Competing for the top developers with Facebook and Google is tough, especially for bootstrapped startups aiming to find and hire developers on the markets with a high talent shortage. According to McKinsey’s report, Denmark alone will experience a shortage of 19,000 IT specialists by 2030.
Moreover, hiring developers in-house is also costly, especially for a bootstrapped startup, as a full employee cost for hiring a mid developer in the US amounts to $ 71,038 per year.
How can you overcome these challenges and find one of the best developers to build killer SaaS features, create a chatbot, or develop your software from scratch?
In this article, we will share some tips on where to find and hire the best developers to build a website or app features faster. With the tips I will share, you will be able to choose the best option for your startup – hiring developers in-house or outsourcing software development abroad.
Let’s start by looking into places where you can source developers!
Where To Hire Software Developers & Tech Teams?
You have probably come upon several of the most well-known talent marketplaces, such as Upwork or Toptal.
When you choose to look for developers there, get ready for a long process of interviewing candidates. This matter has even become a frequent question in some online tech communities!
If you happen to work with freelancers on talent marketplaces, read terms and conditions for using these platforms. Quite often, they prohibit taking cooperation with freelancers out of the platform. According to the contract, you have to keep working with developers within Upwork. You also pay a hefty commission ranging from 5%-20% on Upwork that otherwise would be just your developer’s remuneration.
Tech Teams On Google
You can also search for developers on Google. The best way to approach your Google search is by going to Clutch, a review platform for B2B service providers.
An advantage of choosing tech teams on this portal is reading reviews and testimonials of their previous clients. Software companies are investing quite some time to collect client referrals and build a positive reputation on review platforms. As an insider, I can claim that some even slightly press their clients to give them only five-star reviews.
As you understand, you will get swamped with an abundance of options similar to talent marketplaces. As tech agencies are working hard to get positive reviews on their websites, making a final choice on your dream team won’t come easy.
For example, by choosing “Top PHP Developers” on Clutch, I have received 7,639 search results. I would need to do lots of work researching the best options while reading reviews for every company, not mentioning a number of business emails sent back and forth to book introductory calls.
Hackathons & Conferences
If you have more time for the hiring process, you can use an opportunity to visit industry events for developers.
Conferences and hackathons are perfect places to get into casual conversations with developers to understand if they are currently looking to change a job. You can also learn if they fit your requirements when it comes to experience, understanding of your business, and whether you have a personal fit with them.
Do a little research online and choose development conferences you can attend. Here are some examples of hackathons:
- TechCrunch Disrupt
You can dig deep into options in your region.
Try your chances by searching through multiple developer communities online to find bright talent. You can take a look at GitHub, Stack Overflow, Reddit, and some job boards such as StartUs, AngelList, Mashable, or CrunchBoard. Some developers even start a blog on their experience with product development that you also can come upon online by searching through keywords.
If you want to open a subsidiary office abroad, the best option would be to work with local recruiters who will source and interview developers and use some recruitment tools to facilitate the process of sourcing and shortlisting. This way, you will get highly vetted local professionals.
Working with professionals on site will save you time doing your research in the language you don’t know, prepare recruiting emails, qualify candidates for interviews, and manage work email without an end.
The 2020 COVID-19 crisis has taught companies to strive for more elasticity in terms of hiring employees. Just take a look at the problems a German fintech startup, N26 is facing, with employees going on a strike due to salary discrimination.
That is why it is worth considering opening subsidiaries in the countries where there is more significant flexibility in scaling a team and reducing it when needed. The salary deemed low to high-income countries would be highly competitive in countries like Poland and Ukraine.
If you want to avoid time-consuming research, filter through thousands of developers, and manage communication with them, choose to work with concierge services or matchmakers to do it for you.
By working with companies like Trustshoring, you can get recommendations for freelancers and full tech teams with a track record of 100% client satisfaction rate. You have certainty your cooperation will succeed as the company regularly supervises them.
You can get matched with a few teams that deserve your time to be interviewed within 2-3 days and get teams to make project proposals for you.
As a bonus, you don’t have to pay for this service. Matchmakers usually charge a small finder’s fee to tech agencies if the cooperation starts and the contract is signed.
Hiring A Team vs. Outsourcing
You now have an overview of multiple sources for finding tech talent gems to work on your startup.
Let’s consider what options fit the best for you – keeping development in-house or outsource.
In one case, you can decide to work with recruiters or explore the developer community and job boards to find developers who would join you in-house.
In the other, you can consider outsourcing development and hiring a full team of developers abroad or get a few freelance developers working on your project remotely.
In both cases, you first have to assess the costs of hiring and outsourcing. Let’s compare the two options – hiring a mid developer in the US and working with one in Ukraine (one of the most popular outsourcing destinations among startup founders.
As mentioned earlier in the article, an average mid developer salary in the US is $ 71,038 per year, after taxes. As of now, the cost of hiring a developer is $ 34.
The average rate of hiring mid developers in Ukraine is around $ 30. Not a big difference, right?
However, we have not counted taxes!
Let’s calculate what tax you would have to pay to hire a developer in the US. I will use the framework of Joe Hadzima, an economist who has brought complex taxation calculations to a simple formula. According to Hadzima, the employment cost varies between 1.25 and 1.4 of the base salary in the US.
If we crunch our numbers, we will get the hourly rate of between $ 42,5 and $ 47,6 before taxes. A full employment cost of a mid developer in the US would amount to $ 88,798-$ 99,453.
This calculation makes a difference now, as, with outsourcing development, a $ 30-per-hour rate is your full cost.
Let’s move forward with other hidden costs of hiring developers in-house!
If you decide to go with hiring developers in-house, you have to account for other hidden costs such as office rent, hardware, software tools, recruitment, holidays, and leaves.
What’s Better – Hiring In-House Or Outsourcing Development?
By sticking to numbers, a more logical decision would be to go with outsourcing. Even if you decide to outsource now when you have a more established company, you can always start building your tech team in-house.
When scaling your startup, you can use tech agencies only occasionally. Keeping and managing your affiliates abroad is easier with a team collaboration software and a set of simple remote work practices – this is something you can learn relatively fast.
Apart from hiring and outsourcing, you can also choose a hybrid approach and keep a small in-house team of developers working on core app functionalities, while outsourcing the development of integrations to tech agencies abroad.
The Bottom Line
No matter if you decide to keep development in-house or outsource, you have plenty of resources where you can find hidden tech talent.
- Freelance marketplaces like Upwork or Toptal
- Google search, including Clutch
- Hackathons and conferences
- Developer communities
- Matchmaking services with pre-vetted talent
If you choose to do your research, get ready to dedicate a lot of time for sourcing and interviewing developers as there are thousands of freelancers and tech agencies listed on talent marketplaces, and review platforms.
Work with matchmaking services to cut time on interviews and get in touch with tried-and-tested teams with a high success rate supervised by an independent expert. With these services usually being free, this seems to be one of the best options to pursue.
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