Hiring dedicated developers vs using a dev shop

As a CTO, choosing between hiring dedicated developers and engaging a dev shop, or development outsourcing agency, isn’t always straightforward.

While both options should provide the same outcome, the journey to getting there is quite different. The suitability of each approach depends on your specific needs and goals, for example in terms of cost, flexibility, cultural alignment or communication. This article will explain the differences between dedicated developers and dev shops and examine the pros and cons of each.

Dedicated developers

Dedicated developers are software engineers hired to work exclusively for you over a specific or ongoing period of time. Carbon is home to 3,000+ dedicated developers, or Carbonites as we like to call them. They typically come in two forms:

Full-time employees who typically receive a salary, bonuses and equity. Giving employees equity encourages long-term commitment, this applies to employees who have been hired directly by your company and those hired indirectly through an employer of record (EOR).

Fixed-term contractors who work exclusively for you for as long as you need, whether that’s three months or several years. This arrangement is more flexible for you and for the developer – there are typically no notice periods, or only very short ones, and there are no costly severance packages.

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Note on hiring fixed-term contractors

In the US and other Western markets, contractors and freelancers are often considered to be temporary hiring solutions for short-term and part-time engagements. They are sometimes, perhaps wrongly, thought of as mercenaries who are only in the job for the paycheck.

In Carbon’s talent markets of Central and Eastern Europe and North Africa, this isn't the case. Due to varying income and employment tax rates, it has become standard practice for a large and growing portion of the developer talent market in these regions to work on full-time contract engagements. Senior engineers who are more accustomed to working remotely for foreign companies particularly favour this way of working.

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Working with dedicated developers

Direct control and communication – you have direct access to your developers which makes it easier to precisely implement your vision.

Flexibility and scalability – because you can hire for the specific skills you require, you can seamlessly scale your teams up or down based on your project needs.

Long-term engagement – dedicated developers can grow with the project, understanding its intricacies deeply.

Cost-effectiveness – given the reduced management layers, it’s more cost-effective in the long run to work with dedicated developers than a dev shop.

Cultural fit and team integration – you can choose developers who align with your company culture and integrate into your existing teams.

Dev shops

A dev shop, or development outsourcing agency, is a company that provides software development services to clients. Dev shops typically provide an entire team of developers, designers, project managers, and other specialists to work on various projects, often in parallel to each other.

Working with dev shops

Team-based approach – you will be provided with a team of professionals with diverse skills to work on different aspects of a project, such as development, design, testing, and project management.

Project-based engagement – dev shops typically work on a per-project basis, so you could engage a team to tackle a specific section of your codebase, for example building a new app. The team will work on the project for a defined period then, once the project is completed, they will either stop working with you altogether or you can assign them a new project.

Specialised expertise – agencies typically have experience with a variety of projects so they may be able to execute projects more quickly than dedicated developers because they already have established workflows in place.

Less integration – while collaboration will be prioritised, the level of integration with your internal team might not be as deep as with dedicated developers.

Communication – there may be an intermediary layer between your company and the agency’s team which can introduce communication challenges, especially for non-native English speakers.

Considerations when deciding between the two

Both approaches have their merits. Ultimately, the decision to go with dedicated developers – full-time employees or fixed-term contractors – or a development agency depends on several factors:

Nature of the project – for specialised, long-term projects, dedicated developers could be more suitable. For shorter projects with a broader scope, a dev shop could be more efficient.

Budget constraints – dev shops have substantially higher upfront costs but might provide more predictable budgeting in the long run. Dedicated developers have lower initial costs but may require more time and management investment down the line.

Management capacity – if you have the capacity to manage and direct a team, dedicated developers are a good choice. If not, a dev shop’s project management bundle may be more efficient.

Scalability needs – it’s important to consider how quickly you need to scale your team and the specific skill sets you require to do so. While dev shops might have fully managed teams, they’re often circulated from project to project whereas dedicated developers can grow with you.

Though it might take longer to hire dedicated developers, you can save time by partnering with a remote hiring partner, like Carbon, which has deep connections in strategic talent markets, like Eastern Europe. You could even explore an alternative, innovative staffing model that offers seamless integration between external and internal teams.

Carbon is the go-to staffing specialist for Eastern European and North African technical talent. Trusted by the biggest names in technology and venture capital, Carbon’s hyperlocal expertise makes entering new talent markets for value-seeking global companies possible.

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