Besides the many points already mentioned: * consultants come and go, you can't guarantee that the guy who wrote the code will be back for the next feature. Th

Besides the many points already mentioned: * consultants come and go, you can't guarantee that the guy who wrote the code will be back for the next feature. This has a non-irrelevant cost of transitioning. * consultants are not necessarily honest about estimates and the status of your code base, nor they have any economic incentive to be. Employees have no incentive to cheat you on this - they would have no advantage in doing useless work. How can you make sure that you are not being cheated? * productivity of employees and consultants is similar, in coding basically no one can get more than 4-6hrs of actual work done on a regular basis. The number of hours actually worked is irrelevant. * In London an average senior developer makes maybe 55k£ (http://www.totaljobs.com/salary-checker/average-senior-developer-salary-london http://www.totaljobs.com/salary-checker/average-senior-devel...) for an average of 220 work days (44 weeks). An average consultant of similar skill will make around 475£/day (http://www.itjobswatch.co.uk/contracts/london/senior%20developer.do http://www.itjobswatch.co.uk/contracts/london/senior%20devel...). Quick calculation: 55k$ of consultant time are 115 days (23 weeks). How can anyone say that a consultant is cheaper? Even considering perks, etc, it's still basically twice as expensive.