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How Much Does It Cost to Hire Software Developers in 2022?

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5 min read

After an innovative software development idea has been conceived, and the project’s functionality or specifications outlined, the question of how to put the idea into practice comes to the fore. Let’s examine the core questions to ask while hiring a software development team.

What Is the Cost of Outsourcing, and How Can You Keep Your Budget Safe?

Freelance Developers

Indicative rates charged by freelance developers for different languages and platforms can be in the region of the following:

These figures though are broadly based on the US market. Given the global expertise that is available, it can be worth considering developers from other countries than the company’s own one as a way to reduce software development costs. Some popular aggregator sites where business owners can find and hire freelancers include:

Software Development Companies

Let us assume that a company is contracting out for a software development team, rather than trying to recruit developers to augment an in-house team. The location of the developer plays a role in the cost quote for a project, due to variances in global standards of living and local market demand.

For example, costs for US software developers will bring such associated expenses as social security, disability insurance, healthcare, unemployment insurance, and annual bonuses. Rates of developers from northern and western Europe will have to take account of a payroll tax, social insurance, municipal tax, state tax, healthcare, unemployment, pension, and other components.

As major Western markets have higher costs, exploring further afield can be valuable. A recent report from Accelerance provided the following indicative ranges that show how much can be saved:

It is worth noting that the Eastern European market especially benefits from having highly educated, English-speaking developers who are able to offer a wide range of IT services. For instance, Belarus stands out due to its technical expertise, former‑Soviet background, compliance with the EU law and regulations, and brings additional bonuses associated with Hi-Tech Park.

Hi-Tech Park is one of the foremost innovative IT clusters in Central and Eastern Europe. It provides a special business environment with incentives, such as lower taxes and others, unprecedented for European countries, and brings together 173 companies as of July 1, 2022.

How Is Distance Communication in Different Time Zones Carried Out?

It’s no use having minimal costs if it takes an inordinate amount of effort to ensure the progress of the development team.

Global communications have been revolutionized. While timezone differences may lead to a delay in responses, most European software developers are used to working flexible hours. So much so that even for customers in the US market, timezone challenges can be considerably reduced.

For example, when a Belarusian Team Lead or a Project Manager is required for a call, even if scheduled for 11 PM or 7 AM, they will adjust to the customer’s needs. And within Europe itself, working cross-borders is increasingly becoming the standard for many firms.

How Can the Development Process Be Made Fully Transparent?

The advantage of working with software developers is that they are well equipped to make the process visible.

A professional developer will provide instant access to the project’s status in a project tracking tool such as JIRA, Trello, or any other, and hold stand-ups via any preferred channel: Skype, Phone, Email, Google Hangouts, Slack, WebEx, or similar.

For instance, in JIRA a customer can see all project’s details in real-time: epics, user stories, backlog and sprints, tasks, etc. This visibility enables the client to stay totally informed about the project’s progress and make timely changes if needed.

How Is Knowledge Transfer Carried Out?

If you have an existing product or system, a new development team will need to dedicate some time to get into the details of the product/system before starting on the actual software development. There can be several ways of knowledge transfer: online or on-site.

Online knowledge transfer can be carried out via a video conferencing and desktop sharing solution, or their combination: Skype, Google Hangouts, WebEx, Team Viewer, or similar.

On-site knowledge transfer means that a team will travel to the customer’s office and personally collect the required knowledge. Conversely, a client may come to the developer’s location and provide the needed transfer of information. The applicability of the above options likely depends on the complexity of the software development required.

Who Pays for Expenses and Downtime?

Paying for expenses and the team’s downtime depends on the particular contract model followed. While there are several types of engagement models, the two most often used ones are Fixed Price (FP) and Time & Materials (T&M).

The cost of an FP contract does not depend on the resources used or time expended and is solely related to the achievement of the deliverable. FP contracts place a minimum administrative burden on the contracting parties but put the maximum risk on the contractor (in terms of the cost escalation – for example, should development take longer than was planned).

For T&M, the cost is directly linked to the time and materials used and expended by the contractor, albeit it often has a specified upper limit and / or deliver-by time.

The key point is that it should be specified within the contract what is covered in terms of payments.

How Can I Be Sure About the Quality I’ll Get?

Freelance developers and software development firms usually provide references for projects that they have delivered previously, and / or are ready to discuss the technical qualifications of their staff and their alignment with the latest development trends. It is important to note that the more detailed requirements and specifications of the project you provide, the easier it is to estimate costs and check against delivery.

Bottom Line

Considering contracting with software developers in another country can seem like a big step. It can appear to be a risk, especially if the business owner has only previously partnered with a local team. But the opportunities offered in terms of gaining access to expertise at a lower software development price are significant. There can be potential challenges related to different time zones, project transparency, and knowledge transfer, but none are insurmountable and most can be easily and swiftly addressed. 

Sergei Vardomatski


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Sergei Vardomatski - Founder - HQSoftware dev company

Sergei Vardomatski