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Should you outsource your project build or hire internally: A complete guide

Your project team members are your most important asset. When you need to grow and bring in new employees and skills, you’re faced with a wide range of hiring options and decisions. In order to move ahead you need to balance cost, team dynamics and efficiency.

To help you navigate the growth of your team, these are the main points you need to consider before deciding whether you want to hire internally, work with contractors or bring in an outsourcing agency. As CTO of Digital Solutions at iTechArt, I have 16 years of experience working both in-house and agency-side, and I’ve witnessed first hand that all three strategies have benefits and drawbacks. Understanding a little more about how each process works will help you to find the best fit.

Hiring internally

Hiring internally

Hiring internally is effective, but often costly and potentially time consuming.

On the plus side, you can create a locally based team who are well connected, who work alongside each other and whose personal career path is tied in with the success of your project. When you hire your own team internally, it’s also easier to align with your company culture.

Additionally, if the process of the project build is likely to increase the skill level and intellectual property of the team undertaking it, hiring internally will ensure that you keep those skills within your own company, making the project as a whole more valuable.

But, here’s the downside: hiring internally can be a slow and expensive process, particularly in the current climate in which talented employees are in demand. If your company is based in a high demand region or country, you could end up paying inflated salaries and high running costs including pensions, medical insurance, training, office hire and hardware purchases. The higher costs of internal recruitment also mean that your budget won’t go as far and you will likely have a smaller team and skills-pool than if you worked with contractors or an agency.

If you choose to hire internally it will also be difficult to scale back if you come to a pause in development or are between funding rounds.

Outsourcing to contractors

Outsourcing to contractors

As an alternative to permanent hires, working with contractors can be a more flexible and cost-effective solution that allows you to scale up and scale down as your project evolves. Working with contractors also allows you to tap into a global recruitment pool that is larger and more flexible than a locally based, permanent workforce.

Be aware though, contractors tend to be used to working independently, which makes it hard to promote team dynamics and collaboration. Contracting teams are also less stable and reliable and tend to move on to new projects more quickly than permanent staff. Similarly, if a contractor is not performing or proves inconsistent or hard to reach, you are left with few options other than to move on and find a new contractor, or to stick with them and try to make things work. All in all, this could lead to a less cohesive team and a less reliable employee base.

Outsourcing with an agency

As a third option, you could consider outsourcing your project build to a specialist agency. Many outsourcing agencies work globally and will likely be based abroad. They tend to have large employee pools that offer a wide variety of skills and just like contractors, they make it easy to scale up and scale down. Unlike contractors, there is a system of escalation if a particular team member is not performing or meeting your standards, and agency teams can also work alongside your internal team, creating a larger team with a more diversified skills base that is still cohesive.

If you choose to work with an agency, it is recommended that you have some technical leadership internally. A technical lead can act as a bridge between your internal team and the agency to ensure that the project being built matches your needs and expectations. If you don’t have someone available internally who can fill this gap, the agency may be able to provide a locally based lead who can fulfil this role.

You also need to consider how much intellectual property your product build will hold. If there are high levels of intellectual property involved in the project then team augmentation allows this knowledge to still remain in the company as information is shared. Also investigate the agency policies on security and privacy to ensure your data is always held securely.

As many outsourcing agencies are based off-shore, you may have concerns about the language ability of the team. Generally speaking, if the Project Manager is able to communicate well with you in your native language, and if the project requirements are clear and well documented from the outset, this should not present a significant barrier, although you do need to consider which members of the outsourced team you will need regular communication with.

Ask the agency about their hiring and training strategy for their team members to see if language courses are covered to keep. This will help team members to keep improving on their skills. It’s also worth requesting the opportunity to interview each of these direct-contact employees in person before they join your team. By doing this, you can validate their language abilities and also assess how well they will fit in with your company dynamic.

Working effectively with an outsourcing agency can take a little practice. It’s worth spending time ensuring that you are clear about how you want to work together and exactly what you want to get from the partnership.

Ultimately, whatever decision you make, having motivated, engaged and enthusiastic team members is key to ensuring that your project moves ahead in the right direction. Whether you grow your team through internal hires or you opt for outsourced or contracted workers, take your time to ensure every member of the team is clear on the goals and objectives for the project and feels invested in its overall success.

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