How Much Does It Cost to Hire a Developer?
Updated on Mar 8th, 2023
The cost of hiring a developer varies on multiple factors, including the experience and skill of the developer, the type of software project, and the developer’s location. In this post, we’ll unveil various factors and components that decide the cost of hiring a developer and see how you can optimize the same to get the best value at a minimum cost.
- The cost of hiring a software developer includes various components like salary, recruitment cost, technical assessment, etc.
- The cost of hiring an in-house developer has additional constituents like company benefits, office space, equipment, resource training, and management.
- The location of the developer also plays a huge role in deciding their hiring cost. Generally, developers in large cities and countries tend to cost more than developers in emerging demographics.
- The cost of hiring a developer also varies depending on the type of project and the developer’s experience level
Table of Contents
Components of the Cost for Hiring a Developer
Now, when we talk about ‘how much it costs to hire a developer,’ we do not only mean their remuneration. As an investor, you have to budget for everything that goes into the process of hiring a software developer, training them for the role, and allocating resources to them to get them ready for the job. Here is a brief description of the various components that formulate the developer hiring cost.
Although it is not the only cost component, it is the most substantial one when finding out how much does it cost to hire a developer. A developer’s salary can vary widely depending on their experience, location, and industry. We’ll talk about all these factors and their effect on the overall cost of development later.
A company can source a developer by posting job advertisements on online job portals such as Indeed, LinkedIn, Glassdoor, and Monster. They can also contact local universities and recruiters for assistance in finding qualified developers. However, all these sourcing techniques have a cost associated with them too. A recruitment agency charges the most from among the different options, which usually ranges from 15 to 25 percent of the developer’s annual salary.
The second most expensive way of sourcing developer candidates is through job portals. Generally, most job portals charge up to a 10 percent fee on the developer’s total compensation package. However, depending on the job portal and the specific job posting, this fee could get higher or lower, making huge differences in the final answer to your question- how much does it cost to hire a software developer?
Internal Recruiter Costs
If yours is a big company or project, you may consider hiring a full-time recruiter or a recruitment team in-house. Now that, too, gets added to the ultimate cost of hiring a developer. This particular component also depends on factors like the size of the company and the scope of the recruiter’s responsibilities. Generally, the cost of an internal recruiter may range from $30,000 to $100,000 per year, including salary and benefits. Additionally, the company may need to invest in recruiting software and other resources to support the role.
The cost of assessing a developer’s candidature depends on the job’s complexity and the applicant’s experience. Generally, the cost of an initial assessment would include the cost of interviewing the applicant, reviewing their resume, and conducting a technical assessment through questionnaire tools. It may also include additional fees for background checks. Depending on the job’s complexity, the assessment cost may range from a few hundred dollars to several thousand dollars.
Factors Associated with Developers’ Remuneration
The developer’s salary varies depending on various factors, including the type of developer, level of experience, technology demand, etc. Let’s understand these and other major factors influencing a developer’s salary and, eventually, how much does it cost to hire a software developer.
Developer Skill Level
Developers with more technical skills, such as proficiency with specific coding languages, can earn higher salaries. Developers with more experience also earn better remuneration than those with less.
|Experience/Skill Level||Average Salary Range/Annum|
|Entry-Level||60,000 – 140,000 USD|
|Mid-Level||75,000 – 165,000 USD|
|Experienced||87,000 – 190,000 USD|
Type of Software Developer
The cost of hiring a software developer varies greatly based on the type of software being developed and the complexity of the project. It usually ranges from a few thousand dollars for simple applications to millions of dollars for more complex software solutions.
|Frontend Developers||Backend Developers||Full-stack Developers|
|65000-162000 USD/Annum||70000-190000 USD/Annum||66000-160000 USD/Annum|
Software as a Service (SaaS) is a cloud-based web application in which applications are hosted by a third-party provider and made available to customers over the internet. They are typically accessed through a web browser. They are today the most popular delivery model for various business applications, including customer relationship management (CRM), enterprise resource planning (ERP), and analytics. Since SaaS uses a cloud infrastructure instead of a single server, their development requires additional costs associated with cloud management. They are also quite scalable and have high uptime. For all these reasons, SaaS development has a huge demand in the market, which has propelled the developers’ salary to range between – 65000 to 150000 USD annually.
