When to Hire Engineers vs. Work with an Agency

Hire full-time engineers when:

Full-time hires are an investment. You're paying for long-term value and institutional knowledge, not just immediate output. The best full-time engineers become force multipliers who improve processes, mentor others, and make strategic technical decisions.

• You have ongoing, long-term work (at least 12+ months of known projects)
• Deep product knowledge is critical (engineers need weeks/months to understand the domain)
• You're building core IP that defines your competitive advantage
• You need people embedded in your culture and decision-making
• The work requires continuous iteration and maintenance

Use contractors when:

Contractors are most effective when the problem is clear and the work is relatively independent. They're less effective when extensive context is needed or the work requires deep coordination across teams.

• You have a specific project with a defined scope and timeline
• You need specialized skills for a short period (3-6 months)
• You want to test a technology or approach before committing
• You need to scale capacity quickly for a peak period
• The work is well-defined enough that someone can start contributing quickly

Work with specialized agencies when:

Good agencies bring accumulated knowledge from similar projects. They've solved the problem before, so they avoid common pitfalls and deliver faster. The trade-off is less control and higher cost than individual contractors.

• You need multidisciplinary skills (design + engineering + product)
• You're building something outside your team's expertise
• You need to ship something quickly without ramping up internal capacity
• The project is high-risk and you want an experienced team
• You need strategic advice along with execution

Many successful companies use a hybrid model:

Core team of full-time engineers who own the product and architecture. Contractors for specific projects or to fill temporary gaps. Agencies for specialized work outside the team's expertise (AI implementation, SEO, infrastructure scaling).

This approach gives you stability (full-time team), flexibility (contractors), and specialized expertise (agencies) without overcommitting resources.

On paper, full-time employees seem cheapest per hour. But factor in recruiting time (3-6 months), ramp-up period (2-3 months for productivity), benefits and overhead (1.3-1.5x salary), and risk of bad hires.

Contractors and agencies are more expensive per hour but more predictable. You pay for immediate productivity, no recruiting costs, and easy scaling up or down.

The real question isn't 'what's cheapest per hour' but 'what's the lowest risk way to get this done well?'

Hiring full-time when you don't have 12+ months of clear work (leads to layoffs or people getting bored).

Using contractors for work that needs deep product knowledge (they'll spend most of their time getting context).

Using agencies for ongoing maintenance work (expensive and creates dependency).

Not having anyone full-time who owns the technical vision (even if everyone else is contract/agency).