Freelancer vs. Employees vs. Company: Which Is Right For Your Software Project? November 14, 2018 | Blog

One of the difficult decisions as an enterprise owner one has to make is hiring a software developer since this is one of the most vital strategic steps of a business. The decision to hire software developers for the brand to design and develop software is crucial because it will determine the future of the product, or a brand whether it will be a success or a failure. The decision of whether to have a software developed by a custom software development company or a freelancer or hire a fulltime employee can be quite challenging because it is not always about the cost.

If one seeks the opinion of the professionals of the industry they will often tend to side with the service they have chosen for their brand or products. In reality, however, a business owner needs to make an informed decision about the kind of software development services and from whom they want to get it.

A business owner needs to bear in mind that none of the 3 are better than the other, each service provider has their strengths and weaknesses based on the project that they work on and under which environment. As an enterprise owner whether small, medium or big one needs to consider whether the project is long term or short term, the kind of project it will be, and the budget?

Long Term vs. Short Term Project

One needs to consider the following questions about their projects first:

  • How long will the project run and do is there enough resources for the project?
  • Does the project require ongoing maintenance and regular update for the product?

Project Details

After deciding on the tenure of the project one needs to consider the specifications of the project like:

  • The technical requirement and the features needed
  • Do you require additional guidance on the specificities of the project?


This is crucial, as it will also determine the service one can get. Though not necessarily has to equate to a small budget means hiring freelancer and a huge budget equals to web development companies or hiring employees. The decision to seek the service whether, of a freelancer, employee, or a company should be determined by the project and its length. For example:

For a year-long project which would benefit your company more a full-time employee or a person hired on an hourly basis?

Communication Style

Another factor to consider while one hires a software developer is what kind of communication style would one prefers. Out of the three types of options two imply conversing remotely, are you alright with that?

In the next section, we will look into each kind of developer and their pros and cons.


Freelance software developers execute their tasks remotely most often mainly because they are high in demand. Generally, a freelance developer is hired for a particular project and an agreement is drawn which is generally they get paid after the job is done or a percentage is paid at the beginning and then the rest amount on completion.


  • Rates are much lower than web development companies offering software development services. Also, employers do not have to cover taxes, health insurance, supplies, hardware, etc.
  • There are many efficient software developers who are easy to find on platforms like Upwork, Toptal, Guru, Crew, etc.
  • With competition, freelancers generally develop and master a skill and accumulate experience on that so for specific areas they are the best.


  • To hire software developers as freelancers can be a headache to the employer by doing a disappearing act for a few days since they work on multiple projects at a single time. Also, there is always the risk of disclosing confidential and intellectual information.
  • Since they get paid once the work is done at times quality can suffer. They do not need to offer extra maintenance services.
  • With specialization in a single area, they lack the ability to view and work on the entire project with precision.


With a company hired employee one can be sure that they will devote 40 hours of work per week typically for a project. A full-time worker can be paid on an hourly or monthly basis.


  • A dedicated worker of your company who is part of your team and will promote your brand or product. He/she is fully accountable for the work they do.
  • Full-time employees are often more motivated than freelancers because they need good appraisals hence at times work longer hours to meet deadlines when a software project is in development.
  • With full-time developers, the need for training for new technologies, frameworks, and tools can be less of a botheration for the employer.
  • As an employer one can maximize the capacity of the developer by asking to focus on a particular task or even ask to multi-task.


  • Apart from the salary, the employer has to pay other entitlements like paid leaves, payroll taxes, health insurance, etc.
  • While during the deadline they do work overtime but when things are normal often productivity reduces.
  • Even if someone is not working properly it is difficult to terminate an employee compared to a freelancer because the former can always bring in legal issues.


Hiring a provider of software development services is often the best choice if one wants reliability, professionalism with quality end- products, and security.


  • A software development service company often offers the entire range of service, i.e. from business analysis, consulting, to idea verification, development, implementation, and if required maintenance too.
  • The team often consists of experienced and skilled professionals who keep up to date with the latest technologies and trends in the field of software development. They also work closely with the enterprise and has a smooth workflow with a positive attitude. This is because they care about the reputation of their company.
  • They maintain a good portfolio that can be quite reassuring for an enterprise owner about the web developer’s services.
  • They guarantee reliability and security of the information that is shared by the enterprise.


  • Generally, a company offering software development services has higher rates than a freelancer.
  • The hourly rate of the companies can be drastically different depending on the region from where the service is being hired. E.g. India charges $10-$20 per hour whereas the US and Europe charge $200-400.
  • The choice is hard to make on which web development company to select with a list of about 15,000 companies enlisted for web development in the directory.

The choice between freelancer developer, employee as a developer, or whether to hire a contractual custom software development company should be determined by all these above criteria along with the type of business goals one has. Also the location, economy, and style of the company but as mentioned earlier each type offers something special.