What to Consider When Comparing Hourly Rates for Software Developers

Just like any IT profession, the hourly rate for software developers can be broad. In countries like Poland and Romania, you can expect to pay anywhere from $15 to $25 per hour, while in the United States the average hourly rate for software developers is between $33 and $39 USD.

Of course, when it comes to outsourcing, there are many factors that contribute to the hourly rate for software developers. These include their geographic location, years of experience, education, and specialist skills and knowledge. Whether they are an independent contractor or part of an agency is another cost factor. But beyond this, there are deeper, less obvious hidden costs, which can gradually eat up your software development budget.

The Hidden Costs of Hourly Rates for Software Developers

When you compare onshore and offshore rates for software development, there is a lot to think about. How do you get the best value for money without compromising on the quality of the end product? Striking the right balance between the two can be tricky. Here are a few details to keep in mind when you start searching.

Onshore vs Offshore Software Development

This is one of the first choices you will have to make. Will you hire onshore or offshore software developers?

Onshore software developers are vendors located in the same country as you are. They will complete your project, start to finish, while residing in your country and possibly even your local area. Offshore software developers are vendors located outside of your country. They may come from many different parts of the world, and work together to complete your project from start to finish.

There are many benefits to hiring onshore developers. They will likely speak your native language. And they will be in the same time zone as you, making it easy to collaborate in real time. However, they will be more expensive than offshore developers, and your talent pool will be limited to whoever you can find in your local vicinity.

Hiring offshore developers can save you a fortune. Especially if they are in a country where the hourly rate for software developers is lower than your own. And, by broadening your search to international workers, you will have access to a wider range of talent, thus increasing the odds of finding the specialist skills you need to complete your project. Some potential roadblocks to hiring offshore developers include language barriers, working across time zones, and different quality control standards.

Independent Contractors vs Agencies

Independent contractors are individual professionals who work for one or more employers at once. Depending on their education and experience, they may specialize in a specific programming language or technology, or they may be adept in a wide range of development skills. Independent contractors typically charge high hourly rates. Plus, if you need a wide range of skills for your project, you will need to approach multiple contractors, which can be time-consuming and frustrating.

Agencies are full-service companies that provide a range of software development services under one roof. They will have teams dedicated to providing specific software development services, from QA and Testing to Mobile App Development and Artificial Intelligence. The main benefit here is that you get all the services you need from one trusted vendor, and at lower hourly rates than independent contractors.

Most agencies have their own in-house project managers, who make sure milestones are delivered on time and within budget. This will save you time on administration and give you peace of mind that your project is on the right track.

Time Zone Differences

Working across time zones is inevitable when you hire offshore software developers. The good news? There are ways to streamline the collaborative process, so that you enjoy the benefits of an affordable hourly rate without compromising on a positive working relationship.

Software development agencies have become very adept at providing their services remotely. For one, they use asynchronous communication to work with clients in different time zones. This is communication that doesn’t happen in real-time and gives clients a chance to respond whenever they want. The most popular asynchronous communication tools are email, Google Docs, and messaging and task management platforms such as Slack and Trello.

Of course, when collaborating remotely, there should be regularly scheduled real-time video meetings. These meetings give you the chance to monitor progress, brainstorm ideas, provide constructive feedback, and raise any issues you may have. Video meetings can be held weekly, fortnightly, or monthly, depending on personal preferences.

Language and communication barriers

Strong communication is essential to a productive working relationship. Unfortunately, language and communication barriers can arise when hiring offshore developers. These issues can become a hidden cost that eats into your budget. Fortunately, there are ways to overcome these challenges.

How? Get to know the software development team before you hire them. See how well they communicate with you through written text and in video meetings. You should have a clear understanding as to what they have to offer, and whether they meet your project needs or not.

Ask yourself: Do they explain technical concepts to you in a language that you can understand? Do they respond in a timely manner to messages? And do they effectively demonstrate their capabilities to you in a way that relates to your project? If the answer is ‘No’ to any of these questions, look elsewhere, until you find a vendor with strong communication skills.

How to Choose the Right Software Developers for Your Project

Hopefully, these pointers will help give you an idea into what goes into the hourly rate for software developers. As you can see, sometimes, going for the cheapest option is not the wisest choice. Sure, you could save money in the short term, but if their communication is poor and their quality control standards are lower than you expect, you could end up paying more in the long term to have these mistakes fixed.

For these reasons, it’s important that you shop around and receive multiple quotes before you proceed. If you choose to work with an agency, a reputable one will be open, honest, and transparent about their pricing structure. You will know exactly what you are paying for, why, and what kind of outcomes they can expect to deliver. This way, you will have all the info you need to accept their offer with confidence.