In the last few years, there’s been a sharp increase in tech salaries and the budgets that businesses are willing to invest in technology and development.
The average salary of a developer specialising in PHP, for example, is, according to data from Dev IT Jobs, £46,000/yr – before any benefits and additional contributions. With that said, it’s an average. A first hire should typically be experienced and self-sufficient – comfortable in an environment of little-to-no support – and with that comes a salary beyond the national average. Businesses scaling a team by increasing the number of juniors will find salaries fall below the average.
Whilst it’s the salaries in technology that often grab the headlines, it’s ultimately your business’ short-term objectives and long-term goals that are key factors when deciding whether to opt for a freelance, contract, or permanently employed developer to add to your team.
Freelance
Opting to work with a freelance developer is the most flexible solution for businesses. This is typically a transactional service, where any work is pre-agreed and quoted for either as a total cost or an hourly rate with a provisional deadline and no long-term commitment beyond your initial requirements.
Freelance developers tend to add the most value to businesses with no existing development team, where they can remove the headaches and issues of any development tasks off of your plate. As such, typical projects can range from maintaining your website to developing bespoke new software.
The hourly rate of a freelance developer in the UK ranges anywhere from £30 to over £100/hour, with £50 to £70 being the typical bracket. Whilst this is understandably higher than the hourly rate of a permanently employed staff member, this is for short to mid-term work and has no additional costs associated with having a direct employee.
Importantly though, the flexibility factor of working with a freelancer works both ways – they typically support you on your current requirements whilst also supporting other businesses at the same time. It’s important to ensure that any set deadlines are achievable and that you as a business owner consider the implications of any potential conflicts of interest. Above everything, ensuring that the intellectual property of anything developed in collaboration with a freelancer becomes solely yours upon completion and payment.
Freelance is best suited for
- Businesses with no expertise in-house,
- Delivering smaller projects, allowing an existing team to focus on other goals,
- Gaining outside perspective on projects with no ongoing commitment.
Key considerations for a freelance developer
- Freelance developers typically work on multiple client projects in parallel,
- Look for previous clients or projects when vetting a potential freelance developer,
- Hourly rates mean this is a cost-effective solution for short-term projects, but not the best suited to long-term development.
Contract
Opting to work with a contract developer is a midpoint between short-term freelance work and permanent employment, making it a popular choice for businesses looking to temporarily scale an existing team, or for businesses beginning to test the water of having dedicated development expertise in their business.
Contract developers are a short- to mid-term extension of your business, typically exclusively. They are a part of your business (usually on full-time hours) for a defined period from one to 24 months. The immediate benefit here versus a freelance is exclusivity; the individual works solely on your business project.
In terms of costing, where some contractors operate based on a monthly fee, others charge based on a day rate – hours required, contract longevity, and the experience of the contractor are all factors in day rates, but typical ranges in the UK are between £300-£500 per day for short-term contracts.
An important consideration for working with contractors of any capacity is IR35 and carrying out some basic due diligence to ensure that the contract developer in question operates either inside or outside of IR35 as per your requirements. In basic terms, the regulation was put in place to ensure that contract workers pay a similar amount of National Insurance and Income Tax as directly employed workers, as many contractors opt to operate through their Limited company entities.
Contract is best suited for
- Businesses with an existing team that requires additional resources temporarily,
- Supporting development on an existing system or pushing a new product to launch,
- Businesses use short- and mid-term contracts to begin bringing development in-house before permanent recruitment.
Key considerations for a contract developer
- Contract developers are typically full-time, so ensure that your development requirement warrants this amount of time,
- Ensure that the contract length gives a suitable timeframe for delivering your goal, otherwise, you may need to source another developer if the current contract cannot be extended,
- Be sure to do your research on IR35 guidelines when working with a contract developer.
Employed
An employed developer is a dedicated ongoing asset to your team. Regardless of the level of experience, they bring ideas, problem-solving, and an ongoing commitment to delivering your product or solution. Understandably, developer salaries are a spectrum and whilst the average for a PHP developer is £45,000 this is a). a national average, and b). specific to PHP developers – there’s a huge range of technologies, languages, accrued experience, and requirements that can affect the salary expectation of any given developer, from £20,000 through to £75,000 (and well beyond that).
Employing a developer is common practice for tech agencies and any business with a technical focus or requirement (be that client-facing or in-house). These businesses tend to already have a set structure and operating procedures built over time that allows for any new hire to quickly integrate into an existing team.
For businesses employing a developer for the first time, we’ve touched already on the need for experience and self-sufficiency. A first hire will typically bring in initial processes, either formally or informally, as their way of working de facto becomes your development process that any future hires will come into. Another important consideration, particularly for first hires, is ensuring they have a suitable facility for continuous learning – by providing a budget and time, this could be time out of the business at events, or through time to utilise online courses or explore R&D-esque projects that allow using new technology and methodologies.
Employed is best suited for
- Businesses looking to grow their existing development team with long-term projects,
- Businesses pivoting towards tech, bringing requirements in-house, or beginning to invest in long-term development.
Key considerations for an employed developer
- For a first hire, experience and the ability to problem solve and be self-sufficient is crucial,
- The placement cost of a full-time employee through a recruiter can be significant (20% of salary is not uncommon and it can be much higher),
- Taking on an additional employee comes with costs beyond salary, both time and financial.
In closing, the decision on whether to engage with a freelance, hire a contractor or grow your team permanently with an employed developer should be based not only on cost, but your short-term objectives and long-term goals. There’s also the opportunity to utilise more than one path for working with developers – utilising freelance and contract to begin brining technology in-house with the aim of recruiting full-time dependent on the success of the initial step.
