Both methods of hiring are acceptable, but the choice depends on the purpose. If a company has enough resources to hire and take care of an in-house team, and the country doesn't suffer from a skill gap, then why not?
But if the budget is limited and there are no needed specialists in the country, then addressing a vendor is a smart solution.
The advanadge of the former hirig method is direct participation and control. While the drawback - it requires significant investments.
When speaking about vendors, the problem is to find a trusted one. Also, there is not much information about how staff augmentation model works , so people tend to consider it unreliable. The pros of cooperation with vendor is shared responsibility and cost reduction.
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