March 1, 2023
Hiring freelancer developer talent for startups is not easy.
There are 100s of resources + websites dedicated to helping startups “hire developers” or “find freelance developer talent.” This includes the Upworks of the world, the niche developer hiring marketplaces, offshore agencies, recruiters, and staffing agencies.
But startups do not have time to do a comparative analysis against all the options — imagine trying to assess dozens of freelance hiring resources to determine which offers the most qualified and well-vetted talent with a specialization in a niche language that is onshore and is available part-time. So in the interest of time, resources, and sanity, startups will default to the same hiring options and they end up experiencing varying degrees of success. To help navigate this process, we’ve written this comprehensive rundown of the available hiring options for startups and a review of the top developer hiring websites.
This piece is broken down into 3 parts:
Before we jump into the developer hiring site review, let’s take stock of the developer hiring options, including the differences between a Staffing Agency vs. Recruiter vs. Dev Shop vs. Direct Independent Contractor Hiring. We’ll also run through top-line PROs + CONs for each.
Staffing agencies help companies hire for temporary workers (clear start/end date), temp-to-hire (sign on for temporary work but could turn into a full-time hire depending on performance), direct hire (a full-time position where staffing agency acts as the recruiter). Staffing agencies source and vet candidates to present to the company, and handle paperwork associated with new hires (e.g. contracts, taxes, and other payroll tasks). Fees for staffing agencies can range from 20-100% of the hired employee’s wages. Companies may need to prepare for additional fees, including fees for filling the position or a contract buyout if the company hires a temporary employee full-time
Companies partner with recruiting agencies to save time and resources on hiring efforts. Recruiters pre-screen and recommend candidates to companies. Recruiters facilitate interview scheduling between candidates and companiesUnlike a staffing agency, recruiters focus solely on filling full-time positions on behalf of companies. There are several types of recruiting agencies (e.g. Retained vs. Contingency vs. Container Recruiters), which offer different fee structures. Such fees should be considered in the total cost of hiring a new employee.
Also known as a software development shop or dev agency, Dev Shops provide services for building software products including websites, web-based apps, or native apps. Dev shops are usually used to build products from scratch, but can also be used to develop on top of existing products. Dev shops can be pretty costly ranging from $10,000 for a simple web app to $200,000 for a customized and complex product. Usually, Dev Shops will produce your product and offer maintenance for a pre-defined period after handover, but once that is done it’s up to the core dev team to take over. Dev Shops may compromise between quality and cost. To maintain costs, a Dev Shop will hire average developers with lower salary requirements, which may result in an average or sub-average quality product. On the flip side, hiring higher quality developers will result in higher costs, but potentially a higher quality product.
Independent contractors are self-employed, so companies would contract directly with them rather than through an agency. By being self-employed, independent contractors pay their own taxes + benefits. They usually work for multiple clients on a short-term or per-project basis. Because independent contractors pay for most of their overhead costs, they are a cost-effective hiring option. Independent contractors are also specialists in their skill set, which helps companies save time in training. However, with direct independent contractor hiring, companies must vet and quality talent rather than rely on an external third-party agency. Starting and ending relationships with an independent contractor is easier than with full-time employees.
“Should I go with a freelance developer? Is this the only option?”
— Every Startup Looking to Hire Developers
Here are the distinctions:
Someone who is self-employed and often works on short-term projects with various clients. Among their administrative duties, they set their own hours, pay their own taxes, and receive no employee benefits from their clients, but control their rates for any given project.
While fractional workers share most of the administrative duties of freelancers, their role is distinct in that fractional workers are full-time working professionals looking to join long-term projects based on their expertise. On top of their full-time role, fractional workers are capable of dedicating 20-30 hours to another project.
