Full-time Developer vs Freelancer vs Software Development Company

Published: December 23, 2018

6 min read

Last updated: June 22, 2022

So, you have an idea of a Digital Product for your business or a Tech-Startup in mind and want to build a Minimum Viable Product, but don’t have an In-House Development team at your company? Or maybe your Tech-Team doesn’t have enough capacity to develop the Side-Project of your business? These are some of many cases you might need to get a contractor who knows how to help on board.

Maybe, there’s not enough decent tech specialists in your area. In that case, Near- or Offshoring of your Product Development may be also a good solution.

But who should you be working with: a Freelancer, Digital Agency or Remote Full-time Developer? Looking for Software Development Contractors is a strategic step that can either skyrocket or play a dirty trick on your Business or Startup.

A good contractor will guide you in the right direction

A good contractor will guide you in the right direction (image by Janis Andzans)

There are many vital considerations that are to be taken into account when you choose between a Full-time Developer vs a Freelancer vs a Software Development Company.

When we’re talking about the creation of a Web or Mobile App for your business, a generic portrait of your perfect Tech Partner most likely looks like this.

This should be an experienced contractor with well-organized Software Development processes and excellent communication skills that can understand and handle your business-specific challenges. They also should be dedicated to your project and be able to support you during the development, release, and post-release stages.

It’s not a rare case when, after some time, companies find themselves dealing with the consequences of a wrong decision if the chosen contractor (or the decision not to have any at all) doesn’t match this portrait:

  • For example, the whole Project was assigned to a Freelancer who has a narrow specialization and works on a few projects at once. The result can be a non-scalable Product and the necessity of additional specialists for outsourcing other development parts.
  • Another story: some non-tech business decided to create their own In-House Dev Squad but wasn’t successful enough because of the lack of expertise in managing tech teams.
Not sure how to choose a contractor? This guide will help to figure it out!

Not sure how to choose a contractor? This guide will help to figure it out! (image by Paul Olek)

Yet, it would be totally wrong to say that there’s only one acceptable solution for you - it all depends on a few key things like whether the digital product will be a core of your business, the complexity of the task, available budget etc.

As each project is different, think carefully before making the final choice on Full-time Developer vs a Freelancer vs a Software Development Company. Let’s reveal ins and outs of each approach!

👩‍💻 Freelance Software Developers: Strengths and Weaknesses

Before we move on to the pros and cons of hiring a Freelancer, let’s recall some basic info:


Fitting Project Type 📝

Execution of tasks, where you need 1 specific expertise (for example, manual QA or implementation of a particular SDK) in case your Remote or In-House Team doesn’t have appropriate expertise

Optimal length 🕰

Usually, up to several months

Where to find 🌏

Freelance staffing platforms like Upwork

Average rate 💵

$20-50 per hour

So, in a few words, freelancers are individual developers who have expertise and experience in several particular fields and are suitable for performing narrow tasks within their сompetence.

If it seems that your case doesn’t require involving freelancers, jump right to the pros and cons of hiring a Full-time Developer or a Software Development Agency.

Advantages of hiring a Freelancer for your Project

  1. Low Rates. Since freelancers usually work from home, don’t have employees and other business-related costs, it allows them to set lower rates. Also, you don’t have to think about paid vacations, sick leaves, insurance, taxes, and paying for office space or buying work equipment and office supply, etc. However, it isn’t always true. Highly experienced developers can also charge above-average rates. Plus, the fee rate significantly depends on the region.
  2. Easy to Find. There are hundreds of thousands of freelance developers all over the world. Therefore, you can pick one that matches your requirements better than others. Places, where you can find them, are also well-known - Upwork and other similar staffing platforms. So, as Nike’s slogan says: just do it!
  3. Increased Flexibility. As a rule of thumb, freelancers are fine with working some extra hours since they usually manage their own schedules. Surely, it’ll cost you extra as well, but it’s still better to have a rather flexible contractor.

