Outsource vs New Employee – how do you decide….?

Equally important – does this apply to you?


Well, if you are a Manager in one of these scenarios – this article was written for you:

  • You have a short-term project coming up
  • Your new product requires new technology skills & experience
  • Software is not a core competency for your business

I’m often asked: “why should I outsource my software development process – when I can hire really good people and keep everything under my control….?”

People tell me about all the offshore horror stories they’ve heard, and how they could never trust people outside of their offices to know what they want, or build something right the first time…because of the language barriers and long-distance communications problems.

And at first blush, I can’t blame them for being hesitant about contracting out their product development…and here’s why.

I’ve learned that most people are down on – what they’re not up on

Fear of the unknown.

I get it.

So I ask them – how well did you know every one of the employees you’ve ever hired, before you hired them?

And was every employee absolutely perfect – without any issues whatsoever….?  Did you keep every one of them on staff….?

I think you know the answer.

Here’s the difference between hiring a new software developer – and hiring a professional, experienced & client-referenced software development company – to deliver your product.

That new employee is a complete and almost unverifiable unknown entity to you, your company and existing employees.

Yes – your Dev Mgr says ‘he’ is great, or your friends in the industry tell you that ‘she’ will really make the difference for your team – but quite honestly, you will never know…until after you have pulled the trigger and hired that person.

Whether contractor or full time – you won’t know for months.

That’s a lot of time to gamble with, don’t you think?

Even if you call their references – do you honestly believe they would give you a bad reference?  We’ve all contacted our closest friends in the Industry – even some “former” bosses – and asked them to provide positive references.  It’s human nature to be kind.

Additionally, there are legal ramifications if a company provides a negative reference for a prior employee – so most provide only dates of employment.

This leads to another benefit of outsourcing.

When you hire a company – you get not just one new Engineer – you get the whole team; software architect, developer, project manager, quality assurance & test engineers and usually professional technical writers who add more value than you can imagine.  Additionally, due to their experience, they don’t require hand-holding or special training – like a new employee does.

That company will have client references galore.  Plus, you can Google them and find everything you want to know about practically everything they’ve done since day one: from running a D&B Report (their credit history, i.e. – integrity) to non-referenced client reviews.

It’s all out there.

Once you’ve completed your due diligence – say you utilize a company which was also contracted by another business similar to yours – then you can sign contracts, which guarantee non payment for unsatisfactory work, NDA’s, and every type of legal protection imaginable.

And remember – outsource companies live & die by their last project; meaning – with every new client they take on, their focus is 100% customer satisfaction because they want that stellar reference….and follow-on work.

Hiring an employee – provides none of these benefits.


A new employee adds more risk than reward – due to the fact you have to ‘wait & see’ before knowing whether they were a good hire, or not…

Another benefit: an outsource company is experienced with ramping-up for new projects – they have established processes in place, which are designed to add value almost immediately – and usually, they can help you avoid traps….in software development…and steer you in a good direction; especially if you’ve acquired the typical ‘bad habits’ when trying to rush a product to market.

They will help guide you towards a more process driven approach, because it will save you costly (time consuming) mistakes – you’ll shrink time-to-market, improve product quality and make more money.

Therefore – you will appreciate their support and be more likely to utilize them in the future.

See the difference?

A new employee wants a job.  A paycheck.  Sure they want to produce, but first – they have bills to pay.

An outsource company wants you to succeed – because only when you truly succeed…is the moment the development partner succeeds.

Then you become a new (appreciative) reference and potential follow-on business.

That’s a win/win relationship.


In summary, the benefits of hiring an outsource company outweigh hiring an employee for almost every business I can think of.

  •  Outsource company
    • Vast experience with software development across multiple platforms
    • Knowledge of new technologies and software tools/techniques
    • Been there / done that – with typical or unexpected issues that arise
    • Professional approach towards software delivery
    • Desire to help the client succeed for mutually beneficial reasons
    • Very cost-effective and when project ends, so does the expenditure
    • Everything is properly documented – it’s part of the contract – so no domain knowledge loss after project completion.
    • Will contribute more to your company by bringing (proven) software development processes – they add value because they want you to succeed
    • After project completion, this is a resource you can release hassle-free…yet the domain knowledge is available for future releases.

Follow me on LinkedIn:  www.linkedin.com/in/krisgkelly


My thanks to Toby Partridge, Larry Pollack, Eric DePaul and Kathleen Glass for your input to this Article.   🙂


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