The cost of hiring a remote developer can vary from $15,000 to $150,000 per year, or hourly rates between $15 and $150. What defines the cost itself are several factors, such as the type and complexity of the project, the location where developers are based, and their level of experience and qualifications.
If you are on the lookout for skilled remote developers at affordable rates, our article covers everything you need to know, from the main factors that influence the cost to the key elements to consider when searching for the right candidates.
What Factors Affect the Cost of Hiring Remote Developers?
Are there any hidden costs associated with hiring remote developers that you should be aware of? Yes. Hiring remote developers can benefit your business in several ways. From reducing costs due to location to having access to better talent.
However, the cost of hiring remote developers will depend on 5 main factors:
1. Geographic Location – Cost of Living
The salary of a mobile app developer living in Canada will not be the same as the salary of a mobile app developer in Romania. Why? Due to the cost of living.
When businesses have a tight budget but still need senior-level developers or programmers with specialized skills they can’t find locally, hiring globally is the better choice.
For remote developers, working for foreign companies often means better salaries. And for companies hiring remote developers, it means hiring more affordably and better talent.
Let’s look at a simple example of the average cost of hiring software developers in these different locations:
| Country | Average Salary (USD) | Average Hourly Rate (USD) |
| Canada | $80,000 – $100,000 | $40 – $60 |
| United States | $100,000 – $120,000 | $50 – $70 |
| Mexico | $20,000 – $30,000 | $10 – $20 |
| Brazil | $15,000 – $25,000 | $8 – $15 |
| Romania | $15,000 – $25,000 | $8 – $15 |
| Ukraine | $10,000 – $20,000 | $5 – $12 |
| Poland | $20,000 – $30,000 | $10 – $20 |
| India | $8,000 – $15,000 | $4 – $8 |
| Philippines | $5,000 – $12,000 | $3 – $6 |
| Germany | $60,000 – $80,000 | $30 – $40 |
| Japan | $50,000 – $70,000 | $25 – $35 |
2. Skills and Level of Experience
A common misconception about hiring remote developers is that they will always be “cheap.”
Often, bad remote hiring experiences are when companies do not take the recruiting and hiring process seriously. Especially when it comes to testing and conducting technical evaluations.
Hiring a junior-level developer that can support your tech team is different than hiring a senior-level developer that can efficiently manage and understand the pain points that need to be addressed.
For example, if your project requires core knowledge of high-level language libraries such as React or Angular, a mid-level developer can reduce your hourly rate and support your team through different tasks.
But if your development involves building native applications for iOS and Android platforms, along with automating workflow-related services, then hiring a senior-level full-stack developer with the right skills is a must. They need to have profound technical knowledge and experience building these applications and working on similar projects.
Here is when you’ll realize that hiring a mid-level React developer is not the same in terms of costs as hiring a senior-level React developer. But it all comes down to your needs and evaluating what, in the end, is more cost-effective.
3. Project Complexity and Duration
It’s not the same as building a simple application as building an eCommerce platform.
The complexity of a project instantly reduces or increases the costs that contribute to the rates of remote developers. More complex projects demand developers that have enough experience and advanced skills.
Besides the technical expertise required, time is also a key factor. If your application is estimated to take a year to be developed, then it will add up the costs more than if your application is more simple and easy to build and can take 3 months.
Short-term projects have different hiring considerations compared to long-term ones.
Let’s look at a real-life example:
| Project Description | Simple and Affordable Project | Complex and Expensive Project |
| Complexity | Basic website with static content and minimal interactivity. | Comprehensive e-commerce platform with advanced functionality. |
| Required Expertise | Junior-level front-end developers | Senior-level full-stack developers |
| Required Skills | HTML, CSS, basic JavaScript | E-commerce platforms (e.g., Magento, Shopify), Back-end languages (e.g., PHP, Python), Advanced functionality, Database management, Payment gateways, User authentication |
| Project Timeline | Few weeks | Several months |
| Hourly Rates | $20 – $40 | $50 – $80 |
| Total Project Cost (Approx.) | $1,500 – $3,000 | $30,000 – $60,000+ |
4. Employment Type: Full-time or Freelancers
When considering to hire remote developers, you’ll often be faced with hiring full-time developers or freelancers.
This will also impact on your costs.
Hiring full-time remote developers is crucial for long-term projects as you need people on your team who are committed and available for extended periods. That way, they can oversee the project from start to finish, being able to support and solve issues that always arise with time.
On the other hand, freelancers can be another option for short-term projects or hiring managers with a limited timeframe.
For freelancers, you will pay an hourly rate; with full-time developers, you’ll pay a salary.
Additional expenses from managing remote developers can be related to onboarding costs or overhead costs that usually come up from required resources and equipment.
5. Remote Infrastructure Requirements
Are there any additional expenses or challenges related to managing remote developers that could impact overall costs?
Hiring remote developers is a cost-effective option because you don’t need to rent an office space and all its other costs (food, utilities, and more). A report from Lemon.Io shared that companies offering remote work options save up to $10,600 per employee annually (only rental costs alone can save up to $5,580 per year).
However, when you hire a remote developer, you still need to overview other costs regarding having a strong remote infrastructure. This often involves:
- Hardware and software: While most companies require developers to have their own hardware, usually, it’s necessary to provide them with licensed software and development tools that will depend on the specific project requirements.
