Should you hire a developer or use an agency?

The question is usually framed as a cost comparison, which is the least useful way to look at it. All three options can be made to cost roughly the same. What differs is what happens when you are wrong about what you need, and you will be, at least partly.

When is hiring the right answer?

When software is the business, and you can keep someone occupied for years rather than months.

A developer on staff builds up something no external party can: they know why the odd exception in your pricing exists, they remember the customer who caused it, and they will spot the consequence of a change before you ship it. That context compounds. It is genuinely valuable and it is the strongest argument for hiring.

The costs people underestimate:

• The loaded cost is not the salary. Employer taxes, equipment, software licences, holiday, sick pay, and the manager’s time all land on top.
• Hiring takes months and the good ones have options.
• One person is one skill set. A brilliant back-end developer will produce a serviceable interface, and vice versa. You will feel the gap.
• A single point of failure. Holidays, illness and resignations all stop the work entirely.

If software is central and permanent, absorb those costs and hire. If you are not sure it is permanent, hiring is an expensive way to find out.

When is an agency the right answer?

When the job has a shape and an end. A migration. An integration. A defined product you can describe on two pages.

An agency brings a team, so you get design, back-end and project management without hiring three people. They have done your problem before, and that pattern-matching is worth paying for.

Where it goes wrong is scope. The commercial model rewards defending the boundary of the agreed statement of work, because that is how the engagement stays profitable. Which means the moment you learn something, and you always learn something, you are into a change order. The relationship shifts from “how do we make this good” to “what did we agree in March”.

That is not agencies being cynical. It is what fixed scope does to everybody.

When is a subscription partner the right answer?

When there is a continuous stream of work, no single project big enough to scope, and no confidence that a salary is justified yet.

You get a team rather than a person, you get to reorder priorities weekly without renegotiating anything, and you can stop when the work stops. The trade is that you are one of several clients, so you are buying a share of a team’s attention rather than all of one person’s.

It is the wrong answer if you need someone in your standups every morning, or if there is genuinely nobody on your side who can look at work and make decisions.

How do you actually decide?

Two questions, in order.

Will there still be work in eighteen months? If clearly yes and it is core to the business, hire. If clearly no, use an agency for the defined piece.

If it is somewhere in between, which it is for most small businesses, the question becomes how much certainty you have about what the work is. High certainty suits an agency. Low certainty suits a subscription, because changing your mind costs nothing.

Anyone who tells you their model is right for everybody is selling, not advising. Ask each of them where their model stops working, and take the answer seriously.

And if you only have one well-defined job, a single month of a subscription is often the fastest way to get it built and shipped. You can stop after it.