Enterprise Software Developers
Enterprise software solutions provide organizations with the tools they need to efficiently manage their business operations. They can help organizations streamline their processes, improve efficiency, and increase productivity. They can also provide tools for data analysis, security, and customer experience and can be developed to meet the specific needs of any organization. Since these software programs are usually created to streamline large-scale operations through integration, the cost of hiring a developer for enterprise software development would remain in high numbers but a narrow range, i.e., 80000 to 108000 USD.
Mobile App Developers
Mobile app developers are programmers who create software applications that run on a mobile device, such as a smartphone or tablet. Mobile apps are created to perform specific tasks and functions and can be downloaded and installed from app stores. These apps are typically designed to enable users to interact with the device and its functions, such as making a purchase, playing a game, or connecting to social media. Mobile apps can also be further divided into two categories- native apps (iOS and Android) and cross-platform. Now developing a mobile app of any type requires a wide range of skills, including coding, design, and user experience, and the complexity of all these skills decides the final cost of hiring a mobile app developer. Here is a brief overview of the hiring cost based on the type of mobile app.
|iOS Developers||Android Developers||Cross-platform App Developers|
|60000-123000 USD/Annum||60000-116000 USD/Annum||90000-128000 USD/Annum|
Smart Television Software Developer
Developers’ Cost as per Location
One major factor that affects how much does it cost to hire a developer is their location. Generally, developers in larger cities are more expensive than those in smaller towns and rural areas. In the US, developers in New York, San Francisco, Los Angeles, and other major cities tend to be the most expensive. Similarly, developers in London, Paris, Berlin and other major cities tend to be the most expensive in Europe. However, all of them still cost a lot more than the developers in the Philippines, Ukraine, India, and Eastern Europe. Here’s an approximate range of hiring developers in various locations.
|United States of America||$79,257 – $140,863|
|Switzerland||CHF 76’361 – CHF 135’716|
|Canada||$82,662 – $146,915|
|United Kingdom||43,647 – £77,573|
|Germany||59.735 € – 106.167 €|
|Netherlands||€ 51.835 – € 92.126|
|France||48 088 € – 85 466 €|
|Spain||39.513 € – 70.226 €|
|Philippines||₱561,384 – ₱997,743|
|Japan||￥6,797,356 – ￥12,080,891|
|Ukraine||494 328 грн– 878 566 грн|
|India||₹13,40,710 – ₹23,82,834|
|Belarus||BYN 13,341 – BYN 23,711|
Hiring Developers In-house vs. Outsourced
When it comes to hiring developers, there is no one-size-fits-all solution. Each organization must weigh the pros and cons of in-house and outsourced software development services and decide which option is best for its needs. And only in the end will they have the qualitative answer to their question – how much does it cost to hire a developer?
In-house Software Developers Hiring Cost
Hiring developers in-house has the biggest advantage of having a dedicated team that is exclusively focused on the organization’s development needs. This can result in increased productivity and better collaboration. In addition, in-house developers can be more easily integrated into the organization’s culture and processes. However, the cost of hiring and maintaining an in-house development team can create issues for some organizations. There are various components that add up to the cost of hiring software developers in-house that can eventually overflow the decided budget for the company.
Benefits such as health insurance, paid time off, vacation days, and other perks are big constituents of an in-house hired software developer. Companies offer these perks to attract the best developers, but eventually, it does add up to the cost of hiring a developer.
