The Rails Project Dilemma – Should You Build In-House or Outsource?

Deciding whether to build your Ruby on Rails product in-house or find an external partner? The hire vs outsource Rails companies dilemma can be tricky, so we weigh the pros and cons of both approaches to help you choose the best path for your project.

Ruby on Rails, affectionately known as Rails, has been a cornerstone of web development for nearly two decades. With its “convention over configuration” philosophy and robust ecosystem, Rails allows developers to build scalable and maintainable applications quickly.

Not the latest, trendiest technology, Rails is a powerful and flexible framework backed by one of the most active and supportive developer communities. It’s no wonder that companies like Airbnb, GitHub, SoundCloud, Netflix, and Shopify grew from startups to industry leaders with Rails as the foundation of their tech stack.

Mature and stable, in 2025, Rails will remain the technology of choice for many startups and large enterprises. However, deciding whether to build your Rails-based product with an in-house team or to outsource the work to a development company can be as intricate as the framework itself.

While we’ve already reviewed the matter of in-house development vs outsourcing in general, this article explores the unique considerations for Ruby on Rails development to help you make the right choice for your business.

In-house developers familiar with your business domain and Rails-specific practices can be a great asset. Over time, the team develops a deep understanding of your industry’s nuances and can tailor Rails’ conventions to fit specialized needs. This can be particularly valuable for organizations whose entire core business revolves around a Rails-powered product, and who are prepared to invest in building and maintaining that team for the long haul.

When your Rails developers and other key roles (designers, project managers, etc.) all work in the same physical space, you can benefit from more organic, day-to-day interactions. It gives you the option of impromptu discussions and quick clarifications – especially if face-to-face collaboration is the norm in your organization.

Investing in an internal team means growing their expertise in Rails framework (conventions, best practices, upgrades) and supporting libraries like RSpec. If you already have robust processes in place for continuous learning and knowledge-sharing, the team’s expertise can grow significantly over time.

As your team builds and maintains your Rails application, they develop a deep understanding of its quirks, dependencies, and overall structure. This institutional knowledge can mean faster troubleshooting and fewer knowledge-transfer hurdles down the road.

Rails developers, especially those with deep expertise, are highly sought after and increasingly scarce. Finding and retaining such talent can be time-consuming and expensive, especially if your company doesn’t position itself as a major tech employer with compelling Rails-specific growth paths.

Beyond salaries (which are also expected to rise as developers advance), recruiting and retaining a Rails team involves substantial costs, including the hiring process, continual training, and providing the resources for tools the team will need in their work. Over time, these costs add up and might not be justifiable unless Rails development is a central pillar of your business.

While in-house teams develop strong domain-specific knowledge, they focus on a single project and may lack experience with the broader Rails ecosystem. External agencies often have experience across different project types and scales, which equips them to suggest unconventional but effective solutions that your team may not have encountered.

Rails is mature but still evolving – new gems, patterns, and framework improvements surface regularly. Without exposure to the broader community or external experts, an in-house team risks falling behind on Rails trends, which could limit your product’s development velocity, long-term health, and ability to stay current and competitive.

An experienced Rails agency typically works across multiple industries and project types – for example, our engineers have worked on over a hundred different development projects! This broad expertise often leads to creative, well-informed solutions – like optimizing complex queries in ActiveRecord or setting up scalable background job processing infrastructure specific to Sidekiq.

The hiring process for building a team from scratch can take months, while outsourcing provides instant access to a full-fledged team of Rails professionals. This rapid onboarding is especially valuable if you need to go to market quickly, tackle a technically complex project, or start a long-postponed dependency upgrade process.

An external partner can scale your remote team up or down, depending on your current project requirements. For instance, you might need additional backend developers during the early development phase and fewer resources post-launch. With outsourcing, you only pay for the capacity you require rather than sustaining a large full-time team year-round.

Specialized agencies are immersed in the Rails ecosystem. They stay up to date on everything from performance optimizations to compatibility with the latest versions. Their exposure to a wide range of challenges – and their corresponding solutions – can support rapid development and significantly enhance your project. 

External developers may not fully mirror your internal processes or business context on day one. Depending on your choice of outsourcing company, seamless integration can be challenging, but a reputable partner will prioritize understanding your workflows and domain to minimize disruptions.

Outsourcing can mean relinquishing some oversight on the nitty-gritty of development. However, transparent processes, frequent check-ins, and collaborative project management tools (like Jira or Productive) can ensure you always know what’s happening with your product.

Handing over an existing codebase or domain knowledge can feel challenging. Clear documentation, regular syncs, and well-defined onboarding processes go a long way here – and experienced partners often have protocols in place for those scenarios. It also helps when an agency knows what to ask.

Code quality can vary among outsourced teams. It’s crucial to choose a partner that adheres to Rails best practices, invests in thorough code reviews, and enforces consistent standards – so that your product remains maintainable and future-proof.

If you decide to outsource your Rails project, here are a few tips from an experienced partner agency to make sure you reap all the benefits – and none of the pitfalls:

By partnering with an agency that checks these boxes, you can sidestep the usual concerns about outsourcing and tap into the full potential of a specialized Rails team – no compromises necessary.

Ruby on Rails is a powerful tool for building modern web applications, and it comes with its own set of nuances – everything from major version upgrades to discovering the perfect gem for a particular task. 

The decision whether to hire vs outsource Rails companies ultimately hinges on your immediate project needs, long-term goals, and the unique challenges of the ecosystem. As you weigh in-house vs outsourced software development, consider the extent to which you can sustain the costs, recruitment efforts, and ongoing learning a Rails team requires.

However, this choice doesn’t have to be an either/or scenario. You can also consider hybrid models like team augmentation that combine the strengths of both approaches. For instance, an in-house team can define the core vision and maintain the product post-launch, while an outsourced partner provides expertise during development and scales resources as needed. 

With the right balance, you can leverage Rails’ full potential to build a product that aligns with your business goals and evolves with your users’ needs. If you need any help in that department, check out what our Rails team can do for you.