In the wake of the COVID-19 pandemic, numerous companies are obliged to smoothly transition to remote or partially remote operating modes. And even after some restrictions were lifted, many offices decided to leave their employees the opportunity to work from home, since this turned out to be a more cost-effective solution. Indeed, according to statistics, 90% of software company employees were extremely satisfied with remote work conditions and recommended this work format to their friends.
But let’s learn the exact reasons for hiring an in-house team vs remote team vs extended team.
Remote Team Model
What is a remote team? It’s a group of employees interacting with each other via digital communication channels instead of the usual live communication in a physical office. Organizing a remote team is considered among the types of outsourcing. Usually, the services of such workers are much cheaper than the full-fledged employment of the in-house team. Let’s take a look at the main pros and cons of the remote format of interaction between developers.
Remote team pros
The major remote team benefits include:
- Extensive talent pool. One of the main advantages when choosing remote workers is the absence of any territorial restrictions. You can find candidates using online platforms for searching outsourcing teams, labor exchange options, etc. In some countries, rates of specialists may be several times lower than in your local labor market;
- No need for live interviews. To recruit a team of full-time employees, you will need to spend a lot of time on offline interviews. Alternatively, remote interviews, for example, via Skype, will save you tons of time even at the hiring stage;
- No need to rent an office and hardware. Hiring a remote development team, you will not have to pay for office rent, which usually takes a large part of the company’s budget. You also don’t need to supply an employee or team with equipment and software;
- Minimized tax expenses. Hiring a remote team of employees can be the only way to lead a business without having to pay taxes at all. For instance, you can relocate your company’s activities to the most taxpayer-friendly country by registering your business offshore.
Remote team cons
To each upside, there is a proper downside as they say:
- Remote limitations. Sometimes, even the best specialists can’t handle telecommuting that well, and the lack of live interaction with other employees can negatively affect the quality of the work performed. These situations are especially common in large-scale projects that take months to complete. In such cases, outsourcing companies can come to the rescue, in which the process of remote work is established as efficiently as possible.
- Task prioritization issues. When developers work on their own, it can be difficult for them to decide which tasks require the first-priority solution. This may entail certain delays in the delivery of the project;
- Task statement issues. When there is no constant control over work processes, the employee gets to handle tasks assigned to them in the most individually convenient way. Nevertheless, such a “free flight” can sometimes play a cruel joke with business owners: remote workers may perceive task briefs in their way and perform differently than the client expects. This can spawn unwanted workflow delays;
- Communication hardships. Although there is a wide range of tools to support telecommuting these days, some remote workers may experience Internet connectivity issues during their work hours. On top of that, software developers may be situated in different time zones and not be online at the same time. This can lead to delays and disrupt the deadline.
Extended Team Model
What is an extended team? This is when you introduce an extra workforce to your existing in-house development team. If you have a staff of developers but lack certain expertise or the number of profiled experts to implement the project, you can supplement your team with third-party personnel. The extended team is responsible for sharing the same methodologies, business goals, and approaches that you practice while focused on delivering a high-quality product. Management of such a team can be implemented on the client-side or outsourced to the service provider’s project manager.
Now, let’s see what benefits and downsides we get from this model of collaboration.
Extended team pros
Based on our experience in the market, we can highlight the following benefits:
- Full control over workflows. Going for an extended team model, you can fully control the development process as if you were dealing with in-house employees. You get to set tasks directly, plan and manage all activities without worrying that some developers will miss out on your managerial input;
- Close relationships between in-house and extra staff. All of your team members know they are bound by a common goal. In this regard, cooperation between them becomes as close as possible and implies constant sharing of important project details. Overall, this forms a common vision of the project’s goals and is the actual key to the overall success of the final product development;
- Simpler results tracking. As the project manager/owner, you gain full access to all aspects of the work performed. That’s why you can easily assess the progress and adjust the workflow of both full-time and additional employees;
- Team role distribution. Because you choose who to hire and who does what, you can screen out inappropriate candidates promptly. This means that you get a great opportunity to gather the most productive people for your dream team;
- Transparent expenses. You can calculate the labor costs of your employees at the initial stages of project development. Salaries are based on your budget and consist of developer hours and associated administrative costs.
