Hedge Fund vs Private Equity: What’s the Buzz About?

10 September 2019 Apphawks

Start-ups and Funding

Hedge fund vs private equity? Big, simple, and quick cash promise for startups.

Innumerable people toss their caps in the ring to attempt to get their share and make their business vision a reality.

As you know, there is a very tiny number of lucky startups growing, the dominant part of effective new companies has occupied with numerous endeavours to raise capital through rounds of outer subsidizing.

These financing rounds give outside speculators the chance to put money in a developing organization in return for value, or fractional responsibility for the organization.

How do financing rounds work?

Funding Round

New companies don’t simply raise a singular amount of money or get a new company credit and afterward be set up forever. In reality, there has been an increase in the number of times start-ups return to the market to raise more capital. Each of these increases is referred to as a ‘funding round.’

Each round is intended to provide enough money for entrepreneurs to reach the next milestone or phase. This runway between rounds can be as short as a year. 

However, a few business people push it to a half year. At each round authors are hoping to exchange value their organization for the capital they can use to step up.

How Do Funding Rounds Work?

The way toward bringing funding up in each round commonly incorporates the accompanying advances. There might be special cases if new companies get spontaneous inbound offers, or a closeout type circumstance is built up. 

Recruiting the assistance of investment bankers and fundraising advisors in this process is useful to many entrepreneurs.

Steps involved in fundraising rounds:

  • Gather your data
  • Research investors
  • Create a winning pitch deck and finish
  • Attend investor meetings and pitch
  • Build relationship
  • Field term sheets and offers
  • Survive due diligence

Close the round and carry out the documentation via cables.

There are different sorts of funding rounds accessible to new businesses, contingent on the business, the degree of enthusiasm among potential financial specialists, and that’s just the beginning. 

Beginning with what is known as “seed” financing or angel investor financing is not unusual for start-ups. 

Next, these financing rounds can be trailed by Series A, B, and C subsidizing rounds, just as extra endeavours to procure capital also, if proper.

Pre-Seed Funding

The most punctual phase of financing another organization comes right off the bat in the process that isn’t commonly included among rounds of subsidizing.

Known as pre-seed funding, this phase typically relates to the period when the founders of a company get their activities off the ground for the first time.

The founders themselves, as well as close friends, followers, and relatives, are the most prevalent pre-seed funders. 

Speculators at this stage are not making an interest in return for value in the organization; by and large, the financial specialists in a pre-seed subsidizing circumstance are simply the organization authors.

Planting the Seed

Seed funding is the first phase of formal financing of equity. It commonly speaks to the primary authority cash that a business adventure or venture raises; a few organizations never stretch out past seed funding into Series A rounds or past.

As part of an analogy for planting a tree, you can believe of seed funding. Ideally, this early economic assistance is the seed that will assist the company to develop. Hopefully, the company will eventually develop into a tree given enough income and a good business strategy, as well as investor perseverance and commitment. 

Seed subsidizing encourages an organization to fund its initial steps, including things like statistical surveying and item advancement. With seed funding, an organization has helped with figuring out what its last items will be and who its objective statistic is. Seed funding is utilized to utilize an establishing group to finish these assignments.

Optimize: Series A

Making it to this stage requires having increased some evidence of idea. Investors are starting to look at real data to see what has to be shown by the start-up for previously invested money. 

This may not be income, but they want to understand what relevant metrics are being improved and get a true grip on the ability to make this a precious money-making machine.

Typically, the capital of this round is to optimize what has been accomplished and found so far. It is to transform the business model into something that can then be truly scaled up.

Prior financial specialists may take an interest. Even though at this stage, new businesses will start to require the association of financial specialists who can truly help with taking the dare to the following level.

Series A shareholders are generally capitalist ventures or angels. If it takes place after an investment seed round, prospective Series A investors will assess how any seed money has been used and whether this would bode well for their capital. Other investor profiles that may be involved in such a round include family offices, private equity firms, hedge funds, and corporate venture weapons.

B Is for Build

By a Series B round, new businesses are unquestionably searching for V.C. level support. 

This stage is tied in with structure out the organization and expanding on existing triumphs. Capital might be utilized for extending groups, geographic venture into new markets, and by large scaling.

A Series B round is likely to involve and increase in the range of tens of millions of bucks. Benefits may even now be rare. However, the start-up ought to fire on all chambers and exhibit footing and plan of action that works. 

At this point, investors need to be thoroughly selected to leap to the level of business. Likely, potential acquisitions are already being considered.

Let’s Scale: Series C

If you’re doing it at this point, you’re likely going to get to the large moment. It’ll probably be a sprint to an exit from here. Or at least to replace market share and position. 

Strategic purchases are highly likely to be on the menu. This can be for talent, eliminating competition, immediate user leaps, and geographic coverage, and packing together various businesses to prepare for a buyout exit. 

Now you will work with the greatest funding firms and perhaps corporate level speculators.

