Internal development: Pros and cons

Latest posts by David Pawlan (View all)

The definition of in-house developer has changed over time given the wave of remote work. You can now be thousands of miles from your home office, but still be an in-house engineer.

Even amid the growth of remote work, in-house development still remains the conventional model for building a development team. But any business owner starting out or looking to expand should consider the pros and cons of in-house development.

So, what is internal development? Simply put, it’s when you build an internal software development team. This means that you are hiring full-time employees for your company, not a contractor.

To put it another way, you’re working with a W-2, not a 1099. And the output of that internal hiring includes everything from managing the hiring process to payroll to HR.

(For a look at the other side of in-house development, see our analysis of software outsourcing here.)

Benefits of an integrated in-house development team:

Hiring the entire development team in-house is arguably the most common method of building a software development team out there. That way, you’ll enjoy the many benefits of having an in-house development team.


When you hire an internal development team, you inherently gain more control over your team and its roadmap. These people are your direct hires, so they are guided by your orders. You own the process of onboarding these developers and teaching them the processes and philosophies you want them to follow. As full-time members, they begin to learn the organization more thoroughly, making them effective employees who can adapt more eloquently to the company’s needs.


Communication can be one of the most difficult aspects of developer management. As your internal team, you can communicate directly with the developers themselves instead of having to interface with an intermediary. This level of direct communication can help reduce ambiguity and miscommunication.


When you hire an internal team, you’re hiring a team that you hope will grow with you as a company. This means you have consistency in talent. You’re investing in the future, not just the immediate gratification of building a product. By retaining your development team, you build domain expertise that becomes incredibly valuable to your product roadmap, a position that doesn’t always come together when you contract with temporary developers.

Sign up for 12 new, free courses on topics from SBA loans to influencer marketing. Verizon Small Business Digital Ready.

Disadvantages of an integrated in-house development team:

While hiring in-house developers offers many advantages, it also has some disadvantages that place it as a risk that every company must weigh. There are three main negative aspects to consider before deciding to hire an in-house team.

Bandwidth limitation

While it’s great that your team developer is committed to your team, you also need to consider that you’re limited by their knowledge and bandwidth. If you need some quick work done in a different technology, you can’t draw on other resources like you could when outsourcing. you’re stuck with your team, so you’re bound to its limitations.

Time intensity

It takes a long time to hire the right person. In some cases it can happen in weeks, but in others it can take months. You need to find the right candidate, put them through an interview process, and then if you decide to hire them, you need to spend at least a month getting them on board and up to speed. Overall, it is a very time-consuming endeavor compared to the speed of outsourcing.

High cost

As we all know, time is money. When something takes a long time, it means it costs a lot. Hiring an in-house developer is not only more expensive from a salary perspective, but also from a process perspective. You should expect to pay an in-house hire at a multiple of what you could otherwise hire for when outsourcing. You also need to consider the amount of overhead it will be to manage this in-house developer and factor that into your cost projections.

So how do I get started?

If you are hiring internally, check out sites like Embedded to publish your work. BuiltIn is an awesome website that highlights tech jobs. You tend to get great leads through BuiltIn’s network and outreach. You should also rely heavily on your own networks, such as LinkedIn, as well as personal connections who are familiar with your work needs and have a community they can connect you with.

Whichever route you take, make sure you’re ready with the right hiring infrastructure to onboard your new developers, as well as the right benefits system to keep them as your employees.

Not sure if internal recruiting is right for you? See our thoughts on outsourcing your software development, either entirely or by supplementing your in-house team.

Leave a Comment