Working with external developers: Employees vs Consultants

Jaim Zuber
3 min readNov 11, 2015


Are you working with the right developers for your business? This is the beginning of a series describing the ecosystem for outsourcing your development. It is designed to help entrepreneurs and business owners get the most value from external development.

Who should I work with?

Handling all development work in house isn’t the right choice for many organizations. They need software to run but don’t have the budget for a CTO and fully stocked development team. They rely on external developers or dev shops, like Sharp Five Software, to deliver the software that fuels their business.

Employees vs consultants

On a per hour basis, temporary workers will cost more the an employee. For companies with a steady workflow, a full time employee will usually be more cost effective. On the other hand, you don’t need to keep paying temp workers after a project has been completed or during slow periods. If you have enough work and budget to keep a developer busy for 1–2 years, your goal should be to hire a full time employee. Other than that, the choice isn’t as clear.

Some benefits of Employees:


Full time employee’s are at your beck and call each workday. They work on the priorities you set for as long as you desire. Consultants have other clients and may not be able to work according to your timeline.

Domain Knowledge:

An under appreciated value of any developer is how well they understand your business and your specific problems (domain knowledge). This benefit goes beyond understanding how the software works. When a developer spends time working with you and your organization, they learn to speak your language. They begin to understand what’s important to keep the business growing. This is a significant benefit of hiring full time employees. Of course, it’s naive to rely on a full time employee staying with your company for many years. Some do, but turnover with employees should be expected. This is especially true with in-demand skill sets. It’s important to make sure any worker you hire (full time or temporary) documents the reasons behind the systems they produce.

With all the benefits of Full Time Employees, why choose outside development?


Why limit your development team to the people who are willing to commute to your office as employees? You are missing out on many people capable of helping you grow your business.


Many companies don’t have the budget to commit to a CTO and fully stocked development team. They can produce software in shorter cycles with out the financial commitment of full time employees. Outside developers can be more expensive while they are working, but often they are less costly overall since you only pay them when they’re needed.


Your existing staff may not have the bandwidth to hit critical deadlines. External developers can help ramp up your team to hit release cycles that keep your company competitive.


Both Budget and Timeline concerns can be handled without committing to the continuing cost of a full time employee. You’re committed to paying full time employees day in and day out, even when business slows. External developers are often cost effective long term.


Your team might not have expertise in a needed skill. Hiring employees with rare skill sets is expensive because they can command top salaries. Training existing staff is cost effective, but takes time. You can ramp up your team in a needed skill quickly without committing to the long term expense.

These are some of the factors that everyone who hires development work must consider. Next post we’ll go over different types of outside development help.

Originally published at Sharp Five Software.