The choice to hire in-house staff or outsource is not as cut and dry as one might think. There are a lot of factors that determine which option would be better. Cost is obviously a huge factor. Of course, this is the case with any industry. When it comes to hiring a technical team to build a website, custom software, mobile apps or anything else like it, it’s always a struggle to think would it be better just to have my own team or just hire a company to do it for me. Letting someone else do it takes a bit of pressure off for the business owner. Here we will evaluate the pros and cons of both sides to help you make a more educated decision.
Before you make any decision you must determine what the scope of the project(s) is, what your budget is, and when you want it to be completed by.
Why you should outsource
This is really useful for startups that don’t have the funds to hire a whole in-house team. Larger more established businesses usually have more funds and tools to hire and pay who they want. It can be more cost effective and easier to just hire an outside company to build what you need. This is especially true for individuals trying to build and get funding to expand their idea further.
With that being said not all established businesses can hire a whole team either. Especially if they don’t have the expertise to hire the right people or manage the team and project. It can be a lot quicker to hire a company that already has a team ready to create your mobile app, website or software that you need.
Building technology comes with a lot more than just hiring and paying the right people. There may be hosting needs, hardware and/or software the project requires, and other technical pieces that are required that a business never knew or thought about. A development company would know all this since they do it every day and they can take care of everything for you.
Pro’s to outsourcing
a. Great development companies have teams of people that specialize in various aspects of technology so they can do it all for you.
b. The cost savings is pretty large in comparison to hiring people yourself
c. It’s perfect for short-term projects. If you just want a 5-page app created it is definitely much easier and cheaper to outsource
d. You can hire a development company anywhere in the world. You can choose cost-effective companies that do development in countries where the dollar is worth more.
e. The time to interview and train a team vs hiring a team that can start now saves a lot of time
f. Hiring the right company could give you a partner for life. You could have someone that can take care of any problems that arise with very little interaction from you
Outsourcing can free up a lot of your time to focus on tasks that help you build company and brand awareness. That alone is a time-consuming task. Having someone else manage the IT and development tasks takes a lot of pressure off you. The easiest things to outsource are marketing tasks, app development, app design, website development, website design, and of course all the details that also need to be managed within those categories.
This is also a much easier way to find talent that are experts in their field. The right outsourcing partner will be able to provide you with all the services mentioned. You do, however, want to do your due diligence to make sure you are hiring the right team. There are great development companies and there are bad ones. There are questions you will want to ask them and make sure they can answer before you hire them. For example, if you are looking for a great web development company there is a certain list of questions you should ask specifically for that type of development.
Con’s of outsourcing
a. It can be less secure. As mentioned be careful who you hire. Make sure there is an NDA in place and that they make you the full owner and provide you all ownership of the codes.
b. Hiring outside of the country can be a risk. They are not easily accessible and could be fake.
c. The timeline could be a bit longer as companies usually have a structure in place which they follow and you can’t decide or change how they do it.
d. You have less control over the people working on your project and communicating with them usually means meeting at random times due to different time zones.
When to hire in-house
Some companies need to build a product that requires the utmost secrecy. It is usually a rather large project like that of Facebook. If that is the case in-house is the better way to go. It can also be more cost-effective as well. You can also have more control over your team as it would be rather large. Your team will also share your company culture and be right there with you to solve any issues quickly.
If you are wondering how you can find the right team to do this, don’t rely on the internet to find them. The best way to find the right team is through people you know. References tend to yield better results when it comes to finding the best staff.
Call centers are also something that is better in house. Customer service is very important for any business and that service tends to decline when companies outsource. It may take some time to realize it but if you want your companies culture to remain intact then an in-house team is the best way to go. It’s not always the cheapest option but having customers that feel positively about your company/brand can only help you.
Pro’s of in-house
a. You have complete control over the employees you hire.
b. Your employees are more invested in your success. This is especially true if you provide them options for growth which you have the ability to provide them.
c. You can easily access the team. You can meet with them anytime to discuss ideas and brainstorm.
d. In some situations, investors value an in-house team versus an outsourced team. If you’re looking for funding to add more people this is a good selling point.
e. Intellectual Property is more secure
f. Problems can sometimes be fixed quicker since this is their sole job
Businesses can automate some of their activities to not only keep it in-house but also make it more efficient. Some of these tasks include using payment gateways, using accounting tools for bank transactions, AI customer service tools, scheduling tools for social media as well as content for various subjects like email, and ready-made templates to create basic websites and apps.
Con’s of in-house
a. It can be pretty difficult and time-consuming to find qualified talent. References may not be enough and trying to determine who would be the best at the job is very difficult
b. To get great employees you most likely have to pay them a higher salary with a lot of benefits which can become very costly
c. The cost of the interviewing process, then the onboarding process, training, and turnover are incredibly high.
d. Managing the team requires more time and energy since it is your team so there is a lot more responsibility on your end.
Best of both worlds
It’s a bit harder to find but the best solution is having an experienced cost-effective team that works like they are in-house but are actually outsourced. Finding a company that provides you with a dedicated programming team is the best solution. They don’t work on any project other than yours. You have access to that team at any time and can make as many changes as you wish at any time. This may seem too good to be true but it’s not. Although this option is more expensive than hiring them for 1 fixed cost it’s usually less expensive than hiring in-house.
With the right company, they can provide the right resources to match exactly what you need. You can discuss all your needs and they will know exactly what is involved and who should work on it. You will also have a project team leader who you can communicate with at any time. As a customer, you should receive daily work log reports with phone and email conversations with the staff to ensure productivity.
In the end, it’s about figuring out exactly what you excel at and what you don’t. For example, if you are looking to create a new website and all you have is 1 IT person and you know nothing about web development, then its probably a good idea to hire a company who does have the expertise. Of course, your IT person can manage any issues that arise after completion so maintenance can be kept in-house.
Keep in mind the most important factors; cost, experience, and time. This isn’t an easy decision to make so take your time with it. There’s no need to outsource everything and there is no need to have everything done in-house. Finding the right balance is key. Play to your strengths and outsource the rest.