What began as a small team of five QA engineers grew into a 24-person research and development operation over six years. This business growth story shows how one company expanded its engineering capabilities, managed growth challenges, and learned why building the right support systems matters as much as hiring talented people.
Key Takeaways
- Growing a business successfully doesn’t always mean hiring as quickly as possible. Strategic, gradual expansion can produce more sustainable results.
- The company started with five QA engineers and expanded to 24 engineering professionals over six years.
- As the team grew, challenges involving management, infrastructure, equipment, and compliance became just as important as recruitment.
- Keeping technical decisions under the client’s control helped maintain consistency while delegating local operational responsibilities.
- Employee retention, strong leadership, and careful hiring played important roles in maintaining continuity during expansion.
Every growing business eventually faces a difficult question: How do you expand your capabilities without allowing costs, management responsibilities, and operational complexity to grow faster than the business itself?
For one hardware technology company, the answer began with a relatively modest decision. Its product development and release schedules were putting increasing pressure on its existing engineering team, particularly when it came to quality assurance and testing. Hiring additional engineers locally would have been expensive, but the company needed more technical expertise to keep up with its workload.
Rather than committing immediately to a large expansion, the company started with five QA engineers through a dedicated team arrangement managed by Newxel, a provider of engineering team development and operational support.
What followed was a six-year growth journey that transformed a small testing group into a 24-person research and development operation, complete with its own testing laboratory, dedicated facilities, and around-the-clock operational coverage.
The experience offers useful lessons for entrepreneurs and business owners who are considering how to scale their businesses while keeping costs manageable and maintaining control over their operations.
Table of Contents
Starting Small: Solving One Business Problem First
The company’s original goal was straightforward. It needed additional engineers with embedded systems expertise to support its quality assurance activities. Its existing team was struggling to keep pace with testing demands, and expanding its local workforce would have required a larger financial commitment.
Instead of building an entirely new department from scratch, the company began with five engineers hired through dedicated team services.
Under this arrangement, Newxel handled employment and local administrative responsibilities, while the client maintained control over engineering priorities, technical standards, and daily work assignments.
This distinction was important. The company wasn’t simply outsourcing a project and waiting for a finished product. It was building an extension of its own engineering organization, with people who would work within its existing processes and answer to its engineering managers.
The first challenge wasn’t finding enough candidates. It was finding the right ones.
The client maintained its own interview process and technical requirements, rejecting candidates who didn’t meet its standards even when doing so slowed recruitment. That approach required patience, but it also helped establish expectations for the engineers who would eventually join the growing operation.
For entrepreneurs, there’s an important lesson here. When a business begins expanding, the temptation is often to fill positions quickly so work can move forward. Yet the first few employees frequently shape the culture, standards, and expectations of everyone hired afterward.
A small team built on strong foundations can be easier to expand than a larger organization forced to correct early hiring mistakes.
Growing From Five Engineers to 24 Without Rushing the Process
Once the initial team was established, the company didn’t immediately set out to hire dozens of additional engineers. Expansion followed the work that needed doing.
The first additions focused on QA automation, helping address the manual testing bottlenecks that had prompted the original engagement. As the company’s needs evolved, it brought in embedded engineers, professionals who could work across firmware and hardware, and specialists capable of supporting additional product lines.
Each new position was tied to an existing operational requirement rather than an ambitious headcount target.
Over six years, the team grew from five engineers to 24, gradually becoming a much more substantial part of the company’s research and development capabilities.
This approach may not produce the dramatic hiring announcements that often accompany fast-growing startups, but it offers a practical alternative for businesses that want to expand without committing resources before they need them.
Hiring too far ahead of demand can create unnecessary financial pressure. Hiring too slowly, on the other hand, can leave existing employees overwhelmed and delay important projects. The challenge is finding a pace that reflects actual business requirements.
The U.S. Small Business Administration’s guidance on growing a business emphasizes the importance of planning for the financial and operational demands of expansion, whether that involves additional employees, new locations, or more resources. For this company, adding engineers gradually allowed its workforce to grow alongside actual projects.
The Turning Point: When a Small Team Needed Real Management
One of the most important changes occurred when the engineering group grew beyond approximately 10 people.
During the early stages, the client’s engineering managers could coordinate directly with the remote team. With only a handful of employees, that arrangement was manageable.
As the group expanded, however, recruitment, onboarding, facilities, employee concerns, and administrative responsibilities began consuming more time. Managing those activities from roughly 2,000 kilometers away was becoming increasingly difficult.
The solution was to appoint a local site manager with approximately 20 years of experience.
The manager took responsibility for day-to-day operational matters, including hiring coordination, onboarding, and facility management. Meanwhile, the client’s engineering leaders continued directing technical work, reviewing code, establishing priorities, and making product decisions.
This separation of responsibilities helped the organization continue expanding without forcing its engineering managers to become full-time administrators.
