Freelance vs. Full-Time: How Much Does it Cost to Hire a Software Developer

How much does it cost to hire a software developer in a full-time framework vs. a freelance form? Although it may seem that we’re talking about pears and apples, there is one core need that makes these two types of professionals financially comparable—the cost of talent. In the end, both where the most affordable and where the best talent is are, in fact, the same question: How do I get my money’s worth with truly capable professionals? Which option is the best at attaining the developers I need while staying affordable?

That’s why we’re presenting a thorough comparison between hiring freelance vs. full-time developers in four key aspects.

#1 How much does it cost to hire a software developer annually:  freelancing vs. full-time 

According to Payoneer, worldwide, the average freelancer earns 21U$D per hour. And while this can seem like a good deal, taking a closer look can reveal a rather surprising truth about the real cost of hiring a freelance developer. 

A first fact that may shock some is that freelance platforms are only responsible for 1-3% of total global employment. Which can rather indicate that hiring freelancers has to be done locally, at local prices.

How do those prices compare to full-time prices all inside the U.S.? Let’s find out.

Salary comparison

According to UpWork, in the U.S., freelancing programmers earn an average of 60-70U$D per hour, with an annual salary of around 120.000. However, full-time developers in the U.S. earn from 80-100U$D per hour. But remember, all of this is within the range of average, without tapping into the elite, 8+ year experienced senior or semi-senior developers. 

This also doesn’t take into account that only 69% of freelancers have postgraduate education—meaning assessing their skillset and career orientation will pose unique and new challenges compared to full-time developers. 

So, is that the end of the story? Is hiring freelance developers objectively cheaper than full-time developers? 

There is, in fact, a better option in which full-time is better than freelance. A workframe that involves your professional being elite, highly experienced, highly educated, completely dedicated to your project, and equally if not more affordable than a freelance U.S. developer: a full-time senior LATAM developer. 

Let’s take a look at how the salaries of the different types of freelance U.S. developers compare to full-time LATAM developers in both wages and the most popular technologies: React, Ruby, Node.js, and .NET. 

Perks vs. added charges 

We’ll list below some added charges freelancers incur annually in comparison to how LATAM developer perks add up:

The reason why perks and benefits are displayed at zero is because tech talent partners that offer full-time LATAM software developers that are timezone aligned, like us at BEON.tech, have these perks included within the average annual salary of the developers.

#2 The Total Cost of Ownership (TCO)

“Quality is remembered long after the price is forgotten.” – Aldo Gucci

Total cost of ownership (TCO) measures the total expenses associated with a product or service throughout its lifespan. It provides a more precise method for evaluating the value (cost compared to ROI) of a service rather than solely considering the initial purchase price. 

This is why we’re going to analyze the surrounding aspects and expenses of freelance hiring versus full time. For example, some of the reasons many popular U.S. businesses have abstained from hiring freelance developers, according to Statista, include:

• Complications with intellectual property
• Harder to assess the professional skills of freelancers
• Very scattered talent pool, not knowing where to find them at need

All of this adds to the cost of hiring freelancers. Some of the added expenses to fix these issues could be:

• Higher investment in HR or Tech Lead professionals to assess the skills of the candidates
• Higher number of recruiters to find the right freelancers with matching proposals for your business, as many don’t use platforms like UpWork
• Investing in legal assessments regarding software intellectual property because you’re entering an agreement with an individual, unknown professional. 

All of this explains why the number one reason in said study was lack of affordability when hiring freelancers.

#3 Guarantee of quality talent and accountability for results 

According to Statista, some of U.S. tech businesses deciding factors to hire a freelance developer are:

• English speaking
• Vast/seniority experience
• Proactivity and initiative in taking charge
• A good portfolio
• Similar culture and mentality to that of the business owner
• Lower rate
• Friendliness and team mentality

In another study, only 10% of respondents were willing to pay more than 55U$D per hour if the freelance was anything less than a senior professional.

All of this means that when it comes to hiring software developers; the standards are high, and the quality must be prime in order for business owners to feel they’ve gotten their ROI. 

However, finding professional developers with all of those requirements is not only difficult, but in many instances extremely time consuming, as you have to navigate through endless profiles across all sorts of platforms, many of which don’t make themselves responsible if the freelancer fails to hold up to their claims or isn’t a cultural match with the business owner and the rest of the in-house team.

Falling into this trial and error or even encountering just one bad experience that no-one holds accountable for can represent a serious loss of resources and, thus, money.

This is why staff augmentation firms and tech talent partners are becoming increasingly popular, as they offer already-vetted talent from abroad while putting their reputation and business in line as guarantee of finding you a quality professional that fits your needs. 

 At BEON.tech, we offer professionals that are:

• English fluent
• Senior level
• Excelling at soft skills such as proactivity, leadership, and communication
• A good CV and track record of successes in their area
• Perfectly-matching mentality and deep understanding of U.S. culture and nuances
• Affordable
• Friendly and team-oriented

If you are interested in a tech talent partner to grow your IT team, we are here to assist you. We support our clients by:

• Selecting candidates from the top 3% of software developers in Latin America;
• Conducting interviews customized to your recruitment process ideals and technical needs;
• Managing contract, compliance, and all legal tasks, including payment, to simplify the process;
• Establishing a strong relationship with the dev for guaranteed retention.

Interested in discovering more? Schedule a meeting with one of our representatives to learn how BEON.tech can work for you. 

Key takeaways

• At first glance, freelance developers in the U.S. may appear to be a more budget-friendly option, but full-time developers, especially those from Latin America, can provide more competitive rates along with additional perks, making them a cost-efficient choice. 
• Opting for freelancers might lead to unforeseen expenses like human resources costs, legal fees, and recruitment efforts. On the other hand, full-time developers, especially those from Latin America, often come with fewer associated expenses and more comprehensive benefits, resulting in a more favorable total cost of ownership. 
• While hiring freelancers offers flexibility, it also comes with risks related to quality assurance and accountability. Tech talent partners, such as BEON.tech, offer pre-screened, highly skilled developers with strong cultural alignment and guaranteed performance, reducing risks and ensuring a higher ROI.

Damian Wasserman

Damian is a passionate Computer Science Major who has worked on the development of state-of-the-art technology throughout his whole life. In 2018, Damian founded BEON.tech in partnership with Michel Cohen to provide elite Latin American talent to US businesses exclusively.