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How Much Does it Cost to Hire Software Developers?

How Much Does it Cost to Hire Software Developers?

Software development cost is a massive concern for businesses of all sizes. Today, the cost of hiring a software developer has become so competitive that some organizations are paying more to get quality work done.

Fortunately, finding software developers online has never been easier for small businesses and startups. And luckily, many open source projects have made it possible for developers to work almost for free for certain tasks. These factors combined make finding quality programmers online much easier and more cost-effective than ever before.

But determining the cost of a particular software development project can be difficult. At best, you can estimate your budget, but it may not accurately represent the final cost of your project. Unlike products produced on an assembly line, costs cannot be determined by referring to past projects. Not every software development project is similar and costs the same. However, to find out exactly how much it costs to hire software developers or to get an estimate, take a look at these critical cost-influencing factors.

Key factors influencing the cost of hiring software developers

Project size

The size is a bit of a guess. There tends to be a close correlation between the cost of a project and its size. Project sizes generally fall into the following categories:

  • Small projects

Small projects usually contain small changes like UI optimizations or bug fixes with well-defined and known root causes. Customer interaction is also limited in small projects, resulting in less time consumption and low cost. Medium-sized projects

These engagements are larger than small projects but likely have a clearly defined scope and are often standalone solutions or integrations. Usually, with such projects, you deal with a single data source. Projects such as small mobile applications or web interfaces to existing inventory systems fall into this category. External requirements to interact with customers are more robust than smaller projects. This may include several design sessions, weekly check-ins, and milestone sign-offs.

  • Large projects

These solutions come with more depth and complexity. Larger projects may require integration with multiple systems, database components, security, and logging capabilities. Underlying frameworks and module-based designs for scalability and maintainability are common. Multi-party applications running on multiple platforms (iOS, Android, Web) fall into this category. External requirements for customer interaction are very robust, resulting in extended design meetings and milestone agreements. Daily phone calls and interactions with technical team members, followed by weekly progress calls with senior management, are the norm in large-scale projects.

  • Enterprise-level project

These are significantly large projects but more complex. Enterprise-level projects are built almost entirely on top of the underlying framework. Security, logging, and error handling are much stricter. Data integrity and security are paramount for these mission-critical applications. Although not limited to this category, support systems are resilient and designed to handle two to three simultaneous failures in the underlying infrastructure before impacting users. Mobile apps like Uber are an example.

Determining the size of a project is a good starting point for estimating the cost to hire software developers.

Features and team size

Features can be one of the biggest drivers of software development costs. The more commands a program requires, the higher the price. The logic behind this is simple; more people need to work on a specific project and spend more time developing it.

The developer must complete each feature of the software. Otherwise, it will not work or meet the requirements. This means that everything the program needs to do based on each command must be present and function properly. Of course, certain features require specific skills that not all developers possess. For example, suppose you're building an app that needs the attention of an experienced developer. In that case, it's natural to assume that their hourly rates are much higher than junior/intermediate-level developers.

Different levels of engineers have different salary grades, and jobs are assigned based on experience and knowledge. Leave simple tasks to less skilled developers, and let more experienced developers handle complex features (such as payment integration). As a company, you should consider what it takes to create the desired software and have a complete picture of the amount of work and the required number of developers assigned to the project.

The more complex the project, the more experienced software developers should work on it. This factor also affects the cost to hire software developers.

Project schedule

Developers are paid by the hour, so the time it takes to complete a project affects its overall cost (estimates ranging from $30 to $150 per hour based on skills, experience, and responsibilities). Determining how long a software development project will take is challenging.

Teams running into minor problems can create a domino effect and cause many deadline delays. For this reason, we recommend that you consider an incremental approach. This approach allows you to divide your project into different phases and create a budget for each phase.

You can adjust the budget after completing each phase based on the costs of the previous phase. It depends on whether the project meets the deadline or if the schedule needs an extension.

Scope of the project

In a software development project, the workforce and timelines are likely to be fixed (whether or not you choose fixed iterations), but the scope is more likely to change as the project progresses. This is the result of constant feedback from stakeholders during the development of the software. You can decide whether to reduce costs by removing features you deem unnecessary or adding features that increase costs. Of course, the larger the scope, the higher the cost to hire software developers.

In-house vs. outsourcing

When you’re looking at hiring in-house software developers, you have a couple of options for how to go about it. The first is to hire someone directly in the company for a permanent position, which means you’ll have to pay them a salary and provide benefits. This can be costly, especially if you’re a startup or small business and have a team of 10 or more developers.

The second option is to outsource your software development to an outside software development company. Outsourcing allows you to hire qualified candidates at low rates while still getting access to their expertise and experience.

While in-house development is often the better choice to retain control over who works on your projects and to monitor progress more easily but when it comes to costs with quality, outsourcing developers is a much better option.

How much does it cost to hire software developers?

The cost to hire a software developer depends on these three categories:

In-house developers

When a business decides to hire developers for a software development project, it should also consider the cost accrued by this recruitment. According to Payscale, corporations must pay $44 - $82/hour to hire an in-house software developer in the US. Hiring an in-house software developer has many pros, like project control, feature customization, and timely updates, among others, but this option is quite expensive for small businesses and startups.

Freelance developers

As per Glassdoor, you can expect to pay $82,978 per year to a freelancer and that cost can vary based on projects ranging in size from small to enterprise. But hiring freelancers for large and enterprise-level projects is not viable as they are more prone to leave projects in-between and sometimes unable to provide continuous support.

Outsourcing

Outsourcing is considered the best option for software development as you can access worldwide talent at various prices. Whether your business is small or big, it is easy to find a software developer that fits your budget through this hiring option. According to Geniusee, hiring an offshore or outsourced software developer will cost around $18 - $50 /hour depending on the outsourcing country.

Conclusion

The hiring cost may be based on assessing those mentioned above and other additional factors. A higher salary can be offered for culturally fit candidates who know the industry and has desired skill set. However, many other factors affect the cost of hiring software developers, which aren't that straightforward. While there is no way to predict the accurate project cost or the time it'll take to be completed, you can always plan the budget in advance and make educated and data-driven decisions when making an offer.

It’s quite hard to find suitable hiring options that fit everyone’s budget needs. But Turing got you covered in this case. Whether you’re a small business or a large enterprise, Turing has developers that suit everyone’s budget. We’ve got 2 million+ developers from 150+ countries across 100+ skills, all pre-vetted for a Silicon Valley bar. So, hire today to start your 2-week risk-free trial and start building your dream engineering team within your budget.

Author

  • Author

    Aditya Sharma

    Aditya is a content writer with 4+ years of experience writing for various industries including Marketing, SaaS, B2B, IT, and Edtech among others. You can almost always find him watching anime or playing games when he’s not writing.

Frequently Asked Questions

The average cost of a software developer as per Indeed is $100,000-$150,000.

This includes the salary of the software developer, as well as all other costs associated with hiring and retaining that person.

The cost of hiring a back-end developer depends on several factors, including your budget and the scope and complexity of your project.

According to PayScale, the average base salary for a back-end developer in the United States is $69,766 per year for beginners, and it goes up to $96,468 per year for experienced developers.

The cost of a full-stack developer depends on the type of work you need to be done, the experience level of the developer, and how much time they're willing to spend on your project.

As per Indeed, $35.47 per hour is feasible for a newbie or one who has only worked on small projects. If you're looking for someone who can do more complex work, like building a larger application or working on large databases, the cost can go up to $45.2 per hour.

For developers who have years of experience in their field and are highly skilled, the cost range varies between $55-$75 per hour.

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