Remote Developers vs. In-House Developers: Cost Comparison

Starting a new project? How many times have you discussed with your team whether to hire remote developers or in-house developers? We bet the number will come out to be huge. Many companies now face key questions like how to hire remotely, compare costs, and choose between remote or in-house teams—decisions that can greatly impact the budget.

Although ⅕ of the global workforce has switched to remote work opportunities and it is estimated that this fraction is going to grow in the coming years—hiring in-house has its own set of advantages. Therefore, in this blog, being a software development services company, we aim to help companies like you make an informed decision, by providing a detailed cost comparison between remote developers and in-house ones.

Understanding Remote Developers

Let’s first understand the concept of remote developers and the various types of engagement models available for you to choose from. 

Well, remote developers are those professionals who work from outside their geographical area and are located anywhere globally. So when you choose to hire them, it basically means you are willing to cross the geographical barriers to fulfil your project needs. They usually work outside your typical office setup and can be categorized as freelancers, dedicated remote developers, contractors, or professionals in an IT outsourcing agency.

Understanding In-house Developers

In-house developers work under the traditional office setup. This long-standing employment model involves full-time employees using your office, equipment, utilities, and perks. They can be categorized into full-time employees, part-time employees, and on-site contractors hired for specific projects. 

While the in-house hiring model facilitates greater control and project dynamics, it comes with its own costs and leaves little room for flexibility in the modern marketplace.

Benefits of hiring dedicated Mean Stack developers

1. Time and Cost-efficient: Hiring dedicated mean stack developers significantly reduces the development time and costs associated with it. First, instead of recruiting separate teams for front-end and back-end development, you can hire a single and dedicated mean stack developer to handle the project. Second, hiring a dedicated developer means you can ignore the overhead costs, employee benefits, and perks etc. So overall, hiring a dedicated mean stack developer saves a lot of your money, which may otherwise go into hiring in-house developers. 
2. Versatility: One of the most significant benefits of hiring dedicated mean stack developers is the versatility they offer. They are well-trained to handle both front-end and back-end development tasks, alongside database management. Their ability to develop a full-fledged application streamlines the development process, saves time, and ensures a cohesive end product. 
3. Cutting-edge Expertise: Mean stack developers offer supreme expertise in the latest web development technologies. While staying updated with the latest industry advancements, they allow businesses to leverage the trending tools and features in the mean stack to create applications. 
4. Seamless Communication: Since mean stack developers are proficient in different technologies, they are also able to communicate effectively with teams like designers, project managers, database administrators, etc. Their smooth and sound communication fosters collaboration and further ensures that the project development process moves forward without any clashes.
5. High Demand, Limited Supply: Due to the many benefits that stack developers offer to companies, they have created a high demand for themselves. On the other hand, the supply falls short, especially if you are limited to a specific region. As companies race to find the perfect candidate, hiring dedicated mean stack developers has become crucial. Businesses that hire mean stack development services swiftly can ensure a top-notch web application and a competitive edge.  
6. JavaScript’s Dominance: JavaScript has been in the industry for a long time now. It has already become the most popular programming language for web development, and its usability continues to grow. Mean Stack company has expert developers who are experts in JavaScript, both on the client-side (AngularJS) and server-side (Node.js), making them important assets for businesses seeking comprehensive web solutions.  

In-House Development: Breaking Down the Costs

Let’s break down the costs incurred in hiring in-house developers. 

1. Benefits and Perks: In-house developers demand comprehensive benefits like health insurance, paid time off, accommodation, retirement plans, etc. Overall, these perks and benefits add up to 20-30% in the base salary of your in-house team. Besides these benefits, you must cover costs like electricity, office space, internet, and tech subscriptions.
2. Overhead Costs: As discussed above, in-house developers require space to work, as they will be available solely for your company. Though operational costs are unavoidable, remote work three days a week can save businesses up to $11,000 per employee, according to Global Workplace Analytics.
3. Salaries and Compensation: Salary and compensation always take the limelight when job seekers take a first look at the job description. They will apply for the position only if they are paid well. The salary must match their expectations. And this mostly happens in the case of in-house developers, since you are limited to hiring local talent only. This cost largely depends on paying as per industry norms in your region or country.
4. Recruitment and Training Costs: Hiring in-house developers requires a traditional setup, which is lengthy and expensive to follow. It starts right from advertising your job across multiple platforms and ends with conducting extensive interviews. Training in-house developers can further add to the hiring costs. 
5. Turnover and Retention Rates: Employee turnover is another category where you need to begin the recruitment process from scratch and train the new employees during the transition period. 

Contact our custom website development company to learn more. 

Which is better, outsourcing or in-house?

So this is completely your choice. Choose a model based on your project needs and budget after weighing the pros and cons. At Brain Inventory, we provide IT staff augmentation services to our clients located globally. We have flexible working models like part-time, contract basis, and dedicated professionals to suit your project demands. Our company has years of experience that make us a trusted and genuine partner for any type of company that is looking for excellence in work! Contact us to learn more.

Conclusion: Making the Right Choice for Your Business

So by now you must be thinking about whom you should choose. Remote developers or in-house ones. Let’s shed light on some of these crucial points to get more clarity. 

1. Time Zone Differences: When you hire remote developers for your project, there is an added advantage of round-the-clock productivity. Time zone differences are an advantage, enabling 24/7 work and faster time to market.
2. Communication and Collaboration Tools: Effective communication is the essence of remote teams and brings success to any project. So you must purchase tools like Zoom, Slack, or project management software like Jira. These tools are not only good for in-house teams but for hybrid teams as well. So the point is, investing in these tools is something which you can’t ignore, irrespective of the model you choose. 
3. Skills and Expertise: In a remote hiring setup, you get access to a diversified skill set. However, in a in-house hiring setup, your reach is limited to a specific zone and local talent. You can’t find highly specialized skills which might be available to you in a global talent network at much lesser price. 
4. Work Quality and Innovation: In-house developers tend to show a superior work quality and innovative approach to the development process, as you can supervise them directly. Remote developers often work on diverse global projects, leading to high-quality output that meets international standards with a touch of creativity.
5. Scalability and Flexibility: Remote developers offer scalability as you can scale your team size up or down based on your project requirements. But with an in-house team, sometimes you are liable for a long-term commitment irrespective of the market dynamics. And it will cost much more to conduct a full-blown interview round if your project demands scaling up the team. Not only this, training of the new set of employees also needs work and adds to the overall costs.
6. Legal and Compliance Costs: There are legal and compliance strings that come automatically attached with remote hiring models. This is because you are hiring from a different country, so you have to be mindful of the laws. This adds to hiring costs through labor laws, taxes, data security, and workflow ethics. It can potentially offset the savings made from overheads and salaries.

However, this doesn’t mean you don’t have to bear compliance issues in an in-house hiring setup. For in-house teams, compliance costs would include drafting employment contracts, taxes and benefits, intellectual property, etc. We are a leading PHP web development company. Contact us to get started with your PHP project.