Software development outsourcing vs in-house hiring

The demand for high-quality software won’t ever decrease. People create applications to solve specific issues and fulfill particular user needs. Be it VR software or simply a mobile checklist app — we want it to work well, have an interactive user interface, and help us reach our goals.

So you have an idea and you want it to become a real product but the only thing you need — is a team of professionals who can do the job. Thus, you have two options: hire an in-house team or outsource software development to a remote vendor. Today I’ll tell the factors that may help you choose the perfect variant.

Factor #1 — Cost

In-house

Hiring developers directly on the premises is expensive. You have to make sure people have comfortable working places and other facilities (read — overhead costs). You also have to provide them a good compensation rate, healthcare, and vacation. You have to take care of local taxes. Hence, you gotta pay for the service and for the comfort of your employees.

Outsourcing

The main benefit of software outsourcing companies — is that they offer high-quality software for a much lower rate. The company already took care of the employees and they can work with different projects from all around the world without the client having to pay for their comfort. Hence, you pay for the service only. Even though the overhead costs are included in the rate of the vendor — the per-hour cost can still often be lower while the quality of the work is equal (if not better)

Factor #2 — Skill

In-house

Finding professionals is not an easy task. Everything depends on the type of software you want to create. Finding a good PHP developer to create a website won’t be hard, but if you need somebody with knowledge of more niche technology like Lisp or Scala, it can be much harder because you only have a handful of local developers available. It means there’s a possibility that you will have to change your plans and adapt your idea for the limited number of available resources.

Outsourcing

Outsourcing model offers you an undeniably huge talent pool because you are not limited to any location and are free to hire whoever you need from wherever place he/she is located at. As long as all your needs will be fulfilled, this way you can create a software of much higher quality.

Factor #3 — Perspective

In-house

It’s not uncommon for in-house employees to lose focus (or the opposite — get tunnel vision) with each passing year. This limits the development process from valuable outside perspectives and can stifle creativity and growth.

Outsourcing

Working with an outsourcing partner allows you to quickly scale teams up or down based on the development needs. Good documentation allows vendors to change the developers on a team or rotate employees upon your request. This way you’re always working with a team that can provide a fresh perspective on your product and grow with it. Plus — the large talent pool will allow your product to benefit from new technological advancements without needing to kickstart the entire scouting, hiring, and onboarding process.

Factor #4 — Risks

In-house

Leveraging risks associated with project management and communication is easier when your employees right next to you. The problem with in-house hiring is that you usually spend too much time managing and taming your workers, instead of focusing on your business.

Outsourcing

Since the remote team of developers can be located very far from your country, it’s probable that managing them would be a bit harder than managing an in-house team. However, modern outsourcing companies take care of all possible risks, including cultural diversity, language differences, and communication. Such issues like people grabbing your idea and disappear — is easily diminished with the help of a legal contract, while the quality of software can be controlled with a Service Level Agreement.

Factor #5 — Time

In-house

Your team of developers can work as good as the remote one but don’t forget that you first need to adapt them to your project before things become stable. This takes up a lot of time and the actual launch of the product can be delayed. Also, don’t forget about the bugfix and the issues that may occur in the course of the development process. You have to take care of them as well. And you have no choice but wait till the job is done, while the team can relax and do it slowly as long as they’re sure you won’t go anywhere.

Outsourcing

Remote teams are usually managed by experienced Project Managers who keep an eye of the job to be done on time. The deadlines are thoroughly negotiated and set beforehand, so nobody can get the wind up before the product is approved and launched. Outsourcing companies have higher interest in successful finale of every project they work on because it increases their reputation. Dragging time and simply doing a bad job is not for their benefit.

Overall, it’s hard to say for sure what hiring model is better because it all depends on the peculiarities of each business type. However, there are tangible benefits of outsourcing model like reasonable pricing, bigger talent pool, and high expertise, while in-house teams can be controlled easier but demand bigger budget and more time to launch the product. In case you decide to hire remote team of developers, choose the company that is trusted by big clients and which team has experience in a number of technologies, works with different businesses, and has a proof of supreme results.

Head Of Business Development at QArea. I’m passionate about new technologies and how digital changes the way we do business.

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Sandra Parker

Sandra Parker

Head Of Business Development at QArea. I’m passionate about new technologies and how digital changes the way we do business.

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