It’s a familiar challenge for small business owners. In the beginning, founders often handle nearly everything themselves, from recruiting employees to approving purchases and resolving operational problems. That hands-on approach works when a business is small, but it becomes increasingly difficult as the company grows.
Small business owners often face this challenge. In the beginning, founders often handle nearly everything themselves, from recruiting employees to approving purchases and resolving operational problems. That hands-on approach works when a business is small, but it becomes increasingly difficult as the company grows.
According to the U.S. Small Business Administration’s guidance on hiring and managing employees, growing businesses need clear employment procedures, payroll systems, and an understanding of their responsibilities as employers. These requirements become more demanding as the workforce expands. U.S. Small Business Administration
Eventually, growth requires more than additional employees. It requires people who can take ownership of essential business functions. In this case, bringing in an experienced local manager relieved the client’s engineering leaders of administrative responsibilities while allowing them to maintain control over technical decisions.
The Unexpected Challenge: Building the Infrastructure to Support Growth
Hiring engineers was only part of the expansion. As the team took on more responsibilities, the physical and technical requirements of the operation became more demanding.
By the time the group exceeded 20 people, ordinary office arrangements were no longer sufficient. The company needed a dedicated facility that could accommodate its engineers, testing equipment, and development activities.
The operation eventually expanded into a purpose-built facility measuring more than 500 square meters, with its own testing laboratory.
But securing enough space was only the beginning.
Hardware testing requires dependable electricity, reliable connectivity, appropriate equipment, and secure working conditions. An unexpected power interruption or network failure can disrupt testing schedules and delay engineering work.
To address those risks, the facility incorporated redundant power systems using inverters and generators. Its network infrastructure combined high-speed fiber connectivity with Starlink as an additional connection option.
The operation also had to account for physical security, equipment management, and local compliance requirements.
None of these needs had been central to the original plan to hire five QA engineers. They emerged as the business relationship developed and the engineering team’s responsibilities expanded.
For entrepreneurs, this illustrates an often-overlooked reality of business growth: expanding capacity creates new expenses and responsibilities beyond salaries. A growing company may need better software, more sophisticated financial systems, additional insurance, stronger cybersecurity, or larger facilities. The National Institute of Standards and Technology (NIST) provides cybersecurity resources specifically for small businesses, including guidance on protecting systems, data, networks, and connected devices. These considerations become increasingly important as organizations expand their operations and rely on more complex technology. NIST
Businesses operating physical facilities also need to consider employee safety and working conditions. The Occupational Safety and Health Administration (OSHA) provides small business resources covering workplace hazards, safety programs, and employer responsibilities. While the exact requirements vary by business and location, the broader lesson is that facilities and operational safeguards should be part of expansion planning rather than addressed only after problems arise.
Keeping Control While Delegating Responsibilities
Another important factor in the company’s growth was the decision to retain control over its core engineering work.
Throughout the six-year engagement, the client continued to determine technical priorities, product architecture, code review requirements, and release decisions.
The engineers worked within the client’s existing tools and processes, following its standards and receiving assignments through its established project management systems.
Newxel, meanwhile, handled responsibilities associated with operating the team in the hiring country, including employment, payroll, HR, local taxes, legal and financial administration, equipment, and facilities.
This arrangement allowed the client to expand its workforce without having to establish and manage every aspect of a separate local business operation.
It also reduced the risk of losing direct control over important product development decisions.
For business owners considering outside partners, this distinction deserves attention. Delegating administrative or operational work doesn’t necessarily mean giving up control of the activities that make a business competitive. However, companies also need to understand which legal and financial responsibilities remain with them. The Internal Revenue Service’s guidance on hiring employees outlines important U.S. employer obligations involving employment eligibility, employee records, and tax withholding. International staffing arrangements introduce additional considerations based on the countries involved, making clearly defined responsibilities especially important. Internal Revenue Service
The key is establishing these responsibilities from the beginning, including who makes decisions, who manages employees, who handles compliance, and how performance will be evaluated.
Why Employee Retention Became a Competitive Advantage
One of the less visible challenges of growing an engineering organization is maintaining continuity.
When experienced employees leave, companies lose more than the time required to replace them. They also lose familiarity with internal processes, technical decisions, product history, and the reasoning behind previous work.
For an engineering team supporting complex hardware products, repeatedly rebuilding that knowledge can be especially disruptive.
Newxel reports an overall employee retention rate of 98%, which it identifies as an important factor in supporting long-term client relationships. The company also emphasizes continuity as one of the strengths of this six-year engagement.
Although the case study doesn’t provide a separate retention figure for the 24-person team, the broader point remains relevant: retaining experienced employees can help organizations preserve institutional knowledge as they grow.
The value of an experienced team becomes increasingly apparent when employees understand not only what they’re working on but also why earlier decisions were made.
