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How Much Does it Cost to Hire a Software Developer In 2023?

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How Much Does it Cost to Hire a Software Developer In 2023 | 9NEXUS
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It’s hard to imagine a world without software. These days, it seems like almost everything we do involves some form of software. Whether we’re checking our email, driving to work, or even just going about our day-to-day lives, software is everywhere. As a business owner, you know that in order to stay competitive, you need to have a strong digital presence. And that means having a great website and top-of-the-line software products. But developing this software can be expensive – especially if you don’t have the right development team in place. If you’re reading this, then you’re probably wondering how much it costs to hire a software developer. In this blog post, we’ll take a look at the average salaries for developers around the world.

We’ll also discuss how you can save money by hiring a remote software developer, and some tips on how to find the best talent. So let’s dive in and take a closer look at the cost of software development in 2023.

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What Does the Total Cost to Hire a Software Developer Include?

The upfront cost of hiring developers can reach far into the five figures. Technical talent is among the most in-demand skills, yet hiring a software developer is more expensive than ever. Hence, it again comes down to the question: how much does a software developer cost? Whether you want to engage an in-house developer, a freelancer, or an agency will affect your recruitment costs. When you’re trying to determine the cost of hiring a software developer, it’s important to remember that there are several different factors at play. Hiring, sourcing, recruitment, and other expenses are all included in the total cost of hiring a software developer.

  • According to the Society for Human Resource Management research, the average cost of hiring an employee is  £3,413. Also, it generally takes 42 days to fill in a vacancy.
  • According to Glassdoor, maximum UK businesses spend  £3,238 on average to recruit a new employee.
  • According to research by the National Association of Colleges and Employers, the average cost of employing one employee for a business with 0-500 workers is  £6,170.
  • Typically, hiring a new employee will take 20-25% of that people’s basic pay. Meanwhile, the Bureau of Labor Statistics reports that in May 2020, software developers’ median yearly salary was  £88,882.

Keep in mind that this is only an estimate. Developers may receive more or less pay depending on their level of experience and seniority. A DevOps expert, for example, might earn more money than a full-stack engineer.

Speaking of hiring software developers in the United Kingdom, the procedure is very similar. However, the average UK firm must pay the following costs when hiring a software engineer. Have a look.

  • Legally required benefits: 7.6%
  • Insurance: 7.8%
  • Paid leave: 7.4%
  • Savings and retirement: 3.5%
  • Additional compensation (premium and overtime): 3.3%.

When compared to the median annual income for software workers, each of these costs comes to £26,315. An average developer earns £115,219 annually. Therefore, the range of recruitment costs is from £23,043 to £28,805. Your internal and external costs will also be included when calculating your cost per hire.


Identifying applicants is the first task you must do. You have three options for sourcing software developers: job boards, staffing agencies, and in-house/HR recruiter teams.

Job Boards: Job boards are a very popular way to source software developers. They allow you to reach out to the right people and let them know about your job opening. You can also use job boards to post your own ads and get the attention of qualified developers. This method is cost-effective but time-consuming. Posting on job boards costs between £650 to £1,300 per post.

Staffing Agencies: Staffing agencies are another way to source software developers. They can provide you with pre-vetted and trained candidates, who are ready to join your team. Recruiting firms cost around 25% of a developer’s yearly salary when you hire them through the agency. The cost of hiring a software developer through a staffing agency can range from £8,000 to £17,000.

In-house/HR Recruiter Teams: In-house and HR recruiting teams are perfect for companies that need to fill multiple positions. They can provide you with pre-screened and selected candidates at no extra cost. Moreover, it allows for more in-depth assessment of a potential candidate. The cost of hiring an in-house or HR recruiting team may vary depending on the number of roles you need to fill. As per Indeed, the typical compensation for a Human Resources Manager in the United Kingdom is  £39,211.


The next step is to select your candidate after you’ve compiled a list of contenders. You can use interviews, assessments and other methods to shortlist your applicants. Also, the cost of recruitment includes advertising costs, internal resources to process applications, and other expenses. Ultimately, the cost of recruitment depends on your choice of methodology as well as how big or small your company is.