Part-time work is similar to fractional work in that the role is less than 40 hours per week. The U.S. Bureau of Labor Statistics defines part-time employment as 1 to 34 hours per week, but is usually a minimum of 20 hours per week. In terms of hours, part-time is similar to fractional work, but the key distinction is part-time work is the only engagement, whereas fractional workers already have a full-time role but tack on an additional 20-30 hours per week. Part-time is similar to freelance in that they pay their own taxes and receive no employee benefits from their employer. Part-time work can be on a pre-determined schedule or on an as-needed basis like being on call for additional shifts or seasonal overtime.
Full-time workers have a single employer and are paid fixed remuneration (e.g. salary). They might work in the office or be a part of a remote team hired and are hired to fill a designated role as opposed to working on a single project. The employer provides benefits (such as vacation time, healthcare, and pension plans) and is also responsible for taxes and contributions. Employees typically have a fixed position that determines their work hours, role, and the terms of their employment.
Sourcing talent from outside a company’s home base (e.g. international talent). Companies may engage in offshoring by partnering with a third-party recruitment agency to handle talent sourcing or hiring talent directly themselves. Offshoring is considered a cost-effective option, but the quality of talent varies. You’ll first need to decide the scope of work, duration of the engagement, and potential costs. Once you’ve decided on these details, you can look more closely at the available developer hiring websites.
Nearshoring is another form of offshoring that occurs in adjacent countries that are in or near your timezone and may be more culturally similar. Examples of this would be for US-based companies, Nearshoring in Canada, or Central or South America.
Onshore hiring sources from your home country (e.g. if you’re based out of the United States, then you’d be sourcing U.S.-based candidates). Working within the same or similar time zones is helpful for communication. Quality is typically of a higher caliber and there are less cultural barriers. From a regulations perspective, onshoring is easier in that copyright or intellectual property laws are transparent from the beginning. However, onshore is oftentimes a more expensive option.However, onshore is oftentimes a more expensive option.
As mentioned above, there are many ways to go about sourcing + contracting developers. Now this raises the question of what are the employment options for developers? Full-time hiring is expensive, so startups may think they’re priced out from good developer talent, but that’s not the case. Options like freelancers or offshore are more affordable, but the quality may be hit-or-miss. Fractional hiring offers the best of both worlds — access to top US-based talent without the costs of hiring a developer full-time. We dug into the distinctions among all the options for a better view of the landscape.
Dev Shop / Offshore, Freelance Teams + Part-Time
Expertise: BairesDev specializes in providing dedicated offshore (Latin America) software development teams + hourly or part-time staff augmentation.
Engagement: The BairesDev dedicated teams work autonomously to deliver your solution, which suggests that once the project is done, so is the engagement. However, through the BairesDev IT Staff Augmentation offer, companies can add hourly or part-time staff to fill a need, which could be more ongoing.
Team Support: For the BairesDev dedicated teams solution, management is conducted by a BairesDev Scrum Master or Engineering Manager and client product owner. It’s unclear how involved the dedicated team would be with the core team. The BairesDev IT Staff Augmentation offers a higher likelihood that the hourly or part-time staff would be more part of the team, but this would also depend on how well the Product Management team manages these developers.
Cost: Based on 2020 data, hourly costs for a senior developer (senior developer or senior QA) is estimated at around $35-50 per hour. Anecdotally, we heard $60-80 per hour was the ongoing rate around 2020. However, the costs for a dedicated team would be a multitude higher. Typically BairesDev dedicated teams are composed of a PM, software engineers (plural), QA engineers (also plural), and various other roles depending on scope.
Staffing / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: CloudDevs pre-vets senior freelance talent from Latin America through a 4-step process including Tech Stack Evaluation + Language Proficiency; live coding challenge; and logical reasoning + problem-solving; background check. Average years of experience is about 7+ years. They also offer an Elite East Asian Senior Talent option.
Engagement: Engagements may vary depending on the scope, but CloudDevs are freelancers so the nature of work could vary from ad-hoc or project-based to fractional and potentially full-time if the client buys out the talent.
Team Support: Again, this depends on the engagement type, but if the company offers a full-time or fractional position, then yes a part of your team dynamic could happen.
