The question that always puts business owners in a difficult position and makes them think: develop an in-house development team or hire dedicated development teams? More and more often, the Dedicated Development Team model takes the lead.
A Dedicated Development Team is a collaboration model where a company engages a separate team of developers who work exclusively on their projects while formally remaining employees of a partner agency.
Why are more and more businesses choosing this model when they hire a dedicated development team? There are several reasons.
First, rapid company growth often requires urgent team expansion, and searching for and hiring dedicated development team members locally can take months.
Second, talent shortage in local markets is an especially acute problem in the US and Western Europe, where demand for niche IT specialists significantly exceeds supply.
Third, the need for unique expertise grows with technology development: AI, fintech, complex cybersecurity systems—these areas require specialized knowledge that isn’t always easy to find.
Over recent years, this model has rapidly gained popularity. Companies understand that hiring dedicated development team is not just an alternative to an in-house department, but a strategic business growth decision that allows faster market entry and more efficient resource utilization.
Next, we’ll examine in detail the process of creating such a team with all the advantages, disadvantages, and pitfalls.
Advantages and Disadvantages of Dedicated Development Teams
Advantages:
- Access to Global Talent Pool. You’re not limited by the borders of your city, country, or even your LinkedIn contact list. You can find the best specialists anywhere in the world through an established and extensive candidate database.
- Cost Optimization. Building a dedicated team will cost less than creating your own department while maintaining high work quality. Savings come from reduced HR hours for searching, no need to spend on office equipment, social packages, bonus and motivation programs, and other associated costs.
- Flexible Scaling. This approach allows you to quickly expand the team before a release, opening a new product development line, or improving existing features to keep up with competitors. This happens painlessly and can be done within 2-4 weeks without numerous interviews and hiring announcements.
- Complete Focus on Your Product. Unlike regular outsourcing where an agency might have dozens of clients, a dedicated team works exclusively on your tasks. You maintain full control over the process and product.
- Transparent Planning and Budget. By choosing a good agency and forming a good team, you’ll know exactly what the team’s work will cost per month ahead of time and can plan expenses accordingly.
Disadvantages:
- Time Needed for Onboarding. The team needs time to learn your product, processes, and corporate culture. But this is exactly what helps them integrate better and bring maximum benefit.
- Remote Format. Requires established communication and clear processes. But this also gives the business flexibility and the ability to work with the best talent regardless of geography.
7 Steps for Hiring Dedicated Development Team
1. Define Project Needs
The first and most important step requires clearly formulating what exactly you need. What roles are necessary: backend developers, frontend, QA engineers, project managers? What technologies will be used? What level of expertise is needed (junior, middle, or senior specialists) and in what quantity? Describe everything you need by tasks and estimate which specialists can handle them. Also define the final goal for which this work will be done.
According to PMI research, 47% of unsuccessful projects fail to achieve their goals due to poor planning.
2. Determine Project Budget
Decide what budget you’re ready to allocate for the team. Based on your needs and capabilities, determine how much you’re ready to allocate monthly for this. Do you need a fixed monthly budget, or are you ready for a flexible Time & Materials model? Define priorities: development speed, code quality, or minimum cost?
This will help facilitate and accelerate the selection and creation of a Dedicated Development Team.
3. Contact Agencies and Choose One for Collaboration
With clearly defined needs and budget, contact potential partners. Reach out to specialized companies that provide hire dedicated development teams services. Compare several options. Pay attention to experience in your niche, collaboration terms, and reputation.
Companies like Newxel specialize in helping to hire dedicated development teams quickly and efficiently. often incorporating AI interview processes to streamline talent assessment.
4. Agree on Terms with the Team
At this stage, it’s important to agree on:
- KPIs and success metrics
- Rates and payment model
- Deadlines and project stages
- Reporting format
Pay special attention to legal aspects: intellectual property rights, data confidentiality, and party responsibilities.
Set up communication channels and determine meeting rhythm. Prepare tools: Slack for daily communication, Jira for task tracking, GitLab for code work.
5. Sign Agreement and Onboarding
After agreeing on terms and signing the contract, team onboarding begins. This is the stage where you need to familiarize specialists with your product, business goals, key success metrics, and tools you use (for example, your CRM system, corporate chats, Slack, or Trello).
It’s also important to convey corporate values and communication expectations so the team feels like part of your organization. It’s also recommended to plan daily small introductory calls for the first week, once or twice a week for the next few months, and then as needed. Quality onboarding forms the right foundation for quality results.
6. Control and Monitoring
For effective work, you should immediately establish a transparent control system. Plan regular updates and meetings, determine sprint lengths, use task trackers and productivity metrics.
But do this not to control workers, since trust is important for long-term collaboration. Do this to quickly identify problems, adjust the work plan, and maintain stable product quality.
7. Team Scaling
When the project develops, there’s a need to expand the team. A properly configured system allows doing this without losing quality and efficiency.
If you work with a professional agency, the team expansion process will be simple and fast: they’ll help you select the right people quickly and accurately. Scaling flexibility allows responding to changing priorities.
How to Choose an Agency for Creating Dedicated Development Teams
So, it’s clear that the quality result of the engaged team largely depends on selecting the right partner for hiring dedicated development team. To avoid mistakes with the agency, when choosing a partner, pay attention to several key factors:
- Portfolio and Case Studies. Study the agency’s previous projects, especially those similar to yours in complexity and technologies. For this, it’s useful to review Clutch, where companies publish real cases and results.
- Client Reviews and Stability. Check the company’s market reputation, how long it has been operating, what reviews clients leave. On Clutch, you can also find real company reviews. Besides this, you can check LinkedIn to learn the opinions of former clients and employees.
- Legal Transparency. Clarity of legal processes, transparency of financial terms, readiness for detailed contract discussion.
- Geographic Factor. Consider time zone differences and cultural compatibility. For example, British companies often choose Eastern Europe for the optimal combination of price, quality, and convenient working hours.
Scaling and Long-term Team Retention
The right partner choice and systematic approach following the seven described steps significantly reduces the risks of engaging a Dedicated Development Team and guarantees faster product market entry or overall business growth.
Team retention is just as important. Invest in development programs, career growth for team members, involve them in strategic product decisions. This creates a sense of involvement and motivates more efficient work while forming loyalty as an employer.
When you hire a dedicated development team through a reliable agency, you get an optimal balance of price, speed, and quality. This solution allows focusing on business development while delegating technical implementation to experienced professionals.
