation, on the other hand, entails hiring additional talent or specialists to complement an existing in-house team temporarily. These individuals work alongside the internal team, providing expertise and support.

Consulting VS Staff augmentation

Consulting offers expert guidance to organizations, aiding in achieving their objectives while staff augmentation involves hiring additional personnel to actively contribute to project execution.

How do managed services differ from staff augmentation?

Managed services entail contracting a third-party provider to oversee specific IT functions, such as network or application management. It aims to enhance efficiency and cut expenses for organizations.

Pricing strategies for staff augmentation

The IT Staff Augmentation Pricing Model is beneficial for its transparency in several reasons:

Operational Flexibility in staff augmentation

This model allows companies to be adaptable in how they build their teams. They can quickly add specialists when they need more help during busy times or reduce the team size when the workload decreases. This helps in using resources efficiently and avoids problems like having too many employees. It makes the company’s structure more responsive and efficient without extra costs.

Cost-effective staff augmentation

Hiring full-time employees includes more expenses than just their salaries. Things like health benefits, training, and possible severance pay add up. Staff augmentation changes this. By bringing in professionals for specific contracts, businesses only pay for the expertise and hours worked


. It’s like renting a car when you need it instead of buying one and paying for it all the time. This means getting quality work done without spending a lot of money.

Access to Specialized Talent:

Instead of having a general set of skills for all tasks, companies can hire exactly the expertise they need for specific projects. This means they get experts on board exactly when they’re required. This avoids the need to hire someone for a long time when their skills might only be necessary for a short period. It’s about getting the right person for the job each time.


Overall, the Staff Augmentation Model allows companies to be flexible, saves them money, and ensures that they have the right skills for each project without unnecessary long-term commitments.

5 Best It Staff augmentation pricing model

Here are the 5 commonly used staff augmentation pricing model explained in simpler terms:

Fixed rate Pricing Model

In this model, both the company and the contractor agree on a specific scope of work and a set price at the start of the project. No matter how many hours the contractor spends working on the task, the price stays the same. Whether the job takes less time or encounters unexpected difficulties needing extra hours, the decided cost remains unchanged.


This model gives companies a clear idea of how much they’ll spend, making it easier to plan their budget without worrying about surprise expenses.

Continued Term Pricing Model

This model is like a flexible subscription for hiring talent. Companies and contractors regularly discuss and adjust the job details, payment terms, or other parts of the agreement as needed. It allows for changes along the way to match the project’s evolving needs. It’s suitable for companies that prefer adaptability and want the freedom to modify agreements as the project progresses.

Hybrid Pricing Model

When you use more than one pricing model in your strategy, it becomes a hybrid pricing model. For businesses offering staff augmentation, this often means using different ways of billing to attract more customers and make them stay longer.


The goal is to make customers want to renew their subscriptions by offering a service that feels valuable at a fair price. In simple terms, hybrid pricing means combining two or more ways of deciding how much to charge customers.

Value-based Pricing Model

Value-based pricing is a strategy where prices are determined mainly by how much value a product or service holds in the eyes of the consumer. This approach revolves around understanding what customers believe a product is worth and setting the price accordingly. In essence, companies using value-based pricing focus on aligning their prices with the perceived value that customers place on their offerings.

Monthly retainer pricing Model

Similar to subscribing to a service, in this model, a company agrees to pay a contractor a fixed monthly fee. In return, the contractor guarantees to be available for a certain number of hours or specific tasks each month. It’s like reserving the contractor’s time and skills in advance, ensuring they’re ready to work when needed. 


This model provides companies with predictability and assurance, knowing they have consistent resources without the need for frequent renegotiations. It’s useful for projects needing ongoing attention or specialized skills regularly.


These strategies offer Flexible staffing pricing models for companies to work with contractors, providing flexibility, predictability, and adaptability in managing staffing needs for various projects.

Staff Augmentation Pricing Model Based on Experience

Here’s an explanation in simpler terms on how pricing for Staff Augmentation Services is determined based on different developer levels:

Junior Developer (1 year of experience)

  • Hourly Rate: $25/h to $49/h
  • Description: Beginners in the software development field, possessing basic coding skills. Their lower pricing reflects their early career stage. Suitable for basic to moderately complex tasks, they bring fresh perspectives and eagerness to learn.

Medior Developer (3 to 5 years of experience)

  • Hourly Rate: $50/h to $80/h
  • Description: Mid-tier developers with practical skills gained from multiple projects. Their pricing reflects their increased experience compared to juniors but is lower than senior developers. They offer versatility and a balanced blend of advanced skills.