However, successful startups and prosperous businesses are sometimes skeptical about selecting such an option for development purposes. Why? Because of the following drawbacks:

Concerns of hiring a Freelancer for your Project

  • Lack of Reliability. Since they are remote and might work on several projects at the same time, and can be hardly supervised in general, it’s not a rare case when they just might disappear with no explanation.
    However, these concerns are easily handled by implementing 2 simple things into the workflow: a well-thought-out contract and sustainable communication & reporting channels.
  • Narrow Specialization. One person can’t know everything. That’s why these guys usually focus on a few technologies. Therefore, don’t expect them to be able to build a whole product from scratch or deal with tasks that are out of their competence.
  • Lack of Dedication To Your Project.. Another concern is that a typical cycle of a freelancer lacks dedication to the project and thus, the product might be of lower quality. For this issue, there isn’t a solution. You just need to find the right person for your contractor so that it won’t be a problem.

Alternatively, Startups and Businesses are often advised to hire remote Full-Time Contractors. So, let’s highlight the positive and negative sides of this option to make a Full-time developer vs a Freelancer comparison.

👨‍💼 Hiring a Full-time Developer: Ins and Outs

From our experience, we can split full-time developers into 2 groups:

  • In-house Developers;
  • Remote Full-Time Developers.

To put it shortly, when talking about the In-House Dev Squad we mean your internal development team in its “classic” meaning: a group of people working in a shared office 5 days a week. Here are some other basics:

In-House Developers

Fitting Project Type 📝

A long-term project where a Mobile or Web App plays a key role

Optimal length 🕰

As long as it will be relevant and profitable - therefore, it may take years

Where to find 🌏

Employment websites

Average rate 💵

Highly depends on salaries in your country and region

So the main difference between a Full-time developer vs a Freelancer is that creating your In-House Team may be reasonable only if your Mobile and Web app will be the core of your business.

Think of Snapchat or Tinder - their business is built around the mobile app, while for offline businesses (let’s say, a restaurant or a retail store), an application will become a good enhancement to increase the level of their service but not something they can’t exist without.

What are the advantages and disadvantages of having your own development team?

Advantages of hiring a Full-time Developer

  1. You’re on the Same Boat. A full-time employee is usually not someone who will come and go as easy as a Freelancer. Such workers are motivated to do their best (the more successful their company is, the better salary they can expect), share your corporate culture, and better understand your business with time.
  2. Effective Supervision. To be fair, tasks like schedule planning and task assignment are tasks for the Project Manager or CTO but by establishing sustainable reporting channels, you can be aware of everythings that’s happening in the team and what progress was made.
  3. Predictability. The employer-employee relationship implies a legal basis (an employment contract). Therefore, your confidential data should be safe, payment and working details - clear, and you may not worry that the developer will just disappear.
  4. Common Space. It’s not a significant advantage (thanks to modern communication tools) but it’s nevertheless more convenient to discuss, plan, hold meetings, review code, and provide help to someone who is right next to you.

Yet, there’s always the other side of the coin:

Disadvantages of hiring a Full-time Developer

  • Build a Team from Scratch. People on the same Dev Team should complement each other and work as a single unit supervised by a CTO, which is quite a challenge.
  • Additional Expenses. When hiring a Full-time Developer you have to keep in mind that the written in the contract salary isn’t the only kind of expenses related to the employee: think of taxes, paid leaves, health insurance, office rent, purchase of the needed technical equipment etc.
  • Keeping Them Busy. If you decide to build an In-House Team, you should have a long-term development plan and backlog so you don’t face the situation when you hire more people than you actually need and have high fixed costs that aren’t generating revenue.
  • Limited Options. When looking for someone to join your office, you’re limited to those who are living nearby or would like to relocate, while the most skillful developers may be miles away. And cost a few times cheaper without loss in quality!
What about Remote Full-Time Developers?

What about Remote Full-Time Developers? (image by Igor Kozak)

Remote Full-Time Developers are remote full-time developers who may join your In-House Team if your team needs another developer for a short period of time (e.g. while you’re waiting for the next funding round to hire for that position) or to perform a specific task (like porting your Product from Web to Mobile). Here are some other key features:

  • Since Remote Developers usually sign an employment contract, they focus on the current Project and don’t tend to disappear.
  • Possible discipline and organizational issues are the main concerns.

