Pros and Cons of Contracting Software Projects over Hiring a Team

Last Updated on May 23, 2023

Do you want to create a cost-effective, swiftly installed, and high-quality mobile or online software application? Are you debating whether to hire an external development team or build your own? Learn about the benefits and drawbacks of both strategies by reading this article. Find out what is most effective for you.

Before we start, I think it is important to iron some things out. I’m sure you know what it means to hire a software development team. You would have to hire a project manager, business analysts, UX/UI designers, team leads and others who would work together to create the software you need.

When it comes to outsourcing your software projects, you have two options. you can either give it to a freelancer or a contractor. I know these terms are usually used interchangeably but allow me to explain the difference between the two.

A freelancer is a non-permanent, self-employed individual who provides goods and services to a variety of businesses. As long as their schedule allows, these specialists can work for as many clients and as many projects as they like. As a freelancer, you have complete control over your rates, tax payments, and where you work. Journalists, copywriters, graphic designers, and web programmers are examples of freelance workers.

A contractor, on the other hand, is an outside employee who is either self-employed or not. In the classical sense, a contractor is someone who works for a company or an agency. They report to these agencies’ management and are paid on a regular basis by them. However, in a more modern context, the term may refer to a freelancer. These are highly competent experts who own their own businesses and operate for themselves rather than for an agency and provide specialist services like customer service assistance or IT infrastructure support.

A freelancer can actually become a contract worker. If, for example, a company delegates a project to a freelancer and the person does such an impressive job, the company can ‘retain’ the freelancer’s services in the sense that any time they have similar projects to delegate, that particular freelancer is who they call to take on the project.

Now that all that has been made clear, we can move on. Let us talk about the advantages and disadvantages of outsourcing software projects over hiring a software development team.

Advantages of Contracting Software Projects

Lower overall cost

This is a major selling point for hiring contractors or freelancers. Simply said, it is less expensive. Sure, most contractors (and the companies through which they operate) charge significantly greater prices than direct hiring. You will, however, be exempt from many of the fees associated with directly recruiting the contractor.

Contractors will not expect the benefits you provide to direct hires, such as medical insurance, paid time off, and other programs. There will be no workers’ compensation insurance, and they will not expect the benefits you provide to direct hires, such as medical insurance, paid time off, and other programs.

Companies also save a lot of money by recruiting low-paid workers from other nations rather than hiring high-paid local software experts thanks to outsourcing.

For example, delegating a project to a Nigerian from the U.S. for $200. Hiring a software development team in the U.S. will cost way more than that but that amount to someone in Nigeria is just fine.

The best option for one-off or short term projects

If you have a massive project that requires additional assistance but has a set deadline or objective, or you need help with a short term project, hiring contractors may be the best option.

If you employ a contractor for a specific project within your company, there will be no shocks or upset feelings at the end of the contract. If the project is still in progress and the relationship is still going strong? It is simple to renew a contract.

Increased productivity

When you employ contractors, you may also benefit from increased efficiency. Because most contractors bring specialized knowledge to the position, they may usually start working right away, saving time and money on training.

Whether you’re hiring a data analyst, software engineer, or business consultant, you can be sure they have a solid set of specified talents you may look for when making recruiting decisions.


As opposed to hiring a full team, freelancers are overly available. In order, to hire a full team, you have to put out applications, vet resumes and holds interviews before picking your candidates of best fit.

Not to mention the fact that you have to hire for multiple positions. So if you have found your project manager and frontend developer but have not found a UI/UX designer, the show can’t go on.

However, with freelancers, you can get the talent you are looking for with much more ease. With large freelance platforms like fiverr, UpWork and Freelancer, delegating projects to readily available talent has never been easier.

Read: How to Create a Budget for Your New Business

Disadvantages of Contracting Software Projects

Communication issues

The causes of this issue are several and their effect on the project can be rather severe.

One of these issues is timezone differences. For example, when a U.S. worker begins work, the rest of the outsourced company’s workforce has already gone to bed, which is a severe issue. If you can’t handle it, your productivity will suffer greatly.

Another example of a communication issue is when there is misinformation or misunderstanding between the company and the contractor. In this instance, a company should limit communication using email or other text-based methods. Video calls will allow you to quickly go over all of the key and complex points.

Inconsistent quality

Many employers only use contractors on a project-by-project basis for relatively short-term tasks. Workers will come and go at a steady rate, which can be inconvenient and annoying.

Furthermore, the quality of work you receive from various contractors may be inconsistent. Employers who need consistent labour on a daily basis should hire employees rather than contractors.

Also, some contractors work with the deadline as first priority and not quality. This could lead to low-quality software being delivered and the company would have to pay a lot more to get it fixed. If the poor quality product has already been launched, the company’s reputation would be affected.


This is a big issue. As you know, freelancers work for themselves, they frequently work on multiple tasks at once. It is common practice for some of them to take on more projects than they can handle or to disappear without completing a project. Freelance software developers can produce excellent outcomes, but those who plan to work with them should have a backup plan in place.

Security Risks

In this day and age of data protection, it’s critical that you use client data with caution. If you plan to outsource processes that need personal data, you may be jeopardizing the privacy of individuals or jeopardizing the security of your company by disclosing such information to others.

So what should you do?

Should you consider employing contractors for your upcoming opening? That depends entirely on your organization’s aims, the nature of your projects, and the culture of your company. You are the only one who can make this decision; both direct hiring and contractors have advantages and disadvantages.

Before you go…

Hey, thank you for reading this blog to the end. I hope it was helpful. Let me tell you a little bit about Nicholas Idoko Technologies. We help businesses and companies build an online presence by developing web, mobile, desktop and blockchain applications.

As a company, we work with your budget in developing your ideas and projects beautifully and elegantly as well as participate in the growth of your business. We do a lot of freelance work in various sectors such as blockchain, booking, e-commerce, education, online games, voting and payments. Our ability to provide the needed resources to help clients develop their software packages for their targeted audience on schedule is unmatched.

Be sure to contact us if you need our services! We are readily available.


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