Senior Developer (5+ years of experience)

  • Hourly Rate: $80/h to $130/h
  • Description: Highly experienced professionals with extensive expertise. Their higher pricing is due to their top-tier skills in handling complex tasks adeptly. They are akin to master chefs in the tech world, ideal for demanding and intricate projects.

The determination of pricing for Staff Augmentation Services depends on the developers’ level of expertise and experience. Junior Developers offer affordability but suit less specialized tasks, Medior Developers strike a balance between skills and cost, while Senior Developers provide top-tier expertise for challenging projects at higher prices.

How to Choose the Right Staff Augmentation Pricing Model for Your Business

How to Choose the Right Staff Augmentation Pricing Model for Your Business-min

When picking the right staff augmentation pricing model for your business, consider these factors:


  1. Know Your Needs: Understand your project goals, must-have features, and desired outcomes.
  2. Assess Project Complexity: Consider how long the project will take and its level of complexity. Identify the necessary resources and skills needed.
  3. Budget and Constraints: Determine your project budget, expected return on investment, and associated risks.
  4. Balance Cost, Quality, Time: Decide on the quality of the final product, project timeline, and how to stay within budget.
  5. Consult Specialists: Talk to staff augmentation experts. Check their experience, the pricing models they offer, and their terms.


By answering these questions, you can find the right staff augmentation model that aligns with your project needs, budget, and timelines.

Why You Should Partner With a Staff Augmentation Company?

Why You Should Partner With a Staff Augmentation Company_-min

How to augment staff correctly in 2024 with MentorSol

Initial Discussion

We’ll start our partnership by having a call with you to understand your business needs and goals. Using this information, we’ll create a customized proposal detailing the scope of work, pricing, and other important details. This proposal will highlight the advantages of outsourcing digital marketing positions, such as accessing a larger talent pool while being cost-effective.

Building the Team

Once the agreement is signed, our HR department will start screening and recruiting marketing experts to form a dedicated team for your project. We’ll present qualified candidates to you for review and final evaluation to ensure they’re a good fit for your business.

Onboarding Process

After assembling your dedicated team based in Belgrade, we’ll initiate the onboarding process. This involves setting up their office and workspace, providing necessary equipment or tools, and ensuring they receive essential training.

Project Execution

The marketing team will execute the project as per the agreed Service Level Agreement (SLA). They’ll employ various methods like email marketing, social media outreach, content creation, PPC campaigns, etc. Your designated project manager will keep you updated and ensure everything runs smoothly.

Training and Support

We’ll provide thorough training for the newly recruited marketing team, covering product knowledge, sales techniques, and other necessary skills. Our aim is to equip your marketing team with the tools and resources needed for success in your industry.

Management and Reporting

Each project will have a dedicated project manager overseeing all operations and serving as your main contact point. This manager ensures that your requirements are met and provides regular updates on the project’s progress.


In short, our process involves understanding your needs, building a specialized team, providing necessary training and support, and executing the project efficiently while ensuring effective communication and reporting throughout the process.

Hire proficient technology team to meet your need

Our IT staff augmentation services provide the flexibility to scale your team up or down based on project requirements, ensuring optimal resource allocation and cost-effectiveness.

Frequently Asked Questions

Staff augmentation is a strategic approach that companies use to temporarily bolster their workforce, especially in fields like software development and other industries. Staff augmentation fills these gaps by providing specialized skills and expertise that might be lacking in the current team. This approach allows companies to avoid long-term commitments while bringing in the right developers and specialists for particular projects. 

The staff augmentation pricing model works like an adjustable tool for companies in software and data solutions. Instead of committing to the full expense of hiring a permanent developer, along with benefits, companies can choose this model. It ensures they pay only for the exact software development services needed for a specific time, making it a cost-effective consulting approach that prioritizes maximum value for the client.

Staff augmentation is indeed a cost-effective management solution, particularly for businesses in need of software development and data solutions. Rather than hiring full-time developers, which involves additional overhead costs, companies can use staff augmentation to bring in high-quality talent as and when needed. It’s similar to renting specialized software equipment instead of purchasing and managing it outright. 

Staff Augmentation:

Staff augmentation involves hiring additional software developers or data experts as needed for a project. These professionals join your existing team, providing consulting and management solutions to assist your company.

Outsourcing Services:

Outsourcing, on the other hand, involves giving the entire software or data project to an external entity. In this approach, tasks and responsibilities are delegated to a completely separate group outside of your company.

In the field of software development and data projects, the staff augmentation service model is highly adaptable to accommodate rapid changes. Contracts within staff augmentation are crafted with flexibility in mind, acknowledging the dynamic nature of technology. If there are alterations in data needs, project timelines, or client requirements, contracts can be adjusted accordingly.