The hidden costs of hiring in-house developers. Did you realize this?

Recently, I had a very interesting call with a potential client who was interested in cooperation. We talked about the outsourcing of our developers and discussed the real costs of hiring in-house dev. I would like to share this story with you.

In general, on the software development market you can find customers who have been outsourcing for years and are very satisfied with this solution. You know the usual reasons – comfort, convenience, etc. There are also those who are skeptical about it, like the client I spoke to during my recent call. I heard from him that outsourcing does not pay off, because employing an in-house developer is cheaper. Is it true?

I decided to argue a little bit with him so I gave some facts and data that best show how many hidden costs are associated with in-house hiring. I can’t share exact details of our conversation, but – believe me – he was very surprised by what he heard so this call inspired me to write this article and share with you some thoughts on the hidden costs of hiring in-house developers. You should know that the monthly salary you pay the developer is not the only cost you incur.

Check below :

1. You pay for the recruitment process. First, you invest in your time in finding an effective recruiter (unless you already have an HR department) and you have to pay their fee. However, this is just the beginning of the road. Going forward, you have to be reliant on your recruiter to find a real professional. You have no guarantee of success. The recruitment process can be very long.

2. The demand on the developer market is so big that you will probably have to compete with the high rates of other companies that will also want to employee your potential developer. Trust me - competition is there.

3. You are involved in the recruitment process. You either monitor the effectiveness of your recruiter or you actively participate in job interviews. At this time, you could do many other things that are very important for your business. True?

4. You invest in office space, equipment, onboarding and the purchase of programs. More costs. Check your excel file now.

5. Keep in mind the cost of maintaining a developer on your team in the long term. On average, developers work for single company for a little over a year. They regularly change job - mainly due to higher salaries. This is what competition on the market looks like.

6. Do you pay a monthly salary for your developer? Ok, but keep in mind that there may be days off work, such as holidays or sick leave. And then what? It depends on the details of your contract, but most often you pay for it all.

7. You need to invest in a project manager/mentor. For the efficiency of each project, the best solution is to have a project leader or a project manager. This is your next cost. It is also good to plan the developer’s career path. A mentor would be useful for that. More costs.

8. Your project is coming to an end and what next? If you do not find another project to manage, then your developer is left without a job. Will you release him? This is not the best idea as then you have to recruit again later.

9. Knowledge and experience. It may also turn out that your project requires a broad knowledge of several technologies. In this situation, the skills and competences of your developer may be insufficient. It's good to have a wide team that complements your knowledge. What does this mean in reality? More costs. Yes, check your excel again.

To be honest with you guys, I didn’t write this article to encourage you to outsource. Really. However, I would like to let you know how many hidden costs there are in hiring in-house. Perhaps you didn’t even know about some of them. It is a topic worth considering.