Assessments: The platform for coding assessment is the first cost. You’ll need to enlist the aid of a few members of your hiring team to review the applications and give feedback to the candidates. Let’s say you ask a programmer in your department to handle it, and they take an hour to review each submission and generate a concise report on their observations. If you had 10 applicants and paid your developer the typical UK developer wage, this review might cost  £480.

Interviews: Interview fees will vary depending on how your procedure is set up. For instance, if you include a few technical interviews and an in-person interview, the cost could be £450. But if you decide to include additional tests or assessments, the cost could go up to £1,700. Overall, the cost of conducting interviews depends on the number of applicants and the complexity of the process.

Reference Checks: Lastly, you will have to contact the references for the selected candidates. This task is usually done by the HR team and depending on the number of applicants, it could cost between £100 to £700.

Additional Cost

Finally, there are some additional costs associated with hiring software developers. These include the cost of relocation, training and onboarding new hires.

Relocation: This cost is associated with moving a software developer from another country or city. It typically includes flight costs, visa/immigration fees, and hotel costs. The cost of relocation depends on the location and can range from £1,000 to £4,000.

Training & Onboarding: Training and onboarding new hires is an essential part of the recruitment process. It helps the software developer to understand their job role and become familiar with your work environment. The cost of training and onboarding new hires depends on the duration and complexity of the process. It can range from £1,000 to £2,500 for each candidate.

Overall, the cost of hiring a software developer can range from £8,500 to £25,000. This includes the cost of recruiting, assessments, interviews, reference checks and additional costs. Ultimately, it depends on your company’s size and recruitment process. It is important to keep in mind that a good software developer will be worth the cost and can bring value to your organisation.

Hiring a Software Developer Depending on Engagement Model: In-house vs. Outsourced

The developer’s choice/expertise is an important factor in deciding the cost of employing a software developer. In-house developer employment is typically a sensible choice if you need professionals for your team on a long-term basis, as is common knowledge. But keep in mind that they are far more expensive than an outsourcing team. For in-house development, a sizable budget and easy access to money are required. Not to add, not every company can afford the risk of making significant investments in teams. The cost-effectiveness and scalability of outsourced development, On the contrary, outsourced development’s cost-effectiveness and scalability are what turntables here make it a popular choice for most organisations.

Engagement Model: In-House Development

  • It is expensive. Pay close attention to the obvious and hidden costs associated with hiring an internal workforce. According to Payscale, the typical UK salary for an IT developer is £57,720. Please take note that the expenses for sick days, paid time off, insurance, social security, and recruitment are not included, nor are the hidden costs of hiring and onboarding each person you’ve hired. Additionally, you will be responsible for paying the team’s regular salary even while they are between projects.
  • The least difficult part of growing your business is finding the best employees, even though high turnover rates may occur. Given how in demand IT talent is, you will struggle to resist competitors’ and recruiters’ attempts to grab it. Even if you submit a counteroffer with better benefits, your developer might accept it, which would result in higher payroll. If not, you risk losing your team’s talent.
  • You must improve the team’s abilities. The IT industry is constantly changing as a result of the introduction of new technologies, tools, and languages. You need to make sure that your team is kept informed if the changes have an impact on how your products are developed. In either case, spending money on training and equipment could have a significant impact on your business’s bottom line.

Engagement Model: Outsourced Development

  • Increased cost control. The main advantage of outsourcing is relevant if your company is based in a country where hiring local expertise is expensive. You can hire an IT company in a nation with far lower wages by having the same knowledge.
  • A bigger talent pool. You will have access to a larger pool of developers and other IT professionals from which you can find the perfect combination of skills, experience, and proficiency for your project.
  • Reduced risks. When you outsource software development, you no longer need to worry about finding talented employees who are up to date with the latest technologies or managing their performance. In any case, you’re in control of the project’s timeline and can make changes quickly to meet your goals.
  • Flexibility and scalability. If your business experiences sudden growth or has a spike in demand for its services, it may be difficult to respond with an in-house team. Outsourced development provides flexibility and scalability that can be adapted quickly to meet your needs.

