Staff Augmentation

How to Reduce Developer Recruitment Costs?

  • Published on : May 27, 2024

  • Read Time : 15 min

  • Views : 3.4k

Reduce Developer Recruitment Costs by Up to 65%

Are you struggling to find right set of resource with quick turnaround time? In today’s tech industry, finding skilled talent can be both challenging and expensive. But have you ever researched to study the real costs behind building your productive team?

Believe it or not, as per Glassdoor the average U.S. employer spends about $4,000 and 24 days to hire a new worker.

Between endless interviews, costs of training, and hidden expenses like recruitment agency fees and infrastructure setup, the traditional hiring process can turn into a financial nightmare taking a whopping time.

Key Factors Influencing Cost per Hire

The goal of all this investment is increased productivity and saved time. Skilled developers receive multiple offers, making it tough to secure the perfect fit for your team. Plus, training expenses, time and unexpected costs can quickly exceed your budget.

Discovering skilled talent remains a persistent struggle in today’s competitive market. The battle for developers is intense, and traditional recruitment methods often leave companies frustrated when there is:

  • Onboarding Overload:Endless interviews, paperwork, and training – it takes forever to get new developers up to speed.
  • Candidate Hiring:Finding the perfect talent is tough, and the competition is fierce.
  • Hidden Costs:Recruitment fees, infrastructure setup, and additional benefits – the bill adds up quickly.

Feeling the pinch?

You’re not alone. There’s a better way: Staff Augmentation. Keep reading to learn how Staff Augmentation can Cut Developer Recruitment Cost by 65%.

How Staff Augmentation Can Slash Developer Recruitment Costs by 65%

Staff augmentation offers a strategic approach to developer recruitment that can significantly reduce costs compared to traditional hiring methods. Here’s how:

1. Sourcing and Screening

Traditional Recruitment: You invest time and resources in crafting job descriptions, posting them on various platforms, and sifting through resumes. This can involve additional costs for premium job boards, advertising, or head-hunter fees.

Staff Augmentation: Partnering with a reputable staff augmentation company eliminates these expenses. They have a pre-vetted pool of developers and utilize established sourcing channels to find the right talent based on your specific needs.

Cost Comparison:

Consider investing approximately 120 hours over a span of 2-3 weeks on recruiting and screening a developer within your company. At an internal cost rate of $50 per hour, this amounts to $6,000 in internal expenses solely for the recruitment process.

However, utilizing staff augmentation services allows direct access to developers without incurring recruitment costs associated with external agencies or additional hiring efforts. This streamlined approach offers a more efficient and cost-effective solution for fulfilling project requirements.

Imagine you need to hire 5 developers.

  • Traditional recruitment (low-end estimate): $4,000 per hire could mean $20,000 total.
  • Staff augmentation (low-end estimate): $1000 per hire per service (assuming the company charges a service fee) would be $750 total.

Conclusion: In this scenario, staff augmentation is likely cheaper due to eliminated expenses and reduced time investment.

2. Onboarding and Training

Traditional Recruitment: Onboarding a new developer involves administrative tasks like setting up equipment, accounts, and access. Additionally, training them on your specific technologies and workflows requires time investment from senior developers.

Staff Augmentation: Many staff aug mentation providers handle initial onboarding of the developer, including basic system access and configuration. They may even offer some level of project-specific training, reducing your internal burden.

Cost Comparison:

Suppose let’s consider 40 hours of onboarding and initial training at $100/hour. This translates to $4,000 in internal costs. Staff augmentation might offer basic onboarding for a flat fee, and project-specific training could be negotiated as part of the overall contract, potentially saving you money.

3. Performance Monitoring

Traditional Recruitment: Once a developer is hired, you’re responsible for monitoring their performance, providing ongoing feedback, and addressing any issues.

Staff Augmentation: Some Staff Augmentation companies like Codiant offer performance management as part of their service. They regularly monitor the developer’s performance, keep you updated, and address concerns if necessary.

Cost Comparison:

Quantifying the cost of performance monitoring is challenging, but consider the time spent by managers conducting performance reviews, addressing issues, and providing feedback. Staff augmentation can free up this management time, allowing them to focus on core business activities.

4. Payroll Taxes and Benefits

Traditional Recruitment: Full-time employees come with payroll taxes, social security contributions, health insurance, and other benefits. These can significantly increase your overall labour costs.

Staff Augmentation: With augmented staff, you only pay for the developer’s hourly rate or project fee. The staff augmentation company handles all payroll taxes and benefits, reducing your administrative burden and associated costs.

