Kicking off a new development project? One of the big questions you may run into is freelance developers vs in-house developer. It’s not always an easy call — both routes come with their own set of advantages and challenges, and the right choice will depend on your goals, resources, industry, and how you like to work. By the end of this article, you may be surprised to discover that, in many cases, a combination of both options can be the most effective solution.
Before looking into the freelancer vs. in-house debate, let’s define “in-house developer” and “freelance developer.”
An in-house developer is a formal employee, that is, someone directly employed by a company according to the labor laws of their country.
A freelance developer does not have the legal status of an employee — and this can happen for a number of reasons, including the freelancer’s personal preferences or the fact that they are based in a different country where the employer does not have a formal entity. Some typical engagement models are project-based, hourly, or retainer.
In terms of the actual working process and collaboration, however, the differences between freelance developer vs in-house developer may be non-existent.
Now that we’re clear with the definitions, let’s examine the benefits and potential drawbacks of each model.
Benefits of hiring in-house developers
One of the most cited reasons for hiring in-house developers is that it’s easier to maintain company culture with them, especially when they work in the office regularly. As permanent members of the organization, in-house developers are likely to develop a deep understanding of the company’s culture and goals. A clear path for career progression further motivates them to collaborate and contribute meaningfully.
For very large companies, hiring in-house developers to work on-site — whether in a hybrid model or fully in-office — can be essential for ensuring efficiency and cohesion. That’s because, the bigger a company, the more complex it may get to operate fully remote and ensure efficient communication. In a small or mid-sized team, a manager can quickly notice if a developer is slacking off or simply not performing well. In contrast, in a bigger organization with a large number of teams, identifying these issues and maintaining oversight and control becomes significantly more challenging. An in-house, office-based work arrangement may help mitigate this problem by allowing for better supervision in the office.
Potential drawbacks of hiring in-house developers
One significant drawback of hiring in-house developers is the reduced flexibility in scaling the team. Expanding or downsizing becomes a time-consuming process: recruitment takes time, and parting ways with an underperformer may take even longer, depending on the country’s legislation — not to mention that it may be very costly.
Hiring in-house also entails substantial fixed costs — especially if your headquarters are based in high-cost cities like London, Frankfurt, or Stockholm. In addition to office-related expenses, you’ll need to account for higher salaries that reflect the elevated cost of living in these locations.
Furthermore, exclusively relying on in-house developers can lead to skill gaps, limiting your team’s ability to adapt to evolving technical demands. When you restrict your search for qualified candidates to your area, your options are limited — if your office is based in a smaller city, it’s even more limited. In contrast, with freelancers, the world is literally your talent pool.
Common situations in which companies opt for in-house developers
Companies may choose in-house developers when working on products that require ongoing development, deep technical ownership, and strict confidentiality. In industries like finance, healthcare, or defense, companies often prefer in-house tech teams to maintain full control over sensitive systems and proprietary technologies. For example, banks invest heavily in their in-house tech teams to build secure banking applications and manage vast amounts of customer data. In sectors like defense, there may also be strict requirements such as rigorous background checks and even nationality-based restrictions for personnel involved in critical projects. Hence, hiring freelancers is not an option.
In the tech industry, Apple keeps core product development in-house to protect trade secrets around its hardware and software innovations.
Benefits of hiring freelance developers
There are several advantages to hiring skilled freelance developers vs in-house developers.
First, they bring talent, expertise, and motivation to the table. Hiring freelance developers allows you to tap into talent from all over the globe instead of being restricted to your local area. This greatly benefits businesses located in regions with skill shortages or highly competitive markets. Moreover, there are many highly skilled developers out there who opt to work as freelancers to enjoy greater flexibility — selecting projects that genuinely interest them and maintaining the freedom to live in their hometowns or preferred cities while collaborating with international companies. Furthermore, because freelancers often work on a project basis and are less backed up by rigid labor legislation, they have every reason to deliver results quickly.
Freelance software developers bring valuable knowledge gained from their experience in various industries. This means new perspectives and ideas, which can be pivotal in overcoming project challenges. Additionally, freelance developers are an excellent option when a project requires specialized expertise, allowing you to fill specific gaps without the need for a long-term commitment.
Flexibility is a major advantage of contracting freelance developers: they can be engaged on a project basis, enabling your company to adjust its workforce according to demand. This elasticity also helps avoid the financial burden of underutilized staff during slower periods.