In any case, this can likewise be perhaps the hardest round for organizers. 

Financial specialists are probably going to be much all the more requesting, and expect the due tirelessness procedure to be overwhelming, concentrated, and exquisite.

Hedge Fund vs Private Equity – Definition

Speculative stock investments are elective ventures utilizing pooled reserves that use various procedures to gain a dynamic return, or alpha, for their financial specialists. 

Mutual funds might be forcefully overseen or use subsidiaries and influence in both household and worldwide markets to produce exceptional yields. It is essential to note that hedge funds are usually available only to accredited investors because they require fewer SEC laws than other funds. 

The fact that hedge funds face less regulation than mutual funds and other investment vehicles is one element that has distinguished the hedge fund sector.

Each hedge fund is built to exploit certainly recognizable market openings. Mutual funds utilize distinctive venture procedures and along these lines are frequently arranged by speculation style. There is significant assorted variety between styles in risk characteristics and investments.

Lawfully, flexible investments are regularly set up as private speculation constrained organizations that are available to a predetermined number of certified financial specialists and require a huge starting least venture. 

Hedge fund investments are illiquid because investors are often required to maintain their cash in the fund for at least one year, a moment known as the lock-up period. At particular periods, such as quarterly or bi-annually, withdrawals can also occur only.

Private equity is an alternative class of investment and is made up of assets not listed on a public exchange. Private value is made out of assets and financial specialists that straightforwardly put resources into privately owned businesses, or that take part in buyouts of open organizations, bringing about the delisting of open value. 

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Institutional and retail investors provide private equity capital, and capital can be used to finance fresh technology, acquire, expand working capital, and strengthen a balance sheet.

A private value store has Limited Partners (LP), who ordinarily claim 99 percent of the offer in stock and have constrained risk, and General Partners (G.P.), who possess 1 percent of offers and have a full obligation. The latter is also accountable for the investment’s execution and operation.

Private equity investment come mainly from institutional investors and accredited investors, who can devote significant amounts of cash for prolonged periods. 

Mostly, extensively long holding periods are regularly required for private value interests to guarantee a turnaround for upset organizations or to empower liquidity occasions, for example, the first sale of stock (IPO) or a deal to an open organization.

Hedge Fund vs Private Equity – Difference and Similarities

The following points address the distinction between hedge fund & private equity:

  • Private equity can be comprehended as the venture assets acquired by the secretly held organization from high total assets people or firms, huge institutional financial specialists, and so forth. 

In comparison, hedge funds connote a collective investment vehicle, generally accessible to high net worth individuals or companies, using investment strategies to invest in a variety of securities.

  • Private equity’s main purpose is to obtain tiny and financially distressed businesses, to improve its exhibition by utilizing various methodologies and from that point selling it either secretly or through IPO, at a benefit. On the other hand, a hedge fund’s basic goal is to produce maximum returns is less time.
  • Because both private equity and hedge funds investments nullify high-hazard venture for a more secure venture, in a hedge fund, the amount of danger is high compared to private equity since hedge funds tend to generate maximum yields in a very short time.
  • In the case of private equity, the assets are reinvested in value and obligation of the privately-owned businesses, so the assets are secured for a time of least time of 3 to 5 years. On the contrary, for a brief period hedge funds are invested in liquid assets.

In private equity, by buying a private company, the investment is created directly in the business. In contrast, the investment is produced in extremely liquid assets in hedge funds that are promptly convertible into money, for example, stocks, securities, monetary forms, exchange, etc.

Activist Hedge Fund vs Private Equity

Hedge fund vs private equity? An activist investor is a person or group that buys big numbers of shares of government business and attempts to get seats on the board of the business to make a major shift in the business. 

An organization can turn into an objective for activists’ authorities if it is botched, has unreasonable expenses and could be run all the more productively as a privately-owned business or has another issue that the lobbyist speculator trusts it can fix to make the organization increasingly significant.

There has always been a double-edge connection between private equity and activist hedge funds. While in the past activist commitments often led to the sale of a target business or a company’s less lucrative activities to private equity funds. Activists attempting to enhance the conditions of the agreement opposed many go-private transactions, and businesses brought private equity funds in as knights during a hostile takeover. 

Nevertheless, tensions seem to disappear slowly as the transitions between activist hedge funds and private equity funds blur. Mostly, pressures appear to be gradually vanishing as the changes between activist’s hedge funds and private equity funds become obscured. 

Private value assets are starting to embrace activist strategies and are progressively captivating in private value exchanges.

A real owner’s mentality differentiates activists from personal shareholders that are both passive public equity investors. Activist executives usually approach private equity funds in comparable ways by purchasing shares in publicly traded businesses. 

Many activists explicitly use their’ private equity strategy to government markets’ to express not only a concrete book value discipline and a sustainable approach to cash flow assessment, but more importantly, a longer-term emphasis for business development and operational improvements or turnarounds. 