Cost Comparison:

Payroll taxes and benefits can vary depending on location, but they can easily add 25-35% on top of a developer’s base salary. Staff augmentation eliminates these additional costs.

Additional Cost-Saving Benefits

  • Pay-as-you-go: Staff augmentation offers flexibility. You only pay for the developer’s services when you need them, allowing you to scale your team up or down as project demands fluctuate. This easy release approach eliminates the burden of fixed salaries and benefits for roles with temporary requirements.
  • Access to a wider talent pool: Staff augmentation companies have a global network of developers, giving you access to a wider range of talent beyond geographical limitations. This increases the chances of finding the perfect fit for your specific needs.
  • Reduced administrative burden: Managing the entire recruitment process, from sourcing to onboarding, is a significant administrative burden. Staff augmentation takes care of these tasks, freeing up your internal resources for core business activities.
  • Faster project completion: With a pre-vetted and readily available developer, projects can start sooner, leading to faster completion times and potentially quicker ROI.
  • Lower risk of bad hires: Staff augmentation companies have expertise in developer evaluation, minimizing the risk of hiring someone who doesn’t fit your requirements.

While the exact cost savings can vary depending on factors like project scope and developer location, staff augmentation can potentially lead to a 50% or more reduction in developer recruitment costs compared to traditional methods.

Cost Comparison Example

Let’s consider a scenario where you need a developer for a 3-month project:

Traditional Hiring:

  • Salary & Benefits (average developer): $10,000/month (total for 3 months = $30,000)
  • Recruitment Costs (advertising, agency fees): $5,000
  • Onboarding & Training Costs (estimated): $5,000

Total Cost: $40,000 (even if the project takes less time, you pay the full salary)

Staff Augmentation:

  • Hourly Rate (average developer via augmentation): $25/hour
  • Estimated Hours for 3 months (assuming 40 hrs/week): 480 hours

Total Cost: $12,000

Note: This is a hypothetical number and can vary based on hourly rate of the Staff Aug Company and project scope

This scenario highlights a potential cost advantage of $28,000 with staff augmentation. But the true benefit lies in:

Flexibility: If the project is completed in less time, you only pay for the utilized hours, saving a significant amount compared to a fixed monthly salary.

Reduced Risk: Staff augmentation companies pre-vet candidates, minimizing the risk of a bad hire who might require additional training or replacement.

Staff augmentation proves to be a more cost-effective solution for short-term or project-based needs.

Companies Utilizing Staff Augmentation for Developer Recruitment

Companies Utilizing Staff Augmentation for Developer Recruitment

1. Google: Google is known to have used staff augmentation services to rapidly scale up their development teams without incurring the high costs associated with traditional recruitment processes. By partnering with external staffing agencies on a project basis, Google was able to access specialized talent without the need for extensive in-house hiring.

2. John Deere: John Deere, has utilized staff augmentation services from Codiant to bolster their development teams. This approach allows them to access specialized technical expertise for specific projects, ensuring they have the right talent to drive innovation.

3. IBM: IBM, has also leveraged staff augmentation services to optimize their workforce and reduce recruitment expenses. By working with external agencies to fill specific skill gaps for short-term projects, IBM was able to control costs and maintain flexibility in their staffing strategies.

4. Uber: Uber, a leading technology company, has utilized staff augmentation services to meet fluctuating demands in their development projects. By engaging external developers through staffing agencies, Uber was able to access additional resources quickly and efficiently, thereby cutting down on recruitment lead times and associated expenses.

5. Netflix: Netflix, has adopted staff augmentation services to enhance their development capabilities without the need for extensive internal recruitment. By partnering with external staffing firms, Netflix was able to bring in specialized developers for short-term projects, helping them optimize costs and improve project delivery timelines.

6. Accenture: Accenture, a global consulting and professional services company, has integrated staff augmentation services into their workforce management strategy. By supplementing their existing teams with external talent on a project basis, Accenture was able to reduce recruitment overheads while ensuring access to specialized skills as and when needed.

Case Studies: Accelerating App Development with Codiant

1. ZEEpay: Streamlining Loan Approvals with Mobile App Development

Zeepay, a fintech company, needed to develop a user-friendly mobile app with features like rapid loan approvals and flexible repayment plans. Traditionally recruiting a team of skilled mobile app developers could have taken weeks and incurred significant costs in advertising, interviewing, and onboarding.

Solution and Advantages:

Zeepay partnered with Codiant – A Yash Technologies Company for staff augmentation services. Codiant’s expertise helped Zeepay quickly assemble a team of two mobile developers (one iOS and one Android) with experience in loan application development. This reduced recruitment time & cost by an estimated 40% and saved Zeepay an estimated $7,000 in recruitment costs.

