In this video Ian Peterman, CEO and founder of Peterman Design Firm, walks viewers through the decision of hiring design talent via contractors, agencies, or building an in-house team, and explains how mixed approaches can be used. He outlines the benefits and drawbacks of each model—contractors offer on‑demand, specialized expertise with flexible pricing but require individual management; agencies act as an on‑demand department with built‑in project management and broader service packages, though they come with higher overhead costs; in‑house teams provide maximum control and continuity but involve significant HR, payroll, and management overhead. Peterman then describes how companies of different sizes typically adopt these models: cash‑strapped startups often start with contractors, midsize firms may rely on a single agency or a combination of two models, and large enterprises frequently employ a hybrid of all three to optimize cost, speed, and capacity. He emphasizes that the right choice depends on budget, project urgency, and the need for ongoing versus cyclical work. The video concludes with a call to action to subscribe and learn more about Peterman Design Firm.
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Hello, my name is Ian Peterman. I'm CEO and founder of Peterman Design Firm, and today I wanna talk about whether you should hire contractors, an agency, or an in-house team. I made a couple videos about, you know, finding one and a little bit on the differences, But I wanted to really dive into, you know, why you would want to hire one of these 3 types of designs, designers, and design teams rather than the other, and also talk about a mixed approach. So we're talking about the contractors, what is beneficial about them, drawbacks, building, you know, an agency, hiring an agency, or more than one. And building an in-house team, and then last, talking about a mixed approach, which many companies use. So first, contractors. So contractors are great because they are on demand. There's no requirement to keep them on longer than the actual project. You can hire them by project hourly. There's a lot of flexibility. Depending on where you are at, you can hire remote contractors, hire contractors outside of the country. There's a lot of options that you can do to get really good contractors, really cheap contractors, and you can kind of find that whole gamut of, you know, low quality, cheap, high quality, expensive, whatever, whatever is gonna really work. You know, their benefit is they're typically highly skilled in one area. That's kind of the idea with them is that contractors often specialize a little bit more. So they're able to help you, you know, say you got a mechanical engineer, the contractor, and a structural engineer, and then you got a graphic designer and then a packaging designer. You can kind of cobble together a team of your own and none of them are gonna be, you know, the payroll. They're not gonna be an employee. So you don't have to have long-term plans for the project. You can just bring them on. as needed and have them. Now, pricing-wise, typically, they are going to— contractors are going to be more than an employee. They are going to obviously be able to decide when and how they work. There's some other— they have different rules than an employee. You can't just tell them what to do and they have to do everything your way all the time. It's kind of a— can be a flexible rule. But there's a lot of things that go into it. And they're not attached to you as well. So contractors, they can stop working. They don't have to keep working. There's no 2-week notice requirement or anything like that. They can typically just work how they want. And you also are going to have to manage— as you need a diverse team, you're going to have to manage each one of those individually and hope that they're available for the projects that you have. So there are some drawbacks with using contractors. Pricing-wise, they're typically kind of in the middle. They're not going to charge as much as an agency will, but then— and they're going to charge more than an in-house. But at the same time, there's— it's kind of that middle ground in terms of pricing. Contractors are great. A lot of companies use them. I've used them on projects. I actually bring in quite a few contractors depending on the specialties required on a specific project for, highly specialized designers or engineers that just— I'm not gonna have, you know, I've worked on, for example, vacuum pump systems for overall product development. I don't do enough vacuum engineering to require someone specialized in that kind of work, but I did for a couple projects, so I brought one on. have him involved as needed. And then when we don't have a product, he is off working for other people. So it's a great model. It's— I really use— a lot of agencies use that model. A lot of big companies use that model. And so it's something to consider. And especially if you're starting out and you want to be able to have a cheaper option, use contractors. You're able to get— also find people with less experience that you can hire for less. And keep them on a contract. That way they can come in and help you with something, and then they're not a constant overhead that you have to worry about. I want to talk about agencies. So hiring an agency, you have— depending on how, how big you are or how specialized you want to get, or just your approach. I've worked at companies where we've hired 3 or 4 agencies just to put together a website or multiple agencies to put together product development and branding and different components. So depending on what your internal capacity is, you may be able to have the overhead to pay someone to manage multiple agencies. You can also hire a more project management, design management agency to manage other agencies for you as well. You can, you can get as big as you want, as many as you want. But that just depends on what your budget is, how big of a project you are. You know, agencies are great because they're basically an on-demand hired department. So rather than hiring just one contractor or a couple or, you know, 5 different contractors to get all the services done, you hire an agency because they're able to take care of more things in a little bit more complete of a package. And they typically self-manage. They have their own people. PMs and product managers and design managers in-house because they have to manage multiple projects. So with them, you get a certain level of project