Hourly price is a minor detail when hiring a software development freelancer

Posted on October 15th, 2018

When searching for new freelance developers, specialists or managers to extend your team a simple question comes easily into mind: What is the hourly price vs. skills and experience of that freelancer. This question is actually quite meaningless and should become a topic only if the price is totally out of the context.

First of all, software development is knowledge driven decision making from the beginning to the end. This means that everyone in the team performs by making creative decisions either on business or technical level. And often those two levels overlap. One creative decision might change your approach to something totally different, but no-one can tell you beforehand what that decision might be and when it’s about to happen.

Decisions made by a freelancer are rarely tied to the amount of the hours unless if the work is purely mechanical. One software developer can produce ten times more and better software than another - and there is no single explanation to this. One freelancer might be able to bring better frameworks into your project, other might provide better teamwork automation or one might simply get your customer’s requirements fulfilled with less complexity. Therefore price differences become easily a minor detail in your recruitment process. There is of course a connection between price and skills overall, but that does not say much about the potential outcome of the work.

Actually, when talking with freelancers there is only one hard figure that can explain the freelancers price: Freelancer’s calendar vs. your budget. If the freelancer’s calendar is already fully booked with better priced jobs, it’s probable that your project gets easily lower in the priority. Even if you hire a full-time freelancer, it’s probable that he is already looking for a better opportunity. That’s the nature of freelancing. On the other hand if the freelancers price clearly exceeds your budget, then you should simply save your energy and move on without spending any further time on negotiation.

The biggest differences that can be found in price levels are rooted into economic area. Freelancers from Central Europe are more expensive than freelancers from Africa. This is of course defined by freelancer’s capability to lower the prices on the market - if life costs are less, also work can be sold cheaper. But does that really guarantee anything for your business needs? We live in a global world where freelancers are found from global talent pools. The best freelancers from Africa cost the same as the best freelancers from Europe. Only average or low-skilled freelancers vary their prices. Therefore at the end of the day it doesn’t matter where the freelancer comes from - as long as outputs are valuable for your business and you are able to stay in your budget.

When hiring a freelancer the best way to find out if the price is good for you is to allow your key team members to join the interviews and allow freelancer to show the skills. After you have validated the candidate together as a team, simply prepare a trial period. If your development processes are properly tuned with reviews and quality assurance, your team should be able to say quickly is the freelancer successful or not. If it was, then try to engage the freelancer as well as possible. Otherwise just shake hands politely and move on to the next talent.

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K. Tanninen

I'm an Interim Manager, Agile Coach and SaaS Founder. With 20 years of work experience I help global software businesses and distributed teams to perform better.

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