At first glance, the in-house vs outsourcing comparison seems simple. A full-time local hire might cost $5,000 a month with taxes and benefits. An offshore hire? Around $2,000. On paper, outsourcing seems like the obvious choice.
But salary isn’t the only factor anymore.
In 2024-2025, agency margins are thinner, client expectations are higher, and AI is accelerating timelines across the board. The pressure to keep up is real, but most hiring systems haven’t caught up.
That’s why more agencies are starting to change how they hire. Instead of trying to do everything themselves, they’re working with offshore teams that are quicker, more flexible, and easier to grow.
So how do you decide which path makes more sense? Let’s take a closer look.
The Hidden Costs of In-House Hiring
Hiring locally seems less risky, but it often includes costs that go far beyond basic salary. Here’s what tends to get overlooked:
Hidden cost | Impact on your business |
|---|---|
Recruiting time | Even with an internal recruiter, someone senior (typically the founder or a department lead) still reviews the final candidates. SHRM estimates that hiring takes an average of 42 days, with the average cost per hire at $4,129. Internal team members, including founders or department heads, may still spend dozens of hours per hire on interviews, scheduling, and other hiring tasks. |
Onboarding drag | Most new hires only work at about 25% of their full ability in their first month. Many need 3-6 weeks of active mentoring before they’re fully up to speed. That means ongoing time from experienced team members, not just a one-time setup. |
HR & compliance | Payroll taxes, benefits, legal reviews, policies are essential, but none directly contribute to revenue. |
Turnover risk | In many tech roles, average tenure is under two years. When someone quits, you start the cycle again, with added pressure if deliverables are already behind. |
In-house might feel more hands-on, but it doesn’t guarantee long-term stability.
Modern Outsourcing ≠1990s Outsourcing
Outsourcing today looks nothing like the call-center setups of the past.
Instead of rotating freelancers or one-off contractors, modern offshore hiring means full-time professionals who are embedded in your team. They join your Slack channels, attend meetings, and use your tools just like local hires do. The only difference is where they’re based.
And because you’re not managing payroll or navigating local labor laws, your team grows with less operational friction.
Here’s what that can look like in practice:
Outsourced IT vs In-House
A SaaS company in the UK tried to hire two local front-end developers with base salaries of around £70,000. After three months and over £20,000 in recruitment fees, they still had unfilled roles. (UK agencies typically charge 15–20% of a candidate’s first-year salary, and even more for niche tech roles.)
They turned to an offshore hiring partner. Within two weeks, they had two full-time developers based in the Philippines, with four hours of daily overlap with the UK timezone. The product roadmap was back on track within two months, and they didn’t have to pause delivery due to hiring delays.
Outsourcing Customer Support
An e-commerce brand wanted to improve their response time but couldn’t afford to keep expanding their local support team. They moved email and live chat support to an offshore team. Customer satisfaction (CSAT) rose from 88 to 94, and first reply times dropped below 15 minutes without sacrificing tone or quality. The local managers could finally focus on CX strategy instead of handling escalations.
Outsourcing doesn’t mean settling. It means tapping into global talent with the structure and accountability of a long-term hire plus the added benefit of an Employer of Record (EOR) handling compliance, payroll, and contracts.
In-House vs Outsourcing: Common Myths
“It’s easier to ensure quality when you hire local.”
What many founders mean is: “It feels safer when we’re in the same room or timezone.” And that’s fair. Face-to-face builds trust quickly. But real quality doesn’t come from proximity. It comes from structured processes: strong vetting, documented workflows, clear KPIs, and regular feedback loops.
Plenty of in-person teams underperform when expectations aren’t clear. A well-managed offshore setup with the right partner can actually offer more visibility and consistency over time.
“Clients won’t accept offshore work.”
Most clients care about outcomes, not locations. They want delivery they can count on, especially if they’ve been burned by delays or last-minute changes before.
When you tell them you’ve expanded your team to improve capacity and reduce risk (without compromising on quality), you’re giving them more reason to trust you, not less.
“Communication is always easier in-house.”
That depends entirely on the setup. Local doesn’t always mean available, especially when the team is stretched or overloaded.
Our offshore teams use a mix of async and live tools: Slack, Notion, ClickUp, Zoom, and others, to stay aligned. They can provide clearer, more consistent updates than in-house teams juggling too many hats. With timezone overlap and intentional workflows, offshore communication can be just as smooth or sometimes even better.
Hybrid Model as an option
Not every task needs to stay local. And not every offshore role is “just execution.”
While some founders keep high-context or compliance-heavy roles in-house (like government-linked dev work), they still delegate customer support, design, and other repeatable tasks offshore, often because speed and bandwidth matter more than proximity.
From the roles we’ve filled lately, here’s what we’re seeing:
Often Kept Local | Offshore Candidates Clients Are Exploring |
|---|---|
Client-facing strategists | SEO specialists, developers, email marketers |
Creative leads | Designers (UI/UX, graphic), social media managers |
Core engineering roles | Full-stack developers, app developers, data engineers, QA testers, support reps |
Choosing a hybrid model doesn’t bypass the in-house vs outsourcing decision; it sharpens it. You just have to be intentional with every role, not defaulting to either side.
Ask yourself:
For example, one client with strict data policies runs his dev team in-house, but we support his sales follow-up and after-hours support through vetted hires in the Philippines.
It’s not all-or-nothing. It’s the right mix for what your team actually needs to grow.
Not sure which way to go? Start with this.
If you’re unsure whether outsourcing is even on the table for you right now, here’s a simple way to assess.
We put together a list to help you spot the signs based on real patterns:
Hidden Costs in Black-and-White
When making the in-house vs outsourcing call, it’s tempting to just compare salary lines. But once you stack up everything else, such as benefits, taxes, admin time, recruiting effort, the cost gap widens.
Here’s a real-world breakdown we calculated for a UK-based full-stack developer with five years of experience:
Cost item | Local hire | Offshore hire |
|---|---|---|
Base salary | ÂŁ70,000 | - |
National Insurance (15%) | ÂŁ9,750 | - |
Pension (3%) | ÂŁ2,100 | - |
DIY recruiting (30 hrs Ă— ÂŁ60) | ÂŁ1,800 | - |
HR admin & tooling | ÂŁ1,500 | - |
Laptop & desk space | ÂŁ1,000 | - |
Total local cost | ÂŁ90,000+ | - |
All-in offshore cost |
| = ÂŁ33,000 |
This looked like “£70k vs £33k.” But once you factor in the hidden overhead, the actual saving is closer to £56k plus fewer HR obligations.
Note: The offshore total reflects the all-in cost, which already covers health insurance, salary tax, tools, and other benefits. These figures are based on UK industry averages and client data from our internal hiring cost calculator.
What you’re really deciding
You’re choosing between:
You’re choosing between doing things the way they’ve always been done or setting up a system that finally gives you room to scale.
This post laid out what the in-house vs outsourcing model actually costs.
Now ask: Which one gets you where you want to go faster?
You don’t have to figure this out alone.
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and we’ll show you what this could look like for your team.
