NOVEMBER 05, 2018


Freelancers vs. Software Development Company: What's Right for You

Written by: Ksenia Larina

Freelancers vs. Software Development: Count Real Benefits


It’s a quite frequent problem when you have a business idea but for its implementation, you need a competent developer. There are so many freelancers and development companies feigning to be those that can carry out your plans. But whom of them should your entrust your intentions, a remote freelancer or a software development company?


Okay, you have chosen to save more money and hire the freelancer. But will it be indeed a prudent use of resources in the long run? On the other hand isn’t the software development agency deceiving you by offering the same services at a higher rate?


Let’s evaluate all the arguments for and against and decide the dilemma between freelance developers vs software development company once and for all!


Freelance vs Software Developers: Running Ahead Here’s Your Answer

There is no single right answer.

So many variables affect the final choice such as task complexity, project duration, product-specific and technical matters, as well as the need for continued maintenance and updating.


This article is gonna show all the pros and cons of development company vs freelancers. Upon reading it, you will identify which of them suits your company best.


Freelance or Software Development: Taking a Look at the Freelance Developer


Freelance developers can work in 3 modes (contract, freelance, full-time,) and perform all the assignments remotely. Most commonly, they are hired for specific project/tasks and sign a temporary employment contract. There are some risks as the freelancers often run a number of projects simultaneously, and you should remember that.


Advantages of Hiring Freelancers


Reduced Costs

Since the freelancers aren’t officially employed employers are not obliged to cover for their medical insurance, taxes, work equipment, as well as worry how they will play with the rest of colleagues etc.


A Large Choice


There are a great many generic freelancing websites to find a required specialist: Upwork, Freelancer, Guru, or Hubstaff Talent. The only thing you have to do is to find the right candidate, agree on the terms and conditions of the task/project, create the contract and submit the milestone.


In case there will are delays in terms, incomprehension or simply no common ground you can cancel the employment contract. You can ask for the refund and if the reasons are weighty (managers can easily check all that in the private chats) then they will approve it.


Experts in Specific Area


Freelance developers are often former employees of large corporations. They are highly experienced and have got a solid background. These folks have great freelancing skills in a specific area to fulfill independently technical assignments.


More Flexible


Is there an issue has to be resolved urgently or fix some bugs outside of working hours? They are more interested to get the job done ASAP, so they can easily work day and night.


None of the Legal Confusions


You are not bound by any legislative norms, except as a temporary working contract. The only thing you are to do is to pay for the job done. That’s all, your labor relations are over. And there won’t be any fundamental reasons for the contractor bring the claim or even apply to the court.


Disadvantages of Hiring Freelancers


May Disappear

Well, the disappearance is a really frustrating thing. Just imagine, all conditions, terms, and payment to have been specified, the project to be launched.


Then one day the developer might simply have gone silent and become a fantom. Might sound like a horror story, but if you choose to work with unreliable freelance platforms or individual contractors that have no real means to guarantee you the delivery, that’s exactly what can happen.


So, keep it in mind and be ready with plan B, just in case. Alternatively, find a couple more candidates in advance as a reserve.


Quality of Work


Furthermore, not all hired contractors to take care of the accomplished work quality. Generic platforms like Upwork or PeoplePerHour don’t invest in vetting the freelancers who are listed on their websites.  So it’s like you bump into someone whose strivings are just to earn some quick cash and rapidly pass the project. Reputational risks are not the matter of the utmost importance for such freelancers as there’s always the possibility to create a new account or work anonymously.


Confidentiality Concerns


Unless you sign non-disclosure agreements (NDAs) with freelancers. If privacy is a concern for you, at Coding Ninjas, we strongly recommend signing the NDAs before you start working with any new freelancer. Otherwise, be sure: there are certain risks for data leakage. Especially, for companies with a high conspiracy or classified information.


No Maintenance & Support


After building a website, mob application, or evolving some tools, the remote developer completes the job and usually does not provide further maintenance. So, if you just hired someone to do the project from scratch and then lose them from your sight, you will have to find other freelancers to occasionally fix the bugs and do the maintenance. And you’ll be lucky if the first person you hired did a good job and their code is readable. Otherwise, you end up with awful heritage code no one would be able to maintain and support. Next thing you do then? Start the whole project from scratch and hope it turns out better this time.

Organizational Difficulties


Often freelance developers may forget about deadlines, ask for additional working hours, or misunderstand the initial goals. Which will certainly lead to mistakes in building the product. After all, your freelancer is likely to have several clients.


So it’s better to stipulate deadlines, not for the very last day.


The Pros and Cons of Development Company (vs Freelancers)


Hiring the development agencies seems like it will help you clear the schedule and rely on professional assistance. They seem reliable and accountable, like someone who’s ready comply with work processes and procedures, ensure the security. A successful outsourcing business usually has on board the representatives of nearly all professions: the developers of websites/mobile apps, testers, product managers, content makers, designers, analysts, etc.


The operation process is split into small stages (sprints/iterations) along which monitoring, analysis, and required customization are made.


Generally, there are two ways to pay to a dev agency: on “time and material” or “set price” basis. It is also crucial to note that the client transfers the full product’s and the source code’s rights to the executor.

Advantages of Hiring a Software Development Company




The development agency has an extensive work experience within various sites, ranging from simple visiting card websites and ending with large Internet resources.

Errors made by newcomers or the only person are optimally minimized here. Thanks to team diversity, namely, developers, designers, managers, QAs, etc. they can quickly get into substance, consult with one another and find appropriate solutions collectively.


