There’s something special about working with the same people in the same place. The crew. The squad. The gang. Give them any name you want, but collaborating with those you’ve built a rapport with and know you can trust always beats working with strangers. On an individual level, most people would choose to stick with the same team and bring as few new members on board as they can.
Is this approach always feasible though? No. Not when you want the business to grow anyway. Growth means change. And, in the IT world, change means tapping into the available talent pool and reeling in the best catch you can find.
When you get there, you’re left with but two options: expanding the in-house team or outsourcing the task(s) and bringing in “burstable” partners. So, which one should you choose? What’s the best business decision you can make in this case? Which approach will prove the most fruitful? That’s what we’re here to decide.
In-House Hiring: What’s the Deal?
In-house hiring, as the name suggests, means reinforcing the in-house team with new in-office members. Needless to say, this method is as old as time. Before outsourcing and outstaffing models entered the picture, the only choice you had was hiring new people to the company’s existing team.
More often than not, in-house hiring would mean hiring locally. Of course, nowadays, with the Internet and its networking advantages, you can hire people from anywhere across the globe. Provided they’re willing to relocate, that is.
Hiring in-house offers several benefits that may support different business needs. That being said, this model also has its downsides. So, let’s see what they are:
In-House Hiring: Advantages
Control
As much as different collaboration apps help, you cannot control the remote team as tightly as you can the in-house crew. When you have the entire team under the same roof, controlling all the processes and managing teamwork internally becomes a much easier task.
You can also build upon existing skills, yours and the team’s. Have the team lead take the reins on the project. See how someone who hasn’t worked in a management position before will fare. As they grow (personally and professionally), you can develop these people into even more valuable assets to the company.
Besides the growth benefit, when the same specialists work on the project from start to finish, they know everything there’s to know about it. Unlike the remote team that will require some time discovering and grasping the project’s details, the in-house pros modify it straight away.
Motivation
Assuming you treat them right, the company’s in-house employees will normally be more invested in its future than burstable partners. When the project(s)’ success is within reach and the people are 100% committed to it, they will seldom mind stepping on the gas pedal. As bad as crunch modes can be, an occasional crunch time is inevitable, and the in-house crew will usually prove more willing in this regard.
Plus, when you invest time and resources into growing the more talented in-house hires, you can build a bonafide all-star team. With these people, you can turn the company from a one-trick pony into an actual business enterprise that can realize massive projects with ease.
Schedule
The fact that the schedule concerns are on you is as much a downside as it is an upside. On the one hand, deciding on the schedule and managing it is additional work. On the other hand, because you have a big say in your employees’ schedule, you can also organize it the way you see fit. When you have the necessary specialists always available when you need them available, streamlining the project’s progress comes pretty easy.
Provided you don’t drop the proverbial ball, a sensible schedule will let everyone in the office stay on the same wavelength and react to any stumbling blocks without delay. Besides the instant response benefit, this can also enable seamless collaboration.
In-House Hiring: Disadvantages
Cost
Hiring in-house specialists, also known as insourcing, is a luxury that not every company will be able to afford. First things first, logistics costs come into play. As you can imagine, you’ll need to seat the new talent somewhere. In other words, you’ll likely have to rent a more sizable space. So get ready to pony up for a new workplace.
Apart from that, you’ll also have to equip these people, meaning new furniture, laptops, different peripherals, you name it. The hardware, the software, the countless supplies – these things cost money, right? And, as little as it may seem initially, these costs add up, making up a noticeable sum.
Last but not least, assuming you’re operating from the West, the local talent will cost you more than its offshore competition. Much more. Because most companies outsource projects to the developing world, they’re able to hire quality specialists at a fraction of the Western world’s cost.
Hiring locally (or relocating these specialists), you will not be able to do so. And, even when you’re finished with the project, you’ll still have to pay these employees salaries (or fire and hire these people anew when you need them, but that’s a whole other can of worms).
Time Investment
More and more people these days are embracing the remote lifestyle and rejecting in-office work altogether. Because that’s the case, you’ll have far fewer candidates to choose from. And since not everyone is interested in moving to a new city (or country), the available candidate pool is shrunk once again.
What you’re left with, depending on the city you’re operating from, might still be a decent crowd to choose from. But even if that’s true, you’re still limited to a much smaller group of people than you would be if you were willing to consider outsourcing the work.
Fishing in a small pond rather than in a vast ocean usually takes more time to catch quality fish. Dropping the analogy, you’ll likely have to spend weeks or even months looking for your ideal in-house candidate. And, because high-level professionals are rare to begin with, you might have to cough up extra to persuade this person to join your team.
Management Hassle
Hiring new people can be as simple as finding them, interviewing them, and settling on the wage, benefits, working hours, the usual (in)tangibles. They’re usually subject to change, but you seldom change them more often than every 6-12 months.
Managing these things, on the other hand, is an everyday task. The payroll, taxes, scheduling concerns, HR and administration hassles, and everything in-between. When you choose the outsourcing approach, these hassles rest on the offshore agency’s shoulders. When you don’t, they are on you. So is tracking the vacation and sick days. So is making sure that the work gets done.
The conflicts between colleagues. The birthdays. The company retreats. As small as these things may seem on paper, they take their toll on you and your progress.
Outsourcing Talent: What’s the Deal?