- Communication and collaboration tools: Effective communication and collaboration tools are necessary for remote teams. Tools such as Zooms, Trello, Git, etc., are fundamental for seamless collaboration, and those always add up costs.
- Data security and privacy: Working with remote developers includes ensuring data security and privacy. This involves setting up secure virtual private networks to protect information, implementing a multi-factor authentication system and regularly updating security protocols.
- Remote support: Developers may occasionally require technical support or assistance, so it’s always good to consider the costs associated with supporting their various needs.
Hidden Benefits of Employing Remote Developers That Go Beyond Cost
Cost reduction isn’t the only reason you should consider employing remote developers. While it’s without a doubt a relevant factor that has made companies decide to opt for this model, other benefits come along that can benefit your business significantly.
1) Access to Specialized Skills
Hiring remote developers gives you instant access to a larger talent pool. If, in your local area, you can’t find specialized developers or developers with specific skills, by looking globally, it’s easier to increase your chances of finding the best fit for your project.
According to IWG, 64% of recruiters share that offering remote work policies allows them to hire more quality talent.
2) Increase Employee Engagement
Developers want to work remotely.
They want the flexibility to work from home in an environment they feel the most comfortable. Remote work arrangements contribute to higher employee satisfaction and engagement. This translates to reduced turnover rates.
The financial impact of employee turnover can be substantial. Studies suggest replacing an employee can cost anywhere from 30% to 150% of their annual salary. Technical positions, which often demand higher salaries and specialized expertise, can pose even greater losses for companies when employees choose to leave.
3) Maximize Efficiency
Remote developers are more productive than onsite developers. They have the freedom to work in their preferred settings, which impacts their productivity and job satisfaction. Also, they no longer have commutes and office distractions. This means more time to focus better on their work.
The State of Remote Engineering Report (2022) mentions that when it came to productivity, 65% of developers said they can get more meaningful work done while working remotely or from home, compared to 32% who said they are more productive working from an office.
4) Business Continuity and Disaster Recover
No one was prepared for the pandemic except for those businesses that already had remote teams and the right infrastructure.
Not saying that another pandemic will happen or that companies always need to prepare for the worst, but another often hidden benefit of remote work is that in the event of unforeseen circumstances that prevent physical access to the office, remote developers can always continue working from their location, ensuring minimal disruption to ongoing projects and operations.
4 Strategies for Cost-Effective Hiring of Remote Developers
If you’re looking for high-quality remote developers at a lower cost compared to local talent, these are four practical strategies to keep in mind:
1. Conducting Thorough Needs Analysis And Project Scoping
The first step before the hiring process, starts by conducting a comprehensive needs analysis and project scoping.
This will help you understand the project or role requirements, scope, and desired outcomes. In other words, you’ll avoid overhiring or underutilizing resources because you’ll know exactly the type of candidate you need, their skill set, level of expertise, etc.
2. Thoroughly Evaluate Candidates
Evaluating candidates for tech positions are often more challenging than other positions because interviewers need a certain technical background. So, doing generic interviews with questions and answers, candidates can easily find online is definitely something to avoid.
Having helped companies for over 10+ years find and hire remote developers, we noticed that the best way to ensure candidates have the necessary skills is by going beyond the whiteboard coding tests.
Once you have the role clearly defined, prepare a technical interview that can help you grasp those skills. You can blend the interview with questions and a test made exclusively for the role.
3. Explore Remote Recruitment Agencies
If you’re still unsure about how to evaluate tech candidates, then explore other recruitment options. IT remote recruitment agencies are a great option to easily find and hire candidates that not only match your tech requirements and needs but also are a good culture fit.
By partnering with agencies like DistantJob, you’ll gain access to a wide talent pool of senior-level developers who live in time zone-friendly areas, have a good English level, and have all the expertise your business needs.
4. Set Clear Expectations And Deliverables
Finally, setting clear expectations is key to mitigating risks, avoiding delays, and keeping costs under control.
This means:
- Communicate project/role goals from the start
- What are the timelines?
- Define project milestones and expected outcomes
- Discuss budget constraints and compensation
- Establish communication channels and project management tools
Save Costs by Hiring With DistantJob
The best way to save costs by hiring top-tier developers is by building a solid recruitment process. Or working with recruitment experts with all the strategies to headhunt the best developers in the industry.
Find and hire remote developers with the skillset your business needs in less than two weeks. At DistantJob, we can help you hire top-caliber candidates well-versed in the technology you need.
FAQ
Hiring a developer can cost from $15,000 to $150,000+ per year, with average hourly rates spanning $15 to $50.
The factors contributing to remote developers’ pricing are project type, complexity, developer location, experience and qualifications. The best way to ensure you get a fair rate is by ensuring developers have the skills and experience your business needs through effective recruiting and evaluation processes.
When hiring remote developers, legal and compliance aspects such as employment laws, tax obligations, data protection, IP rights and contractual agreements are fundamental to consider. These factors can impact costs and require attention to ensure compliance and risk mitigation.
To evaluate the ROI when hiring remote developers, you can consider factors like project efficiency, cost savings from reduced overhead, increased productivity, expanded talent pool, and the ability to scale operations compared to the expenses that hiring remotely involves.