This stands as a glaring difference to the original perspective of value-centered equity-focused hedge funds being excited dealers, nearly centred around quarterly EPS and the present exchanging P&L.

Some notable dissident investors, for example, Carl Icahn and Nelson Peltz, take part in their business exercises through their holding organizations or hedge funds.

How to Start Cooperation: Funding/Seed Process with Hedge Fund vs Private Equity

The following steps show the traditional funding phases through which new companies develop: seed funding, equity at the early stage, equity at the late stage and exit. 

The route is different for every company. To what extent an organization remains in each stage or whether it even goes through each stage shifts enormously relying upon the start-up’s conditions.

Seed Funding

Initial sources of capital for a start-up are referred to as seed funding. The name seed refers to both the company’s youthful status and its growth potential. 

The main economic sponsors of businesses at this point are Angel investors, family members, and close friends. Investors are showing greater levels of risk tolerance during this stage in the company’s growth. 

The overwhelming bulk of seed investment fails due to the problems of entrepreneurship. Seed financing regularly comes as little ventures made through casual understandings. Business visionaries looking for seed financing principally want to tie down enough money to kick off the business.

Early-Stage Equity: Series A/B

Following the growth of technology of a company into a more marketable product, the economic requirements of the start-up increase more than seed investors can comfortably provide. 

Financial speculators represent considerable authority in beginning period organizations become the essential wellsprings of capital in this stage. The financing procedure in this stage appears to be unique from seed fundraising method as businesses now work with professional investors. 

Venture capitalists formalize funding agreements by providing comprehensive legal documents, give the start-up a concrete appraisal, and provide big investment sums.

Late-Stage Equity

In the subsequent phases of the funding process investors with much lower risk appetite become more involved because investors feel less risk in businesses that have a record of development and achievement. 

Investment from large risk capital funds as well as from other investors such as hedge funds, mutual funds, and private equity companies is being attracted by late-stage businesses. 

Typically without a doubt, fruitful organizations will verify late-arrange value rounds while their less effective friends will neglect to pick up footing with speculators. Late-arrange financial specialists get a lot littler return contrasted with effective speculators in the prior stages. 

However, they have the additional affirmation that the investee is bound to encounter an exit later on.


At the end of the day, investors wish to liquidate their holdings to collect their returns. These are called exits or liquidity occurrences. Experienced financiers always have a clear exit strategy in mind for investment. For start-up investors, the initial public offering (IPO) or acquisition offers two possibilities for successful exits.

At an IPO, the business sells its shares to the public. Although an IPO has many advantages, shareholders profit mainly from the liquidity provided by such a case. 

Any investors in the organization, including financial specialists, originators, and representatives, can, in the end, sell their offers on the securities exchange after the IPO. 

A purchase provides comparable liquidity advantages, but the current owner group typically needs to sacrifice all control and ownership in the business when the agreement is concluded. Private equity companies and big companies are common purchasers.

Cities with the Highest Funding for Start-ups

New businesses have been mushrooming in several urban communities around the globe. However, some towns have the correct circumstances and laws to attract and assist business talent. 

Employers want to find themselves in towns which give an innovative atmosphere. Silicon Valley in California stays one of the world’s greatest start-up centre points. 

However, in recent years, certain other towns have also seen an unbelievable rise in start-ups. Here are some of the start-up towns worldwide.

San Francisco, United States

San Francisco, valued at about 279 billion dollars, is the world’s biggest start-up ecosystem. In the last year alone, start-ups from Silicon Valley got more than $26 billion of vents. It is the best location for entrepreneurship and wages.

Amstardam, The Netherlands

Amsterdam is one of the best towns to reside in, but this is not the only reason why it is one of the world’s best start-up towns.

It provides the fastest portable Internet speeds, maximum net average wage and the lowest standard of living. It attracts and maintains worldwide talent. All of these contribute to creating a lively start-up ecosystem in Amsterdam.

Copenhagen, Denmark

Copenhagen offers a high calibre of life, an incredible training framework, and propelled medicinal services offices, which help it pull in global ability. 

In this town, the start-up ecosystem is extremely interconnected, although the amount of start-up investments has declined over the last few years. To assist start-ups, the Danish Government has established the Danish Start-up Fund.

London, United Kingdom


London is a financial hub more than a worldwide one. It has a lively start-up environment, also. However, there are a few concerns concerning the strength of its start-up system due to Brexit.

Uncertainty about Brexit has left London for other towns such as Amsterdam or Berlin for many start-ups and other talented people. There are over 6,000 start-ups in London, including Shazam and TransferWise.

Berlin, Germany


Berlin is one of the best start-up city on the planet. Its decent variety and comprehensiveness give it an edge. Berlin likewise has a generally lower average cost for basic items. 

Germany’s business and creative spirit are mirrored in the town. Enterprises can access financing easily. Numerous new businesses are moving their workplaces from London to Berlin amid Brexit concerns. The city has delivered numerous effective new businesses in web-based business, gaming, ad tech, and SaaS.

