When it comes to the challenges organizations face when creating software, the availability of funding is a key factor. In the software development world, estimates can be unreliable and, without being prepared for the most common issues, project issues can arise.
A significant portion of the budget is likely to be allocated to recruiting and retaining software development personnel. It is important to consider the cost of employing a software developer, as well as the most effective way of sourcing and recruiting them.
The content of this article aims to provide an insight into the costs associated with hiring a software developer for your projects. We hope it will help you make informed decisions. Let us begin!
Is It Expensive to Work with a Software Developer?
In small tasks, one programmer may be sufficient. However, for more complex projects it may be necessary to have two specialized developers – one for programming and backend, and another for design and frontend. These developers will be able to work independently.
Freelancers may be the best solution for this kind of project integration.
Freelancers
Independent contractors, also known as freelancers, can be engaged by businesses to provide assistance with the implementation or development of a project on a temporary basis.
Why Use Independent Contractors
- Hiring a freelancer from a country with lower living expenses can be a cost-effective solution for companies. While the initial outlay may be greater than hiring an in-house employee, the long-term savings can be considerable due to the lack of legal fees and other benefits associated with an in-house worker.
- Engaging freelancers on a project-by-project basis can be a cost-effective and adaptable way of obtaining specialist skills for a specific project. By contracting with a freelancer for a limited amount of time, you can easily rehire them whenever you require their services again.
Costs Associated with Independent Programmers
In most cases, the operational expenses of freelancers are already included into their rates, making their pricing structures transparent.
It’s important to be aware of a few additional, less obvious expenses, though:
- When working with independent contractors, establishing open channels of communication is essential. To ensure that the project gets off to a successful start, it is important to arrange a suitable means of communication and file sharing. In some cases, this can be done without incurring any additional costs. However, if the requirements of the project are more complex, there is a risk that your organization could face unexpected costs if there is not a dedicated staff member to install and configure the necessary software.
- To ensure you select the most suitable contractor for your project, it is necessary to review the available options. It is important to consider any additional costs that may arise from the need to assemble a team and purchase any necessary equipment to assess the capabilities of prospective contractors.
In addition, there is the developer’s hourly charge to consider. What is the going rate for a software developer?
Dependent on factors such as location and expertise, the value might vary greatly:
| Situaiton on the Map | Wage Per Hour On Average |
| In the U.S.A. | $70 / hour |
| Both Down Under and Down Under | $70 / hour |
| Canada | $65 / hour |
| Arab Peninsula | $64 / hour |
| Southwestern Europe | $63 / hour |
| Somewhere in Eastern Europe | $56 / hour |
| Western Africa | $55 / hour |
| Those Countries in Latin America | $51 / hour |
| Asia | $49 / hour |
| Countries Previously Part of the Soviet Union | $49 / hour |
| Asia’s Northern Region | $41 / hour |
(As determined by Codementor’s algorithms)
What Does It Cost to Employ a Software Development Staff?
If a project is too extensive or intricate for a couple of freelancers to manage, it may be time to consider forming or finding a team to work on it full-time. This is where both outsourcing and recruiting in-house personnel prove to be beneficial.
Outsourcing
When outsourcing a project, it is possible to hire a team from a software development company to manage the process on your behalf. These companies typically have the necessary resources to successfully complete a project and may be able to adjust the size of their team as needed.
If You’re Not Going to Do It Yourself, Why Bring in Outside Help?
- Outsourcing companies are renowned for their ability to provide personnel with the necessary expertise and adaptability to meet the staffing requirements of any project. They are also able to adjust the number of specialists according to the needs of the project.
- Outsourcing is more practical and cost-effective than recruiting an in-house development team of developers.
- Working with a reputable software development company ensures you’ll have a high-quality end result.
Problems with Outsourcing and Their Solutions
When a project is outsourced, operating costs are kept to a minimum and typically remain within the parameters specified in the initial agreement. However, there are a few factors to consider.
- It is essential to ensure that a well-drafted contract, outlining the terms of the project’s implementation, is in place prior to the commencement of negotiations. Professional legal advice should be sought to draft and review the contract.
- It may be necessary to appoint a project manager to act as a liaison between your business and the development team, which could incur additional costs for your organisation.
- It is important to note that additional costs may be incurred if the project’s objectives change or additional features are identified during the development process. These costs may be stipulated in the contract or specified when the parameters are altered.
The cost of the project may include additional expenses related to its development. These costs are usually discussed at the start of the contract and depend on the capability of the development company and the size of the project.
| The Scope of Your Project | Average Hourly Wage | Minimal Costs |
| Small | $75 – $125 / hour | – |
| Medium | $200 – $300 / hour | $100,000 |
| Large | $250 – $850+ / hour | $500,000+ |
In-House
An in-house software development team can provide increased control over projects and enable you to tailor the team’s specialized capabilities to meet your requirements. This can also allow you to manage the speed of task completion to suit your needs.
Why Establish an Internal Group?
Power to Command entirely:
When you get to decide who you employ, you get to decide how quickly things get done and what kind of expertise is needed to complete your tasks.More Effective Interaction:
Rather than working with a third-party at the software company, you can communicate directly with the developers, which should make the process more efficient than if you were to use an external team.Self-sufficiency:
By creating an internal team, businesses can be equipped to manage future projects on their own and have the necessary support to complete projects without having to rely on external sources.Budgeting for software production:
As your team gains experience and access to additional resources, their efficiency and capacity to take on more daunting tasks will increase. Though there may be a substantial initial outlay, this will be offset by the improved project continuity, efficiency and quality of delivery.
The Expenses of Using an Internal Group
Hiring an in-house team to manage the project development is the costliest option; however, depending on the needs of the company, this could be a worthwhile investment. It is important to consider early on whether the company has the capacity to fund the associated costs.
Hiring:
Recruiting the right team is essential for a successful recruitment process, but it is also important to consider investing in technologies that can streamline the screening and hiring process. Without them, it can take months to fill job vacancies, leading to higher salary and operating costs. Dedicated service providers may be employed to aid in the process. According to Salary.com, the average yearly salary of a Human Resources Manager in the US is $111,648.Training:
Specialists who are a good fit for your company’s culture and procedures can be sourced, although they will need time to become familiar with the processes. The type of work undertaken by the developers will have an impact on the overall cost. Generally, the average cost of employing a worker is between £980 and £1,300 per year.- The costs associated with onboarding can vary significantly depending on the role being filled. Generally, paperwork and administrative costs are estimated to be around £400, while setting up a workspace for a new employee may range between £500 and £1,000. Relocation expenses may be considerably higher, depending on the distance and individual circumstances, with potential costs ranging from £20,000 to £80,000 or more.
In addition to these expenses, you must also cover the regular wages of your developers. Wages vary depending on the skills and workplace of each individual. For reference, here are a few examples:
| Expertise | Annual Wage Moderately Above Average |
| Distinguished Software Engineer | $137,130 |
| Craftsman of Computer Programs | $93,490 |
| Designer and Programmer of User Interfaces | $81,763 |
| Analyst, Quality Assurance | $79,590 |
According to Salary.com
Tips for Locating Low-Cost Software Engineers
Creating new software can be costly, so it is essential to make the best decision for your software development needs. We have gathered all known expenses to help you make an informed decision and avoid going into debt.
Works‘ IT Recruitment team can provide you with access to senior, highly-qualified software engineers to suit your requirements and budget – whether your project is small or large. Our team of experts have the skills to meet your needs and will identify the right individuals to work on your projects, ensuring compatibility with your company culture. Please do not hesitate to contact us.
