How Much Does It Cost to Hire a Software Developer in 2021
I think we can all agree that costing is the most important factor in making any business decision. If we look at the market, it tells us that demand for software has been increasing each year, and the industry is growing exponentially by the millions as well.
Employing a Senior level software developer in the United States will set you back between $130,500 and $170,500 per year, not counting taxes and benefits. In the Bay Area, a midrange software developer will set you back $90,050 to $155,550. On average, net salary accounts for 70% of overall developer costs, with taxes and perks accounting for the remaining 30%.
Why are Software Developers so Expensive?
Rapid technological breakthroughs and increasing development challenges have led to an increased demand for employing a software developer with extensive technical knowledge. A limited talent pool, on the other hand, is a primary factor for the high cost of employing a professional software developer.
In order to keep up with the latest industry trends and technology, the demand for highly trained developers has skyrocketed. According to industry forecasts, job opportunities in software development would grow at a rate of above 20% percent by 2026 (Source: EEWeb), compared to only 11% for all occupations combined. The fast-paced demand for cyber security, healthcare software, and mobile applications is expected to drive the demand growth.
Cost of Hiring a Software Developer
Your project can be completed by one of three types of developers: freelancers, in-house developers, or offshore specialist teams. Freelancers are mostly found through freelance websites, where they display their portfolios and look for related work. We will go through Upwork and use it as a source of developer rates.
Freelance developer rates, according to Upwork, are as follows:
- Front-end web development: $60-$85 per hour
- Back-end web development: $85-$160 per hour
- Desktop development costs between $40 and $110 per hour.
- Mobile development $50-$160 per hour
Because freelancers typically work for a global market remotely, geographical location does not play a significant impact on the developers pricing. If you are thinking of outsourcing a project that requires ongoing attention and uncompromising quality, you should think about other options. Freelancers are unlikely to be as committed to solving your company problems as in-house developers or dedicated teams.
A second alternative is to hire in-house developers and other project-related personnel such as a project manager, designers, testers, and so on. This is an incredibly costly option because you will have to bear all costs associated with hiring and retaining people and keeping them in-house for a longer period of time than the project may last. Remember this when comparing in-house developer salaries against hourly rates for outsourced devs.
In-house developer salaries are determined by location and, of course, skill. According to Indeed, Payscale, Neuvoo, and Glassdoor, average salaries are as follows:
USA:
Front-end web development: $107,716 a year / $52 per hour
Back-end web development: $127,214 a year / $61 per hour
Desktop development $96,334 per year / $46 per hour
Mobile development $124,654 per year / $59 per hour
UK:
Front-end web development: $110,740 / $53 per hour
Back-end web development: $130,900 / $62 per hour
Desktop development costs $102,340 (or $49 per hour).
$126,725 / $60 per hour for mobile development
Canada:
Front-end web development: $97,500 / $46 per hour
Back-end web development: $115,000 / $55 per hour
Desktop development $105,236 / $50 per hour
Mobile development $92,625 / $44 per hour
· Germany:
Front-end web development: $76,350 / $36 per hour
Back-end web development: $78,670 / $38 per hour
Desktop development $90,660 / $43 per hour
Mobile development $93,050 / $44 per hour
Keep in mind that you must also set up their workstations, give benefit packages, and so on. Hiring a developer is quite expensive on average.
The third option is to put together an augmented team, which means some in-house developers and some outsourced ones through a company of developer providers. This differs significantly from hiring developers in-house because it is less expensive, easier, and does not necessitate carrying additional HR costs in the long run; you get a carefully assembled team of experienced software professionals who will develop and complete your project. You can also bid for projects to make a profit after your own needs are met.
If you choose this option, you should think about the developers’ geographical location because it will help you determine rates.
If you recruit remote software developers from the United States, for example, you will incur costs such as social security and unemployment insurance contributions. European developers’ rates will include payroll taxes that support social insurance and other expenditures. Eastern European markets, for example, supply highly educated and English-speaking developers who work for a variety of software outsourcing companies with modern working cultures. They also have a former-Soviet technical background, adhere to EU legislation and global rules.
Look at firms in Belarus and Estonia for low hourly rates for software development:
Front-end web development: $25–35 per hour
Back-end web development: $30–40 per hour
Desktop development costs between $33 and $43 per hour.
Mobile development costs between $33 and $43 per hour.
Asia is another market you can look at. It will provide you with the cheapest developers in the market. But try to hire through staff augmentation providing businesses. Since they ensure that the time and language barrier is avoided as much as possible.
Front-end web development: $15–25 per hour
Back-end web development: $10–30 per hour
Desktop development costs between $13 and $33 per hour.
Mobile development costs between $13 and $33 per hour.