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The Costs of Hiring In-House Developers vs. Outsourcing

The Cost of Hiring In-House Software Developers

Although there are many ways to develop custom software, the method most appropriate for your company will depend on your unique needs. And if you plan on hiring internally for all of your positions, you’ll also need to plan for the significant costs associated with this approach.

One such solution to reducing development costs is supplementing your internal teams with nearshore software developers. Join us today as we explore the true cost of hiring in-house, how to reduce your costs, and how number8 can help.

The Hidden Costs of Hiring IT Talent

Hiring an employee in any sort of IT field is time-consuming and expensive, at least done right. After all, this is an employee that will likely have an important role in your company for years, so the hiring process should be thorough.

It takes time to find good candidates, more time to interview them, and then even more time to train your new hire. As any good businessperson knows, time is money. If you spend time hiring, you’ve lost the ability to allocate that time to more directly making profit.

Internal recruiting is estimated to cost a company as much as 12% an employee’s average salary. Going through a recruiter can cost even more. It’s not a process to be taken lightly.

This is all on top of any additional costs. You likely are going to pay to advertise the opening so as to attract the best candidates. Depending on the position, training may be a significant expense. Getting an employee certified often requires you to pay an outside organization to train them, for instance.

Once you’ve hired an employee, you’re liable for their wages and any benefits they’re owed. An employee’s health insurance might cost as much as $1500/month or more.

Furthermore, employee turnover needs to be a concern as well. If your company needs to replace an employee that is leaving, hiring a replacement tends to cost even more. In part, this is because the transition process is now more difficult as you both must recruit an employee and work understaffed as you do so.

It’s been estimated it costs 20% of an employee’s salary to replace them. This is why it is very important when hiring in-house to seek employees likely to stay with your company for a significant time. Recruiting and onboarding costs are often forgotten once an employee is hired, but they can have a major impact on your bottom line.

Altogether, hiring is a complex process that is only worth it if you really need a new person in-house. While your company very well may, there are also alternatives to supplement your team that we will discuss below. For now, just keep in mind that hiring in-house developers is not the only way to strengthen your company’s development capabilities.

In-House Software Development

An in-house software developer, even working from home, is likely to cost you upwards of $100,000 to $200,000 annually. If you need a team, that means your company could potentially be looking at quite the yearly expense.

Your company will also have to pay for the development software your employees will be using. Basic software can cost hundreds of dollars and more robust packages can cost thousands. This will be on top of the basic costs of hiring an employee noted in the section above.

Some of these costs are just the reality of software development. But they certainly can be expensive, especially if your project demands a large team. These high costs can also make it difficult for your employees to deliver a high ROI.

The good news is that your company can reduce these costs by supplementing your in-house team with some outside help. It is this point that brings us to nearshore development.

Nearshore Development

Nearshore development is an excellent alternative (or supplement) to in-house development. Your company can save big while dodging the common risks of outsourcing.

Nearshore software development is when a company outsources its software development to a country in the same time zone. For companies operating in the United States, this would mean outsourcing to either Latin America or Canada.

Due to the basic economics of those two regions, Latin America is generally left as the most realistic option for companies concerned about price. This is where our company, number8, comes into the picture.

While some organizations are concerned outsourcing to other countries can result in a dip in quality, our results speak for themselves. The software our team develops always rises to the standards our clients ask of us.

Our company comes highly rated and highly recommended, with almost 50% of our staff having at least twelve years of direct work experience in software development.

On top of producing quality work, the costs of services like ours are far less than in-house development. You just contract our team for a open-position. There is no complicated hiring or onboarding process.

It allows you to skip the lengthy hiring and onboarding process and go right to giving a group of professionals the specifics of what you need. You can also guarantee you receive professional service, thanks to our excellent reputation and expert staff.

Internal Development is Expensive. Consider Nearshoring!

The short of what we have to say is that in-house software development can be expensive. By augmenting your team with nearshore developers, costs can be greatly reduced.

Nearshoring the development process can boost a team’s productivity, all while still ensuring you receive a high-quality end result. Our company works closely and constantly with US companies, so we understand how to cater exactly to any software need!

If you’d like to talk to us about how we can help you develop your software, Contact Us. We welcome any and all questions and concerns. You’ll learn just how easy it will be for you to meet your development goals on budget, on time, and without having to go through any complicated, expensive in-house hiring process.

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