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Hiring In-House vs Remote Developers – a Cost-Based Comparison

Posted Apr 01, 2020 Trends

In the current situation, remote work has become a life-saving solution for the majority of companies. Even the most conservative proponents of office work, like banks, have come to realize that remote work is not all that scary, and with a well thought-out approach it can be even more efficient than working in the office.


If you're currently faced with making talent decisions, hiring remote employees is worth considering for two basic reasons — flexibility and cost efficiency

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How Does Hiring Remote Developers Help to Keep Your Company Flexible and Productive? 

The experience of global companies has shown that shifting to remote collaboration increases business flexibility and can help to get through tough times such as the worldwide quarantine. 

The main precondition for successful remote collaboration is setting your work processes the right way. Here are the four steps to manage this task:

  • Distribute responsibilities (make sure remote developers know who to contact in each specific situation); 
  • Arrange daily sync-ups (you’ll no longer be able to turn around and clap your colleague on the shoulder to ask what they’re currently working on);
  • Develop a service-level agreement (determine a universal response time for all employees in different communication channels);
  • Take care of security (make sure developers have antivirus software, use their personal devices according to BYOD, and have access to a secure network).

How Does Hiring Remote Developers Help to Cut Costs? 

Hiring local employees in developed countries can be very expensive if you add all social benefits to net salaries

Remote collaboration offers more cost-optimized methods of recruitment than hiring in-house employees. There are many companies that offer services in remote tech talent recruitment. 

Such tech partners help businesses save on local recruitment and at the same time get access to markets with wide tech talent pools

To explore the costs for hiring developers, we recently researched four countries with developed economies that have a high demand for programmers — the US, the UK, the Netherlands, and Germany. We compared hiring costs in each of these countries with the cost of hiring developers in Ukraine through Daxx. 
 

 UKGermanyNetherlandsUSUkraine

Developer’s Annual Gross Salary Including All Company Taxes

$74,058$81,657$88,058$138,539$60,000

 

how much does it cost to hire developers

How Much Does It Cost to Hire Developers in the US, the UK, Germany, the Netherlands, and Ukraine?

The research shows that the US has the highest average annual after-tax cost per developer – $138,539. The Netherlands is next with $88,058.

Germany follows with $81,657, and the UK comes next with $74,058. Ukraine has the lowest average annual cost for a developer that ranges between $50,000 and $60,000

Let's compare the annual employment costs in the US and Ukraine to see the numbers in greater detail:

 Junior Software Developer Mid-Career Software DeveloperSenior Software Engineer
US developer cost
Annual net salary$63,735$106,816$139,148
Supplementary pay 3.2%$2,039$3,418$4,452
Insurance 8%$5,098$8,545$11,131
Paid leave 7.1%$4,525$7,583$9,879
Retirement and savings 3.8%$2,421$4,059$5,287
legally required benefits 7.6%$4,843$8,118$10,575
Total after-tax cost$82,661$138,539$180,472
Daxx developer cost
Total annual cost$37,200$60,000$67,800

 

how much does it cost to hire developers in the us

How Much Does It Cost to Hire Developers in the US?

All in all, tax contributions in the US make up 29.7 percent of the net salary. 

Hiring a junior software developer in the US will cost you $82,661 per year on average. If you need to hire a middle software developer in the US, you’ll have to pay $138,539. And hiring a senior developer in the US will add up to $180,472 on average. 

Meanwhile, hiring a junior developer in Ukraine will cost you $37,200, recruiting a middle software engineer in Ukraine will vary between $50,000 and $60,000 annually, while the after-tax cost of a senior programmer in Ukraine is around $67,800

You can find more detailed numbers regarding software development costs in the UK, the Netherlands, and Germany in our research

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Conclusion 

Hiring remote developers has now become a widespread practice all around the world as businesses continue to adapt to the rapidly changing work culture.  

High speed internet and a broad selection of available communication tools and methods make the move to remote collaboration as seamless as never before. And successful experiences of global players continue to prove it. 

If you're currently considering remote hiring options but still have lots of questions, don't hesitate to contact our experts and get a consultation on hiring dedicated developers in Ukraine with Daxx. 
 

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Olena Herasymchuk

Digital Content Creator

Olena Herasymchuk is a tech-driven Digital Content Creator at Daxx. She is eager to discover latest trends of the IT world and share valuable insights with the readers of the Daxx blog.

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