Full Package


They offer a whole cycle of services such as consulting, business idea estimating, business analysis, and structuring strategies. That’d be a great plus for startups or self-starting entrepreneurs who have money but don’t have the needed knowledge and skills.


Clear Deadline


You receive weekly (daily/monthly – depending on the agreed conditions) progress reports. During the development process, you can monitor the reports, contact the project manager and ask for the necessary refinements.


Caring about their reputation, good software development companies are highly responsive to meet all the agreed deadlines.

Stability and risks’ absence – here’s what you obtain by signing an agreement with the software development company. Legislation and open financial records reassure that the work will be definitely done and on time. You also don’t have to work out the contract, but only to read/check and sign a prepared contract.


Reputation & Customer Care


Great outsourcing businesses become great because they do a great job. Everything is simple here: the agencies make a great project/product they get a lot of positive feedbacks and their reputation grows the number of new customers expands.


A happy customer brings two clients, and the unhappy one steals ten


Maintenance & Support


Qualified companies are focused on building long-term relationships with customers and, of course, upselling more services. Therefore, they are always the first to offer their services for maintaining the created/existing products, fix bugs, and, if necessary, suggest any modification of functionality and other refinements.


Disadvantages of Hiring a Software Development Company


Higher Priced


Obviously, the software development team has a higher level of rates than the freelance development. It makes sense, because they make money from the margin they put on their professionals’ hourly rates.


Tough legal teams

Working with a development outsourcing company can put a lot of restraints on you. First of all, big businesses have much better legal support, and therefore – more conditions. Chances are if you’re not satisfied with the results they deliver, or, let’s say, the fail the deadline, their lawyers turn the case in such way, you won’t be the winner.




Another point is that, as a company, they have corporate rules and policies that may be not the most convenient ones for you. For example, if the project they’ve delivered needs an urgent fix in the middle of the night, you’ll be obliged to paying for overtimes or graveyard shift. With a freelancer, you just hire anyone who’s available right now and pay the usual price.


Poor management kills the benefits


Across all the agencies, the struggle is the same: if the person who serves as entry point for the tasks lacks professionalism, the whole project is doomed from the beginning.

The best advice we can give you: before you sign the contract and start working with any dev shop or an agency, make sure their account manager is good at their job. The minimum requirements are:


  • Nice and clear communication
  • They propose a transparent workflow
  • Proficient in English
  • Provide quick responses
  • If they’re unable to answer your question, they’ll match you up with someone more competent on the topic.

Comparison of Freelancers vs. Agencies: the Summary


CriteriaFreelancerSoftware Development Team
PriceLow RatesHigh Rates
QualificationExpertise in narrow fieldMulti-skilled in different fields
ReliabilityCan vanishWon’t vanish
Task ConcurrenceMulti-jobbingEach of teammate is responsible for his part of the job
Further Project PerformanceNo maintenanceWill upsell maintenance
TermsTemporary Contract or Long-term cooperationLong-Term Cooperation
Size of ProjectFrom small to full-timePerfect for Bigger Projects
ConfidentialityYou’ll need to sign NDAs if privacy is a concernNDAs usually included in the contract
TimelineFlexible HoursTime-limits or extra payments


Freelancers Versus Development Company: Whom You Should Choose


From the very start of this post, we point out that there is no universal response whether you should opt to cooperate with the freelancer or with a whole development agency.


You can conclude from the represented data, the freelance development is cheaper and perfectly fits rapid tasks/small projects while dev agencies might not be the best choice in such cases. Also, this type of workflow gives you unquestionable freedom of setting targets both at off-peak times and in the shortest term.


But from the other side if you have a scope of works as planned major projects and you don’t know how to manage freelancers, working with independent contractors may become a challenge.


The Never-Ending Battle?

Not really!


Both types of outsourcing your dev tasks we’ve covered in this article have their ups and downs. Hiring an independent contractor from a vendor that can’t guarantee delivery and quality has its obvious risks. On the other hand, if you decide to delegate the development to an agency or a big outsourcing company you won’t have the first-hand experience and direct communication with the developers, some things can get lost in translation, you will depend on your manager’s professionalism, and can forget about the flexibility you get with freelancers.


At Coding Ninjas we strive to combine all the benefits of working with freelancers and having a vendor who can ensure your task  will be done on time and according to your initial request, and hope to end the “freelancers versus development company” debates.


Here’s how we manage to do this:


  1. We only work with vetted developers. Any professional who applies to join our freelance network has to pass through our testing process that includes 4 steps:
    1. CV and background check
    2. English proficiency test
    3. Test project to ensure code quality
    4. Live interview
  2. When a client submits their task, they don’t have to choose among dozens of freelancers and make their best guess on who’s gonna do the job better. Instead, our team will match you with the developer who’s both available, and is the best fit for the job in terms of their skill set.
  3. We have obligations to our clients and care about our reputation. That’s why we strive to provide the best service even in case of unexpected consequences. Let’s say, a freelancer who’s been assigned to you had a force majeure and is unable to complete the task on time. Usually, when you work with freelancers, such situations turn into disasters. In our case, we’d just suggest another developer without shifting the estimates and costs.
  4. The freelancers who work with us get decent salaries. Most of them dedicate to the platform as full-time freelancers. That results in two things:
    1. They sincerely value the cooperation they have with us, and don’t let us down
    2. We are able to provide freelancers that not only can cover the small tasks and projects, but also those who are able to fill your full-time positions, which is extremely valuable for anyone who’s working with mid- to long-term projects.


So, if you’re in a place where you need something similar to what we offer, don’t hesitate and request free quote from us!


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