The Limitations of Hiring Internal Development Teams


27th May 2021


7 min


Scott Batchelor

Whilst hiring internal teams can seem like a good way of controlling the full development process‚ it can cause business-critical issues in scalability‚ project velocity and ultimately‚ your ability to achieve sustainable success.

Many of these pitfalls are not immediately obvious without an in-depth understanding of the industry‚ so we dissected the core obstacles to building‚ managing and growing internal development teams. 

The Limitations of Hiring Internally

Lack of Flexibility

You need to be certain your internal team is capable and flexible enough to handle each item on your product roadmap- including unplanned future updates. 

This is difficult‚ as it means either hiring a large panel of developers with different specialisms (which in turn creates the need for additional management staff) or multi-talented senior developers‚ who are both expensive and difficult to come by. 

For example‚ you may decide to hire a .Net developer with experience working with Azure to manage the back-end of your product. If a feature of Microsoft Dynamics is identified as beneficial to the performance of your product‚ there is a chance that you will have to hire a completely different developer to handle that integration. This runs the risk of hiring without a steady enough flow of work to be sustainable.

Requires the Creation of Multiple Internal Teams

It is often thought that hiring developers will provide the resource necessary to take ownership of a product. In reality‚ development requires creating a number of internal teams and ensuring that they are staffed with specialists in their respective fields.

A fully functional development department requires multiple hires in design‚ project management‚ QA and analysis to ensure that developers are able to do their job effectively. No one role acts in isolation and they all rely on each other to function.

Working with an external partner allows you to tap into established teams who are used to working alongside each other without the necessity of extensive recruitment campaigns. That level of synergy is absolutely crucial if you want to build a team capable of building a successful product.   

Support and Development is Difficult

Businesses need to have confidence that they are able to support and develop their new hires. This is an exceptionally difficult task unless you have a deep understanding of development and the day-to-day requirements devs may have.

Neglecting this aspect of management means that ultimately teams are unable to continue their work‚ damaging project velocity and giving your competitors the opportunity to outpace you‚ taking their ideas to market faster.

Some businesses attempt to solve this problem by offering equity to highly experienced specialists‚ who join to grow and develop a development department‚ manage the staff within it and ensure their success. Whilst this allows them to forego the high salary requirements attached to staff of this type‚ it also presents a key risk. The wrong type of hire at this stage can cause long-term issues amongst stakeholders.

Consistent Project Pipeline

One of the most crucial things to consider when deciding whether to build an internal team is the flow of development work for your product. It is a bad idea to hire for the busiest times‚ as the necessity for development capacity does not always necessarily follow a consistent linear trend.

An advantage of working with a medium or large size agency is that you will have access to a pool of development talent that expands and shrinks as required. This means that you have the capability you need at the right times without the need for expensive new hires or team members with low or stagnant workloads.

The ability of an agency to expand available resources or shift focus to your project during times of increased importance is called burst capability. To learn more about its importance in development‚ read our recent insight ‘What is Burst Capability and Why is it Important?’ here. 

Cost of Tools

Even if you’ve got the perfect hire‚ they’re well supported by a wider team and they have the experience to expand and grow your development team‚ there is still a lot of cost attached to the toolset they will need.

On top of the cost of hardware‚ the wider development team will require a library of costly licenses. Hosting‚ design software‚ project management tools and QA resources all present a significant cost.

By internalising dev resources‚ you are accepting that you are going to provide the tools necessary for your staff to operate efficiently. This is something that presents a major cost and should be factored into the ROI of building internal development teams.


The Advantages of Development Agencies

Build Better Products

There is a growing number of third-party suppliers available for tender‚ all of which are competing for business. It is in their best interest to provide the best possible service to their clients as they can ultimately be replaced by another supplier.

Part of this service involves leveraging their experience across different industries to help develop and expand your ideas‚ market testing them to ensure their validity‚ and mapping the implementation. Experienced development agencies don’t simply build your product‚ they work collaboratively with you to ensure its success.

A key part of this process is Discovery or Sprint Zero. You can read more about Discovery and why it is important in our insight ‘What Is the Discovery Phase & Why Do I Need It?

Confidence when things go wrong

If a member of an internal team leaves and you are wholly reliant on their involvement in your project‚ the speed at which you are able to implement changes drastically decreases. The process of finding and hiring a replacement can take months.

This poses a crucial question: Can you tolerate either lack of velocity in your product development pipeline? In the time that your resources are diminished‚ your competitors have the opportunity to push new changes to the market and effectively capture your user base.

No Recruitment Necessary

Developer recruitment is difficult. Understanding how each individual’s technical capabilities fit into your workflow is a complex process‚ and ensuring that they have the support necessary to grow and develop is crucial to keeping them on board.

The industry expertise offered by agencies means that they are able to build highly-skilled teams of reputable developers‚ capable of building high-functioning and successful projects. They handle the due diligence and ensure that their employees have the necessary experience.

In working with an agency‚ businesses gain access to a tried-and-tested team of specialists with an existing team synergy who are capable and experienced in every facet of digital product creation.

Development Agencies as a tool for expansion

A key advantage of working with an agency is that they are able to fit into your existing processes and team structures. 

For example‚ if you are a large-scale business that already has an internal development team but does not have a consistent need for a UX team‚ you can outsource this function to an established agency.

It is increasingly rare for a business to have an entirely in-house team‚ as this essentially means creating‚ developing and maintaining a small agency within the confines of your brand. Whether it be for strategic direction or support and maintenance‚ agencies offer the most flexible option‚ regardless of your internal capacity. 

Looking for a delivery partner that will work with you to identify‚ create and launch innovative technology products whilst providing clear ROI and long-term competitive advantage? Read our case studies or get in touch today.