Companies can also save costs when hiring freelance developers. Of course, the more skilled a developer is, the higher the price. However, when a company in a high-cost country is open to hiring remote freelance developers, it opens the possibility of finding those highly skilled professionals for a better price in a low-cost country — that is, where salaries match the typically lower cost of living.
Finally, hiring freelancers can be a much swifter process than hiring an in-house employee, especially when a third party handles the process. This will save an employer precious time, eliminating the need to post job listings across multiple platforms and sift through CVs. Platforms like Jobshark specialize in this service, allowing you to quickly connect with qualified candidates in your time zone. They can start working within days rather than in months — which is normally the case for traditional recruitment.
Potential drawbacks of hiring freelance developers
Especially if working with multiple clients simultaneously, a freelance developer could be less invested in the long-term success of your product or your business goals. However, there are two sides to this coin: freelancers are often highly motivated to deliver strong results because their business depends on maintaining a solid reputation. Unlike in-house employees, whose performance issues might be addressed over months or even years before consequences are enforced, freelancers face immediate accountability. If a client is dissatisfied, the collaboration can end swiftly — giving freelancers a strong incentive to meet expectations.
Another potential drawback of working with freelance developers is related to communication, especially if they are distributed across different time zones and cultures. There’s room for misaligned expectations and delayed responses that can hinder progress. Of course, this can be worked around. First, to streamline communication, you can hire freelancers who are located within your time zone and speak fluent English. Second, with the right tools and best practices in place, integrating remote freelance developers becomes a powerful catalyst for productivity and collaboration. This shift doesn’t just enhance daily operations — it ultimately strengthens the foundation for scalability and long-term success.
Another issue is that freelancers set their own schedules and may not always be available when you need them most. For example, they could be booked out weeks in advance. This unpredictability can delay deliverables. A solution to this problem is, once you find a strong fit, hire them with a retainer contract. This type of agreement provides guaranteed access to the freelancer’s time and skills on an ongoing basis. It offers stability for both parties: the freelancer benefits from predictable income, while you gain full commitment. Over time, this setup can strengthen the working relationship, increasing trust, efficiency, and alignment with your goals.
Finally, one of the most cited concerns when working with freelancers is maintaining consistent quality. Indeed, without a solid vetting process, there’s a real risk that the final output won’t meet your expectations. To mitigate this, it’s important to collaborate with platforms or partners that enforce rigorous screening — like Jobshark, Toptal, or Proxify. They specialize in thoroughly evaluating freelance talent, helping you ensure that the developers you hire have the right skills, experience, and overall professionalism needed to deliver high-quality results.
Common situations in which companies opt for freelance developers
Many early-stage start-ups will opt for freelance developers to expedite product development — while allowing for experimentation before implementing a permanent team structure. Slack notoriously did it in its early days, hiring expert developers for a few weeks or a couple of months to help build a robust product without the overhead costs and time associated with augmenting the in-house development team.
Many companies choose to contract freelance developers when they need something built quickly and that won’t need long-term maintenance post-launch. Also, they may decide to contract freelance developers when they only need part-time work for something very specific. Or when they need to augment the team temporarily, either during peak development cycles or when the in-house developers are overloaded.
A growing trend among tech teams is adopting a hybrid model that combines in-house and freelance developers. Companies approach this setup in various ways — for instance, some choose to allocate core business and strategic initiatives exclusively to the in-house team, while assigning more peripheral tasks to freelancers. While this approach is valid, it shouldn’t be seen as a hard rule. When working with highly skilled freelancers, excluding them from strategic initiatives means underutilizing (or, let’s be straightforward, wasting) valuable talent.
Another approach to hybrid tech teams comes from companies increasingly viewing freelancing as simply another way of working. The normalization of remote work since the pandemic has blurred the lines between employment models. So, as long as the individual is a good fit for the role, it matters less whether they’re hired as a freelancer developer vs in-house developer.
While large companies in industries like defense or banking may opt for in-house developers as the obvious choice, for most organizations, the freelancer developer vs. in-house developer debate isn’t about choosing one over the other — but rather about finding a strategic balance between both.
With the rise of remote work and the possibility of expanding your talent pool, the most important thing is finding a suitable developer amid the current IT talent shortage. Only once you’ve found a strong fit should the focus turn to selecting the employment model — freelance developer vs in-house developer — that best serves both parties.
In essence, the core issue isn’t about legal classifications or employment types. This has become secondary. The real decision lies in defining a clear remote work policy and establishing the processes that make it successful. With this foundation, organizations can confidently build hybrid teams that combine the strengths of both models, gain access to international talent, and achieve cost efficiencies along the way.
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