Businesses are always looking for effective ways to develop their software, build their website and manage their IT projects. As the demand for top developers is growing daily, the dilemma of choosing between hiring freelancers and remote developers is quite common among companies.
There are pros and cons to both options and cost is an important consideration. In this blog, we’ll dive into the cost comparison of freelancers and dedicated remote developers, allowing you to decide which option meets your project needs, budget, and strategic vision.
5 Key Factors that Affecting Hiring Cost
When determining the cost of hiring either freelancers or remote developers, several key factors come into play:
- Hourly Rate vs Monthly Salary
- Work Commitment
- Project Scope and Duration
- Hidden Costs (Onboarding, Training, and Tools)
- Quality of Output
1. Hourly Rate vs Monthly Salary
The biggest cost difference is how you pay for freelancers vs remote developers.
- Usually, freelancers charge per hour or by the project. Depending on their skill level, location and area of expertise, their hourly rates can change. A senior freelancer in the U.S. might ask $80-$150* per hour for their time, whereas a junior developer from a less expensive area will demand $15-$40* per hour. Hiring a freelancer is very flexible, no long-term commitment is involved, making it a good choice for short-term projects.
- On the other hand, remote developers are paid a monthly salary. They have a pay structure similar to in-house employees, and fixed compensation based on experience and geographic location. For instance, a developer in Eastern Europe may cost around $3,000-$5,000* per month, while those in Asia can be as low as $1,500-$3,500*. Companies looking for ongoing and consistent development work should choose to hire remote developers as it’s a fixed cost.
2. Work Commitment
Another major factor in deciding on the cost difference between freelancers and remote developers is the level of work commitment.
- Typically freelancers are hired to do short-term, project-specific tasks. Freelancers might be more cost-effective if you’re doing a one-off project or just looking for quick help with development. The problem with freelancers is, that because they are working with many clients, they won’t always prioritize your project, and if you need more revisions or faster turnaround times, this can cause delays and additional costs.
- Remote developers, however, work for your company on a full or part-time basis. They are only focused on your projects and can be quickly mobilized to take care of urgent work. If you have recurring needs for development, then having remote developers available all the time may end up saving you some money in the long run.
3. Project Scope and Duration
Choosing between freelancers vs remote developers is also very much dependent on the scope and duration of your project.
- By 2028, the global freelance market is expected to reach $12.01 billion. Hiring a freelancer is probably more cost-effective if you’re looking for short-term projects or particular development tasks (e.g. building a feature, or fixing bugs). You pay for the time worked but there are no long-term expenses.
- Yet, if your project is spread over a few months or needs constant updates, it makes sense to employ a remote developer. A remote developer’s fixed monthly cost is almost always lower than continuously hiring freelancers for large projects such as developing a SaaS product or maintaining an eCommerce website.
4. Hidden Costs (Onboarding, Training, and Tools)
When comparing the costs of outsourcing developers, it’s crucial to consider the hidden costs, which can significantly affect your budget.
- Generally, freelancers work on their own, and with their tools. But when a freelancer needs to learn about your systems, processes, or tech stack, the onboarding time can add up to extra costs. Likewise, if freelancers need to use premium software or tools that you need to provide, this can contribute to your costs.
- For remote developers, especially when you hire them through outsourcing agencies, they are already pre-vetted and ready to be plugged into your team. While you may still need to onboard them when it comes to company-specific processes, the cost is usually lower due to the long-term engagement. Furthermore, remote developers often work with a team that offers its tools, so you don’t have to pay for more software or licenses.
5. Quality of Output
Another important point when comparing freelancers vs remote developers is the output quality. High-quality work results in fewer revisions and smoother project execution, which leads to lower total cost.
- There are a wide variety of skill levels in freelancers. A more expensive, experienced freelancer can whip up high-quality work faster, but you’ll have to pay more upfront. On the flip side, less experienced freelancers tend to appear as cost-effective, but they will also take more time and might deliver lower-quality work.
- When remote developers are hired through an agency or outsourcing firm, it is common for them to undergo thorough screening. They can produce higher quality work because they are fully engaged with your business requirements and workflows. Over the long run, better quality can lower the total cost by avoiding rework or poor system performance.
Conclusion
Ultimately, the choice between freelancers and remote developers should align with the scope of your project, your budget, and the level of commitment you need. Freelancers may be a suitable option for one-off projects, while dedicated remote developers are a smarter long-term investment, ensuring your business grows with consistent technical support and quality output. By carefully weighing the pros and cons of each, you can make a more informed decision and hire developers that best meet your project’s goals and expectations.
