The hybrid solution to hiring developers and answering the “in-house vs agency” debate

In-house versus agency

Every organisation is embracing the digital age by developing more applications and software. But they face a bottleneck. The shortage of developers is hindering progress worldwide and causing extra expense for business leaders. It’s estimated that firms have had to pay 20% above market to hire quality developers. 49% of businesses are finding developer roles the hardest to fill.

Because of this, organisations are searching for alternative ways to hire development talent. From looking offshore/hybrid solutions to hiring freelancers or sticking to in-house employees. There are pros and cons to each decision – and we’re going to run through them all to help you make the best decision for your business.

In-house developer

Hiring a developer in-house is, perhaps, the most familiar form of resourcing development talent. The benefits of this approach is that you’ll always have a developer on-hand for projects. It can be cost-effective, if you have a lot of projects that need attention, and flexible, depending on your pipeline and needs. There’s guaranteed availability and, since they’re embedded in your organisation, they will understand your company culture and its many nuances.

However, they may not have the expertise for certain projects and it can be costly to hire a developer full-time. Especially since they’re commanding above-market salaries. It also takes time to hire someone in-house – roughly 30 days. Time that could be better spent on developing business-critical applications.

Finding the right developer for your team (both in terms of skills and cultural fit) can be as difficult as finding a microchip in a tech stack. On a global level, since you’ll be competing for in-demand talent with organisations all over the world. In countries that may offer greater lifestyle perks than the UK. Plus, there are additional costs to consider such as desk space, equipment and office rent.

Freelance developer

In comparison, a freelance developer will be able to step-in for urgent projects, giving your business the skills it needs in a short time period. They can be more cost-effective, as you only use the developer as-and-when they are needed. Allowing you to up-and-downscale their work depending on demand. They’ll also offer a fresh perspective, which can help innovation and problem-solving. Additionally, freelance developers can take on a lot of ‘grunt’ work, so your in-house team can work on higher-value tasks.

Developing a pool of freelancers means there’s always expertise and help on-hand. So if you have an urgent need, a freelancer can step in at short notice to prevent a project from being delayed.

However, IR35 could be a potential issue for some employers. If a freelance developer works full-time (practically as an employee) they will fall under this tax legislation and this may cause extra admin for their employer. Freelancers also require a bit of work to ‘gel’ with their team and get up-to-speed with company processes. They may also work remotely, which may not work if the rest of the team is onsite-only.

A European Agency

Some organisations may turn to a Europe-based agency as a way to resource talent quickly. Pricing is a benefit here, as is their locality relative to an offshore agency. Developers can be a quick plane ride away. Cultural and time differences may also be less obvious than, say, an agency in Asia. They also offer a cheaper alternative to on-shore agencies, however, are more expensive than an off-shore option.

But a significant drawback comes with any potential changes in free movement, which is a volatile (and highly political) area. Of course, this also impacts offshore agencies. It makes it a lot harder to have a developer work on-site.

An on-shore agency

An on-shore agency, based in the UK, obviously doesn’t have these issues. Developers are free to work off and on-site. Cultural and time differences, again, won’t be significantly different from your organisation’s. Meaning there’ll be better communication between your in-house team and the agency. Plus, any legal issues such as IR35 and right-to-work won’t fall to your organisation to manage.

However, it may take time for them to fit into your team and work practices. Like freelance and European agencies, using agency developers can help you optimise your costs. But these cost benefits will be limited, as on-shore agencies can be very pricey. They are the most expensive option out there.

An offshore agency

The main reason for turning to an offshore agency is cost. They can be significantly cheaper than other options because of their local economy and salaries. Again, agency workers can take on tasks your in-house team might not want to do or have the time for. Plus, as development skills become scarcer, organisations are having to look further afield for talent. There are many qualified developers in Asia, for example, who are eager to bridge this gap.

The significant drawback, apart from language and cultural differences, is time zones. If an emergency occurs, a developer might not always be on-hand to assist if they’re located several hours ahead or behind. It’s difficult to travel to an offshore agency and you’ll have less control over their work processes, the quality of code and who works on your project. There’s also likely be more admin, communication and management required on your end. Frequent quality checks and code reviews are often required when working with an offshore agency.

A hybrid agency

In contrast, a hybrid agency, such as Innovify, offers the benefits of on-shore and off-shore agencies. It’s cost-effective, in that work can be up and down-scaled in response to need, and a hybrid agency is cheaper than on-shore options. It offers a happy medium (in terms of pricing) between on-shore and off-shore agencies – along with many other benefits.

Unlike the large input required with off-shore agencies, a hybrid agency can manage the logistics of working with an off-shore team and its client services are based on-shore. Removing a lot of the cultural, time and language barriers that often frustrate clients with off-shore agencies. Management is streamlined, with the hybrid agency doing all of the quality and code standard checks, ensuring a project is running as planned and that the right developers with the best skills are on the job. Those developers can also be placed on-site when needed, without the aggravation and admin required with European and off-shore agencies.

A hybrid agency can complement an in-house team when projects are needed rapidly or a pipeline is backed-up. Because the client services team are based locally, meetings are much easier than with a European or offshore agency and can occur face-to-face. This can also give the agency greater insight into the unique nuances of working with your development team. Crucial information that’s needed to help your entire operation run smoothly. Finally, if an emergency occurs, there’s 24/7 support available. Giving you greater peace of mind.

Making the right decision for your business

It’s worth taking some time to decide on your options. Finding the right mix of talent is key – and differs from company to company. The best approach, for many, is a combined one. When an in-house team provides consistent support and external developers are brought in as-and-when required.

For external options, a hybrid approach is the most cost-effective, with a high quality of work guaranteed through client services. Removing many of the frustrations and risk that comes with offshore and European agencies, but with the cost-benefits derived through using global talent.

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Prakash Pilley