In-house vs. Outsourced Project Manager: What is a Better Solution for Your Team

The importance of a project manager can never be underestimated or overlooked. They have to plan, budget, organize, delegate and run projects, and have a deep understanding of everyone’s work to make sure they can finish their project successfully.

Reports show that by 2030, there will be a demand for 25 million people in project management-oriented roles. It shows the value of these roles and the importance of a good project manager on every project.

This article will describe the importance of a project manager in a team, their role, and responsibilities. And we’ll answer the question that many companies have when looking for a PM – is it better to hire an in-house manager or outsource? Read on to learn when each option works better and discover the pros and cons of both variants.

The role of a project manager

Project managers are team leaders who are in charge of projects from start to finish. They ensure end products are delivered on time, and their quality is up to the set standards.

Their responsibilities are to:

• Build a product development strategy
• Create a budget plan and make sure everyone sticks to it
• Communicate with the team and the clients to collaborate between both sides
• Manage any potential project problems that might arise

Let’s take a closer look at what those responsibilities mean on a day-to-day basis.

In the planning stages, project managers will oversee the development of the project, manage client expectations, cost and risk, and assign tasks to team members.

There isn’t a clear divide between planning and managing a project since the planning phase never stops. Project managers are constantly shaping the workflow based on new information and changes in the market.

Project manager’s tech and soft skills

Project managers in development teams need to have a significant amount of both soft and tech skills.

Regarding the technical skills, they should:

• Have knowledge of an app/website/software development processes.
• Know how to build a project map.
• Use the right communication and collaboration tools, webinar software, and management solutions for effective teamwork.
• Use the right software for project budget management.
• Implement risk management to predict all issues and offer solutions.
• Know the required project management methodology and implement it into the project development.
• Delegate. The best PM does not try to cope with all issues and tasks by themselves but knows how to spread the tasks correctly in the team.

Soft skills are essential for all managing roles, and PM is not an exception.

Here is a list of the required soft skills every project manager should have:

• Excellent communication skills to work closely with their team members and know their strengths, weaknesses, how much time it takes them to finish certain tasks, motivate them, etc.
• Negotiation skill to continuously talk to developers and clients, explain the main insights, problems, and needs, and manage conflicts between sides.
• Stress tolerance, as there are a lot of stressful factors throughout the project that PM has to manage.
• Leadership skills to win team’s trust and motivate them to succeed.
• Flexibility skill to stay adaptable to constantly changing project workflow, especially if the team works with Agile methodology.
• Proactiveness to come up with new project ideas as PM is the one who understands the project need best and should continuously think on its improvement.

In-house vs. outsourced project manager

The choice between hiring an outsourced or in-house project manager depends on many factors – your project, needs, your development team. An in-house project manager, especially in the US, will cost you more money, but they work best for projects where you have an in-house development team. Then, a PM has better access to the team members, making it easier for them to organize and manage projects.

Outsourced project managers can be a more cost-effective solution and it works great in a situation when a client outsources the entire dedicated team with a PM. Then, it’s likely that the developers and a manager work in one outsourcing agency and have a great connection with each other. Some employers with in-house developers can also look for an outsourced experienced PM, as there is no need to hire a new in-house employee for short-term projects, however, even this small project requires a project manager.

So, let’s look at the main pros and cons of both options: in-house and outsourced PM.

Pros and cons of the in-house project manager

In-house project managers have the upper hand when it comes to their accessibility on the client’s side. Since they are on-site, they are available to answer any questions at any time. They also have better access to their in-house team members and can closely work with them and monitor their progress. In-house managers are always involved more in all project details, and they can have a more transparent business vision, as they can directly connect to any in-house team member.

Project managers who are a part of the company know other employees as well. They understand the company structure and know the different projects and teams, which allows them to be flexible and reach a pool of potential team members when they require new skills. It is especially important in the last stages of the project when the deadline is close, but still many tasks are needed to be done, then project managers can request other departments to join and help.

In-house PMs also participate in the company culture every day, so they understand how the team works and how to motivate and upskill them. They understand the main pains and what solutions can be helpful.

With that being said, only companies with bigger budgets and projects can afford to have project managers on staff at all times. Smaller companies that depend on each project can’t hire project managers just for them not to have anything to manage in between projects. To sum up:

Pros

• In-house PMs have access to all in-house team members, which allows asking any of them for help when needed
• They have a better connection with the in-house development team
• They are more involved in company culture and in-house business processes

Cons

• In-house PMs are not a good choice for short-term projects
• They are expensive to hire

Pros and cons of the outsourced project manager

As mentioned before, outsourcing a project manager is the best option for companies that outsource an entire dedicated development team. Thus, there is usually a product owner or a CEO on a client’s side who has better access and understanding of the company’s values and goals when a project manager works in close cooperation with the developers.

There is also an option of hiring a great project management expert to join and consult your team for a short-term project. This way, outsourcing is also an easy and cost-effective way compared to in-house hire. However, there is a risk that an outsourced PM won’t dive deep into business needs and values and come with the best solutions. It takes time and effort for any manager to learn more about their team members and the company, necessary for this role. 

Let’s sum up when the option of outsourced PM works best:

Pros

• Fresh look and new ideas on the project and business needs
• A great collaboration between engineers and a PM if both are outsourced from one agency
• Cost-effective compared to in-house hires

Cons

• It takes time and effort for the PM to learn more about your business
• Takes time and effort to know the in-house developers and other team members
• Limited involvement in company’s culture
• Less communication with the in-house chief management

Taking into consideration all you’ve learned above, you can estimate your needs, budget, project scope, and development team and define which hiring model works best for you.

Project management methodologies to choose

After you choose the best hiring model and find a PM for your team, the project manager’s methodology is something that needs to be discussed beforehand. Moreover, if you have a preferred methodology you want to use for your project, you should discuss it in the interview, as it’s better to hire a manager who already had experience with that approach.

If you are considering a project management methodology for your team, here is a list of the most popular approaches used in the development process.

Wrapping up

So, which is a better choice for your team and project – outsourced or in-house PM? It depends on your requirements and budget, and what is more important, where your developers are located. It’s always important to have a great collaboration between the development team and a project manager, as they have to work hand in hand to get great results. Analyze all listed pros and cons and define the model that fits your needs.