Well, within a nation, the variations may also be substantial. In London, developers get paid £28.60 per hour, whereas developers in England typically demand £20.20 per hour. Comparatively speaking, Asia and Africa are frequently the least expensive continents for outsourcing. For instance, a developer from India will charge about £27 per hour. In other words, at these rates, a full-time Indian developer would receive £4,707 a month. In London, a full-time software developer would be paid £7,264 for an equivalent amount of work.

Cost to Hire a Software Developer Based on Geographical Classification

Entrepreneurs are aware that hiring a software developer might be expensive depending on where they are located. Generally speaking, the cost of building software is higher in developed western nations than it is in developing countries.

The answer to this question will not be complete if the geographical location of developers is not taken into account. Here, we’ve included a breakdown of how much it costs to hire software engineers in various areas.

Software Developer Hourly Rates In North America

In nations like the USA and Canada, hiring software developers typically costs between £65- £110 per hour.

Software Developer Hourly Rates In Latin America

The average cost to hire developers in nations like Brazil, Mexico, Peru, Argentina, and Panama is between £52-£78 per hour.

Software Developer Hourly Rates In Europe

In nations like Germany, France, the Netherlands and the UK, the cost of hiring software engineers is between £71-£103 per hour.

Software Developer Hourly Rates In Asia

Developers in India, Pakistan, and Bangladesh typically charge between £30-£45 per hour.

Software Developer Hourly Rates In Africa

In African nations like Nigeria, Kenya and South Africa, the cost is typically between £45-£60 per hour.

Software Developer Hourly Rates In Eastern Europe

In nations like the Czech Republic, Poland, Romania, Belarus, Ukraine, Hungary, Estonia, etc., the cost is between £60-£80 per hour.

Why Is It Cost Effective to Hire a Software Developer from an Outsourcing Company?

Hiring a software developer from an outsourcing company can be cost-effective because you will not have to bear the burden of providing benefits, taxes, etc. In other words, by eliminating those costs, it is possible to save a significant amount of money. Moreover, as already mentioned, there are also various geographical locations where hiring developers is far less expensive than in developed western nations. Therefore, outsourcing can be a great way to save money on software development.

Furthermore, most of the time, companies that offer outsourced services also have access to dedicated developers who are experts in their fields and know how to create efficient software solutions within the set budget and deadlines. Thus, outsourcing can be a great way to get the most out of your investment. Moreover, when you hire an outsourced developer, you have greater control over their work. You can easily ask for revisions and provide feedback, which helps to ensure that the end result is exactly as you envisioned it. Finally, it is also worth noting that many outsourcing companies have flexible engagement models where you pay only for the hours worked. Thus, you can save money further by ensuring that no unnecessary time is spent on a project


The cost of hiring a software developer is determined by geographical location and other factors. Generally speaking, it costs more to hire developers in developed nations such as the USA and Canada than it does in developing countries such as India, Pakistan and Bangladesh. Latin American countries also tend to be cheaper than Europe or North America but are still more expensive than Asia or Africa. It is also worth noting that outsourcing software development can be a cost-effective way of getting your project done, since it eliminates additional costs such as benefits and taxes and gives you control over the development process. Finally, with flexible engagement models, you can save money by paying only for the hours worked on a project. Overall, the cost of hiring a software developer can vary depending on your needs and budget, but taking these points into consideration is essential to getting the best value for your money.

In many industries that are developing swiftly, software development helps maintain a competitive edge. If your business is one of those looking to hire specialised or experienced developers, you may be asking how much it will cost to hire a software engineer and a software developer. At 9NEXUS, We have made an effort to undermine the software developers’ fee structure. To discover more about the cost, it is suggested that you get in touch with our established software development company.  For UK businesses, combining IT staff augmentation with offshore outsourcing is a terrific method to improve their access to a large talent pool without incurring a hefty cost. These services enable businesses to discover highly qualified tech employees at a fraction of the expense of hiring new permanent staff.

For more detailed information, please contact a professional in the field for advice. If you have any questions or would like to explore the options available, please contact us today and we’ll be happy to discuss further.

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Outstaffing Solutions | 9NEXUS
Outstaffing Solutions | 9NEXUS
Outstaffing Solutions | 9NEXUS

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