Maximizing ROI: Outsourced Engineering vs. In-House Hiring

In this article learn how to maximize your return on investment when choosing outsourced engineering vs. in-house hiring.

In today’s competitive business landscape, companies are constantly striving to achieve more with fewer resources. This challenge is particularly pronounced in engineering departments, which can be the driving force behind innovation but also a big cost driver. For businesses aiming to stay relevant and innovative in their markets, assessing the return on investment (ROI) in engineering is crucial. The decision to expand the engineering team internally can raise financial concerns, leading to the question of whether such an investment is warranted.

Bandwidth and Priorities

One common challenge in addressing the need for additional engineering resources is a lack of bandwidth within the existing team. While the current engineering department may possess the necessary software and expertise, competing priorities often take precedence. When faced with the choice between addressing immediate product line issues and embarking on a new innovative venture, companies often prioritize short-term needs to maintain existing revenue streams.

Investing in technology can also pose a barrier to innovation. Engineering departments frequently make substantial investments in software and hardware solutions to boost team efficiency. However, there are instances when it doesn’t make financial sense to bring specific capabilities in-house, such as performing occasional computational fluid dynamics (CFD) or finite element analysis (FEA).

Skills and Confidence

Moreover, sometimes companies are willing to invest in technology but face challenges when their engineers lack confidence in using it effectively, especially after staff turnover. Newer engineering graduates may have some exposure to advanced technology solutions but may lack formal training and real-world experience, which can hinder their confidence in using these tools correctly.

Choosing the Right Path

When issues related to bandwidth, technology, or specific skills impede progress, a decision must be made: should a company hire and invest internally or partner with a professional design firm like TriMech’s Project Engineering Group to bridge these gaps? Evaluating the ROI of both options will depend on the company’s current state and future growth plans.

Cost Considerations: In-House Hiring vs. Outsourced Engineering

Hiring a fully burdened, experienced mechanical engineer can entail an investment ranging from $80,000 to $120,000, not to mention additional one-time costs for hardware and software, which could easily add up to an additional $20,000 or more. The advantage of this approach is that the newly hired engineer becomes an expert in the company’s products and brings valuable past experience to the role.

Conversely, outsourcing for occasional needs may cost closer to 10-50% of the fully burdened internal cost, depending on the specific requirements. TriMech’s Project Engineering Group boasts multiple team members with diverse backgrounds and specialized skillsets that go beyond what a single full-time hire might offer. Additionally, there’s no need for additional software and hardware investments, as these tools are readily available.

In Conclusion

The overall ROI for partnering with an outsourced engineering firm is clear: it offers experienced engineers, access to software and technology without the burden of long-term investment, and the opportunity to collaborate with a team that seamlessly integrates with your existing engineering department. Choosing to partner with TriMech’s Project Engineering Group is not just a cost-effective solution but a strategic decision that can drive innovation and success for your company.

Looking to learn more about PEG? Check out this video by PEG director Adam Baker, or contact us today.

Adam Baker

Adam Baker

Adam Baker is the Director of the Project Engineering Group (PEG)
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