Overall, private equity investment is targeted at long-term investments in the target entity’s illiquid assets whereas hedge funds, on the other hand, are focused on short-term liquid assets that are promptly convertible into money and don’t give direct command over the business. 

Whether or not mutual funds will eventually prove as helpful for private equity, but in the brief term, they can be expected to play an increasingly activist role. 


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Staff Augmentation: Bridging The Skills Gap In Your Organisation

08 March 2019 Apphawks

Table of Contents

One can’t deny that with the increase in competition, the need for able staff and manpower is constantly on the rise. This is no different for the field of IT. Major IT companies face these difficulties across the world. 

Well, there does exist a constant battle for employing more talented, able, trained and professional IT staff.

This is where staff augmentation comes across an established solution that can meet the needs of staff and talent crunch.

As per research and statistics, the IT outsourcing market is expected to reach the mark of $481.27 billion by the year 2022 in comparison to the mark of $314.92 billion as of the year 2015. 

Choosing staff augmentation enables organization in getting the necessary assistance of individuals who are versatile, have the talent and aids in maintaining focus on the project.

Another statistics states, with the development of the economy over 40% of IT representatives are wandering for ways to change the employment techniques. And staff augmentation happens to be the best choice not only for organizations but also for IT talents.

Here in this article, we would offer you a detailed understanding of what is Staff Augmentation, its benefits, cost and how it works for the company bringing in more profits and flexible working.

What Is Staff Augmentation?

Staff Augmentation is referred as an outsourcing strategy that aids in filling the skill gap present in companies. It helps the professional to evaluate the existing staff and then determine which additional skills are required.

In staff augmentation, the company hires an expert and not a person that has a general knowledge of things.

Adopting this process not only assists in fastidious growth of businesses but also helps one bringing in skilled and experienced manpower who can further aid in accomplishing the goals.

Photo by rawpixel on Unsplash

Staff augmentation is utilized to the maximum by IT companies to scale up the project team and meet the objective of business. In other words, staff augmentation model works as an extra helping hand for companies.

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It enables the organizations to upgrade the skills of the existing workforce thereby augmenting their expertise further. It works as a great alternative complementing full-blown outsourcing to bring in qualified resources, manpower to work in tandem with your team and go on to achieve the requirement.

Reasons for choosing Staff Augmentation

Staff Augmentation brings into team temporary talent who can aid their support for ongoing projects. They also help in aiding teams manage the internal team in meeting the requirement of the concerned department. 

It renders the flexibility of scaling the workforce depending on the present need in hand without spending any extra cost in the process. Staff augmentation is often referred to as a model that aids in efficient management of the budget.

Offers additional support

Staff Augmentation as the definition can be put across as specialized support that aids as an extra hand for managing work under tight deadlines. It ensures the company culture that is the niche to each organization is applied authentically throughout the process allowing the team to be well organized when working through the project.

The overall process of augmenting staff by roping in innovators onboard who would assist in educating the entire team upfront working on tools, acquaint them to the company culture, meet the business goals and the internal processes efficiently before beginning the actual work on the project.

In short, the entire process model is looked upon as a beneficial stand for companies that solve geographical limitations. Irrespective of where one resides you can connect with the developers and still get the work done efficiently.

It further reduces the time taken in recruitment, helps in avoiding investment in infrastructure as all the required facilities, support staff, and the staff augmentation vendor provides other needs.

Staff Augmentation firm – how they work

The staff segmentation firm is a body of recruiters who hire people with expertise in a field on a temporary basis, part-time or full-time. The firm satisfies the needs of the companies by providing them skilled and qualified professionals to get their work done. They help in getting the work done in the least cost with superior quality.  

Initially, the staff augmentation firm will carry out the process of recruitment to find the candidates needed for particular projects or jobs. The process of evaluation of the candidates is done and then, the candidates are selected. 

Progressively, the firm will maintain a keen eye on the hired candidates. The staff augmentation firm will monitor the candidates and the firm will keep a record of the achievements, attendance, and quality of work of the candidates.  

The necessity of staff augmentation firm

Each situation has its own requirement. In the same manner, each project requires a particular set of skills. It is not necessary for a staff of an organization to possess all the skills, which are required for different projects or contract. Therefore, staff augmentation is required to provide a team with expertise in different fields to the organization to perform their tasks. 

The staff augmentation firm assists the company or business in dealing with the issues related to staff. Along with this, the firm helps the business in having a highly diversified and skilled team assisted with the guidance of experts in order to march towards development. 

Staff augmentation is becoming a trend because of the abundant resources in the sector of Information technology, the diminishing rates and the declining margins of the organization, which requires such services. 

Furthermore, due to the increased competition and the need for skilled and proficient staff, the staff augmentation firm is becoming an important aspect of an organization. As the needs of the staff are continuously changing with time, the staff augmentation enables the organization to meet the current trends and requirements of business with the help of candidates expert in their fields. 

