Hiring a software development company or an in-house team — Which is better?
As a startup or any company makes plans to grow, the dilemma that most of the team faces is whether they should outsource their projects to some other development agencies or they should increase their own team size? Well the solution to this confusion varies from company to company. It depends on many factors like type of business, objective, budget and deadline. Both have their own benefits and risks associated with it.
Let’s see how hiring a correct software company can benefit your business. Now hiring an appropriate software company is very crucial. One should do proper research about the company before hiring them otherwise it will lead to loss of money, time and also can cost company’s reputation sometimes.
Permanent Costs
Hiring an employee adds a permanent cost to the company in terms of salaries and other paid benefits. And there is always a risk that the employees won’t work out so there is an added cost of training those employees.
While in case of hiring a company will not add any permanent costs. Any outsourced company will charge as per project basis or on hourly basis. So there is direct cost reduction as the company will have to incur the cost for a certain period of time.
Hiring & Training Cost
Hiring an employee not only increases cost in terms of salary but also recruitment costs. Hiring an appropriate employee requires investment of resources, time, energy as recruiting involves posting ads, interviews, training,on-boarding support, etc.
Now another problem is that well experienced candidates demand higher salaries as per the market rate which is around Rs.6,25,313 for a full stack developer with an experience of 1 year in India as per Indeed. And the number goes higher with increase in experience.
If the company have less budget, they opt to hire freshers which includes additional investment in training the freshers. The company does not get any benefit against the cost incurred during the training period.
Hiring a software company instead of hiring permanent employees can cut down these costs.
Diverse Technology Stacks
Let’s suppose your company have a project that needs to built in ReactJS and NodeJS. If you are opting to hire employees then you need to hire individual developers for both the technologies which will roughly cost around Rs.5,35,514 for JavaScript Developers(as per Indeed) and 6,11,000 for NodeJS developers (as per Payscale). For every new technology, you will have to hire new employees.
This is not the problem while hiring a company. They already have their own team with diverse technology stacks and they can be a one-stop solution for all your technical needs. The resources are not limited or restricted.
Flexibility
There is no long term commitment in outsourcing your project. You can evaluate their performance and support with a single project and if you like their service, you can continue with them otherwise move to another service provider.
But this is not the case while hiring a full-time employee.
Smooth Operations
By outsourcing a part of your project for eg: the development part, you can focus on the other important aspects of your business like marketing the product. This ultimately increases the efficiency and reduces operation costs. You do not need to invest time in controlling every single approach of your developers.
Diverse Ideas
With hiring a company, there will be a greater scope of creativity and innovation and there will be two whole different teams working on a single project. You can also get additional advice and consultation from the outsourced company.
Standard Process
Agencies try to maximize their Client satisfaction by ensuring quality, strategic decision making, adhering to deadlines or development milestones, great after sales-support and gain trust of their client to build a long term business relation. clear end-to-end processes as the foundation for every client relationship. So with a good company you can develop a great product with having to worry as the company will manage of the whole process.
While with an in-house team, you need to handle and manage each and every step which can be very troublesome for a small scale business.
Summary
Both the process have their own benefits and risks. If you have to choose between the two, consider three main factors — budget, project scope, and deadlines.
Many companies today are going for a hybrid model. They collaborate their in-house and agency teams, outsourcing certain tasks while keeping others internal. Startups generally outsource the technical development part and focus more on sales, marketing and customer satisfaction.
Increasing the size of your team is beneficial in long-term because hiring a perfect team and aligning their vision with your company’s goals requires great deal of effort, time and patience. But hiring a good software company can provide many benefits as well both in long-term and short-term.
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