management. You can also find firms, you know, like my own firm where we do design management in-house in addition to having all of our regular project managers. And we have our internal teams and we have external vendors that we manage everything under one house. So We're able to come in and as an agency be able to replace multiple departments that a company may not actually want all the time and be able to accomplish that. And so you'll find agencies that go to that scale, and you'll also find smaller agencies where they just do, say, web design, or they just do web coding, or they just do engineering. So there's engineering firms, that's all they do. They just do engineering. They don't do industrial design. They don't do branding. They don't do packaging. They may not even do anything outside of, say, just straight electrical or mechanical engineering. And so those are very specialized. They're great. They can work really well. But you may end up needing to hire multiple agencies depending on your project and depending on the agency's capacity. And, you know, the downside, of course, is they are typically more expensive, you know, as they have their own overhead. So with them having their own product managers. They're not— you're not just hiring a designer, hiring a design team with management. And so they have that higher overhead, which means they typically charge more than a contractor will. Now, third, I want to talk about in-house. So bringing a design firm basically in-house, creating your own design team, creating your own agency basically within your own company. And an in-house approach is kind of straightforward, semi-straightforward. There's actually a lot of laws around it, but hiring people directly. So that means hiring an engineer full-time or part-time, hiring a designer, hiring branding, hiring all those people in-house. And then of course with that, you have to hire in your own overhead. So you're going to need project management, you're going to need HR, you're going to need accounting. to do more tasks. You need payroll. So there's a lot of those layers that with in-house you have. However, you do have more control. You know, you can, you can decide exactly how everything is going to be done. It can all be internal. You don't have to rely on hoping somebody else is available or finding someone else. You can just handcraft your own team. And a lot of companies do that. A lot of Startups will have in-house to a certain degree, just in terms of they have their own ideas. They don't have— maybe the founder or co-founders, they all have some experience in different areas. And so it starts with an in-house. So in-house can be very valuable. It also has its downsides of additional overhead and things like that to make sure you're doing it properly. The last thing I want to talk about is mixed approach. Now, big companies, if you work for Nike, if you work for HP, which I've done, I've worked for them in multiple capacities, you'll find that they have in-house design teams, they have individual contractors, and they have agencies that they bring in all at the same time. And it really just depends on the budget of the project, how quickly something needs to be done, You know, they might hire on 15 contractors to supplement an agency, which is already supplementing their in-house team, just to get a push because they know, okay, well, here's a crunch. We need to get this out at this time, and everybody else is already too busy. And so they'll hire on contractors to supplement that. So there's there's always a strategy in place. Each kind of one contractors, agencies, in-house—they all have their place and time where they are the most valuable. And so, as you get bigger, you know, if you're mid-size, you could get away with just hiring an agency, no contractors, no in-house. Be totally fine. You could also in-house it, and you can get away with just one. As you get bigger, when you get into the enterprise level, then you start looking at. Optimizing cost and speed, and you have the budget to be able to hire 100 contractors over a month just to get through a certain project or a few projects and get them done. And so when you do have that larger budget, you're able to expand your strategies and, and do a little bit more optimizing in which way it is. Now, of course, the downside to that is that You are going to have a lot of higher overhead because you're going to require a lot more project managers on your own team in order to make sure that all of your agencies and in-house and contractors are all actually working on the project they're supposed to be, that everything is moving forward. So that's why it's typically a larger company, more enterprise, that will end up doing a full 3-way mix between those. Some smaller companies, you know, I've been a contractor for companies that are smaller, but they had in-house and they just needed a designer or even my agency, we come in and we augment and support an in-house team. And so that's pretty common that you maybe mix 2 in the midsize and 3 is when you're enterprise and up typically. So hopefully this gives you an idea of some pluses and minuses And kind of what stages of your company you may be hiring different ones. It's, you know, contractors are great if you're really cash-strapped startup, can't afford full agency, but need to get stuff done. And then you can grow into an agency, and then you grow into, you know, using contractors, agencies, and in-house. And in-house really can be at any time. It just depends on what your financial status is and what's gonna be most effective, and if it's something that you need all the time, in-house makes sense. If it's more cyclical, then contractors or an agency that has multiple areas of expertise that you can say, well, we need your graphic design now, but then we're gonna need your product design, and then we're gonna need marketing help here, and then it's just cycle through, then it can make sense to hire an agency to be a rotating department based on your needs for that month or quarter. Hey, thanks for watching. We really appreciate our viewers, and if you haven't subscribed yet, please do subscribe to our channel so you can get more great videos like this in your feed, and like the video. If you want to learn more about the Peterman Design Firm, please check us out on our website, petermanfirm.com. You'll find link and information in The description. And of course, we're on all social media as well, so check us out there. All right, thank you. Thank you.