Staff augmentation makes it easy to subtract and add the resources as per the demand of the project, task or the trend. 

What Are The Major Advantages Of Staff Augmentation?

1. Cost efficiency

Cost becomes a barrier most of the times as the organizations are not willing to spend much on the projects or plans or they are not able to gather enough finance for the project. In such a situation, the staff augmentation firm becomes an effective help.

The staff augmentation firm develops a plan, which is beneficial to the organization. Along with this, the staff augmentation firm eliminates the cost of training fresher or candidates.

2. Specialization of skills

It is not always necessary that a set of skills, which is required for a particular project, will be helpful for all the other projects of an organization. Therefore, it becomes necessary to find staff with the skills required for other projects as well. 

In such instances, the staff augmentation firm plays its role. It selects the specific set of skills required for the project and hires them on a temporary basis or project basis. Thus, people who are expert or are skilled in that particular field do the quality of the work increases as the work. Thus, the staff augmentation firm provides access to the skills, which are not present in the organization.

3. Increased flexibility and the rate of response

The organization can take the help of staff augmentation to adapt at a good pace and build a committed team with specific expertise in a field to tackle important projects and meet the deadline. The staff augmentation assists the organizations to react according to the need or requirements of the situation or opportunity and take benefit from the opportunities of growth and development. 

With the progress in time, the working of the organization needs to be updated to meet the latest trends in the current world. Staff augmentation makes the procedure of business flexible and scalable. The required talent can be employed when there is a need to meet the timeline, which is aggressive. 

In addition, it eliminates the need for permanent staff as the organization always has skilled experts available as per their needs. 

4. Resource replacement and management

Staff augmentation manages the existing resources of the organization and utilizes the existing resources in performing the required tasks. Along with this, the staff augmentation firm adds resources in the form of skilled candidates to an organization. 

In the process, the organization benefits by fulfilling the demand for the project and delivering the task on time. 

The management of resources in an efficient manner is possible with the assistance of staff augmentation firm.

5. Time-saving

Hiring candidates is a process, which consumes a lot of time. Especially, when an organization needs candidates with expertise in a field, the process kills more time. The staff augmentation firm minimizes this time to a few hours. 

The companies keep a record of the employees and therefore, they will get a candidate, which fulfills the requirement of your work in no time. Thus, the organization can skip several steps of interviewing and selecting the candidates. 

Apart from this, the candidates chosen by the staff augmentation firm are specialist in their field and thus, they can get the work done at a faster speed. Therefore, the time in doing a particular task or project decreases. 

6. Outsourcing the acquisitions of the personnel

When an organization outsources the acquisitions of the personnel, it helps to lay emphasis on dealing with the timelines of the project more efficiently. Also, it helps in the management of the quality and assignment of the task. Staff augmentation gives the resources in the form of humans to manage the projects and meet the deadline. 

7. Expertise

The candidates employed by the self-augmentation firm are experts in their fields. Therefore, there is no need to train the candidates and also, they will give work of high quality. Along with this, the candidates will understand the need and requirement of the work or project and thus, it will benefit the organization in a number of ways.  

Project Outsourcing vs. Staff Augmentation

The outsourcing company acts as the ‘third-party’ and hire individuals to perform a given set of tasks for a particular organization. The organizations, which outsource their services, rely on the ‘third-party’ to get their work done. 

Outsourcing the project is like signing a contract with the candidates or the organization to get their work done. Moreover, the organizations can outsource a number of services or tasks such as services of information technology, which involves the development of the application, programming and technical assistance, services of human resources, functions related to finance and many other services. 

Outsourcing models


The organizations outsource their services as they believe that project outsourcing would cut down their expenses and improve the efficiency of the work. 

However, some companies do not outsource their services for gaining profit. Instead, they outsource their services as they are not able to employ in-house workers who have expertise in their skills and the experience needed to perform a particular task. 

On the other hand, staff augmentation is similar to project outsourcing with some advancements and some alterations

Staff augmentation is a strategy to outsource the project of the business and meet the objectives of the business. The strategy of staff augmentation offers assistance in the process of the task by providing skilled and certified workers on a temporary basis to fulfill the objectives of the task and meet the requirements of the business. 

The staff augmentation firm acts as a middleman or some mediator agencies which keep a record of the skilled workers and their experience and provide the workers to the business or organization when they are in need of it. 

The staff augmentation firm does all the backstage work of recruiting the candidates and hiring them. The organization or the business just need to state requirements and the staff augmentation firm provides them skilled candidates suitable for the work of the organization. 

Staff augmentation is used by business and organization and typically by the companies of information technologies. 

Although, the aim of the processes of project outsourcing and staff augmentation is to get the work of the organization done. However, the way in which they work and the quality of the services they provide differ from each other. It is believed that Staff augmentation technique is way better than Project outsourcing in a number of ways. 

Let’s take a look at the possible reason why staff augmentation is considered better than project outsourcing.

