The Choice Between in-House Workers and Third-Party Vendors Optimising the Growth of Your Engineering Staff

As the Chief Technology Officer (CTO), it is essential to determine the best approach for organising a software development team. This is a decision that requires careful consideration, as the risks associated with software development must be taken into account. While some CTOs may opt to only hire full-time engineers, others may choose to outsource development in order to speed up the process and meet ambitious product targets. Ultimately, CTOs must evaluate their options and select the option that will be most beneficial for their team.

As Chief Technology Officer at Works, I have encountered this particular problem multiple times. After considering it carefully, I have come to the realisation that in order to achieve all of your development objectives, it is essential to have an in-depth understanding of the differences between hiring and outsourcing, as well as a comprehensive comprehension of how to maximise the potential of both.

The Three Most Important Considerations When Hiring

As an engineering manager, it is essential to ensure that a software development team is quickly assembled with experts who have the necessary skillset to deliver the required results, while also being mindful of the budget. Therefore, when assembling a software development team, the three primary objectives are to ensure the recruitment of talented engineers in an expedited manner, at a high level of proficiency, and at an economical cost.

It may be nearly impossible to recruit for all three in-house engineering roles in a single cycle. To ensure the greatest chance of success, I have come to the conclusion that utilising a combination of approaches is the only reliable way to fill all three positions.

It is essential to decide what your desired outcome is before recruiting new team members. In the case of assembling a Scrum Team this year, my research found that hiring personnel within the United States would be approximately $1M more expensive than hiring from outside the country. This makes in-house recruits the best option for complex projects that are essential to your intellectual property but could potentially exceed your budget. That being said, not all teams or projects are suitable for outsourcing. To determine which approach is best for your situation, it is necessary to establish what your requirements and expectations are initially.

Below, I discuss the benefits and drawbacks of each option:

Benefits and drawbacks of employing internally

Pros: As an employer, it is important to demonstrate a strong commitment to the success of your business and to foster the same enthusiasm among your employees. When you take on new team members full-time, they are likely to be highly invested in the company’s success and bring a unique perspective to the product development process. As their manager, you will have the ultimate responsibility in overseeing their work and making sure they are meeting the necessary performance standards. However, it is essential to recognise and leverage the valuable insights that they can provide, as their in-depth knowledge of the product can be an invaluable asset in the long run.

Cons: Finding qualified candidates to fill full-time positions is a challenge due to both financial and human resource constraints. The process of finding the right individual may be time-consuming and the cost of their compensation may put a strain on the organisation’s budget, making it difficult to maintain a healthy bottom line.

What are the benefits and drawbacks of outsourcing?

Although we have predominantly outsourced specific projects or tasks in the past, there are actually a myriad of outsourcing strategies to choose from, ranging from short-term staffing solutions to the incorporation of long-term personnel into our team.

Pros: When it comes to recruiting in San Jose, California, compared to international outsourcing in Budapest, Hungary, outsourcing is more financially advantageous. Outsourcing can provide businesses with a cost-effective recruitment solution that can help them save money while still allowing them to access the most qualified candidates.

Over the course of three months, I enlisted the help of an outsourced expert to assist me in transitioning a project from Angular to React. This expert not only provided access to specific abilities and information, but also served as an educator to my software development teams by teaching them the new framework. Ultimately, he did much more than just produce products; he enabled my teams to gain a thorough understanding of the React framework.

Engaging an external team of specialists to focus solely on the needs of a single customer can be a huge benefit, as it can significantly reduce the workload of in-house personnel. Additionally, it is important to consider the value of having a diverse team of workers coming from different cultural backgrounds. This notion was demonstrated in a recent project involving the development of euthanasia software, where engineers from different nations provided invaluable perspectives and ideas.

Cons: Without a doubt, there are challenges that come with outsourcing certain tasks. These may include a lack of internal expertise and a lack of reliable control over the quality and speed of delivery. In order to prevent the need for frequent edits and revisions to code, it is essential to ensure that proper documentation is in place.

It is essential that we consider both short-term and long-term staffing options for our organisation. In my opinion, a long-term embedded approach is the most suitable, as permanent contractors have the added advantage of feeling a deeper sense of accountability for their role.

This is the kind of work I usually contract out, particularly at the beginning when you are still establishing credibility:

  • Superior Knowledge
  • Cooperation and Integration Efforts (e.g. having outsourced talent build marketing integrations)
  • Upkeep of the Code
  • QA
  • Incompletely-Started Development Tasks (e.g. Mobile)

It is essential to ensure that robust safeguards are in place for a successful outsourcing endeavour. To ensure a successful onboarding process for all stakeholders, it is important to set achievable objectives and provide comprehensive instructions. Doing so will facilitate the process, ensuring that all parties are on the same page and understand the scope of the project.

Related Article: Software Developer Interview Tips

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