In the last time, demand on outstaffing has boomed. Developers work remotely from offshore offices for European companies. See what the hype is about.
We conducted a research to compare outstaffing from Kyiv with in-house development in Munich, and discovered that outstaffing helps German companies save up to €40.000 per year on one software developer. Imagine that you need to hire a Middle PHP Developer. Average salary for this position in Munich is €27 per hour or €50.000 per year. But you also have additional costs like insurance, workspace and so on. In Kyiv you can hire such a developer for €45.000 including a vendor management fee, that covers all additional costs.
In this article, we have a number of additional costs you can save on using otstaffing. Let’s check.
Employer social insurance [approx. €11.000 saving]
Hiring in-house, you need to pay regular social security contributions, that is about 22% of annual salary. The table below contains current rates in Germany. So if you hire the same PHP developer, social insurance will be approximately €11.000.
|Nursing care insurance||1,525%|
|Total social security||22,105%|
Office equipment [approx. €1.500 saving]
Office equipment is also on your side when hiring in-house. Cost of computer with two screens is at least €1.500.
Workspace [approx. €3.400 saving]
You also provide developers with workspace, it can be about 15 m2 per person. For Munich companies it could cost €3 400 per year as average monthly rent is about €19 per m².
|Districts of Munich||Rent, €/m²|
|Altstadt – Lehel||19,15|
|Ludwigsvorstadt – Isarvorstadt||17,48|
|Au – Haidhausen||16,96|
|Alt Bogenhausen – Herzogpark||16,91|
|Alte Heide – Hirschau||14,73|
|Thalkirchen – Obersendling – Forstenried – Fürstenried – Solln||14,59|
|Oberföhring – Englschalking||14,21|
|Pasing – Obermenzing||13,89|
|Trudering – Riem||13,79|
|Sendling – Westpark||13,75|
|Ramersdorf – Perlach||13,69|
|Berg am Laim||13,62|
|Johanneskirchen – Daglfing||13,58|
|Allach – Untermenzing||12,85|
|Aubing – Lochhausen – Langwied||12,78|
|Feldmoching – Hasenbergl||12,19|
|Approx. additional costs||4,00|
|Avg. total rent||19,11|
Workspace furnishing, groceries, leisure [approx. €3.000 saving]
|Costs||€ per year|
|Coffee, €2,2 per employee per day||574|
|Snacks, €2,2 per employee per day||574|
|Monthly free employee outings, €22 per employee per month||264|
|Learning something new||1000|
|On-site gym, 300 m per 100 employees or 3 m per one||684|
Recruitment fee [approx. €12.500 saving]
Recruitment fee is the most costly option. You may pay up to 25% of annual salary if you seek the assistance of a recruitment agency.
All in all additional costs can be more than €30.000 per year on one developer. And if we take into account saving on salary, overall economy on outstaffing can be up to €40.000.
So now, at any given point in time, you can look into this article, see how you can save on your developers and reach us to help you with this.