Cost Comparison: In-House vs. Outsourced Teams

Companies must make strategic decisions about team structuring to optimise cost and efficiency. One key consideration is whether to hire in-house or outsource. Here’s the cost picture, backed by industry data.

The true cost of an in-house team

• Salaries & benefits: a US software developer averages ~$110,000/year, with benefits adding 30–40% more.
• Recruitment: $4,000–$7,000 per new hire in advertising and onboarding.
• Infrastructure & tools: $10,000–$30,000 per employee per year for office, equipment and licensing.
• Training: ~$1,300 per employee annually.
• Turnover: replacing an employee costs 50–200% of their annual salary.

The cost of outsourcing

• Lower labour costs: Eastern-European developers earn $30,000–$60,000/year — well below US counterparts.
• No recruitment or onboarding expense — the provider handles hiring.
• Reduced overhead — office, equipment and licenses are the provider’s responsibility.
• Flexibility and scalability — scale up or down by project need.
• Operational efficiency — specialised talent delivers faster, improving time-to-market and ROI.

Which is right for you?

It depends on business needs, budget and long-term goals. If cost savings and flexibility are the priority, outsourcing offers significant financial advantages. Companies needing full control and long-term retention may prefer in-house. Often, a blended model captures the best of both.