What is the dedicated team model?

It is an outsourcing arrangement in which a provider assembles and employs a group of professionals who work only for you. The provider handles recruitment, payroll, equipment and HR administration, and you set priorities and judge the results. It is usually charged monthly and suits ongoing work that needs continuity.

How is a dedicated team different from staff augmentation?

In staff augmentation, individual specialists join your team and you manage each of them directly. A dedicated team is a unit assigned to you, often with its own lead, and the provider handles more of the organisation around it. The exact split of management depends on the contract, so agree it in writing.

How is a dedicated team priced?

Usually as a monthly fee, either per person or per team, or as the cost of the team plus a stated management fee. Some providers quote one blended rate. Ask what is included, whether salary and margin are shown separately and what changes if the team grows, shrinks or someone is replaced.

Who manages a dedicated team?

It varies. Some providers supply a team lead who plans work with you and manages the team day to day. Others expect you to manage each member. The provider handles employment matters in either case. Settle who sets priorities, who reviews work and who handles performance problems before you start.

Can I hire dedicated team members directly later?

Often, but only if the contract allows it. Ask whether there is a minimum period before conversion, what the conversion fee is and whether the provider restricts you from approaching team members. Settle this before signing, not when you want to leave.

Who owns the work a dedicated team produces?

Do not assume it is you. In the United States, work by someone other than your employee is a work made for hire only if it falls within specific categories and both sides sign a written agreement. Put intellectual property assignment in the contract and take advice on the law where the team works.

When is a dedicated team a poor choice?

For short fixed projects, for one or two hires you can manage yourself, for work whose requirements change constantly, or where nobody on your side can set priorities. In those cases a project contract or staff augmentation is simpler.

Dedicated Team Model

What the dedicated team model is

The dedicated team model is an outsourcing arrangement in which a provider assembles a group of professionals who work only on your product or operation, for as long as you need them. The provider recruits and employs the people and handles payroll, equipment, HR administration and replacements. You decide what the team works on and judge the results. It sits between hiring individuals yourself and buying a finished project.

The model is most often used for software development and other technical work, but it is also used for support, finance and operations teams. What defines it is exclusivity and continuity: the same people, working for one client, building up knowledge of the business over time.

How it differs from the alternatives

Staff augmentation. Individual specialists join your existing team and you manage them directly. A dedicated team is a unit, often with its own lead, rather than separate additions to your headcount. See staff augmentation and the full comparison of dedicated team and staff augmentation.
Project outsourcing. The provider agrees to deliver a defined scope and manages how it is done. In a dedicated team you direct the priorities and the provider supplies capacity. See outsourcing.
Managed services. The provider takes accountability for an outcome measured by service levels. A dedicated team is accountable for working to your direction. See managed services and managed services vs staff augmentation.
Freelancers and agencies. See freelancer vs agency vs dedicated team for how they compare on control, continuity and cost.

How it works in practice

You describe the work, the skills and the level of seniority you need, and how large the team should be.
The provider proposes people. You interview them and approve the team.
The provider employs the team members and handles payroll, equipment, benefits and local compliance in their country.
The team works to your priorities. Who manages the day-to-day varies by contract: some providers supply a team lead who plans the work with you, while others expect you to manage each person directly. Agree this in writing.
The provider replaces people who leave, within the time agreed in the contract.
You review performance and scope regularly and adjust the size of the team within the notice terms.

What a team may contain

The mix depends on the work. A software team often includes a technical lead, engineers of different seniority and a tester, with design, project management or operations specialists added if the work needs them. A support team may include agents and a team leader. Ask the provider whether shared specialists, such as a part-time project manager, are included in the fee or charged separately, and who they work for.

A typical scenario

Picture a software company with a product roadmap that will run for years, a founder who can set priorities but has no time to recruit in another country, and no wish to set up a foreign entity. A provider proposes a lead and a small group of engineers, the founder interviews and approves them, and the team starts on one product area. After a trial period the founder reviews delivery, adjusts the size of the team within the notice terms and decides whether to ask for conversion of some members to direct employment. The example is illustrative; your own arrangement should be written to fit your work.

Making the first weeks work

Give the team a written statement of goals, priorities and how decisions are made.
Introduce the team to your own staff and tools, and name one person on your side as the point of contact.
Agree working hours, the overlap with your day and how updates are shared.
Review early output and give feedback quickly, rather than waiting for a milestone.

How pricing usually works

Dedicated teams are usually charged monthly. The common structures are a fixed fee per person or per team, or the cost of the team members plus a stated management fee. Some providers quote a single blended rate that does not show the salary or the margin.

Ask what the fee includes: salary, employer contributions and benefits, equipment, workspace, management, recruitment and replacement.
Ask whether the salary and the margin are shown separately. Transparent pricing makes it easier to judge the offer, and a single blended rate makes it harder. The page on how provider markup works for virtual assistants explains the general idea.
Ask what happens to the price if the team grows, shrinks or a member is replaced.
Ask whether you can hire team members directly after a defined period, and what the conversion fee is.

Compare the quote with the total cost of employing the same people yourself, including the cost of finding, employing and managing them. The Remote Hiring Cost Calculator and total cost of employment help with the employee side. This page gives no rates, because they depend on the country, the skills and the provider.

When it fits

The work is ongoing, such as a product you will develop for a long time, and needs continuity.
You need more than one or two people and want a working unit rather than separate hires.
You do not want to set up a company or recruit in the country where the team will sit.
You can give the team clear priorities and a person on your side who will make decisions.
You want to build up team knowledge and may want to take people on directly later.

When it does not fit

The work is a short, fixed project, where a project contract is simpler.
You need only one or two people and already have managers who can direct them, so staff augmentation may be simpler.
Your requirements change so often that no team can settle into a rhythm.
You have nobody who can set priorities and review the work.
A regulator or customer requires everyone who touches the work to be your direct employee.

Legal points to settle

Who is the employer

In this model the provider employs the team, so the provider carries the employment obligations in the team's country. But if you direct each person's work closely, you can end up with employment-style obligations of your own. The IRS states that a person working remotely is an employee under common-law rules if you can control what will be done and how. That is a United States tax test, and other countries and laws use different tests, so read co-employment and misclassification and take local advice where the team sits.

Who owns the work

Do not assume you own what the team produces. The US Copyright Office explains that work by someone other than your employee counts as a work made for hire only if it is within one of nine listed categories and both parties sign a written agreement saying so. Put intellectual property assignment, confidentiality and ownership of code, designs and accounts in the contract, and make sure the provider's employment contracts support it.

Data and security

If the team handles personal data, agree in writing how it is used, stored and deleted. For EU personal data, the GDPR requires a contract governing processing by a processor. See IT outsourcing for the wider checks.

Risks and how to reduce them

Provider lock-in. Keep documentation, source code and accounts in your own systems, and agree a conversion or handover clause.
Opaque margins. Ask for a pricing breakdown before you sign.
Quality of recruitment. Interview every member yourself and ask the provider how it screens and what it does when someone leaves.
Management gap. The provider handles HR, not your product. Someone on your side must set priorities and review the work.
Slow start. Even with a good provider, a new team needs time to learn your business. Plan for a gradual ramp rather than expecting full speed on day one.

How to choose a provider

Ask how it recruits, screens and retains people, and how long replacement takes.
Speak to current customers of a similar size and type of work.
Review the contract for notice, scaling, conversion, ownership, confidentiality and exit.
Check security evidence and data handling.
Start with a small team, review after a trial period and then scale.

Sources

References checked on 13 October 2026. This page is general information, not legal or tax advice.