A QUICK SUMMARY – FOR THE BUSY ONES
TABLE OF CONTENTS
Let’s go back once again to the difficult decision of what to do when hiring a software developer. This is a strategic step that will decide the end product’s future, leading to success or failure with even chances.
And it’s not all about the cost – there are other vital considerations to take into account when hiring a freelancer, a full-time developer(s) or a development company. Also, bear in mind that none of these 3 options is better or worse than the other – each is solid and relevant for particular projects in particular circumstances. Overall, you should consider the following aspects.
If a project runs for few months/years, do you have enough resources?
Will you need ongoing maintenance and regular updates for a product?
Or is your project going to take less than one year?
Do you have all the technical requirements and a list of features clearly determined?
Or do you need additional guidance on project specifics?
Of course, for technical expertise and/or business analysis, you’d want an agency.
The essential part, surely, defining what you’re capable of paying for, though not as one-sided as “with small budget, I’ll hire a freelancer, and with huge budget, a company”. Rather it depends on the project length too.
Say you have a one-year-long project:
An hourly rate basis or full-time employee, which would be more optimal?
Are there training, taxes, insurance, hardware expenses involved?
What communication style do you prefer?
Two out of three hiring options imply conversing remotely, are you ok with that?
Are you open to new ideas and input that could result in project changes?
What project management tools/services are you comfortable with?
The choice between a full-time developer, a freelancer or a contracted company depends on your business (and personal) goals, location and economy, company style, etc. For some, freelance can be a good start, delegating smaller or short-term tasks and collecting experience. Others may need flexibility, mobility and guiding input by a trusted software development company along the way. Let’s see what the pros and cons of each option are.
The full-time employee option guarantees that he/she works for you for the project timeline, typically devoting 40 working hours a week. A full-time developer may be paid on hourly basis or given a monthly salary, and the employer has to provide office space and equipment, taxes, insurance, vacation and other benefits.
Software developers can work in all three areas (freelance, full-time, contract) due to the fact that they can execute tasks remotely, and partially due to high demand as well. Typically, freelancers are hired for a particular project, and the agreement is plain: do the job and get paid. Freelance developers often undertake several projects at a time, which is a risky factor you have to be aware of.
Hiring a software development company is the best choice in terms of professional work, working relationships, quality end-product and security. Such companies, as a rule, consist of all kind of experts (web/mobile developers, designers, analysts, project managers, testers, etc.) to ensure full-cycle of services.
The process is divided into small stages (sprints/iterations) for supervision and possible amendments. Two key payment options are ‘time & material’ and ‘fixed price’, and what is also important, is that an employer secures full rights to the product and the source code.
In raw figures comparison, freelancers win against full-time developers and companies, of course. There are no additional costs except the rate. While development agencies have to deal with office rent, human resources, managers, marketing, accounting, etc., and they have to add those expenses into the cost of their services.
However, there are certain hidden costs, that could tip the scales back to companies.
Firstly, any recruitment efforts take time and money, and finding talented developers individually is going to be tougher than hiring them from a company staff.
Also, freelancers are a less stable option compared to companies, and the recruitment process could end up being more costly.
Regarding full-time developers to hire, consider the costs of hiring and training. For instance, a study by Center for American Progress estimates the cost of hiring a new employee for high-level positions can make over 200% of annual salary (thus, the cost to hire a software developer with $150,000 salary will actually be about $300,000).
Training usually takes several months and also is one of the most expensive investments.
Plus, there are often company-paid benefits, such as health coverage, leave, insurance, bonuses, etc.
Let us sum up what’ve discussed. What option is the best for your project?
In general, freelancers are the cheapest and good for short-term tasks. However, as they usually work on multiple projects at the same time, cooperation can be less predictable and could end up being more costly.
Hiring a full-time developer costs a lot of time, effort, and money. You also need to take care of the contract and all other legal obligations. The unquestionable advantage of having an in-house development is the freedom of assigning tasks at hand.
Working with outsourcing companies and development agencies is pricey but saves you a lot of time and effort, and ensures the highest quality end-product.
Luckily, this range of options for hiring allows enough freedom of choice for everyone.
Every year, Brainhub helps 750,000+ founders, leaders and software engineers make smart tech decisions. We earn that trust by openly sharing our insights based on practical software engineering experience.
A serial entrepreneur, passionate R&D engineer, with 15 years of experience in the tech industry.
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