1. Command over the staff of the organization

Staff augmentation helps in managing the resources closely. This factor is lacking in project outsourcing because, in outsourcing, the outsourcer controls all the processes.

2. Integration with the processes of the organization

The organizations find it suitable to integrate the resources of staff augmentation with the processes of business instead of aligning the business process to external organization or candidates. 

3. Acceptance by the staff of the organization

The candidates who are already working in the firm often find it easy and suitable to work with the model of staff augmentation when compared to project outsourcing. 

4. The changing needs of the staff

The process of staff augmentation hires candidates who are skilled in their particular fields. Hence, the method of staff augmentation is able to meet the changing requirements of the staff because of the expertise and experience candidates. However, project outsourcing fails to provide staff with expertise. 

How much does staff augmentation cost?

When an organization has a big task or project undone and the organization does not have a staff to get the work done or else, the staff, which the organization possesses, does not have the required skills to do the work. 

In such a case, the organization needs to go out in search of skilled candidates who will do their project on time. For hiring the right candidate ideal for the project, the organization needs to conduct a round of interviews, analyze the candidates, evaluate them and come up with a bunch of selected candidates. The process does not end here. 

After a bunch of candidates has been selected, the organization needs to finalize a group of candidates who should be hired. It is such a long process, which consumes a lot of time. Apart from time, the lengthy procedure also demands a lot of finance for the procedures to be conducted.


Photo by Jimi Filipovski on Unsplash

On the other hand, the work becomes easy when the company employs some recruiters to hire the workers. The organization does not need to invest their time, but on the contrary, the organization needs to pay the recruiters for getting their work done. Along with this, a lot of money is invested in conducting the round of interviews. 

To get the candidates to know about the event of interviews taking place, the organization needs to post advertisements to make the aspiring candidates aware of the opportunity. Moreover, posting advertisements becomes a necessity when the organization has the burden of a looming task or project. All these processes, in addition, require a lot of finance. 

Instead of investing in all such procedures, which drain the finance of the organization, the organization can take the help of staff augmentation. The staff augmentation firm does all the work for you and thus, it saves a lot of costs. 

The staff augmentation work keeps a list of aspiring candidates who are experts in a particular field. Whenever the organization needs some helping hands, the staff augmentation firm provides the organization with a bunch of candidates who can get the work done. 

The organization does not need to spend money on conducting the round of interviews, hiring recruiters, or advertising.  

Furthermore, there are times, when the organization might need a helping hand to get the work done when they are falling short of staff. However, the organization would not need the extra staff all around the year.  

It would not be feasible for the company to hire workers on a permanent basis as the organization needs to pay the extra staff even if the extra staff does not have any more tasks to be accomplished for the remaining part of the year. 

For instance, the organization can take the assistance of staff augmentation. The staff augmentation provides candidates on a temporary basis (for example for one year). In addition, the organization can hire the candidates for the term of a particular project or task. 

Along with this, the company needs to train the newly employed workers, which also demands the expenditure of money. But, the candidates provided by the staff augmentation firm do not require any training as they possess skills and are specialized in their fields. The money, which was supposed to be spent on training, is saved. 

It might be concluded that staff augmentation save money by eliminating several procedures from the business process. 

Some Examples Of Staff Augmentation Firms

There are several companies or firms, which provide the services of staff augmentation. Some of the staff augmentation companies are discussed below. 


software testing services

Apphawks  is a software testing company and renders the service of staff augmentation. The company provides QA Testers to overcome the testing challenges. 

The tester of Apphawks gets assigned to the full-time project and tackles the quality of the product and software.

The company offers long term relations and continued advancements in the software of the organization. Along with this, the client has full access or command on the team who is managing the task. The approach of the company is to benefit the company from a number of automated tests and increase the efficiency of the flow of work within the organization.

RNF Technologies

RNF Technologies are a developer of applications of web and mobile and also provide solutions for Information technology to the clients. It provides expertise solutions in E-commerce, Searches engine optimization, and SEM. Along with this; it assists in Android or iPhone development. Furthermore, RNF technologies provide DEV solutions, solutions of digital marketing, services of CAD, graphic designing, data entry, and promise the quality of the services. 

The outsourcing company, RNF technologies provide managed staff augmentation services and solutions to the business to carry their work smoothly and ensure quality in their work. 

The RNF technologies make sure that the organization does not need to pay costs for recruiting the workers, and on liabilities or taxes and render a team of professionals who deliver speedy and efficient work. 

The experts provided by RNF technologies study the requirements and demand of the business. The experts are trained to understand the working of the business, study the objectives of the business and reach the goals of the business in no time. Along with this, the experts classify the requirements of the business and plan out an effective strategy to fulfill the objectives of the business. The RNF technologies provide a quick and speedy response to the clients and provide solutions for the development of the business.

Newfire Partners

newfire partners

Newfire Partners assist the organizations in bringing innovation and new tactics in the market place with the help of services of software development, staff augmentation. 

