Nowadays, a company can no longer thrive without owning an effective and useful website that can be accessed through a desktop or a mobile phone. This is why programmers are always sought after, and due to this, they frequently demand a higher compensation. However, employers who need a programmers’ skills can apply certain tricks to save on costs. Let’s start by differentiating the cost of hiring a full-time programmer vs. a freelance developer.
Comparing annual salary
In terms of hiring full-time developers, their wages are computed on a yearly basis. In hiring freelancers, companies don’t usually employ them throughout the year. Among the advantages of having freelancers is that you can hire them at any time. This indicates that most freelancers are in a short-term contract. Now to differentiate the annual basic salary between the full-time and freelance programmers, let’s multiply the freelance hourly rate to the average yearly hours of work.
The average annual hours of work per laborer in the US is 1,790 hours in 2016 as stated by Organization for Economic Co-operation and Development.
- Full-time programmers’ annual salary rate differs depending on their expertise and experience. The average basic annual summary in the US is 179,000 US dollars.
- Freelance programmers’ rates, on the other hand, depend on their location, experience, and skills. Some demand $20,000 per project while others make $30 per hour. It all depends on the programmer. It is essential to know what specific services you need and venture out into the field to calculate the hourly rate when hiring freelance programmers. The average annual wage of freelancers in the US is 107,000 dollars. Freelance developers also charge 203% lower than web development agencies.
Additional Cost of Hiring Full-Time programmers
Many startups and businesses provide special services like unlimited coffee, free gym pass, limitless paid leave among others to entice excellent programmers. These additional expenses must be included and considered when employing full-time programmers. In addition, here are the basic company-paid benefits as specified by Bureau of Labor Statistics:
- Legally required benefits (Medicare, Social Security, unemployment insurance): 8.5%
- Insurance (medical, dental, life): 7.6%
- Paid Leave: 6.7%
- Retirement and savings: 4.3%
- Annual Bonus: 3.5%
- Supplemental pay (overtime and premium): 2.6%
- Employment training tax: 0.1% on first $7,000
Flexibility in Paying and Hiring a Freelance Developer
Apparently, companies who are selling software and web development services need to have full-time coders in their team. However, if you just need a developer’s help to complete a definite project, to makes more sense as there are loads of perks like the payment flexibility.
You can pay by project, by the hour, or by the day. You can go for either a fixed rate or hourly project depending on what suits your needs best.
When it comes to hiring, it’s also easier to terminate a freelancer when they’re no longer performing well. When hiring full-time developers, some companies think twice about dismissing underperforming employees as they fear being sued. There’s way less bureaucracy when it comes to hiring freelance developers.
When it comes to cost, is definitely the winner. You get to pay less all in all, and you don’t have to cover for the taxes, supplies, health insurance, and so on. You also have fewer obligations. Full-time employees are technically covered by the law as they have certain legal rights you have to respect—otherwise, you’ll have to face unwanted legal issues. You also don’t have to worry about replacement as they’re very easy to find across multiple job portals.
Then again, at the end of the day, it’s all up to your organization’s needs. If you have a steady stream of programming tasks and need someone who can maintain your website, like in terms of technical support and bug fixing, a full-time developer is great. But if you’re on a budget and want more flexibility, a freelancer will definitely do, especially if your project is just short-term. All you need to do is evaluate your needs and weigh your options well.