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As a Product Manager at a software company, deciding between building an in-house UX team and partnering with a UX agency is one of the most consequential choices you will make for your product. The short answer: both options have real advantages, and the best results usually come from combining them. But the right balance depends on your scope, budget, culture, and goals.
Should You Build an In-House UX Team or Partner with a UX Agency?
Neither option is universally better. In-house teams offer deep product knowledge, proximity, and cultural impact. UX agencies offer speed, fresh perspective, breadth of specialisation, and unbiased advice. Many of the best product teams run both in parallel.
Here is a breakdown of what each option actually gets you.
What Are the Top Advantages of Building an In-House UX Team?
Whether you are a startup with a handful of employees or a growing enterprise, investing in an internal design team is a smart way to level up your product's UX. Here are the primary benefits.
Full-Time Focus on Your Product
An in-house designer dedicates all of their time and energy to you. They are at the desk next to you or a few IMs away. When someone invests that much time in one business or product, they build deep domain knowledge they can use to teach others and help the company grow.
Proximity to the People Who Matter
In-house designers work in close proximity to stakeholders, subject matter experts, and decision-makers. External partners collaborate with those same individuals, but working in the same location and having long-standing relationships provides an edge in trust and speed.
Cultural Impact Across the Organisation
The best companies in the world infuse design into every layer of their organisation. It is not just one department or one initiative; it is a philosophy and process embedded into everything they do. When a business builds a solid design team and champions design throughout the organisation, it unlocks the ability to leapfrog the competition and become a leader in its industry.
What Are the Top Advantages of Partnering with a UX Agency?
Some Product Managers engage an external partner from the very beginning to help build their MVP. Others wait until they feel the crunch of too much work, complex product challenges, or ambitious growth goals. Either way, here is what a UX agency brings to the table, especially if you work with the right one.
Speed
This one is simple: UX agencies help product teams get work done faster. With more minds and hands on deck, they can divide and conquer on the march to a sprint deadline or an important milestone. Having additional, external design resources also provides continuity through significant internal changes (turnover, new leadership, and so on) so you can minimise interruptions and delays.
Innovation and Effectiveness
It is not just about launching products faster. It is about launching better products. UX partners have not been immersed in your product, so they offer a fresh pair of eyes to see things your team may be missing. Their strategic mindset and comfort with pushing back (when appropriate) help cut through the clutter and guide you to a more effective solution.
Breadth and Depth of Experience
In-house design teams gain deep product knowledge over time, but they often become generalists because they are required to wear so many hats. UX agencies offer a more accessible and less expensive way to work with a team of specialists, each with unique expertise in one or two disciplines (such as usability testing and content strategy) or platforms (such as mobile or e-commerce).
Agency designers also work on a wide range of projects across industries, which gives them broad experience they apply to each new project. More ideas equals better results.
(In-house teams can try to hire specialists, but since most are in high demand and tend to prefer the dynamic, nimble agency environment, they are typically more expensive and harder to recruit.)
Unbiased Advice
Ever feel like you are surrounded by "yes people" or not getting the brutal honesty you need? That may be because many in-house employees feel uncomfortable saying what they really think, especially when the person receiving that message is a superior or the originator of a design idea.
External UX partners are in a better position to provide honest guidance or say no because that is exactly why they were hired. Whether it is having an independent researcher lead usability studies and customer feedback interviews, or just knowing you have an outside team to bounce ideas off of, working with an unbiased partner saves time and can help your team avoid making critical, costly mistakes.
Where Does the Answer Depend on Your Situation?
In certain areas, there are clear advantages to building vs. buying. In others, it depends on a variety of factors like scope of work, designer expertise, company culture, budget structures, and more.
Is It More Cost-Effective to Hire In-House or Use a UX Agency?
It is nearly impossible to say which is more cost-effective without knowing your specific situation.
- An in-house designer could cost $50,000 to $150,000+ in salary and benefits, depending on their level of expertise and responsibilities
- An external partner could charge $150 to $250 per hour for consulting or production work, thousands of dollars each month on retainer, or hundreds of thousands for an in-depth or ongoing engagement
Budget structures also differ from company to company. Some businesses do not have the budget to increase headcount, but they have a marketing or R&D budget they can use to bring in a UX agency. For others, the opposite is true.
Which Option Offers More Flexibility?
This also depends on your needs, company culture, the agency you are working with, and the type of contract you have with them.
Smaller firms, both software companies and agencies, tend to be nimbler and able to pivot quickly when needed. However, that flexibility dwindles with greater bureaucracy, complex projects with extensive dependencies, and rigid contracts. No matter how flexible you are personally, these external factors play a big role in determining which option will give you the greater ability to adapt as your product and environment evolve.
