Freelance Developer vs Software Development Agency: Which Should I Hire?

April 29, 2023

In today's fast and technology-driven business landscape, it is critical for companies to outsource their software development. Outsourcing helps businesses be efficient and agile in building their software applications.

By reading this, you are already thinking of outsourcing your software development. But where do you start? Which should you choose: hiring freelance developers or getting services from software development agencies?

Let’s explore the advantages and disadvantages of the types of outsourced software development, as well as which outsourcing style is best for you, your company, and your industry.

Freelance Developers

Freelance developers are skilled contract-based workers that companies can outsource to help them in the creation of their software applications.

A freelancer usually offers certain skills that they specialize in, which can help boost an already existing in-house team or a team consisting of several other freelance developers.


  1. Lower costs - Individual freelancers cost less to hire than getting a full-service software development agency. Which is a major consideration given that 70% of businesses choosing to outsource do so to reduce costs and save money, according to a Deloitte study. Hiring freelancers would provide value for money as they are experienced in handling various projects and clients in their niche, and they do not require the same benefits as regular employees. You as a client pay for the specific service you require.
  1. Lightweight hires and specialized expertise - Rather than hiring an employee that needs a myriad of benefits, a company can opt to hire one or two flexible and agile freelancers to help beef up the development team. Freelancers are contracted and get paid only for the service and output they provide, so there is little to no hassle or friction in hiring them.
    Hiring a freelancer also gives companies access to their specialized skills which will help augment the capabilities of the development team. Businesses can also go for freelancers who are generalists. Generalists have experience in and are continuously branching out to various areas in a field or industry. They are learners, so they can fulfill multiple tasks and functions at a time as an upside, but the downside is that they are not experts. Whether generalists or specialists, a company can enjoy the hassle-free services that freelance developers can offer.
  1. Flexible - Freelancers are flexible as you can hire certain skill sets and assign them tasks according to your needs, wants, and preferences. You also have the option to teach them the ways of the organization, adjust to the culture, and even train them with a few soft or hard skills as you see fit. They can be fully integrated with the organization like an in-house employee, or they can be at arm's length, depending on the client.
  1. Can build trust and grow together with the company and the organization - Since they are flexible, freelancers can integrate easily and build trust with the in-house team and the whole organization. Some freelancers, who are a good fit with their clients, build trust over time that they eventually become a part of the organization. This is thanks to the closer communication, connection, and smoother collaboration that is usually forged between a client and a freelance worker compared to software development agencies. Better communication means better alignment and can help with the efficiency of the team.


  1. Only complementary - a freelance gig worker can only complement an already existing team. Building software has a lot of components – it is almost impossible, or painstakingly slow, to rely on only one or two freelance tech workers to develop a software application from start to finish.
  1. Burden for companies to build their team, hiring individually - A company would need either an existing team, or build a development team composed of multiple freelancers before choosing to hire freelance workers. This means that you will have to go through the hassle of building your team first, hiring individual workers, setting up standards and procedures, identifying performance metrics, and laying down safety and security protocols, among others even before starting the development process.
  1. Uncertainty with skills and expertise - It is not easy to hire freelancers as you are not so sure if they really can deliver on the skills they claim to have (unless they have a free trial for you to test out, but most likely you won’t see any). It will take some time – most likely would take a long-term work agreement – to see if they are a good fit with the team and the organization. 

BOTTOMLINE: Hiring freelance developers is the best for companies only looking for distinct specific skills to improve their already existing in-house development team. This is also perfect for companies wanting to be hands-on on the project, and has the time and patience to go through building the development team and learning the ropes.

Software Development Agency

Software development agencies will provide dedicated development teams for your project. These teams, with a project manager included, usually take over the whole development process from planning to deployment and even maintenance.

Booking an agency and its team means little to no stress in the development process as agencies have pre-vetted teams and developers who are trained to deliver fast and quality output and provide progress reports as often as the client wants. 


  1. Professionals with established credibility - At a certain level, agencies are trusted as they have the experience and expertise in catering to clients and making sure that they get the most service or output out of their money. Agencies maintain a certain standard in the quality of service they provide, and every client feedback and comment is important to them for business continuity.
    In this respect, agencies have a mission to meet and even go beyond client expectations to keep them happy. So this will reflect in their delivery and output – quick responses, quality output, regular reporting and updates, agile team, an initiative in problem-solving or avoiding a potential crisis, and many more.
  1. Can give assurance - Clients are assured to receive quality work equivalent to the money they invested when they book an agency. Agencies must provide quality services or else they will compensate you, the client, for any errors or shortcomings on their part. 


  1. More costly - Agencies tend to be more costly upfront as you are booking a whole team. It can be challenging to sustain in the long term especially for smaller businesses as it is a sudden major expense, compared to hiring individual freelance developers that you can build up over time.
    But these costs will be justified and profits from the project can be realized sooner if a company hires an agency with a proven track record of experience, or an agency that is focused on bringing value and agility for its clients regardless of its experience or size to deliver the software faster than expected. 
  1. Some degree of risk and less control -  We’ve said agencies can give assurance, yes, but there are also some risks involved with high costs. As you hire a whole team of developers, you are counting on the team to take charge of the project from start to finish. But if something goes wrong or you find out that the team is not a good fit for the company, it is hard to change service providers midway as the team already knows the project – even if you are not satisfied with their services.
    Getting a whole team also means less control and oversight of the project. Yes, clients can still be involved, but paying an agency means you are paying for a complete team with a project manager. They can execute, manage, report, and deliver the project according to the briefs provided to them, whether or not you are involved in the process. 

BOTTOMLINE: This is best for companies that do not have core expertise in software development, need an agile team, and have the budget to sustain hiring a whole team for months to years.

The Best Option Having the Best of Both Worlds: Managed Developer Teams That You Can Customize

A managed development team like Gigster is the most flexible as it provides a pool of experienced developers and project managers with specific competencies per industry or field. The network can assemble on-demand teams, or present individual hires according to the software development needs of the client and the industry.

This ensures that the company gets the team or individual talent that is tailor-fit to their needs, the culture of their organization, their project specifications, and their business goals.

Even midway through the project timeline, if a company requires adjusting the team, the managed developer network can fulfill this. Whether adding certain skill sets and talents or reducing workers midway for a lean team, managed developer networks such as Gigster do this through the use of artificial intelligence (AI) and other tools to configure and improve team structures, efficiency, and agility in project development.

Companies like Gigster help clients meet their needs at every stage. Gigster is a fully managed software delivery platform providing companies access to over 900 global tech experts in different niches and fields, who are the top 1% of talents in their respective industries.

A managed developer network takes outsourced software development to the next level with its use of new technologies and top talents to assemble a team with the necessary skills to complete the project and to provide solutions for clients and their software projects.

Overall, it can be confusing to know which type of outsourcing would be best for your software application project. But having the option to hire a team and having the flexibility to adjust it to your requirements at every stage is important and can lead your project to success.

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