Comparison
In-house developer or agency — no single right answer.
Custom software, website, or web app needs a developer — but do you hire in-house or choose an external partner? Here's an honest comparison for SMBs.
In-house developer
Your own employee — full-time or part-time developer at the company. Knows your processes, instantly available.
Pros
- Knows the company: no need to explain every project — context is there.
- Instant availability: on Slack, in meetings, at your desk.
- Long-term knowledge: they built the systems, they maintain them.
- Integrated team: part of the company, not external.
Cons
- High fixed cost: gross €2k–€3.8k/month + contributions — even when no project.
- One person's skills: if you need full-stack but they're frontend only — limit.
- Holiday, sickness: when they're out, development stops.
- Hiring is hard: finding and keeping good developers at SMBs is challenging.
Agency / freelance
External partner — works project-based or on retainer. Specialized skills, scalable capacity.
Pros
- Project-based cost: you pay only for work done — no fixed salary.
- Specialized skills: frontend, backend, design, DevOps — team matched to project.
- Scalable: more people on big project, fewer on small.
- No HR risk: no hire, onboard, retain.
Cons
- Context building: every project starts with process mapping.
- Communication: not at your desk — meetings, tickets, specs needed.
- Dependency: if partner leaves, knowledge must transfer (good partners document).
- Variable quality: big spread among agencies and freelancers — choice matters.
Decision matrix
| Aspect | In-house developer | Agency / freelance |
|---|---|---|
| Monthly cost | €2k–€3.8k fixed (1 person) | €0–€1.3k (project-dependent) |
| Availability | Instant (business hours) | Meeting / ticket based |
| Skill breadth | One person's skills (full-stack rare) | Team: frontend + backend + design |
| Scalability | One person's capacity | Team scaled to project |
| HR risk | Hire, onboard, turnover | None — project based |
| Long term (3+ years) | Cheaper if continuous development needed | Cheaper if 1–2 projects per year |
Which to choose in your situation?
In-house developer and agency aren't competitors — they serve different needs. Here are 4 typical situations.
Choose in-house if development is continuous
Continuous development needed (weekly sprints, multiple systems) and budget for full-time person. E.g. SaaS product, internal platform.
Choose an agency if your needs are project-based
1–2 projects per year (website, CRM, web app) and no sense paying fixed salary for "waiting".
Choose in-house if software is your product
IT is strategic — software is the product core, not just support tool.
Choose an agency if this is your first project
First custom project and you don't know how much development you'll need long term — cheaper to try project-based.
Verdict
For SMBs (5–30 people), agency or freelance is usually the better choice — project-based cost, specialized skills, no HR risk. In-house pays off when you need continuous weekly development and have the budget. The tipping point typically comes at 2+ parallel projects or alongside a SaaS product.
My recommendation: don't hire a developer for the first project. Start with agency or freelance — if you outgrow that (continuous need, 2+ projects/year), then consider in-house. Many clients start this way and switch in-house after 2–3 years — by then they know what they need.