In-House vs. Onshore Outsourcing: Which is Better?

In-House vs. Onshore Outsourcing: Which is Better?

When it comes to staffing for custom software, application, or website development for your business or brand, you have a number of options to choose from.

And while all options for software development have their own benefits and favorable elements, they are not created equal.

As you consider how to proceed on your next project, it’s imperative that you explore the options in front of you and make a calculated decision based on the one that’s most likely to benefit you and your users the most.

These Are Your Options for Development

Your Options for Development

The democratization that’s taken place in the development industry over the past decade has been striking.

It’s no longer a select few companies or professionals offering dev services to the masses.

There are now thousands of standalone companies, agencies, and freelancers working in a variety of capacities.

And while they can be organized in more categories than one, you’ll find that most of these developers fit underneath one of four headings:

Offshore Developers

As the name suggests, these are developers you hire from another country. More specifically, they operate in a country that’s in a totally different time zone than the one your business operates in. Technically, you can hire an offshore developer in almost any country, but they’re most commonly sourced from places like India, Ukraine, Russia, Poland, and Romania. When you work with an offshore developer, you enjoy a number of benefits – including lower costs and larger access to global talent – but get less flexibility, lower responsiveness, and issues with time constraints.

Nearshore Developers

With a nearshore developer, you’re working with a company or professional who is located outside of the country but in a region of the world with a more similar time zone. Examples include countries like Argentina, Colombia, Costa Rica, and Uruguay. And because the time zone is more similar, it’s easier to communicate and coordinate projects with greater efficiency.

Onshore Developers

Onshore is also known as local outsourcing – though the developer can still be hundreds or thousands of miles away. This sort of relationship exists when the developer is located in the same country. It removes language barriers and cultural differences, while simultaneously allowing for similar/same time zones.

In-house Developers

Finally, you have the option of hiring an in-house developer. This is where you actually hire a full-time employee and bring them to work inside your organization. This can be done with a physical office-based position, or it could be handled on a remote/virtual basis. The do-it-yourself approach to web development is tempting, but has it’s own risks and rewards.

While all four options have a time and a place, most businesses that are serious about development and have an ongoing need for reliable, high-quality work find the latter two options to be most realistic.

So that’s what we’re going to focus on for the remainder of this article.

Exploring the Pros and Cons of In-House Development

Exploring the Pros and Cons of In-House Development

Let’s begin by taking a look at in-house development.

As mentioned, this is a method by which you hire a full-time developer onto your team.

This individual becomes an employee of your business – signing a W-2 form and getting all of the other benefits that your existing team members have.

There are several pros to working with an in-house developer:

  • Indoctrination. The first benefit is that you get the opportunity to indoctrinate an in-house developer into your business, train them according to your processes, and create a cultural fit. This can take more time on the front end, but results in a much more capable professional who is able to complete projects that align with the DNA of your organization. You can think of it like molding the developer to fit your business, rather than trying to fit a square peg into a round hole (which often happens with outsourcing).
  • 100 percent focused. When you hire an in-house developer, they’re 100 percent focused on your business and your projects from the moment they clock in until the moment they clock out. Whatever you need, they have a professional and contractual obligation to fulfill on your behalf. You don’t get this with an outsourced partner.
  • Accessible. With an in-house developer, you have incredible access. If you’re in a physical office space, you can simply walk down the hallway, poke your head in the developer’s office, and provide feedback. If you operate virtually, it’s as easy as sending a message in a slack channel or setting up an impromptu Zoom meeting so that you can screen-share. As long as it’s during working hours, you have around-the-clock accessibility. This is ideal in scenarios where you’re approaching a tight deadline and need to get stuff done quickly.
  • Builds internal expertise. Your human capital is just as much an asset as a piece of equipment, real estate, or intellectual property. When you hire a full-time developer to work in-house you’re actually making an investment in your business. You’re enhancing the internal expertise of your organization and making it more valuable. This can be leveraged in your marketing, or even in the future sale of the business.

There are also a handful of cons to working with an in-house developer:

  • Limited talent pool. When it comes to hiring a full-time developer, you have much fewer options than if you were to open yourself up to outsourcing. If you’re a local business and you want to hire someone in the area, you might only have several hundred or a few thousand developers to choose from. (With a large percentage of these already working for another company.) And even if you expand your reach to include all developers nationwide, you’re probably looking at one million candidates (a far cry from the tens of millions that you’d have access to with outsourcing).
  • Time-consuming. Hiring an employee takes time – particularly if you’re working with a limited talent pool and have to schedule interviews with developers who already have positions with other companies. From start to finish, the entire process could take a couple of months. This is not ideal when you’re trying to complete development projects in a condensed time frame.
  • Expensive. The cost of hiring an employee is much more than the cost of the salary. The SBA says the rule of thumb is that a new employee costs 1.25 to 1.4 times the salary. So if you’re paying someone $50,000, you can expect to spend $62,500 to $70,000 that first year. (Yes, there are tax savings associated with hiring employees, but not enough to fully offset this premium.)
  • Not scalable. When you’re entirely reliant on a single developer (or even a team of multiple in-house developers), you’re limited by their time and capacity for work. If you suddenly need to double the amount of projects you’re doing, you’ll have to double the size of your team. And as previously mentioned, this requires time and money. This low scalability is unfortunate.

