Agency vs. In-House – What Works Better For Businesses?

Alex Panagis

Hey – I'm Alex, the founder of ScaleMath. Undeniably obsessed with helping our clients grow their businesses.

@alexjpanagis

Over the years, we’ve worked with businesses large and small both of which have been faced with the decision to scale up their SEO & marketing teams by hiring in-house or hiring an agency.

Let’s face it, this isn’t always a clear choice.

And in most cases, it isn’t even a question of one or the other.

In this article, I’m going to break down what we’ve learned from helping businesses directly as clients, helping businesses fill in-house roles, and how to make the decision that makes sense for your business.

This discussion always falls short when it’s happened in the past, because anyone with the opinion that employees are outright better to sway scenarios in their favor to make unrealistic situations & points based on those situations. I’m not here to waste your time with another post like that. 🙂

So – without further ado, let’s dive right in.

Hiring An Agency vs. Recruiting & Training An In-House Team

A reasonable way to compare hiring an agency to the experience of recruiting and training an in-house team is the following:

Imagine hiring an average football player full-time vs. contracting the world’s best football team to play your matches.

Which would you do?

Obviously, the choice is clear – not just the single employee (or football player, in the case of the analogy). But let’s break this down further.

Expertise

When you hire an agency, you get the combined experience of a team of people as opposed to a single person that most likely comes out of college and has little to no experience working with businesses like yours.

Do you really want people to use your business as a training ground?

Efficiency

It can take ages to train employees, agencies can get up to speed in less than a month at which point they could already have more output than a team of 5-20 full-time employees.

Return On Investment

When talking about agencies, at least the good ones, they’re heavily ROI-focused. They have to be to justify their retainers and only really profit when the clients they work with do.

Employees can easily coast while an agency getting paid the same or even less than a full-time employee is forced to allocate far more resources internally to satisfy clients.

The Case For Agencies – Why They Excel & Make Sense

When comparing hiring an agency to full-time employees most people against hiring agencies make unfair comparisons. They compare the agencies that truly don’t take pride in their work and work with any and every business to a unicorn business that almost no business ever comes across…

Let’s skip straight past that and make a comparison that’s realistic.

Agencies further their career and grow by helping the business

Agencies further their career and grow by helping the businesses they work with (that is literally their entire business model) as opposed to job-hopping.

Agencies Actually Have More Skin In The Game

I came across the following Tweet – which I didn’t respond to directly as I stay out of petty discussions, especially ones involving people that make weak arguments and clearly have no idea what they’re talking about.

agency vs. in-house 1
The handle and author of the Tweet have been censored as I’d really rather not bring more attention to whatever it is that they do after this. 😄

Nonetheless, this seems like the perfect place & way to address it…

This person’s thinking is fundamentally flawed for too many reasons to count:

  1. Any employee that’s actually good can easily move on to another company if, for example, their boss is an asshole – making this a useless point. As a matter of fact, employees are trying to further their careers.
  2. On the other hand, agencies further their career and grow by helping the businesses they work with (that is literally their entire business model) as opposed to job-hopping.

Let’s use another example: If a startup hires a full-time engineer straight out of university (i.e virtually no industry experience) vs. contracting a company like Netguru for $100,000 per year which do you think they’d expect & actually get a lot more from for their money. Evidently, Netguru.

The Case For Employees – Their Advantages & When They Make Sense

Build A Company Culture

Building a company culture is really the main reason to hire employees as opposed to agencies and consultants. You want to grow an actual business, the team is the business. If you’re subcontracting for everything you have no business which is why every business should hire employees for their core business model.

For example, if you’re starting a software development company – your engineers really should be in-house & ideally full-time. Marketing & SEO on the other hand form no part of your core business function and should therefore not be in-house roles.

What are you in the business of doing?

The best way to make the choice of when to hire and when to contract an expert (i.e. agency or consultant) is based on what you want your core business model to be. For example, as a content marketing agency, obviously, our content team has to be in-house. However, if we need to build out Google Data Studio reports for clients and custom integrations for the software they’re using –this isn’t something we even want to be a part of our core business model and would therefore contract a partner agency/consultant to help us with.

Put your actual situation through the same comparison – that’s the real way to figure out if the position/need you’re trying to fill is something you should consider taking on in-house.

A great example of a situation evolving here specific to SEO & marketing is a single hotel. If a single hotel grows to be a worldwide chain of hotels, at that point it could make sense to build an in-house team of people (almost like a small media company) capable of handling the SEO & marketing needs of all hotels worldwide in addition to small teams based at each specific location. Although even at this stage, there are still benefits of going the agency route (i.e. not having to deal with that and training people so that management can focus on improving their product which in this case is the hotel’s experience itself, not the marketing).

Conclusion – So Should You Hire An Agency Or Grow A Team?

Unless you plan on being in the business of marketing, and that’s something you want to suffer through, waste money doing – hiring an agency is almost always the way to go.

Save yourself the hassle, save yourself the money, and focus on building the business you wanted to build in the first place.

Let’s summarize:

  • You have to compare on a level playing field, most people compare shitty agencies to unicorn employees (which are rare to come across).

    Of course, nobody wants to work with a bad agency, then almost every employee is better. But you can’t make unfair comparisons (and if you pick an agency, you need to choose the right agency).
  • Agencies justify their ROI because they have to.

    Employees aren’t directly affected by a company’s performance as they’re cushioned by other peoples’ work. An agency on the other hand has to justify and even track their clients’ ROI to ensure that they’re truly doing the best possible work.
  • Employees require training, micro-management.

    This also ties back into the discussion of getting into a business that you don’t want to be in. If you’re building a software company, I completely see why hiring developers in-house makes sense. On the other hand, unless you want to get into the business of SEO & marketing – just don’t. There’s no way you’ll be able to outperform people that live and breathe within that specialization every single day (and have been for years).
  • Agencies have connections that could take employees years to build & know who to go to when a client needs something.

    If a client comes to us with a very specific need, even if it isn’t something that we can help them with. We bring them a solution and tell them our thoughts on it. Employees have no way of doing this, they often lack any connection to the industry.
  • Agencies know what it’s like to work with and manage million-dollar budgets, employees often have no grasp/understanding of how to deal with money at that scale.

    Do you really want to put a $1M USD marketing budget in the hands of somebody that earns less than $100k or would you rather hire an agency that has experience in managing a budget of that size (for themselves and other clients)? Again, rhetorical – the choice is very obvious. 🙂

As with all of our content, this is such an interesting topic and I could go on, so I’ll be keeping this article up-to-date and include more examples of situations that I come across. I hope you found this helpful – feel free to Tweet @alexjpanagis, I’d love to know what your thoughts are 💬

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Most agencies only help businesses in the short-term, but we focus on driving rankings, revenue, and recognition in the long-term instead.

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