Cost: CloudDevs costs are estimated between $40-75/hour. Elite East Asian Senior Talent goes for a flat rate of $35/hour.
Dev Shop / Offshore
Expertise: DevSquad provides full-development teams based out of Latin America. This fully-managed option includes 4-6 developers, a dedicated product manager, QA testers, DevOps, UI/UX, and project management. Developers have 4+ years of experience. While talent is sourced from the Latin America region (specifically Brazil), their US office is based in Utah. DevSquad specializes in APIs and a set of specific languages (Laravel, Vue.js, Node.js, React, Angular, and Electron).
Engagement: DevSquad provides an entire team to build your product. By offering a subscription-based approach, there is an option to have an ongoing engagement following the completion of the product.
Team Support: Fully-managed support is central to DevSquad’s offering. That being said, DevSquad would be a siloed team working on the hired scope. If you don’t already have a dev team, this could be an option. But for those with existing core dev teams, it’s unclear how DevSquad would work directly to support the core team.
Cost: DevSquad takes a SaaS cost approach where users pay an ongoing monthly subscription based on the number of developers you choose to work with. Estimated costs start around $25,000.
Staffing / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: Another popular freelancer marketplace for professional services, Fiverr also offers access to software development talent. Fiverr offers several ways to hire talent. The Fiverr marketplace allows users to review candidates based on specialization. Users can also browse the Project Catalog which has pre-defined projects with preset prices (software development services are not included in the catalog). Similar to Upwork, Fiverr does not formally vet its talent. Average years of experience will vary.
Engagement: Again like Upwork, Fiverr hires could turn into longer-term engagements, but usually, these resources are used for ad-hoc or project-based work.
Team Support: Due to the nature of the engagement, it’s unlikely a Fiverr hire would become part of your team unless a full-time or fractional offer is made.
Cost: Fiverr has an interesting fee structure, charging users a 5.5% fee on all transactions and an additional $2 fee for Gig purchases of $50 or less. According to 2021 data, the cost to hire talent in Fiverr to build a website start at around $40/hour. More complicated software development would require higher specialization and a higher hourly rate.
Staffing / Offshore
Expertise: Full Scale enables firms to hire world-class developers based in the Philippines quickly and affordably.
Engagement: Full Scale focuses on longer-term staff augmentation contracts with clients, where its developers embed as part of a client's software development team.
Team Support: Full Scale handles testing, vetting, hiring, and getting developers ready to join your team full-time, long-term, right now - with 3M+ coding hours delivered to date.
Cost: All costs are included in Full Scale's monthly fees for developers.
Staffing / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: Freelancer.com is the “world’s largest freelancing and crowdsourcing marketplace” and has connected over 62 million employers and freelancers. To engage with their talent, users will need to post a project or contest and then receive bids from freelancers for the work. The user will directly communicate with and vet each candidate. After the user selects the best candidate for the position, they’ll work together to figure out the project milestones which will dictate the payment schedule as payment is only released to the freelancer upon milestone delivery.
Engagement: Depending on the project type, there is a possibility of continuous or full-time positions, which allows for better integration within the core team. However, project-based work would not
Team Support: Due to the nature of the engagement, it’s unlikely a Freelancer.com hire would become part of your team unless a full-time or fractional offer is made.
Cost: When posting a project, users can select a fixed-price or hourly project. Fixed-price projects are ideal for one-time projects or those with limited budgets. Hourly projects are ideal for continuous work or full-time positions.
Recruiting, Dev Shop / Onshore, Fractional (Possible Full-Time)
Expertise: fraction is the first hiring platform designed to connect growing startups with US-based, senior fractional developer talent. In response to the growing developer labor shortages, fraction taps into an exclusive talent pool of elite engineers: the ones already working. On top of their full-time 40-hours/week jobs, these developers are capable of contributing an additional 20-30 hours/week to growing startups. For startups, this is an opportunity to access a new source of senior developers at a price point they can afford.