Depending on the size of the team, office space may need to be rented or purchased. This space is necessary to house the developers and their necessary equipment. Depending on the project, additional hardware devices, like AR devices and other peripherals other than the coding computer, may also be required, and the office space must accommodate all of that.
Technology Fees and Assets
It is not just the space. The equipment and other assets required for software development themselves contribute substantially to the overall cost. Hardware costs, among these, include the cost of purchasing and setting up hardware like computers, servers, and storage devices. Software costs include license fees and applicable fees related to maintenance and support. All of these costs can add up quickly and should be taken into consideration when budgeting for hiring a software developer in-house.
If the development project requires travel, companies may have to cover the expenses associated with it as well. These include travel expenses, visa application fees, accommodation, and the cost of mandatory background checks.
Cost of Outsourcing Software Developers
Outsourcing developers from an offshore development company offering staff augmentation services and other hiring models is a more cost-effective option for budget-conscious organizations. Not only does that allow companies to hire dedicated developers from countries with lower wages, but they also get to choose from a larger pool of talent, specialized skills, and expertise. Usually, the developers, when outsourced, are responsible for handling all the travel expenses, if any, and the assets management costs. They are not entitled to any company perks or working spaces, which dilutes the overall cost substantially.
Hourly Salary Comparison
The major cost constituent of hiring a developer is their salary. While the salary majorly depends on the developer’s experience, skills, and project scope, the way you hire a developer often proves to be the most significant factor. Usually, you can outsource a developer at an hourly pay of 20 to 70 USD. However, to hire a developer in-house, you have to shell out a minimum of 30 USD per hour as a basic salary to over 100 USD per hour for a truly experienced developer.
Maximizing ROI on Hiring Cost of Developers
Hiring software developers can prove to be unnecessarily expensive. Like if a company is using a hiring model that puts too much emphasis on qualifications or experience, they may overlook qualified candidates who lack those credentials. Similarly, if a company is not careful in matching the right candidate to the right job, it may end up hiring someone who is unsuited for the role and costing them more money in the long run. Finally, if the hiring model relies heavily on interviewing and testing, the company may be wasting money on unnecessary costs associated with those processes. All these additional costs associated with hiring a software developer can be minimized by using a suitable approach.
Cover the Full Scope
Before you start investing in hiring developers, it’s important to know what you want to accomplish. Define your goals and the project scope, and make sure they are in line with the overall objectives of your business. Once that’s done, you can easily provide a detailed job description and set expectations for performance.
Plan Well in Advance
Before you invest in hiring dedicated developers for your project, identify the specific software development skills needed and create a job posting that outlines the necessary qualifications. Reach out to universities and job boards only after carefully determining the criteria for selecting candidates and setting up an interview process.
Facilitate Seamless Communication
Often, companies spend a lot more than needed on a software development program due to unclear and redundant communication. You can easily eliminate both by establishing clear communication channels between the development team and stakeholders. Using project management software in conjunction with superior quality communication software tools will also help in maintaining a tight hold on the budget and the timeline of the project, so everything stays well under control.
Software testing helps to identify errors, bugs, and other issues in the software before it is released. Finding and fixing errors before the software is released can save the company money in the long run, as it can prevent costly post-release fixes and customer dissatisfaction. Additionally, software testing can help to ensure the software is released on time, which can save money by preventing any delays in the launch.
There is no single range that you can put the cost of hiring a software developer into. It depends on a variety of factors, including the type of software development project, the experience level of the developer, and the geographic location of the developer, etc. This is why it is far more important to consider all of these factors than to find the cost through other references. Moreover, by planning in advance the full scope of the project and the requirements from the developers, companies can save lots of money from overhead expenses.
In the end, if you really want to know the exact cost of hiring software developers for your project, there’s no better way than to request a quote with a comprehensive plan. With Matellio, you can request a free quote and development plan by simply filling up this form and consulting your software requirements with our experts. You will find no easier way to find the cost of hiring a developer for any project at all.
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