Now, it’s time to move to the third and last comparison: Full-time Developer vs a Freelancer vs a Software Development Company.

👨‍💻 Hiring a Software Development Company: Pros and Cons

Finally, if you’re looking for a trustworthy, skilful & experienced Tech Partner who can build your Product, a Mobile/Web Dev Agency may be the perfect match. Here are some basics regarding a Full-time Developer vs a Freelancer vs a Software Development Company differences and specifications:

Software Development Company

Fitting Project Type 📝

Any kind of project but the best fit is the development of middle- and long-term projects like MVPs or an App for your Business

Optimal length 🕰

From a few months and as long as you need

Where to find 🌏

Agencies’ websites on Google and lists of companies like Clutch or AngelList

Average rate 💵

$40-75 but also depends on the region

Software Dev Agencies try to combine the best features from the previous options without inheriting their disadvantages. And that’s what makes them a good Tech Partner for your app or web development:

Advantages of Hiring a Software Development Company

  1. Expertise. Experienced agencies normally have their teams working together for years, making sure that each member brings a unique skillset and expertise to the whole Squad. Moreover, their Dev-Processes are proven and well organized. It means that they’ll definitely find a way to complete your task.
  2. Self-Organisation. You may outsource your Project to a team and don’t think about organizational issues. Taxes, paid leaves, setting up the workspace - Agencies take care of this stuff on their own.
  3. Reputation. Dev Companies are more bonded to their reputation and testimonials compared to freelancers, for example. Meaning that in a certain way, they can be more dedicated to your project.
  4. No Legal Issues. Companies clearly understand the importance of legal documentation. Even more, they can provide you with contract and NDA templates if you don’t have one.
  5. Flexibility. You can set up any model of cooperation with your team you’d like. Outsource the whole Product Development and wait till it’s done? Got you. Or maybe you want to supervise them more carefully and just need a dedicated team, which you’ll manage? That’s something that can be arranged, too!

What are the drawbacks of such a choice?

Disadvantages of Hiring a Software Development Company

  • Looking for a Big Fish. Dev Agencies might not be that interested in working on small projects with a little budget since it won’t cover their operational expenses and bring actual revenue.
  • Average Costs are Higher. Since Agencies have many business-related costs (employees’ paid leaves, office rent, equipment maintenance), their services are going to cost you more than working with freelancers, for example.

Usually, these drawbacks are easily handled by professional companies so it shouldn’t have negative effect on your Project. Here are a few examples of what our clients say about working with us:

“They make the whole business work for us, and their improvements are fundamental to our operations”. – Founder, Software Company

“They put such effort into my product it might as well have been their own”. – Head of Product Development, Target Up GmbH

💡 Takeaways

Now, you know all the key differences between a Freelancer vs Software Development Company, or a Full-Time Developer. The choice will greatly depend on the key requirements of your project. Let’s recall them!

Contractor Type

Key Features

Freelancer 💻

Best suitable for specific tasks (like the implementation of a particular feature). More affordable and easy to find but usually aren’t focused on your project and less reliable.

Remote Full-Time Software Contractor 🖥

Full-Time developers that can help you with short- and middle-term tasks. Have a limited competency but are usually dedicated to the project they’re currently working on.

In-House Team 🏠

Your own Full-Time Team that is completely managed by your company. It’s quite difficult to build and expensive to keep but you can completely rely on your team and build all working processes within it to reach your long-term goals.

Dev Agency 👩‍💻

Professional Mobile & Web developers with a rich expertise and broad competency. Also, they’re self-organized and extremely flexible so you can consider them as your Tech Partner in many cases.

Looking for assistance in delivering your Product? We at Stormotion help European and US-Based Startups and SMEs to Build Top-Notch Mobile and Web Apps. Just drop us a line and get to know us better!

Develop Your Idea With Us!

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Our clients say

Stormotion client Max Scheidlock, Product Manager from [object Object]

They understand what it takes to be a great service provider, prioritizing our success over money. I think their approach to addressing ambiguity is their biggest strength. It definitely sets them apart from other remote developers.

Max Scheidlock, Product Manager