Guide to Hiring a Software Development Company

Technological advancements push more industries and businesses to go digital, leading to a rapid increase in demand for tech professionals. This makes hiring software development company more challenging. This article aims to guide you in hiring a software development company. Here are some important things to note before hiring:

Types of outsourcing

Outsourcing allows the hiring company access to broader talent pools with relevant skillset and experience. There are three types of software outsourcing based on the software development company and the hiring company's location.

Onshore if the software development company is located in the same country as the hiring company. Onshore outsourcing offers high quality and face-to-face meetings between the hiring company and the software development company. It is more costly but with more hands-on customer service. This outsourcing strategy is more effective for projects with 4-12 months duration. 

Offshore if the software development company is located abroad. This outsourcing strategy is beneficial to companies with clearly defined projects seeking a more cost-effective solution as it costs much less than an onshore company.

Lastly, nearshore if the software development company is located in the hiring company's neighbouring countries. This outsourcing strategy is cheaper than going onshore. This can be a good option for staff augmentation to meet more extensive project timelines.

Defining project details

The hiring company should have a precise framing and scoping of the project they intend the software company to do. This should include a clear product strategy, feature list, annotated designs with technical requirements, launch, and feature improvement process. Specifically, it should consist of the value of the product, precise tasks for the developers, set of technologies to be utilized, and skills needed from the applying company. This should also include the timeline and the estimate of the cost of creating/building the project.

Shortlist of software development companies

The hiring company should have a list of software development companies they are looking for to hire. This list will serve as their menu in the hiring process. It should include an initial company assessment by looking into the company's projects, experience, expertise, and quality. It is also essential to be cautious of bad reviews, complaints, and lawsuits. Moreover, look into how these issues and concerns were resolved.

It will be beneficial to check the website of these software development companies. Most of these companies like have an informative website.

Verifying 'good fit'

It is essential to have sufficient information about the applying companies. This information can be gathered from their company profile and client testimonials which are usually present on the company's website like Moreover, the hiring company can collaborate with an application company for a pilot project to test drive their partnership.

Engagement model

There are different engagement models that the hiring company can choose from in engaging a software development company.

A fixed price is the engagement model if there is a fixed budget. This model is great for small projects when all functional and non-functional requirements are clearly defined, and the scope of the project is known and visible.

The time and materials model is similar to the fixed price model, except it has no fixed budget. It entails that the hiring company pays for the time and resources involved in the project with the software development company.

The extended team model allows the hiring company to recruit for the project, but the developers get to work only after the hiring company's approval. This model is also recommended for long-term projects with changing scopes or requiring full developer involvement. The price formation for a dedicated development team involves monthly payments that will depend on team size.


This is a crucial step in ensuring that the applying company is the best fit for the needs of the hiring company's project. This phase of the hiring process requires honesty and transparency from both sides. 
Importantly, this includes a set of contracts – masters services agreement (MSA), a non-disclosure agreement (NDA), statement of work (SOW). It is essential to include a non-compete clause, payment terms, and intellectual property rights clause into a contract.

Timeline for the hiring

It is crucial to lay-out the timeline for the hiring process. This is beneficial for applying companies and the hiring company.

Collaboration and communication

The hiring company and the applying company should be prepared for close coordination and frequent communication. These are key in guaranteeing that all the details discussed are clear to both parties. This communication revolves around work processes, responsibilities, tools, documentation, practices, rates, management, and experience.

An outsourcing partnership may still be used to your advantage if you already have your in-house team working on your business-specific software solutions. If the developers with the skills required for your project are scarce in your area, hiring nearshore or offshore software developers might help you improve your team with relevant skill sets. Many app development companies can sell you a model of Workers Augmentation that allows you exposure to skilled and inexpensive resources. All and all, a successful app technology partner will be able to provide you with the ability to set up a central, mixed or dispersed tech management team.

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