Hiring in-house vs working with an agency
We are an agency, so read this with appropriate suspicion. We have also watched enough companies make this decision badly in both directions to have a fairly clear view of when each one is right — and in-house is right more often than agencies admit.
Agency / outsourced team
A team you engage and can stop engaging
In-house engineering team
Employees who accumulate knowledge of your business
Side by side
| Criterion | Agency / outsourced team | In-house engineering team |
|---|---|---|
| Time to productive work | 1–2 weeks | 3–6 months to hire and onboard |
| Monthly cost (3 engineers) | One monthly team fee, all-in | ₹6–10 lakh salary plus overheads, equipment, benefits |
| Cost to stop | 30 days notice | Severance, and the morale cost of layoffs |
| Domain knowledge over time | Accumulates, but leaves with the engagement | Compounds and stays |
| Availability for urgent work | Contracted hours | Immediate, and they care |
| Range of skills | Broad — design, DevOps, QA on tap | Only what you hired for |
| Retention risk | Ours to manage | Yours, and the Indian market is brutal |
| Cultural alignment | Takes deliberate effort | Natural |
| Scaling up or down | Weeks | Months either way |
| Long-run cost for continuous work | Higher | Lower |
Choose In-house engineering team when
The cases where we are not the right answer.
- Software is your product rather than a support function — if you are a software company, build the team
- You have continuous development work that will not stop
- You can genuinely attract and retain engineers, which means competitive pay and interesting work
- Deep, accumulating domain knowledge is the main determinant of quality
- You have someone senior who can technically lead and hire well
Choose Agency / outsourced team when
- You need to start now and cannot wait two quarters to hire
- The work is a defined project rather than an indefinite programme
- You need skills you cannot justify hiring full-time — a designer, a DevOps engineer, a QA specialist
- You are testing whether the product idea works before committing to a permanent team
- You tried hiring and lost your first two engineers within a year, which is common
Our honest view
If software is your product, build an in-house team — an agency should be helping you start or filling gaps, not being your engineering department indefinitely. If software supports your business rather than being it, an agency is usually the better economics and certainly the better risk profile. The most common successful pattern we see is an agency building the first version, then handing over to an in-house team hired during the build. We write our contracts to make that handover easy, because a client who outgrows us is a better reference than one who felt trapped.
Common questions
What is the real all-in cost of an in-house engineer in India?
Roughly 1.4 to 1.7 times salary once you include employer PF and insurance, equipment, software licences, office space, recruitment fees and the cost of the hiring manager's time. A ₹20 lakh salary is closer to ₹30 lakh in practice.
Can we start with an agency and transition in-house?
Yes, and it is a sensible sequence. It requires planning: documented code, no proprietary frameworks, and a deliberate handover period with overlap. Ask about this before signing, not at the end.
What is the biggest risk with an agency?
Knowledge leaving when the engagement ends. Mitigate it by insisting on documentation as a deliverable, keeping the code in your own repository from day one, and having at least one of your own people involved throughout.
Still not sure which way to go?
Tell us the situation. We will give you a straight answer, including when that answer is that you should not hire us.