When you’re hiring developers, either as freelancers or a development agency, it can be very challenging to get good value for your money. There are some significant risks. Unfortunately a lot of good ideas or business opportunities are lost each year due to development project failures.
Let’s look at some of the outcomes you probably want to avoid when hiring developers:
Now the good news when hiring developers is that if you know what to look for you can dramatically decrease the negative outcomes and increase the chances of a great hire. One of the most important things to be aware of when hiring developers is simply the level of financial incentives found in the industry. This is a nice way of saying that a lot of developers, particularly those available to take on freelance jobs and contract positions, are very motivated by financial gains.
Generally when hiring developers, the price and the terms and the opportunity for long-term earnings and increased earnings are all really critical factors in any negotiation. And it’s not just a factor when you’re talking to a developer that you might hire. You have to consider that when you see developers offering very discounted rates, this is a red flag. It’s also likely when hiring developers that if you offer a very low rate, only the most unsuitable candidates would be interested. This can lead you to only talking to under qualified or even outright fraudulent devs during the entire hiring process.
Consider on Upwork for instance if you post a developer job where you offer a range of $10-15 per hour. Common sense should tell you that nobody in their right mind would want to work at these rates, if they can get more. And of course it is the qualified developers, the very people you might want to hire, those are the ones that can get more.
Meanwhile the people that might actually bid on your low wage job, those are the individuals that actually do not believe they can get more, and in practice they have failed to earn $20 developer jobs. Just stop and think for a moment how bad at coding a person has to be, to fail to get a $20 per hour job in 2023? When the going rates for highly skilled programmers range between $50 and $80, how terrible would somebody have to be in order to fail to get a $20 per hour job?
What we actually find in our experiences hiring developers from the Upwork platform, is that we need to offer a minimum of $30 per hour to really start to attract good talent. That minima has changed over the years with inflation and changes in the overall market as well. There was a time when there were many developers from the Ukraine and other east european markets who seemed happy to bid on $25/hour jobs. Now that number seems to have increased to about $30. And that of course is the minimum.
If you want the best selection, if you want some of the larger firms from those regions to bid, if you want in demand talent, then you’re going to have to bring that upper range closer to $40 or $50. Remember when hiring developers that even a number like $50 (per hour) is still fairly low comparative to global market rates.
Most developer salaries at development firms, gaming companies and software developers are starting in the 120-135K range and this is based on something in the range of $60/hour. It’s also taking into account benefits, vacations, dental etc. With freelance developers the cost is the cost, there are no extras unless you voluntarily choose to pay a performance bonus but for the most part when hiring developers on a contract basis, you have no extra costs beyond the rate per hour paid.
Let’s clarify here that hiring developers directly doesn’t mean flagging one down on the side of road. It can still be an online meeting, it can still be via an agency in fact, but the difference compared to Upwork is you would be directly invoiced by the developer (or their agency). Hiring developers directly isn’t as common an option as we might expect, and this is likely because platforms do at least appear to give us choice and some level of safety and assurance.
After all there is the feedback system, freelancer ratings, the payments are via a 3rd party, this is why platforms like Upwork have really dominated the market for development. Nonetheless there are developers and agencies out there, SaberWP is included in this, who sell their services directly on their own websites either through hourly rate deals or package offers.