Outsourcing vs. In-House Development

Technical Articles
Oleh Mykhaylovych
18 July 2016

For many companies, there comes a time when they start to think about outsourcing their app or web development rather than recruiting an in-house developer. If you’re one of those on the fence, probably, you want to hear different opinions and study all pros and cons before you can make a final decision. Since feedback varies, for your convenience we’ve studied the advantages and drawbacks of each way of development and will gladly provide you with our findings.

The Pros of Recruiting a Local Developer

Corporate culture.

Those employees, including developers, who work for a company on a regular basis, that is full-time, are more committed. They share the company’s ideas and values and are interested in doing their best to achieve the best results. It’s a great advantage of in-house developers and your company can benefit from it.


Having your own developer is great for another very important reason. Being a part of your company, he is aware of the current issues as well as needs of the company and can come up with relevant solutions. Since working shoulder to shoulder is all about communication, you can discuss some features or anything related to the development process even during lunch instead of waiting for a scheduled meeting to share your ideas and inquire about the progress.

Common goals.

The aim of the overseas developers, especially those who work as freelancers, is to gain many clients and work on different projects simultaneously. While the in-house developers pursue the goals aligned with their company’s strategy.

The Advantages of Hiring a Full-Time Developer

full time developer

High salary.

Today, software developer’s job is very well remunerated with hourly rates of about $150. Add medical insurance to that sum and you’ll realize that a good chunk of your budget has to be allotted to cover salary costs.

Long searches.

It’s not so easy to find a committed developer who will fit in with your culture and goals. Due to a high demand for skilled developers, your searches may take a while before you find the one and convince him to work for you. Also, a long period of searches may distract you from the current issues that require your attention and reaction.

The Pros of Offshore Outsourcing

Labor cost.

Outsourcing your project to low-cost countries you can save a lot of money. Hiring an overseas developer, say from some Eastern European country, will cost you half as much (or even less) as employing a local developer. Since the IT specialists from the so-called developing countries are as competitive as their counterparts from the US, for example, there is no reason to pay more when you can get the same results even on a shoestring budget. However, there is a tendency towards deciding in favor of in-house developers when labor costs don’t differ significantly.


Very often companies need a particular specialist with a particular set of skills for their current project. Or they feel they won’t meet the deadline so they think extra people in their team will do the trick. There is no point in employing somebody on a full-time basis and this is where outsourcing may come in handy. You just hire an overseas specialist, they perform the task, get paid, and that’s it. No long-term commitment and the costs it implies.

Focusing on core process.

By software outsourcing the development process to an offshore IT company, you allow your team to concentrate on other important aspects of a project such as design and management. Moreover, in-house developers often get distracted by the office environment and have to work extra hours to complete their tasks.

The Disadvantages of Outsourced Development


Quality control.

One of the main pitfalls of outsourcing is that you can’t totally control the code and architecture quality. You can’t even be sure that the person who is working on your project is highly professional. When you look through the portfolio of a particular outsourcing company you think that you’ll get the same results and even better. But usually, they list the works of their best developer in their portfolios and you can’t be sure that particular person will be working for you. Nevertheless, you can recruit the best overseas developer.

Possible solution: The first option is to hire a consultant who will review the potential partners and then will recommend the most appropriate ones to you. The second option is to offer the candidates to do a test project. Hold a technical interview in order to see how competent the candidates are. Offer them a test in coding but select a challenging one. Apart from technical skills, you should figure out what kind of personality you deal with and whether they will fit your company’s culture.


Different countries have different standards and the way they develop software may not be the same as yours. As it has already been mentioned, outsourcing software development is unimaginable without communication and collaboration between the parties. If you want to achieve the best product, you need to set your requirements clearly and precisely.

Solution: Outsource your project to those companies that implement Scrum methodology in their workflow. How it works and benefits both parties? If your outsourcing partner uses Scrum it means that their team is self-organized, their work is transparent, and each member of the team is aware of your preferences. One of its conspicuous features is the close and regular collaboration between your and their representatives who meet to discuss the progress as well as make sure that everything is going according to your specifications.

Geographical distance.

If you outsource to the country located in a different time zone, you may be awakened by the call of your partner’s representative far into the night to solve an immediate issue. While it’s the afternoon where they are, in your country it’s not even the time to wake up.

Solution: In order to solve the problem with time zones, make sure that the team you’re hiring overseas has their project manager in your area or nearby. That is how many large shops deal with this problem. Project managers act as intermediaries between you and the developers. They also take care of the cultural and non-technical issues that can arise from the cooperation with the overseas partners.


When deciding whether to outsource development or get a local developer you need to take into account the positive aspects and downsides of each option. The choice completely depends on a particular company and its project as well as its needs and opportunities. If you or someone from your team can clearly write technical requirements, assess the code, and recruit the most suitable overseas development team, outsourcing is right for you.

If you’re still in doubts, try another alternative – consider hiring a local freelance developer. There are a lot of talented developers who don’t want to be bound to a particular company so they prefer a more flexible way of life. They usually choose the most interesting projects and promising startups that let them experiment with the latest tech trends. In terms of labor cost, obviously, it’s much cheaper to hire a freelance rather than a full-time developer.

Before you make your final choice, you should decide what you want from your potential developer, what you expect to achieve. Another point for consideration is your technical competence or in other words your ability to write the detailed technical requirements and judge the code. Also, think about the importance of collaboration between you and the developer. And, finally, consider your budget. Asking around is a good idea since you’ll listen to different opinions, analyze other businesses’ experience, and understand which route is best for your project.


Also you can find useful the following articles:

AngularJS for Startups: Is It Worth It?
Benefits of Using .Net for Startup Development