IT Outsourcing — When Does It Make Sense and How Much Can You Save?

In-house IT team or outsourcing? It's a question more and more companies are asking. The answer isn't obvious — it depends on scale, needs, and the nature of the project. In this article we'll show you the numbers that can help you decide.

The Real Cost of an In-House Developer

Many managers look only at the gross salary. The true cost of an employee is significantly higher:

Example: Senior Frontend Developer (Western Europe)

So the real cost of one senior developer is at minimum €5,500/month, often €7,000–9,000.

Outsourcing: What Does It Cost?

T&M (time & material) model: €40–120/h net

• Junior developer: €40–65/h
• Mid developer: €65–90/h
• Senior developer: €90–130/h

At a full-time equivalent (160h/month):

• Junior: €6,400 – €10,400/month
• Mid: €10,400 – €14,400/month
• Senior: €14,400 – €20,800/month

Retainer model (dedicated developer): Through a software house on a subscription, typically cheaper — €3,500 – €9,000/month for a dedicated developer.

Where Outsourcing Actually Saves Money

1. No Recruitment Costs

Recruiting a good developer means:

• 3–6 months of searching
• 10–30% of the annual salary as a headhunter fee
• Manager time spent on interviews

2. No Training and Onboarding Costs

A new employee works at 30–50% efficiency during the first 3 months. An external firm has ready-made processes and a team.

3. Flexibility of Scale

Project needs 3 developers for 6 months, then one for maintenance? In outsourcing — no problem. In-house team — you lay people off or pay for idle time.

4. No Holiday, Sick Leave, or Severance Costs

The most frequently overlooked argument. A full-time employee has 25+ days of annual leave plus sick days. You pay regardless.

When Does Outsourcing Make Sense?

✅ One-off or time-limited project — building an MVP, new application, system migration ✅ Specialist skills — you need an AI, blockchain, or mobile expert for 3 months ✅ Startup / scale-up — too risky to build a full team before product-market fit ✅ Team augmentation — you have 2 developers, you need 4 for 6 months ✅ No time to recruit — the project starts in a month

When Does an In-House Team Make Sense?

✅ Continuous, stable project — a product developed over years ✅ Domain knowledge — the developer must deeply understand your industry's specifics ✅ Full control — critical IP, high confidentiality requirements ✅ Company culture — integration with the rest of the organisation is important

How to Outsource Safely?

1. Secure Code Ownership

The contract must include the transfer of economic copyright for all code produced. This is a standard that every reputable outsourcing firm accepts.

2. Require Documentation

Code without documentation is useless after the engagement ends. Require:

• README with setup instructions
• API documentation
• Comments in critical parts of the code

3. Access to the Repository

Code should be in your repository (GitHub, GitLab), not the vendor's. You have full change history and can switch providers without losing data.

4. Regular Code Reviews

At least once a month, an internal or independent senior developer should review code quality.

5. Test Independence

Ideally: you can switch software houses without dramatic consequences. If the vendor says "that's impossible without us" — you have a problem.

Soft Synergy: Flexible Outsourcing Model

We offer dedicated developers and entire IT teams on a subscription:

• Dedicated developer — one person assigned to your project, 8h/day
• Mini team — developer + QA + part-time PM
• Full team — complete team for end-to-end project delivery

Ability to scale up and down each month. Response time to scope changes: 48h.

Summary

IT outsourcing isn't for everyone — but for most companies considering hiring 1–3 developers for specific projects, it's a cheaper and faster alternative.

The key question: do you need someone permanently or for a project? Your answer determines the right choice.