With five jobs per candidate on average and 50K median salary, to hire a developer in the UK becomes a major challenge. When it comes to hiring developers in London, it is almost like a luxury. This is why more and more professional founders turn to outsourcing or freelancers. But is this really a solution? In this piece, we explore obstacles and traps on each of the possible ways you can go to source your dedicated development team.
It should come as no surprise that the software development industry is booming, as at current there are five jobs available for each and every software developer. AND the employment forecast is that an additional 100,000 science and engineering professionals will need to be added to the UK economy by 2020 to satisfy a growing demand.
The employment forecast is that an additional 100,000 science and engineering professionals will need to be added to the UK economy by 2020 to satisfy a growing demand.Click to tweet
Just a brief glance at the salaries of developers (the median for London-based software developers is £50,000) may convince founders to kiss their project goodbye. On top of this there are also tax and administrative costs and London’s notorious high cost of living.
Across the ocean, one out of two US technology companies chose to outsource in 2014. The number one reason behind it was reduced costs, given that in the United States more than a quarter of IT freelancers charge above $51 an hour.
But the problem is not just the cost.
The demand for quality engineering talent is increasing every year, however correspondingly software developers have less experience on average than they did the year before.
The good news is that 98% of software developers in London are employed. The bad news is that most them are “passive candidates”. This means that HR has gone above and beyond to lure developers by offering quirky organisational culture, obscure perks and exotic job descriptions. The average IT outsourcing firm ends up being caught focussing its marketing efforts on fighting for talented engineers rather than communicating and servicing with prospective clients.
Even if development is successfully outsourced, few start-ups would be able to afford hiring a UK digital product development agency, because of the fact that they generally charge anywhere from £40 to £75 an hour.
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As a result, so-called ‘vetted talent pools’ a.k.a freelance portals are typically the go to place for start-up entrepreneurs including Toptal, a San Francisco-based firm that prides itself on having a 3% acceptance rate, Sillicon Valley’s Gigster, the struggling UpWork, and many more. Due to the sheer amount of freelances and often conflicting reviews, few start-ups should embark on the long journey of building serious projects with a team of freelancers.
For this reason, ranking and referencing platforms, such as Clutch have emerged. Founded in 2012, this American firm helps software Product Owners find the most suitable outsourcing companies depending on individual needs. However, the real cost of tech staff within software development outsourcing companies in the UK is higher by approx. 30% in comparison with the cost of remote contractors in Central or Eastern Europe.
For the above reasons, start-up founders have begun to engage with remote dedicated teams, but the trouble doesn’t end with finding a reliable, experienced outsourcing agency. Even a well-qualified company can lack the exact skills or expertise required for a given project. While some agencies may meet your exact needs, there is a high chance that their staff are already working on a different project and may require you to wait for months to start developing your dream application.
With the clock ticking, time pressure often compromises the start-up building process and has an impact on commitments made by entrepreneurs to early customers and investors. Start-up founders also have to cope with rent, salaries and their own cost of living in expensive cities.
If You Decide To Outsource IT-processes in London
Overall, since software development branch of UK’s economy is constantly growing, there is a great number of companies to choose from when you are looking to hire developers in London. Despite economic changes following Brexit, new challenges to the industry and relatively high cost of outsourcing IT to London, there is no doubt that the demand for skillful software developers in London will only increase and IT outsourcing to overseas destinations will get strongly embedded in the world business processes.
The complexity of hiring the right software partners for your project should never be underestimated, in addition to the factors mentioned above it is important to consider issues related to legislation, regulations, issue and dispute management.
And yet, in spite of these challenges, London-based start-ups keep rolling new successful digital products out of the garage every month. How do they manage? Well, this will be the topic of our next article. Stay tuned 😉
Credit to Tristan Senycia for final proof-reading this text.
Cover image by Victor Fedyuk, Qubstudio