It also helps in initiating a start-up or business. It empowers a company to launch innovative ideas to help the company benefit. 

The company helps in transforming the innovative ideas into products and increase the speed with which the company progresses. 

The candidates selected by NewFire go through a number of processes which are tough and challenging so that the company can get outstanding workers. Then, the team at NewFire partners is rigorously polished and technically skilled to manage the projects, which are challenging and set new records. 


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Filling the right spot: employment challenges in the European tech sector

17 August 2018 Grzegorz Klos

Searching for an employee

Without key people, your business may lose a lot of potential. The process of recruiting specialists in the IT industry is not easy. You are looking for experienced people, possessing specific skills whose financial expectations meet your capabilities.

When you hire a specialist after the recruitment process, you expect you will be able to develop your business together with that person and other employees. After all, you invest money in a product via the employed person.

Boss, I’m leaving

Unfortunately, the truth is that IT employees in large cities such as Dublin or Berlin may choose offers and often decide not to be dedicated to only one company.

They are curious about other organizations. They favor frequent changes, various projects, new people, and new possibilities. They may change their work locations, because change often means higher salaries or they simply want to work with a different technology or trade.

For you, staff changes always constitute costs of following recruitment processes and implementations. An insufficient number of specialists also results in that Sprints are not as efficient as they should be.

Offering more and more

In order to retain an employee, you offer the person more and more: more money, remote work, flexible working hours, private medical care, company budget for integration, modern equipment, or various other benefits, which constitute the attribute of only IT companies.

What once constituted the attractive element of your company has today become a market standard. 

Startups and larger companies from the IT industry in London, Dublin, Stockholm, or Berlin frequently face the challenge of creating a coherent team.

In order to better understand the specifics of each market, I will perform a short analysis of the main complaints concerning Dublin, Berlin, Stockholm, and London in terms of acquiring and keeping employees. Let’s start with the capital of Ireland.

Dublin’s tech talent 

Dublin, to a large extent, became the European headquarters of large corporations. We can list Google, Facebook, Twitter, Linkedin, Amazon, Zalando, Groupon, PayPal, AirBnB, Dropbox, HubSpot, Accenture, Salesforce, SAP, or Uber. The list is complemented by Siemens, HP, Intel, Dell, Microsoft, and Symantec. In terms of gaming EA, PopCap, Riot Gaes, and Zynga have their offices here. Many European capitals can be slightly jealous of Dublin’s Silicon Docks.

The presence of so many large corporations in Dublin results in about 80,000 specialists working in IT and each year this market expands by a few thousand additional positions. HubSpot established its main office in Dublin in 2013 and in the beginning employed more than 100 people. It was then stated by Declan Fitzgerald (Global Recruiting Director with HubSpot), that their goal is to employ 300 more people in the fields of sales, marketing, and engineering.

This illustrates the magnitude of the demand for specialists not only in large corporations but also in smaller companies where startups must compete with giants who possess much larger resources which they can offer the best people.

Large corporations won’t lose talented people without a fight, seeing how in 2014 HubSpot itself had problems finding and placing the right people.

The large demand for tech-talents results also impacts rent prices which become higher and in the Dublin’s real estate market the demand is higher than the supply, making the city one of the most expensive to live in Europe.

Therefore, if any candidates from outside of Ireland think about working there they often prefer to select or change the company in favor of a one located in the smaller cities of Cork, Limerick, or Galway.

Employees decide to leave the capital in favor of the eastern part of the country because there the costs of renting or purchasing a house are often 50% lower.

Berlin’s tech talent 

The Berlin Jobs Startups research states that there for startups the remuneration is higher than outside of the capital city, however, it is lower than in the case of non-startups. Of course there is a significant difference in the salaries concerning tech-talents between people without experience (€ 2900 median), and those with many years of experience (€ 5000 median). What’s interesting is that circa 50% of employees feel that they earn less than their expectations (they feel underpaid).

Comparing Berlin with Munich, the cited studies are quite interesting. An analysis carried out by HoneyPot indicates that remunerations in Munich are the highest in Germany in reference to the cost of living.

Berlin is currently a location strongly supported by investors. In 2016 London received circa £860 million via “VC funding” while startups and companies from Berlin received as much as £1 billion, the highest amount in Europe. In the previous year, Berlin was a city with the most rapidly developing number of startups.

What may constitute a big chance for Berlin in the future consists in partially taking over employees from London who leave because of Brexit. After all, politicians have implemented billboard campaigns in the English capital with the following slogan: Dear startups, Keep calm and move to Berlin.

The costs of living are lower than in Munich or London (in this case at as much as 43%) making Berlin retain the title of the European capital for startups. If one would look for certain problems faced by employees: higher financial expectations, a large percentage of employees lacking or possessing short-term experience, the rotation of specialists, and the fact that very talented German programmers choose America for their professional development.

London’s tech talent

London achieved the top spot in the European Digital City 2016 Index. 