Everyone in the IT world knows what outsourcing is. In the West, somewhere around 3/4 IT companies outsource everything from project management and customer support to digital security and software development. The market, according to different sources, is at least $200-$300 billion big. And, when you combine outsourcing with outstaffing, the overall market share reaches $900+ billion. Nothing to sneeze at, right?
We’ve talked about general outsourcing methods several times before though. We’ve also discussed the differences between offshoring, nearshoring, and onshoring before. What we’re stacking up against in-house hiring here today is more in the staff augmentation direction.
Also known as bringing in burstable partners, this approach lets you supplement the in-house team with remote third-party developers. More often than not, they join the project and cooperate with the in-office team on a day-to-day basis.
Same as its competition, this outsourcing model also has its distinct pros and cons. Let’s find out what they are:
Outsourcing Talent: Pros
Cost
According to the most recent surveys, Western companies save somewhere between 50 and 70% outsourcing the bulk of the work to third-party vendors. Huge difference? You’re right.
Software developers from Eastern Europe and South America will cost you $25-$50 per hour. Look toward Africa and Asia and you might be able to afford quality software engineers for as little as $20-$40 per hour. Senior developers in the US, on the other hand, usually cost from $75 to whopping $125 per hour.
Need we say more? As great as the devs in the United States generally are, they’re not 3 times better than Eastern European or South America. As you can guess, this is the biggest reason ~75% of Western IT companies outsource a lot of their workload.
Talent Pool
It matters very little where you operate from: someplace Midwest, Seattle, the Bay Area. As vast as the local talent pool may seem, it is nothing compared to the worldwide workforce.
When you’re ‘shopping’ for specialists across the globe, you’re choosing from 55+ million potential candidates. On the other side, even the biggest tech hub like San Francisco is home to fewer than 70,000 ICT workers.
Hiring worldwide, you can find contractors with the most specific skills. From obscure tech to legacy solutions to the latest protocols/algorithms, the choice is yours. There’s variety galore on the international IT market, and ignoring it makes very little sense in the long run.
Flexibility
The current in-house team manages the core business functions just fine but doesn’t quite cut the mustard covering the rest? Hire a few burstable partners and, there you go, the problem is solved. The ‘rest’ has become unnecessary? It’s alright. Since you’ve hired contractors and not full-time in-house employees, you can usually let these people go anytime you want. No fuss, no muss.
In fact, you can always increase or reduce the team’s size with third-party hires with very little time and effort invested. And, better yet, you don’t have to rent a bigger office, buy new equipment, or train these people. Instead, you can remain flexible, and solve various problems as they come.
Outsourcing Talent: Cons
Communication
Communication issues can break the most sure-fire projects. And, as much as things have improved on this front, you’ll always face more communication challenges working with outsourcing vendors.
Of course, you can always minimize them. Make sure that they’re operating from somewhere with world-class infrastructure. Look into the countries with shared cultural crossovers. Avoid those agencies that do not speak adequate English. And, last but not least, take the time difference into account. As long as you do that, you’ll have no trouble making it work.
Having said that, again, you’ll seldom be able to communicate with third-party specialists as efficiently as you would with in-house hires. Sure, apps like Zoom and Slack can help big-time. Still, seamless long-distance communication remains a pipe dream.
Quality
Are specialists from third-party countries as unreliable as they sometimes were back in the days? No. Not even close. There are excellent outsourcing agencies in Eastern Europe, Asia, and South America. More than one.
At the same time, quality assurance can be difficult across long distances. As circumstantial as it is, the remote team will not always produce the same results as the in-house pros.
To make sure the in-office engineers won’t have to fix the third-party developers’ mistakes, look into the latters’ history first. Analyze the agency’s financial records, examine the company’s debt-equity ratio, read reviews, and ask for customer references. Click here to learn more about the interview questions that you SHOULD ask before hiring outsourcing companies.
Provided you look at the firm’s track record, you should be able to address and resolve most outsourcing quality concerns. Still, the remote team will unlikely run circles around the in-house hires.
Synergy
This one’s a handful, but the issue exists nonetheless. We’re talking about multiple potential problems here. First, the in-office team might feel intimidated by the contractors’ expertise. Threatened that you can easily replace them with a more affordable option, they may feel discouraged to grow and develop additional skills.
Second, getting the third-party contractors up to speed is not always easy. As experienced as these people might be, each and every project has its specific needs. The in-house squad, on the other hand, usually knows the project’s in and outs. Because that’s the case, when you bring in burstable partners, you can create a temporary rift between the two teams. Due to this knowledge gap, seamless cooperation from the get-go proves impossible.
Long Story Short
If you don’t mind paying extra, investing more time into looking for new candidates, and all the management hassle that comes with it, you should go the in-house hiring road. In return, you’ll receive full control over the project and you might even be able to foster some A-grade talent.
If you want to stay flexible and don’t feel like paying more than you have to, consider bringing in burstable partners. Working with outsourcing agencies, you’ll be able to afford the best specialists in any niche at a fraction of the cost.
And, should you choose the second option, you might want to look into Wonderment Apps first. The talent and experience that we bring to the table are unmatched at this price point. Our agile and nimble workers will be able to augment your staff and help any digital product come to life. From full-service coding to general product development, we’re there for you.