Comment by bjackman

As well as rational vs irrational they are also just different types of spending.

Hiring someone vs paying a vendor for a service:

- different level of commitment

- might tie your org to a physical location

- different legal risks

- shows investors a different picture (probably this would even influence a bank loan)

- manager has to fight a different bureaucracy

Not to mention that comparing the cost of a hire by looking at their salary is pretty dumb. ISTR hearing at Google that the overall estimated cost of employing a SWE is like 4X their compensation? Can't remember the exact figures though.