Codiant also streamlined onboarding, providing basic project-specific training, allowing Zeepay’s internal team to focus on core business activities.

Additionally, Zeepay is only paying for the developers’ hours needed for the project, resulting in an estimated 15% cost saving compared to hiring full-time employees with benefits.

2. LLO Case Study: Enhancing Logistics with React Native App

LLO, a logistics company, wanted to upgrade their mobile app using React Native technology. Traditionally finding qualified React Native developers can be challenging.

Solution and Advantages:

LLO partnered with Codiant to find a team of 12 developers of React Native and a Native Android developer. Staff augmentation allowed LLO to quickly identify the right talent within a week, saving an estimated 4-5 weeks of recruiting time to initially kick of the project development activities.

Codiant’s team seamlessly transitioned the app to React Native and implemented new features, improving the user experience and efficiency of LLO’s freight services.

LLO estimates a 35% reduction in development costs compared to traditional recruitment due to the elimination of agency fees and faster project completion.

3. PullY App: A Thrilling Gaming Platform

PullY App envisioned a unique gaming platform for skateboarding, scootering, and biking enthusiasts. Building such a complex gaming platform with features like trick contests and social interaction required a skilled team of gaming app developers. Traditional recruitment for such specialized roles could have been a lengthy process.

Solution and Advantages:

PullY App collaborated with Codiant to build a team of three developers: a game engine developer, a front-end developer, and a back-end developer. Staff augmentation allowed PullY App to assemble this team within a week, significantly faster than traditional recruitment. This saved them an estimated $5,000 in recruitment costs.

Codiant’s developers brought their expertise in game development best practices, ensuring the app’s stability and scalability. PullY App leveraged staff augmentation’s flexibility, only paying for the developers’ time needed for core functionalities.

They estimate a 42% cost saving compared to hiring full-time developers, as they avoided additional expenses like onboarding and office space.

Disclaimer: The client’s name has been altered to ensure compliance with nondisclosure agreements and maintain confidentiality.

Key Considerations for Successful Staff Augmentation

Staff augmentation can be a powerful tool to fill skill gaps, manage project workloads, and achieve your business goals. But to ensure its success, there are some key considerations:

Before you Augment

Define Your Needs: Identify the specific skills and expertise you require. Consider project requirements, strategic goals, and existing team skillsets.

Set Clear Objectives: Outline clear project scopes, job specifications, and desired outcomes for the augmented staff. This helps determine the right skills and number of people needed.

Choose the Right Partner: Evaluate potential staff augmentation partners’ experience, reputation, talent pool, and their ability to understand your specific needs. Look for a track record in similar projects or industries.

During Implementation

Effective Communication & Teamwork: Prioritize open communication, collaboration between your team and augmented staff, and regular progress updates.

Onboarding & Integration: Develop a smooth onboarding process for augmented staff, providing training, clear roles, and access to necessary tools and information.

Throughout the Project

Flexibility & Adaptability: Staff augmentation allows for scaling your team size up or down as project needs evolve. Be prepared to adjust team size as needed.

Performance Evaluation: Implement regular performance evaluations for augmented staff to ensure they meet project goals and identify any areas for improvement.

Cultural Fit: While technical skills are important, consider cultural fit and team dynamics. Choose staff who align with your work style, communication approach, and values.

Security: If applicable, establish data security protocols for augmented staff, such as anonymized data sets and clear development processes.

In Conclusion

If your company is looking to cut costs without compromising on the quality of work, it’s time to consider staff augmentation. It’s a proven, effective strategy that can help you achieve your business goals while keeping your bottom line in check.

Remember, the right talent can make all the difference, and with staff augmentation, that talent is within your reach. So, take the leap, and embrace the change for a more efficient and cost-effective future.

Schedule a demo & see how we can help you find top developers.

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Frequently Asked Questions

It can. If you spend less on recruitment, you might not attract top talent or you might rush the hiring process and miss red flags. It’s important to balance cost-effectiveness with the quality of hires.

You can track metrics like the cost-per-hire, time-to-hire, and the quality of hire (like performance levels, turnover rates, etc.). This will help you understand if your recruitment efforts are cost-effective and successful.

Yes, remote hiring can be faster. It cuts out the time needed for arranging physical interviews. Also, the decision-making process can be quicker because it’s based on skills and experience rather than impressions from in-person meetings. Furthermore, partnering with a staff augmentation company streamlines the hiring process, enhancing its efficiency.

Absolutely! Remote hiring allows companies to search for talent beyond their local area. This means they can find the best person for the job, no matter where in the world they are.

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