For small businesses, this is a reminder that recruitment and retention should be considered together. The importance of employee continuity becomes clearer when looking at broader workforce trends. According to the U.S. Bureau of Labor Statistics’ 2026 Employee Tenure Report, the median time U.S. wage and salary workers had been with their current employer was 4.1 years in January 2026. While that figure doesn’t directly measure retention at Newxel or the client company, it provides useful context for understanding the challenges businesses face in maintaining experienced teams over long periods. 2025 A01 Results
Hiring talented employees is important, but creating an environment where they can remain productive and continue developing their expertise can be just as valuable. For a company managing complex engineering projects, the continuity of experienced employees can help preserve knowledge and reduce the disruption that comes with frequent personnel changes.
The Results: A Small Team Becomes a Full Engineering Operation
Six years after the initial five-person engagement, the company’s engineering operation had developed into a much larger organization.
The reported results included:
- 24 engineers supporting quality assurance, embedded development, and other engineering functions.
- More than six years of collaboration, allowing the operation to develop over time.
- A dedicated facility exceeding 500 square meters, including a testing laboratory.
- 24/7 operational coverage supporting the client’s product lines and time zones.
- Dedicated local management and infrastructure, allowing the client’s engineering leaders to concentrate on technical priorities.
These results show the scale of the operation, but they don’t show how much the client saved or how much faster its products reached the market. Those outcomes would require additional financial and performance data.
The case does show how an initial decision to address a specific staffing problem evolved into a more comprehensive engineering operation.
The company didn’t begin with a plan to build a 24-person R&D center. It began with a pressing operational need, tested a staffing approach, and expanded as the business requirements justified doing so.
Five Business Growth Lessons Entrepreneurs Can Apply
Although this story involves a hardware technology company, many of its lessons apply to smaller businesses in other industries.
1. Solve the immediate problem before planning a major expansion. The company started by addressing a specific QA bottleneck rather than trying to build a large engineering department immediately. Entrepreneurs can take a similar approach by identifying the operational constraint that’s limiting growth and investing in that area first.
2. Maintain hiring standards even when growth is urgent. The client took responsibility for interviewing and selecting engineers, even when rejecting candidates delayed recruitment. The people hired during the early stages helped establish the foundation for later expansion.
3. Introduce management before operational responsibilities become overwhelming. Once the group passed approximately 10 engineers, local management became essential. Small business owners should watch for similar warning signs, particularly when routine administrative responsibilities begin interfering with strategic work.
4. Budget for the systems that growth will require. The expansion eventually required specialized facilities, reliable power, network redundancy, equipment, and compliance support. Businesses should consider the infrastructure needed to support additional employees rather than calculating growth costs based on payroll alone.
5. Protect the activities that define the business. The client delegated employment and local operational responsibilities but retained control over engineering decisions. Entrepreneurs can use partnerships to expand capacity while keeping important strategic and quality decisions within their own organizations.
Final Thoughts: Sustainable Growth Is About More Than Headcount
The journey from five QA engineers to a 24-person R&D operation wasn’t built around a single dramatic expansion. It happened through a series of decisions about when to hire, what responsibilities to delegate, and which systems needed to be strengthened as the business grew.
Some of the most consequential decisions had little to do with engineering itself. Appointing a local manager, investing in reliable infrastructure, and maintaining consistent hiring standards helped create the conditions for a larger operation to function effectively.
For entrepreneurs, the broader lesson is that growth isn’t simply a matter of adding more people or increasing revenue. It’s about building an organization capable of handling greater responsibilities without losing the qualities that made the business successful in the first place.
A company may begin by hiring just a few people to solve an immediate problem. With the right structure, those early decisions can become the foundation for something much larger.
Frequently Asked Questions
How can a small business scale without hiring too quickly?
A practical approach is to connect new hires to specific business needs rather than hiring toward an arbitrary employee target. Businesses can begin by identifying their most pressing operational bottlenecks, adding the necessary expertise, and evaluating whether the additional capacity justifies further expansion.
When should a growing business hire a dedicated manager?
The right timing depends on the complexity of the operation rather than employee count alone. In this case, local management became important when the engineering group grew beyond approximately 10 people. Business owners should consider additional management support when recruitment, onboarding, and operational coordination begin taking too much time away from core responsibilities.
What are the benefits of dedicated engineering teams?
Dedicated engineering teams can provide access to specialized expertise while allowing a company to retain control over technical priorities and standards. Depending on the arrangement, an external provider may handle employment, payroll, recruitment support, compliance, equipment, and facilities.
What additional costs should businesses expect when expanding?
Beyond employee salaries, growing companies may need to invest in workspace, equipment, management, software, cybersecurity, insurance, regulatory compliance, and reliable infrastructure. These costs vary considerably depending on the industry and type of work involved.
Why is employee retention important during business growth?
Experienced employees develop knowledge about company processes, customers, products, and past decisions. Retaining that knowledge can reduce disruption, improve continuity, and make it easier for new employees to become productive as the organization expands.