Here’s how you go about finding an in-house developer:

  • Work your contacts. You go about hiring an in-house developer in much the same way that you’d hire any other full-time employee. You can post a listing, work your contacts, and accept job applications.
  • Hire a recruiter. Don’t want to deal with the mess of sifting through applications and interviews to find the right person? You can hire a recruiter. But again…cha ching!
  • Interview and vet. Whether you handle the process internally or you work with a recruiter, you’ll have to be prepared to do your own interviews and vetting to make sure the developer is the right fit.
  • Onboard. Finally comes the onboarding process. It’ll take some time to indoctrinate the new hire into your company culture, teach them the ropes, and get them working efficiently. But once they do, it should be fairly smooth sailing.

Again, there are pros and cons to working with an in-house developer.

Just to recap, you’re basically getting someone who is 100 percent focused on your projects and who will help your business build internal expertise, while paying a premium and requiring more of your time and energy than alternative options (at least up front).

Exploring the Pros and Cons of Onshore Outsourcing

Exploring the Pros and Cons of Onshore Outsourcing

If you decide against hiring an in-house developer, you have three primary outsourcing options: offshore, nearshore, and onshore.

As previously mentioned, onshore is a type of software development outsourcing where you hire someone located within the same country as your business. Thus if you’re an American business, you’d hire someone based out of the United States. It could be New York City, Los Angeles, or anywhere in between – but it has to be within the United States for it to be considered “onshore.”

There are several pros to working with an onshore developer:

  • Convenience. When compared to offshore or nearshore, there’s a higher degree of convenience with an onshore developer. You’re still not physically in the same location, but with fewer time zone issues and cultural barriers, it’s easier to get in touch when needed.
  • Scalability. With an outsourced partner, you can scale up and down on a per project basis without wasting resources or spending ons something you don’t need. This ultimately makes it more cost-effective.
  • Lower cost. Speaking of cost-effective, outsourcing to an onshore developer is much cheaper than hiring a full-time employee. Not only do you eliminate the onboarding costs, which will run you 25 to 40 percent of the full salary, but you also avoid paying payroll taxes, health insurance, and other benefits.
  • Accessibility. When you’re willing to outsource, you get access to more talent than if you’re simply looking to hire. This is becoming even more true in today’s marketplace where younger developers prefer the flexibility of freelancing over being tied down with a single employer.

There are also a handful of cons to working with an onshore developer:

  • Less control. When compared to a full-time employee who is on the payroll, an onshore developer gives you less control. Yes, they’re contractually obligated to provide the agreed upon deliverables if they want to receive payment, but they’re also free to work with other clients and make their own schedule (more or less).
  • Communication issues. Unlike a full-time employee, who is responsible for getting back with you in the shortest time possible, an outsourced developer might not be as responsive. This can be problematic when you’re facing a tight deadline.
  • Security concerns. While not the case in the majority of situations, you do have to consider the possible security concerns that stem from working with developers outside of your organization. Even with advanced protocols in place, there’s the possibility that your intellectual property could get into the wrong hands.

Here’s how you go about finding an onshore developer:

  • Look for freelancers. One option is to hire an onshore freelancer to service as your developer. You can find these individuals on a variety of specialized developer marketplaces, or even general gig marketplaces like Upwork or Fiverr.
  • Find an agency. If you want more control over the process, you can work with an agency who has their own in-house developers that they’ll contract out to work with you and/or a network of freelance developers who’ve already been carefully vetted.
  • Explain your needs. When entering into a relationship with an onshore developer, you want to make sure they understand your needs clearly. Do you need a specific type of programming? Will this be a one-time project, or steady work? Will you need to scale up over time?
  • Build the relationship. It doesn’t matter if it’s an in-house or outsourced relationship, you’ll need to invest in building the relationship so that you can extract as much value as possible.

When it comes to outsourcing, onshoring is typically considered the best option. Yes, it can be more expensive than offshore or nearshore, but it generally gives you greater control. It’s also the most scalable option. So before you consider going another route, make sure you at least give onshore outsourcing a second look! Your Source for Custom Software, Mobile, and Website Development Your Source for Custom Software, Mobile, and Website Development

At, we believe that you shouldn’t have to settle.

You shouldn’t have to settle for beautiful or functional.

You shouldn’t have to settle for quality or affordability.

You shouldn’t have to settle for convenience or versatility.

So we don’t make you settle.

We let you have your proverbial cake and eat it, too.

We do this by mixing strategic innovation with beautiful interfaces to design, develop, and deploy sleek experiences across your entire tech stack. And we accomplish this through connecting you with the right dev team to handle your project.

While there’s a time and a place for hiring an in-house developer or building out your own dev team, we believe it’s much more cost effective and practical to pursue onshore outsourcing.

And we would relish the opportunity to be your go-to resource.

For more information on how we design unrivaled digital experiences for businesses across all industries – including enterprise, government, education, small business, marketing, finance, healthcare, agriculture, and ecommerceplease contact us today!

Ryan is the VP of Operations for He brings over a decade of experience in managing custom website and software development projects for clients small and large, managing internal and external teams on meeting and exceeding client expectations--delivering projects on-time and within budget requirements. Ryan is based in El Paso, Texas.
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Ryan Nead