Engagement: Fractional engagements are long-term in nature, growing the company’s product. Types of work that would work best for fractional developers include backend work (e.g. integrations), front-end UI, and report output to name a few. Fractional developers could work in supporting core intellectual property, but this would require greater support from the company’s established product management.
Team Support: Given the long-term nature of a fractional engagement, fractional developers can grow with the company’s product and team. As the fractional developer becomes more familiar with the product and more knowledge transferred is shared, the fractional developer will be able to contribute to other areas of the product.
Cost: Because fractional developers already have a full-time engagement with a full salary + benefits, there is flexibility on their hourly rate for 20-30 hour engagements. For example, the hourly rate for a US-based Python developer with 6 years of experience would range between $72-92/hour. Fractional work allows startups to access US-based talent with a proven track record at rates comparable to offshore talent.
Dev Shop / Offshore, Freelance Teams (Possible Full-Time with buyout)
Expertise: Gigster provides access to a fully-managed, qualified development team to build your product. Gigster is an invite-only network of top developers, designers, and product managers freelancers. The qualification process involves resume review, written screening, and phone screening. Once onboarded, Gigster members are monitored to ensure high performance.
Engagement: Gigster offers companies access to teams to build an idea into a finished app. But once the app is done, the Gigster team will move on to its next project engagement (unless the company opts to buy out the entire team which could be costly).
Team Support: Based on its engagement model, it seems like Gigster is there to get the work done, but leaves the final product in your hands to take it to the next step. Of course, you could opt to buy out the entire team, they would in that case they could become an extension of your existing team.
Cost: Gigster claims to rely on an AI-drive project quotation system to estimate the cost of a project. Others have quoted Gigster’s starting price at $52,000 per project. Given the comprehensive nature of their project packages (development, design, and project management) delivered by top talent, Gigster would be a good option if you have a generous budget.
Staffing, Recruiting / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: Gun.io is a talent platform offering access to qualified senior software development freelancer talent. Their talent is “optimized individual freelance software development talent.” Average years of experience is about 8+ years. To join the platform, developers must pass a screening, work history and background review, and a live technical interview with a senior engineer.
Engagement: Because Gun.io was designed for freelance development talent, engagements could vary from ad-hoc or project-based to fractional and potentially full-time if the client buys out the talent.
Team Support: This depends on how you opt to hire a Gun.io developer — project-based developers could provide in/out services and fractional or part-time could potentially provide longer-term support. Gun.io is able to accommodate direct, full-time hires from its senior developer pool, so full-time hires could become part of the permanent team.
Cost: According to their website, Gun.io does not charge standard rates, rather they work with each client to create a custom package based on their budget. Developers set their own rates (estimated around $100-200/hour) and keep 100%, and there are no additional fees on top of the rate in each candidate’s profile (all costs are accounted for in the listed price). Gun.io does charge a retainer of $5,000/month. If you hire directly, buy-out is 20% of the developer’s first year’s salary.
Recruiting / Offshore, Fractional (Possible Full-Time with buyout)
Expertise: Shiny was designed to connect startups with freelance fractional executive talent. Their offer specializes in access to fractional executives including CMOs, CFOs, and CTOs. Shiny vets its executives through a rigorous resume review and video interview.
Engagement: Fractional engagements through Shiny can range between 5-25 hours/week. Team Support: Team dynamic will depend on the Shiny fractional executive’s scope and how much team involvement is needed to deliver on that scope. However, Shiny also offers a buy-out option for a full-time hire.
Cost: In terms of their fees, Shiny does not request a deposit or a search fee. Users can sign up to the platform for free and request matching, and then they’ll only pay for the fractional executive you hire, nothing else. Shiny’s buy-out for a full-time executive is a 15% recruiting fee.
Staffing, Recruiting / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: Toptal hires the Top 3% of highly vetted talent from across the world, making them one of the most prominent marketplaces for global freelance talent. Their platform offers access to qualified software developers, designers, finance experts, product managers, and project managers from around the world. Toptal verified talent through its rigorous screening process measuring subject matter expertise, professionalism, and communication skills. The full screening process typically takes a few weeks to complete. Average years of experience is about 3+ years.
