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Why Hiring a Software Development Company is Better than Recruiting an Expert?

When companies are updating their in-house software or planning to build a software application their executives ask: Should we hire someone in-house or hire a professional company to create our solution?  

Hiring an in-house expert may seem like it costs less than the project price mentioned by a software development company. However, in the long run, the responsibilities, risks, and time involved in hiring that employee can cost up to three or four times what it would have cost to outsource the project. 

Costs of Hiring an Employee

Let’s start by talking about the responsibilities of hiring a software developer. First, you need to consider the salary you want to pay the developer. The average salary for a software developer ranges from $ 40,000 to $ 140,000 per year, depending on the market and the developer’s experience.  

While it makes sense in some sectors to hire the cheapest option, this path could be avoided here as this person will be solely responsible for software development. Based on experience, a good developer with the required skill set in this position will cost less than $ 80,000 per year or $ 40.00 per hour.  

If you hire a developer for a three-month contract at $ 40.00 per hour, your total cost will be somewhere in the region of $ 20,000. Most developers are looking for a minimum six-month contract, so in reality, you would have to pledge $ 40,000 for the position. If you are hiring a developer as a full-time employee, you should consider benefits such as insurance and retirement, significantly increasing this amount.  

Management Process

Salary aside, the recruitment process itself presents its challenges. First, the manager needs to have the experience to judge whether the developer deserves the job and is worth the investment. This means that the manager must take the time to successfully and accurately evaluate candidates. The analysis should cover all aspects of architecture and programming since the candidate will be solely responsible for the development project.  

In this industry, personality is a small part of the process, as their expertise cannot be determined by the personality. Developers are often introverted making it difficult for them to demonstrate their capabilities orally. Instead, you want to focus on the skillset. However, if the manager or company interviewing the developer does not have IT experience, it is very likely that they will not be able to find the right person for the job. Once the recruitment process is complete, the company must establish a management process for the developer.  

Software Knowledge

Every developer needs structure, control, and, most importantly, a manager who has the knowledge and experience to lead the project. With this in mind, a manager should take time to create a project lifecycle, including detailed task specifications and general knowledge of the programming environment for software development 

It does not take time to create a task specification list or share the knowledge that will guide the developer through the life cycle. But without them the software will not be built according to the company’s requirements, specifications, and proposed deadlines. The importance of a manager with operational and technical knowledge to guide the developer is underestimated. This does not mean that the manager has to be a programmer; of course, the manager does need experience working on development projects.  

Documentation Requirements

A manager needs to understand the web development software lifecycle, documentation requirements, the programming environment, and the software application timeline. This experience helps the manager monitor all aspects of the project, including testing. The time a company needs to commit to hiring a developer can be several months, and that is not to mention the risk of not providing the right resources and management for the project. 

Risks of Hiring an Employee

Risks associated with regulation, or lack thereof, are one thing, but there are many other risks associated with hiring a developer. The most obvious one is the possibility of the employee or contractor resigning or leaving the company. One example is a three-month project that needs to be completed immediately, and the developer in charge of the project leaves or falls ill one month into development. At this point, the company has to hire a new developer and reinvest the time to review the application infrastructure and software environment with them 

A new developer is often not able to pick up where the previous one left off. It is not just the developer’s skills that become the company’s asset, but their knowledge of the application too. When a developer leaves, their replacement must first learn the application and bind themselves to the previous developer’s code before they can work with it. This can take several weeks depending on the complexity of the application.  

Another risk of hiring a developer arises from uncertainty. No matter how detailed your hiring process is, you often don’t know if a developer is good until they complete a job or activity. Suppose an error is found after the developer has completed a project for you. In that case, it will not only result in the need to upgrade software but also restructure the hiring process, and both of them can cost the company more than just dollars. 

Benefits of Outsourcing the Project

A good software development outsourcing company will be able to take on the stated responsibilities and risks associated with software development on behalf of the company. It will have a management team with experience and expertise to monitor the developers and create the software application. A software development company will also be able to spread knowledge about the project at hand and the business processes itself to a team of developers.  

Custom software development companies can be a great way to create a company’s technology solution, as long as they have a solid understanding of its needs. Without a strong understanding and knowledge of the company’s core business processes and practices, the completed application will likely not represent the company’s interests. Often, the biggest time commitment a client has to make is to familiarize the software development company with their business practices and needs.  

Hiring an in-house employee can significantly reduce the time required to transfer the information as the employee will understand the company by interacting with them daily. However, the right software development agency for the job will already have the experience of working in the industry, which means they have the necessary knowledge. This will shorten the time involved in orientation for the development company and give them a chance to be actively involved in software development based on their previous industry experience. 


Overall, hiring an employee may be an attractive option at first. But the risks and time involved in hiring and managing that employee may outweigh the benefits, if the company is not ready for them. Hiring a knowledgeable and experienced software development firm company with experience in the industry can initially cost more than hiring a developer; however, over time, companies that have invested in IT will find that the best long-term solution is to choose a relationship with a software development company instead of hiring an employee.  

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