Why Do the Best UX Teams Use Both In-House and Agency?
Like many things in life, the best answer is not always one or the other, but a happy middle ground. UX teams are a perfect example.
Instead of focusing solely on building an in-house team or only enlisting outside help, the best results often come from a mix of both. The combination helps overcome some of the cons each option presents, while multiplying the pros.
Combined Expertise
The right UX agency complements your internal team and delivers "the power of many." A single designer or freelancer will only get you so far. They are simply spread too thin and do not have the broad and deep expertise to handle every task or challenge they are given. By working side by side, each team soaks up the other's expertise and skills, allowing both sides to grow and apply their collective knowledge.
For example, our team at Drawbackwards worked with a customer service technology company to design their app, customer portal, website, marketing collateral, and more. They had a talented team of designers and developers, so we collaborated with them to lend our UX design expertise, conduct unbiased usability research, and lead mobile decision-making conversations where our talents were most needed.
It was a great partnership because the Drawbackwards team learned so much about our client's customer service practices and had the chance to try new things with them. Likewise, they learned a lot from us about UX best practices around creative thinking exercises, strong documentation, usability test design and execution, research approaches, better design tools, effective UI design patterns, how to sell new ideas upstream in their organisation, and more. Those new skills and that design thinking mindset provided immense value at the time and will continue to come in handy in the future.
Even Greater Speed
When you have too much work and not enough resources, it usually takes months to hire and fully onboard a new employee. With the right UX agency, you can start feeling the results of their contributions within weeks. That means more work gets done faster so you can meet your goals. Plus, having additional help and collaboration makes the process more enjoyable for the in-house team and can even reduce turnover.
Complementary Skill Sets and Personalities
Every designer has their own skill set and personality. One may be really good at the details of complex component and system design, while another may be more adept at innovation and big-picture thinking. One may be extroverted and great at interacting with other team members, while another may prefer to work independently. You are not going to get everything in one, two, or even three designers.
This is one of the areas where a UX agency can provide huge value fast, if you are working with the right one. Unfortunately, many agencies are just as guilty as their clients of "just hiring for headcount." They do not pay enough attention to skill set, personality, and fit; they just hire to fill a seat and have another set of hands to help.
This is why you cannot just hire any UX agency. You need a partner who not only has talented team members, but also knows how to construct a project team that is the perfect fit for the scope, process, and stakeholders involved.
Drawbackwards was built around this philosophy. We have introverts and extroverts. UX designers and visual designers. Animators and content strategists. Front-end developers and mobile app developers. Dedicated usability researchers. Detail-oriented thinkers and big-picture thinkers.
Then we pair up complementary team members and construct teams for each project that represent a perfect blend of skill sets, past experience, personalities, and strengths. Instead of one unicorn, you get access to a stable of thoroughbreds that are hand-picked for you and your project. There is no better way to solve the toughest UX challenges and achieve the best results.
What Qualities Should You Look for in a UX Agency?
While either in-house team development or agency partnership may work fine independently, in-house and agency collaboration usually leads to the best outcomes, especially because you can adjust the levers as your company and product evolve.
Like any other profession, there are specific characteristics that separate good UX agencies from the great. Which positive qualities and red flags should you look for when researching and interviewing agencies? Request our checklist for a handy resource that will help you make a smart selection.
Frequently Asked Questions
When should a product team consider hiring a UX agency instead of building in-house? If you need to move fast, tackle complex UX challenges, or access specialist skills you do not have internally, a UX agency is worth considering. Agencies are also a strong option when internal headcount is frozen but project or R&D budgets are available.
Can an in-house UX team and a UX agency work together on the same product? Yes, and this is often where the best results happen. The in-house team brings deep product and domain knowledge, while the agency brings fresh perspective, specialist skills, and additional capacity. Each side learns from the other.
How much does it cost to hire a UX agency compared to an in-house designer? An in-house UX designer typically costs $50,000 to $150,000+ per year in salary and benefits. A UX agency may charge $150 to $250 per hour, a monthly retainer, or a fixed project fee. Which is more cost-effective depends entirely on your scope, frequency of need, and budget structure.
What is the biggest risk of relying only on an in-house UX team? In-house designers tend to become generalists over time because they are required to cover so many areas. They can also develop blind spots from being too close to the product, which makes it harder to spot the usability issues or strategic gaps that a fresh set of eyes would catch.
What should you look for when choosing a UX agency to partner with? Look for an agency that builds project teams intentionally, matching skill sets, personalities, and experience to the specific project, not one that just fills seats. Strong documentation practices, comfort with honest pushback, and a track record across relevant platforms and industries are also good signals.
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