Engagement: Depends on the need - engagements can range from less than 1 week to greater than 6 months. Such engagements could support fractional, part-time, or full-time opportunities.
Team Support: Like other freelancer options, the capacity for team support would depend on the type of hired engagement. 1-2 week or 2-3 month project work would not be enough time to truly support the team, however, engagements longer than 6-months could allow for greater a team-building dynamic and potential knowledge transfer to allow the developer to take on more tasks.
Cost: Toptal does not charge a recruiting fee. Toptal freelancer talent prices vary depending on the freelancer’s core skills, location, and if the engagement is hourly, part-time, or full-time. Some external sources estimate Toptal costs as $60-250 per hour; $1,000-$4,000 per week for part-time jobs; and $2,000-8,000 per week for full-time roles.
Staffing, Recruiting / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: Another marketplace for global freelance talent, Turing hires the Top 1% of remote software engineers. Turing uses a combination of automated tests and an AI Matching Engine to match qualified engineers. The AI engine evaluates the results of the multiple choice question tests and coding challenges to analyze developers’ skills, expertise, and work experience. Average years of experience is about 3+ years.
Engagement: Engagements are full-time and long-term, so developers are expected to have full-time availability (devs can start half-time but need to quickly transition to full-time).
Team Support: Because Turing is focused on full-time engagements, a full-time hire would become part of the team.
Cost: Turing does not charge a recruiting fee and actually offers a free 2-week trial where the user starts paying after the trial ends. Rates are set by the developer, not Turing.
Staffing / Offshore, Freelance (Possible Fractional or Full-Time)
Expertise: A well-known freelancer marketplace, Upwork connects businesses with professional talent from around the world, including software developers. Quality of talent will vary since Upwork does not vet its talent, however, client reviews give some insight to quality. Average years of experience will vary.
Engagement: While Upwork hires could turn into longer-term engagements, these resources are usually used for ad-hoc or project-based work. Once it’s done, it’s done. However, it is possible to hire for a fractional, part-time, or full-time role depending on the client relationship, but the majority of engagements are project-based.
Team Support: Given the nature of the engagement, it’s unlikely an Upwork hire would become part of your team unless a full-time or fractional offer is made.
Cost: Upwork offers several packages — the basic plan is free to use and employers only pay freelancers the confirmed fee plus a standard 3% for administration and payment process. The Plus Plan is a monthly subscription that starts at $49.99/month and includes 15 freelancer invites (compared to 3 invites with basic). Upwork also offers an Enterprise option which is a customized hiring solution with dedicated support in the form of account managers, solutions architecture, and program success managers (pricing available via contacting Upwork). In terms of estimated developer costs, this depends on scope + specialization. For example, the hourly rate for a full-custom site ranges between $75-150 per hour.
Dev Agency / Offshore, Full-Time
Expertise: YouTeam partners with pre-vetted software development agency talent in Europe and Latin America to augment teams — this gives them a strong network of 25,000+ engineers spread across 500 dev agencies. They work exclusively with development agencies (not freelancers). YouTeam vets on the agency level to ensure good business standing and fundamentals, and on the candidate, level to ensure quality. Candidates are subject to interviews, testing, and code reviews. YouTeam also offers free verification (by request) for candidate skills with HackerRank for Work.
Engagement: Clients submit a project request and YouTeam takes it from there to identify candidates. YouTeam also supports the project with a Customer Success Manager to facilitate communication with the developers. All candidates are full-time candidates.
Team Support: YouTeam claims long-term predictability — their developers typically stay with a customer for 2 years on average.
Cost: In early 2022, YouTeam published a comprehensive breakdown of remote development team costs, however, macro factors like inflation + various geopolitical events have no doubt impacted these rates. Pricing will vary depending on the developer’s skill set and location.
