Hiring a Freelancer Vs an Agency Developer — Which is Better?

Thinking about working with a freelance developer?

In a recent article, we explained why relying solely on an in-house developer or team is often cost-prohibitive. Hiring in-house PHP developers in the US, for example, for around $85,000 a year isn’t the most viable option for many businesses. When you add the costs in benefits, taxes and equipment, and cost of recruitment and hiring, the total cost can well exceed $150,000.

The most efficient model is one where around 30% of the work is done by a core group of in-house talent, and 70% is outsourced to freelancers or remote agencies.

Now, let’s examine the viability of hiring a freelance developer directly, versus contracting them through offshore development companies such as Capital Numbers.

Pros and Cons of Freelancers

Getting a freelancer directly off of a job site or through referrals may seem like it comes with lots of advantages.

• You save on costs, especially if you are hiring offshore
• Freelancers are quick and agile.
• Some are highly specialized and very skilled.
• Using them frees up your team for other projects.

However, this method also comes with its own set of drawbacks.

Freelancers May Vanish

When you are working with a freelancer, you basically hire an individual who trades their personal time for money. When they do this, minimum investment goes into building an infrastructure or a team. They can get bored, find a better-paying client, go on a holiday, get sick or simply decide to stop working, leaving your business out in the cold. If they are not very ethical, they can simply discontinue a relationship with no apparent reason.

To Build a Quality Product, You need more than just one person

When you directly hire a freelancer, you get exactly one person. But you may need more than just a developer. Working on a project like a web or mobile application means that you’ll need someone who can help contribute ideas, create UI, review the code and test the app.

Scaling is Difficult

Now one of the most beneficial characteristics of offshore freelance developers is that they come with a much, much lower price tag — something like $15 / hour instead of $85,000 a year.

Say you found an excellent developer who does great work for you. However, now you need more. What are the odds that you will find another developer of similar quality, speaking the same language, sitting in the same time zone, and willing to collaborate with each other while keeping your best interests in mind?

It’s even more complicated if you require them to work together. If you haven’t tried this before, just take our word for it: it’s extremely challenging. Each freelancer works their own way and comes with their own nuances. Hiring, training, and sharing information means that you will soon be spending a lot more time coordinating between them, racking up your costs.

Suddenly, the model of hiring freelance developers directly seems much more expensive and cumbersome.

No Support and Continuity

Freelance developers have to be quick and agile. They complete one project and it’s on to the next. But this means that they usually don’t stick around for maintenance or further development. So if something goes wrong with the code and it gets buggy, then you have to look for others to perform fixes and maintenance.

Weak Quality Guarantees

You would think that it makes rational sense for a freelancer to want to do good work and then get repeat work from clients. Unfortunately, not all freelancers work this way; there are plenty who are happy to make it past the interview process, do the work without communicating, turn it in the day of the due date half-finished and then disappear, leaving you to clean up their poor quality. If you are hiring through a freelancing platform, then you can leave negative feedback and get your money back… but you’ve still wasted your time. And you have no guarantees that you will more successful this time.

Another Option: Hiring an Agency Developer

Agencies represent a third option between hiring a full-time in-house developer and depending solely on freelancers. Hiring through agencies eliminates most of the cost associated with having to rely on a full-time developer, and takes care of all of the quality issues brought about by depending on freelancers. Here are some qualities that make agencies your best option:

You Aren’t Just Relying on A Single individual

If you contact an agency, you have the option to not only choose from a selection of managed and vetted developers, but you could also hire the entire team. This team will have worked together for some time and know-how to solve problems and accomplish tasks efficiently.

So you’ll get all of their expertise, without the crippling costs of having to onboard them in-house. This includes not only development, but also expert consulting and strategy, custom-planned design, and even long-term strategy. Most single freelancers can’t offer all of these.

Readiness

When you hire from an agency, you don’t have to waste time sitting through applications and getting on interviews with a crowd of under-qualified freelancers. Once you sign a contract with an agency, your new developer or team can usually start in less than 48 hours. This is because the agency management and leadership have put an efficient process in place to ensure that your remote employee is accountable, responsible, and ready.

Ongoing Maintenance and Support

There’s no such thing as code that’s bug-free the first time, and there’s no such thing as an app that doesn’t need regular maintenance. Freelancers might become unresponsive once the deliverables are turned in, but with agencies, support is written into the contract. Good agencies will stick around to help maintain, support, and secure your code even after the development is complete.

New Technologies and Industry Trends

It’s in the best interest of remote development agencies to constantly evolve and stay on top of emerging industry trends. Freelance developers have limited skills and interests, so it isn’t as important for them to keep up to date with industry-wide trends. They also cannot be as methodical about tracking emerging trends and technologies that fall outside their core area of expertise. On the other hand, agencies can offer you the best of emerging technologies, and the talent to match.

Multiple Skills

Say you run a startup that needs web developers, UI specialists, digital marketers, DevOps, mobile app developers, and more. A good digital agency will be able to provide a single resource from which you can acquire these employees.

Plus, in this case, everyone will be working under the same roof. It makes management much easier. You can even visit the entire team once in a while, instead of dealing with the frustrations that come with trying to get multiple people in multiple time zones to coordinate.

Scalability

When you hire a freelance developer, that’s exactly what you get: one freelancer. If you want to scale up, you have to hire another one. And these are not replaceable. If a freelancer flakes, you have to wait and hire another one and get them up to speed quickly.

However, when you contract with an agency, the agency has the resources to quickly replace a developer who is no longer viable. If an employee has to quit for whatever reason, they can quickly be replaced by someone who can get up to speed quickly. You lose neither money nor time. Finally, if the project ends up taking more resources than you thought at first, agencies can quickly scale up to provide the necessary manpower get it done.

Here’s a chart to show you the side by side comparisons:

Conclusion

Directly hiring freelance developers is a cost-effective option when compared to hiring in-house talent. However, the characteristics of freelancers make them hard to manage and vet properly, and they present unique and costly problems where scaling is concerned.

Hiring a developer from an agency helps mitigate these risks. Agencies provide proper management and support, and they come equipped ready to scale.

For example, at Capital Numbers, if one of our developers is sick or has to take some time off, we can easily refill their spot on the client’s project. This way, there’s no interruption on the work being done, the client hits all their deadlines, and they don’t have to waste time looking for another employee. If the project needs to scale up or down, it’s also easy to remove or bring on additional employees. This benefit is unique to agencies.

Agencies also make it easy to vet and manage employees. At Capital Numbers, all the employees have at least three years of work experience and are supervised by qualified managers. In the name of security and transparency, we also sign NDAs and share detailed work timesheets. If you hire freelancers directly off of a job board, you don’t always get these benefits.

Even though you may be able to save on costs by using a freelancer, a much better option is to take advantage of the security, managed workers, scaling capabilities and resource allocation that an agency affords you.

If you have a question, you can always contact us directly to learn more, or simply leave a comment.