EDCi describing how well different cities across Europe support digital entrepreneurs. For startups and scaleups, the index will provide information about the strengths and weaknesses of local ecosystems […]

The city possesses an immense potential because it still is the No.1 main migration destination for specialists outside of England. As much as 38% of specialists decide to work in England and particularly in London because it is a city which is very open, with businessmen quickly adapting to newly introduced technologies.

However, London is a location that showcases the growing problems of the IT market, a result of a number of interlacing phenomena, and which can be analyzed as clearly as through a lens. First of all, the problem of insufficient number of specialists is present everywhere in Europe and the USA. Secondly, Brexit surprised and impacted the highly inclusive IT environment the most. Only 3% of IT workers supported the UK leaving the EU.

The consequences are that already in 2015 there were only 0.4 candidates per one job offer in London, and demonstrates the fact that 30% of company founders believe that the development of their businesses is halted by problems related with employing a proper number of people while 39% believe that they have problems employing people with a proper attitude.

According to the research, it is believed that in order to fill the deficits of people, 766,000 specialists are needed by the year 2020. Employing people from outside of England or even outside of Europe constitutes one of the most probable solutions for filling the human resources gap.

Brexit may further exacerbate the problem of the insufficient number of specialists. At the current stage, it can be observed that the number of foreign IT specialists willing to work in the UK has decreased by half. Specialists begin to be worried and prefer to choose a different European city. After all, they have many options when it comes to the employee market.

The employee deficit in London can only be compensated by salary growth. Already in 2015, the daily remuneration for working on a contract was 410 Pounds. The especially valuable specialists are those who know SQL Windows, SQL Server, JavaScript, or .NET.

The support of VC funds for companies and a vast number of bootcamps such as We Got Coders, Makers Academy, General Assembly, or LeWagon provide a hope for the British capital city. And furthermore, almost seven thousand Code Clubs operating in Great Britain are currently teach children and students coding languages.

Stockholm’s tech talent

Listed as one of the most innovative economies in the world with high investments in startups, the Swedish government would like to repeat the successes of Silicon Valley.

The most remarkable examples of the Swedish economic success on the world’s tech map are Spotify, Klarna, Skype, or Zalando. And here I list only technological companies. In SparkLabs rankings Stockholm is listed on the second position after Silicon Valley and before Tel Aviv in terms of the number of Unicorns.

In order for a country with 10 million people to achieve such successes, the country’s policy to a large extent focuses on developing innovations in the fields of smart cities, transport, or new materials. All of these actions are related to the financial support for startups and R&D which reach about 3.6% GDP.

If it’s so beneficial are there any perturbed areas which might include startups and larger technological companies?

According to Hays Global Skills Index 2016, Sweden has already outpaced the USA as the country with the highest labour market stress level. The country ranked first among other 33 developed economies, with engineering and technology sectors facing the worst skill shortage.

It is estimated that the by the year 2030, the deficit of IT employees in Sweden alone may reach 30,000 people, the highest of all Scandinavian countries.


In this text, my aim is not to convince you that the situation in your city is so difficult that hiring people in-house has lost any sense. That’s definitely not the case. It’s simply more difficult for a variety reasons. I’ve tried to present certain phenomena in tables for each city. Of course I’m not providing you with a deep analysis similar to those performed by research agencies and public institutions.

But surely you will agree that acquiring a specialist is not easy. I believe that to a certain degree I have presented the true market reality.

Preparing for this text I have collected a few suggestions from other articles which could impact acquiring specialists.

And so, the following are listed: work-life balance, possible interesting projects, training budgets, having fun together and integrating, or monitoring employee work satisfaction.

These tips, even though correct, don’t exhaust the selection of possible solutions. Perhaps freelancers? Why not! However, remember that a freelancer wants to be independent and you probably won’t turn him or her into a full time employee. He or she likes changes and the diversity of tasks.

What I may suggest is to consider (as the CTO, CIO, or Manager) B2B cooperation which may provide the solution for the repeating situations in terms of fighting for talents. 

Of course a certain solution is to relocate employees from Poland and other countries from Central-Eastern Europe, but after all you have no guarantee that after a few months of expenses paid for proper remuneration, relocation, and other benefits, as well as after the time spent with visa documents – you are going to retain the employee at your company.

When the employee becomes part of your city’s employee market, large corporations or highly financed startups may entice that person with even more attractive remuneration and additional benefits.

Access to talent from Central-Eastern Europe or even Asian countries does not constitute a solution, but B2B cooperation between companies does. You are connected by a contract which is a bit more binding. It is all complemented by such reliability rankings as Clutch so your satisfaction with the cooperation is significant.

Also, remember that many software houses from Poland wish to create long-lasting relations with businesses on the other side of the Baltic Sea.

The employee market constitutes a vast opportunity for job-seekers and even a greater challenge for businesses. What matters are intelligently designed, long-lasting strategies which, after all, may complement each other and will not be exclusive.

In case of any questions..