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4 Reasons Why You Don’t Need an In-House Dev Team

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The cost of employee salaries mounts up fast when you’re building a dev team — it’s well known that salaries are the biggest expense for most businesses. Add office space, benefits, bonuses, and taxes to that amount and you’ll get a grand total that can be difficult to justify.

The cost and process around maintaining a team of developers is likely more than you’d think:

  • Hiring Costs: Around $4,000 per hire (according to SHRM report)
  • Salary: Over $100,000 per web developer (according to PayScale)
  • Benefits: Health, dental, life insurance, FSA, 401(k), etc.
  • General Services: Accounting, HR, etc.
  • Office Space: $5000 a month + management costs.
  • Taxes: Unemployment taxes, social security, etc.

In the US, the average salary for a PHP backend developer is $122,000. For front-end developers, it’s between $75,000 and $100,000. For Ruby software developers, it’s around $75,000. An average JavaScript developer salary is also $93,000 and over $90,000 for a DevOps engineer. Obviously, you’ll need a mix of all these skill areas to build a complete team. Fire up your calculator and do the math. Can you really afford it?

Luckily, there are several alternative approaches that’ll cost you much less than $100K per head. There are other ways to build your own development team.

Ryan Carson, the founder of Treehouse, is one of many CEOs who refused to follow the conventional path. Ryan started an online learning platform from his home in 2010. Now, he’s managing a big team of employees, 63% of who work remotely.

Unfortunately, most entrepreneurs don’t always think the same way, and still fall victim to the outdated tradition and convention of hiring in-house teams. There are two steps often taken after raising a round of startup funding:

  1. Find a swanky office space, and furnish it with trendy gear.
  2. Start building your team — of developers, support staff, sales, marketing, office managers, and others.

It’s an increasingly outdated way to start a business, which doesn’t necessarily embrace the flexibility on offer to companies today. Every spare dollar you have is best spent on improving your product, and offering a better service to your customers or users.

Eschewing this traditional model and instead opting to establish a contract with a remove dev team can be packed with benefits. Here are just a few:

1. Hiring Is A Waste Of Time

According to an SHRM report, the average cost-per-hire for small organizations is around $3,000. For large organizations, it can be upwards of around $4,200. It takes 29 days for a small organization to fill a position (while a large organisation might take 43 days).

Imagine how much you can accomplish with that time (and money) if you don’t have to spend that effort on the recruiting and hiring process. You could spend that time finding and negotiating with new clients, closing deals, or improving your product — instead of spending money on hiring a team.

Establishing a relationship with a remote team like Mayven takes the burden of hiring off you, so you’re free to focus on the work that needs to get done.

2. Expensive Overheads

Let’s set aside all the trouble of finding great talent, interviews, negotiations, management costs, company experiences, and office culture developments aside for a moment. Let’s calculate how much it’ll cost you to setup an office.

It costs around $75 per-square-feet to rent office space in San Francisco. It will also cost you around $2,000 per person/desk, at the minimum, for furnishing and fitting out your space.

On top of all the office management costs, you’ll also have to set aside a budget for employee benefits such as bonus plans, dental plans, insurance plans, human resources, and many other additional costs that go into running a full-time staff.

These mount up fast. So whether it’s eating into your profit, or burning through your funding, it’s something you need to think carefully about.

3. It Limits You To Local Talent

Building an in-house team means that you’re also limited to finding talent close to your city, or at least within your country. This means you might be settling for a less talented team (or paying a premium if the competition is fierce).

Relocation is an option, but that doesn’t come cheap. Costs vary quite a bit, depending on factors like whether your new hire is a homeowner or not (as that’ll affect whether they need to sell their house and purchase a new one). But you’re looking at a minimum of $20k, and a top-end of around $70k.

It can be a much more cost-effective path to work with a remote development team. That way, you can make more use of your budget to hire an on-demand remote development team (like Mayven) with a collective range of expertise to cost-efficiently develop your app or product.

4. Employee Management & Training Costs

Building a company culture is also an important part of keeping your in-house team healthy and happy. In order to keep your employees fully satisfied, you’ll have to create vacation plans, invest in creating a good office environment, and other recreational activities. A great culture doesn’t come cheap.

Not only that, you’ll also be responsible for training your team, keeping them up-to-date with the latest trends, teaching new programming languages, frameworks, and more.

This is a critical consideration (you want your team to be on the cutting-edge), but requires significant investment. With a remote team, this burden is completely lifted.

Benefits of a Remote Team

Needless to say, choosing a remote development team over an in-house team comes with significant time and cost savings. But, if you’re still not convinced of the advantages of using a remote team, here are a few more reasons to help you make a decision:

  • 24/7 Coverage — Most remote dev teams have employees around the world, giving coverage across a full 24 hour period. Someone from your development team can always be available to tackle urgent requests and projects (if that’s something that’s important to you).
  • A Bigger Team — Avoiding additional costs of employee management, hiring etc means you can spend more on enlisting a remote team with a broad range of skills — everything from front-end to mobile app development.
  • Invest in Your Product — With the various savings involved, you’ll be able to invest more money and time on your new projects and ideas. The area you can bring the most value!

The important thing to remember is that office space, and a big team of local employees, is optional. Be smart. Save yourself the overhead, and give a remote dev team like Mayven a try.

posted by David Appleyard

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