Extended team cons
Traditionally, there should be downsides to all the goodness this model brings to the table. However, we can point out only one significant con here:
- High managerial responsibility. If you choose to expand your full-time team with third-party workers — people who are technically qualified and have the right skills — you must treat them at the same level as your full-time employees. Namely, you should discuss with them the direction of the project, its vision, and all kinds of changes that are taking place in your company. And all this will require extra effort from you and your managers.
- Language or culture differences. Your inhouse software development team and the extended team will work together. Their integration may not be an easy task as there may occur language or culture differences or other communication challenges. That is the reason why we advise you to assess language proficiency as well as determine the compatibility to the corporate culture before hiring employees.
In-House Team Model
This model is about hiring full-time employees for the project or continuous work in the company. It implies full control over all workflows and higher responsibility for processes. Let’s find out what advantages and disadvantages this model has.
The process of hiring an in-house team
When you are determined to choose in-house development, the main challenges while hiring such a team are location and availability. According to the location your team is situated, it could be difficult to find developers. Nevertheless, this task is not impossible.
In-house team pros
The team working in the office of the project owner’s company is an excellent solution for those who want to control absolutely all development processes. What advantages of such a team can we note?
- In-depth employee control. With in-house development staff at your disposal, you can control every aspect of project development without any extra effort. For some business owners, this is a very important point;
- Fast project kick-off. You will have to spend a lot of time recruiting a professional in-house team. But as soon as you gather the staff, you can immediately start developing the project. Having talented developers dedicated completely to your company can be a significant competitive advantage;
- Deeper team involvement. In-house specialists work on a project end-to-end. They are aware of all functions and can work with them with a deep level of understanding, unlike offshore teams, which will take time to analyze the project;
- Qualification development. In case you need an employee with special skills, you can train the existing specialists. On top of that, they learn over time, becoming more savvy and multipurpose. This is how you get a satisfied employee who has prospects for professional and career growth;
- No culture or language barriers. An in-house team is made up of professionals who live in the same city and have the same linguistic and cultural experience. The absence of boundaries and restrictions, the most comfortable personal communication, and a better understanding of the common cause subsequently lead to fruitful work.
In-house team cons
On the flip side, there are certain downsides to the in-house team model:
- Significant expenses. Recruiting an in-house team is not a cheap process. You will need to invest time and money in the interviews, in the organization of workplaces, and taxes and social benefits;
- Time-consuming recruiting. You are unlikely to immediately find highly qualified specialists on the market since most of them probably already have a job. This means that you will need to offer more favorable conditions and, as an option, raise rates over the competition. At the same time, it can take a long time until you assemble a full team. And since innovations need to be implemented quickly (after all, this is a key moment in the competitiveness of any company), your business idea may simply grow outdated at the time of its release;
- Employee absence issues. A team member might get sick or even quit. In this case, you will have to spend extra time and money on hiring a new employee. And this, in turn, affects the speed of project completion.
Costs of hiring an in-house team
Talking about the cost of hiring an in-house team, you should know that annually software developer earns an average of $100,000. To calculate the sum just multiply an average sum with the number of people you are planning to have in your team. Thus, you will have an idea about the salary you have to pay them.
Besides, you should remember about the salaries you have to pay your HR team as well.
Remote Team vs Extended Team vs In-house Team: What to Choose?
Which to pick from the bunch of remote team vs extended team vs in-house team? Generally speaking, when choosing a specific format for interaction with employees, you should understand that only employees with qualifications above the junior level can provide a decent quality of services remotely. If you plan to recruit for the project young yet ambitious specialists who will grow inside your company with the help of some extra training and education, it is better to hire them directly to the in-house staff. Putting time into bringing up skillful, reliable experts is the main difference between the in-house team vs remote team. As for the extended development team vs in-house, the first option is suitable for those who also want to raise new specialists and tailor their skills to the needs of the company while keeping experienced employees of the Middle and Senior categories in staff. This will be more cost-efficient yet an extended team employee won’t always work for you long-term, so this option better suits individual projects.
These are the major pros and cons of remote team vs extended team vs an in-house team that should help you figure out in which cases this or that model is more suitable. If you are looking to outsource a project or some of its aspects, contact professionals at Deventor. We will provide you with the best talent to expand your existing team or set up a dedicated development team to bring your business ideas to life.