Why sourcing in-house tech talent might not be right for your business
Making smart decisions on when to hire new talent and when to outsource instead is critical for the success of your business. Each option will have significant financial and operational impact. When building a new software product, if you don’t already have the necessary in-house resources you’ll be looking at a substantial long-term investment to obtain both the talent and infrastructure to build internally.
According to Deloitte’s 2020 Global Outsourcing Survey, a majority of business respondents (about 70%) cited cost reduction as their primary reason for outsourcing. Flexibility and speed to market were also highlighted as top drivers of the decision to outsource. Here are some important factors to consider before pulling the trigger on sourcing in-house tech talent for your upcoming software project:
It’s expensive to hire and retain the right tech talent
The demand for senior software developers and other talent with advanced technical expertise has long exceeded the supply, leaving employers scrambling to scrape together increasingly competitive offers.
All new recruiters in the tech space are immediately confronted with the most important truth: competent senior talent is already employed and junior talent isn’t equipped to handle a full product lifecycle. This often-overlooked truth means that the only truly viable recruiting options are generous negotiations or outsourcing.
Hiring any employee with a full-time salary and benefits entails a significant long-term expense for an organization, let alone someone with advanced software skills. And if you make the wrong hire, you’re essentially pouring all that money down the drain.
Recruiting and hiring high-quality tech talent also takes significant HR resources. Then once you have your new team member on board, there will be additional costs associated with both initial and ongoing training. Turnover rates in tech are also notoriously high. After all this investment there’s no guarantee you won’t lose your coveted new hire to a competitor within a year.
Building an in-house team means slower time-to-market
How urgent is the need for your new solution? Are you eager to end the hassle of struggling with inadequate software and start saving time and money as soon as possible? Locating and recruiting the right tech talent often takes months. Depending on your location, it could even be a challenge to find people with the right skill set at all. And once you do make a hire, you’ll need to factor in additional onboarding time before you begin to see a return on your investment.
Even a single-function software or a proof-of-concept project will likely require you to bring on more than one new team member. Beyond hiring and onboarding each person, there will also be substantial time required to set up new workflows and processes, and someone will need to oversee the project and manage the team. Additional resources to accomplish this will have to be acquired or diverted from core business activities.
Your project needs may not be consistent over time
Hiring in-house talent may make sense if you intend to invest in a steady stream of ongoing project work over an extended period of time, and you anticipate that your projects will all have similar tech requirements. However, if you’re looking at a potential one-time project, a variable project load, or the development of applications that require diverse skills to build, you’ll likely need greater flexibility.
Project scaling is much easier and more efficient with outsourcing. Costs can also be saved by outsourcing on an as-needed basis only. Once you’ve hired a permanent employee, you’ll be paying their salary regardless of workload (or skill set). In order to stay competitive in the marketplace, independent software firms are more likely to have tech talent with expertise in the latest and most advanced technologies - and you won’t be covering their internal team members’ training expenses.
In-house teams incur significant infrastructure costs
Every time you hire an employee to work in your physical office space you’ll need to cover all the overhead costs associated with having another body in the building: their desk, office supplies, computer, phone, etc. - plus incremental increases in everything from electric bills to plumbing repairs. Even if your hire will be a remote worker, you’ll still have some of these operating costs to cover.
When you hire tech talent, certain additional infrastructure costs are incurred as well. Each new team member will require specialized hardware and software to perform their job. In addition to the initial outlay of capital costs, there will be additional fees down the road for licenses and maintenance. And with constantly evolving technology, before long there will be even further costs for necessary upgrades to the on-premise IT infrastructure, if applicable.
Don’t have the resources to hire in-house?
When you outsource your software project to Basecode, we partner with you to create the exact product you need, overhead-free. Our tech talent is equipped to handle a variety of advanced projects on-demand. We'll work with you to efficiently craft a solution that fits your business, delights your customers, and maximizes your return on investment. Find out why our customers love working with us.