Freelancers VS consultancies – Which outsourcing option to choose?

When looking for external tech support, many organisations still trust in big consulting agencies without even considering the other alternatives for outsourcing. It’s important to understand the key differences between tech consultancies and freelance tech talents in order to make the right outsourcing decision for your organisation. So let’s find out how these outsourcing options differ from each other and which one is better suited for your needs!

Outsourcing software development

Managers look for external help in their software development teams for various reasons. They might be lacking specific expertise in-house or recruitment is too slow. A manager might need to ramp up production quickly or find an experienced mentor for the junior developers. A company might need to build a prototype or a completely new capability, but they do not have the resources to do it themselves.

Whatever the reason, as the need for external developers in a tech team grows, the managers need to start weighing their options and solve their most crucial problem: Where can I find the best possible people to solve my other problems?

Most often the choice boils down to selecting a partner from a group of well-known tech consultancies. Hiring a team or individual developers from big consulting agencies is often considered the safest option regardless of the situation. However, experienced freelancers are a very valid, yet still relatively unknown, alternative to consultancies.

Key differences between freelancers and consulting agencies

To demonstrate the differences between freelance tech talents and tech consultancies, let’s compare these two outsourcing options in several terms.

1. Price

When comparing prices between tech consultancies and freelance tech talents, a manager will find out that hiring individual consultants or larger teams will be more affordable when purchased through a freelancer agency compared to a tech consultancy. Reasons for this are based on the cost structure of the consultancies.

Tech consultancies need to pay salaries for everyone in the company, even the employees on the bench. In addition they spend great sums of money on expensive rents, employee well-being, and branding, just to name a few costs. Eventually, all these costs will be paid by the clients of the consultancies. On the contrary, the cost structure of freelancers is very light. Freelancers change only their hourly rate and the fair margin of their tech talent agency.

2. Expertise

Higher prices of tech consultancies do not mean the manager will receive better consultants or better service. Tech consultancies boast expert rosters showing off their best people in their proposals. There’s no denying the skills and knowledge inside these companies, but freelancer networks often have just as skilled people – and often there is a larger pool to choose from than with consultancies.

Consultancies must also find projects to their junior employees which means a client manager might not receive exactly what they want, but instead an inferior substitution from the bench. When making contracts with freelance tech talents, you get to choose the talents you work with and define how much experience they need to have.

3. Flexibility

Freelance tech talents offer ultimate flexibility for a manager both in terms of expertise and allocation. Contract negotiations with freelancers are easy and often very flexible. It is completely possible to find a freelance tech talent for any project duration without tying one’s hands to binding contracts or a fixed allocation level.

Flexibility with freelancers is also high when it comes to finding the best match for a project. When partnering with any tech consultancy a manager is limited to the current roster of the company. With freelancers a manager can expect to utilise a much larger freelancer network, which provides ultimate flexibility and a tool for most problems.

4. Support

All projects face challenges that prove to be difficult to overcome even with an elite team. When it comes to support, tech consultancies are hard to beat. While it is true that inside a developer from a large consultancy can usually reach any domain expert with just a simple phone call or a Slack message, freelancers are not without options when it comes to asking for help: freelancers have their own dedicated network where questions are answered and freelancers share learnings from their projects.

5. Team building

Freelance tech talents are the best option when a manager is looking to augment their team through a consultant with a specific skill set and knowledge. However, managers often need more than one person to take care of a task or a project. For these situations, tech consultancies provide ready-made solutions and can easily assemble teams from their roster.

Working with a freelancer (or multiple) means placing trust on the freelancer’s personal brand and the references on their CV. In the market there are companies, such as Thriv, who have vetted their freelancer network and can provide the manager with several quality freelancers to choose from. Tech talent agencies like Thriv are more than capable of building large teams consisting solely of freelancers. These teams can be handpicked by the client, or the agency can find the best matching talents for each position. Project management for a larger project is done similarly – freelancer agencies have some of the best project managers in their networks and they can help both in-house teams as well as lead consultant teams to success.

Which outsourcing option is right for you?

There is no right or wrong in consultancy business, but freelancers can be seen as a viable option to a tech consultancy in almost any situation. If your project requires a single person to augment the team or a few consultants to handle the heavy lifting, freelancers are a great choice with almost no downsides. If you have a larger project for which you are considering a tech consultancy as a partner, take a second to evaluate your options: utilising an agency such as Thriv could help you find a better team to make sure you reach your goals.

Learn more about the benefits of using freelance tech talents by reaching out to us!

Check out this blog post to find out the secrets behind our matchmaking process.

Akseli Olin - Head of Sales

Akseli Olin