How to Hire an In-House Software Development Team

Hiring an in-house software development team can improve collaboration, increase innovation and give businesses a competitive edge. While outsourcing development provides flexibility, having an in-house team makes aligning company goals with the work culture easier.

Today, 90% of employers say they struggle to find qualified candidates — and with the demand for software developers expected to grow by 17% through 2033, the pressure to build talent pipelines for the future remains high. This guide explores the benefits and challenges of moving development in-house and shares strategies to help recruiters hire a software development team.

Benefits of Hiring an In-House Software Development Team

Building an in-house software development team offers many advantages, especially for businesses with ongoing development needs. Unlike outsourcing, an in-house team is a dedicated group of tech professionals integrated into the company’s culture and long-term vision. Here are some of the benefits:

• Better communication: Direct communication supports faster decision-making and problem-solving. Teams working in-house can hold real-time discussions, brainstorming sessions and meetings.
• Greater control: Companies retain full oversight of their projects, from setting priorities to adjusting timelines. This control means that the final product aligns with business objectives.
• Increased security: Developing software internally reduces risks, such as data breaches and intellectual property theft, as sensitive information stays within the company.
• Reduced long-term costs: While initial investments in salaries and infrastructure are higher, in-house development eliminates recurring licensing fees and provides better cost efficiency for iterative improvements.
• Improved productivity and support: Businesses with an in-house team have access to continuous updates and prompt troubleshooting. A dedicated team working solely on a business’s projects eliminates distractions.

Challenges of Building an In-House Software Development Team

As artificial intelligence, automation, the Internet of Things and robotics continue to expand over the next decade, the Bureau of Labor Statistics projects an increased demand for software developers, quality assurance analysts and testers. Some of the challenges to building or scaling an in-house tech team include:

• High recruitment costs: Hiring software developers is expensive. The average cost per hire can reach nearly $4,700. Recruitment costs can be significantly higher for specialized roles.
• Lengthy hiring timelines: On average, it takes 35 days to hire a software engineer, with some processes extending up to two months. Delays in sourcing and screening candidates can slow project timelines.
• Ongoing personnel costs: Maintaining an in-house team includes benefits, retirement contributions, infrastructure investments and salaries.
• Keeping up with new technologies: Businesses must invest in continuous training to keep their teams current as AI, IoT and other technologies evolve. It’s also important to manage team productivity to keep performance consistent.

Steps to Hire a Full In-House Software Development Team

Following these steps can help recruit software engineers for your company:

1. Determine the Team’s Composition

Define the roles the team will need to succeed. Typical positions include software developers, designers and quality assurance specialists. Projects might also need system architects or DevOps engineers, depending on the company’s goals. Understanding the requirements will help you hire the right mix of skills.

2. Establish a Competitive Salary Range and Benefits Package

The median annual wage for software developers in May 2023 was $132,270, with the top 10% earning more than $208,620. The median wage for QA analysts and testers was $101,800, with the highest-paid earning over $164,520. Offer competitive salaries aligned with industry benchmarks to attract top talent, and don’t skimp on benefits such as flexible work arrangements, professional development opportunities and health insurance.

3. Create a Talent Acquisition Strategy

Leverage multiple channels to attract candidates.

• Job boards: Post listings on platforms such as Dice.
• Employee referrals: Encourage the current team to recommend candidates.
• Recruitment agencies: Partner with agencies to access a pool of pre-screened talent.
• Tech communities: Engage with developers on platforms such as GitHub or Stack Overflow.

4. Develop a Structured Interview Process

Design a multi-step interview process to assess technical skills, problem-solving abilities and cultural fit.

• Technical assessments: Use coding challenges or pair programming sessions.
• Behavioral interviews: Explore candidates’ teamwork and communication skills.
• Culture fit interviews: Seek candidates that align with the company’s values and goals.

5. Set Up Necessary Infrastructure and Tools

Prepare the workspace and invest in the tools the team will need, including software development platforms, collaboration tools and secure hardware.

Key Roles in an In-House Software Development Team

Assembling the right mix of skills and expertise is important when building an internal development team. These are some typical roles:

Database Architect

Median salary: $134,700 per year

Database architects design and maintain database systems to support efficient data storage, retrieval and security. They also optimize database performance to handle high traffic and large datasets, giving the team a reliable, scalable foundation.

Computer Programmer

Median salary: $99,700 per year

Computer programmers write and test code for software applications. They also troubleshoot issues and debug to maintain system functionality and develop new software solutions.

Project Management Specialist

Median salary: $98,580 per year

Project management specialists plan, coordinate and oversee development projects. They facilitate communication between team members and stakeholders to meet budgets and deadlines.

Web and Digital Interface Designer

Median salary: $98,540 per year

Web and digital interface designers create user-friendly interfaces for websites and mobile applications. They conduct usability testing to improve the user experience and develop visually appealing software.

Software Quality Assurance Analyst

Median salary: $101,800 per year

Software quality assurance analysts test software to identify bugs and usability issues. They also develop quality standards and testing protocols to ensure reliable, high-performing software solutions.

Market Research Analyst

Median salary: $74,680 per year

Market research analysts assess market trends to identify software features that meet user needs. They provide data-driven insights to guide product development.

Fostering a Successful In-House Software Development Culture

Here are some tips to help cultivate a successful software development team.

• Support continuous learning with tech talks, mentorship programs and cross-functional collaboration.
• Establish clear goals and performance metrics, such as cycle time, code coverage and deployment frequency.
• Partner with a tech recruitment agency such as Dice to speed up hiring and reach professionals with the right mix of skills.