How Outstaffing Helps Save up to €40.000 on a Developer

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.

Social insurance	Rate
Health insurance	10,95%
Nursing care insurance	1,525%
Pension insurance	9,3%
Accident insurance	0,25%
Unemployment insurance	0,08%
Total social security	22,105%

Sources: brutto-netto-rechner24.com, unternehmer.de

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
Schwabing	18,76
Maxvorstadt–Universität	18,61
Ludwigsvorstadt – Isarvorstadt	17,48
Maxvorstadt	17,41
Schwabing-West	17,31
Au – Haidhausen	16,96
Alt Bogenhausen – Herzogpark	16,91
Nymphenburg	16,47
Schwanthalerhöhe	16,05
Harlaching	15,74
Neuhausen	15,67
Sendling	15,32
Untergiesing	15,11
Alte Heide – Hirschau	14,73
Obergiesing	14,66
Thalkirchen – Obersendling – Forstenried – Fürstenried – Solln	14,59
Oberföhring – Englschalking	14,21
Milbertshofen	14,14
Moosach	14,10
Laim	14,07
Pasing – Obermenzing	13,89
Hadern	13,82
Trudering – Riem	13,79
Sendling – Westpark	13,75
Ramersdorf – Perlach	13,69
Berg am Laim	13,62
Freimann	13,61
Johanneskirchen – Daglfing	13,58
Am Hart	13,48
Allach – Untermenzing	12,85
Aubing – Lochhausen – Langwied	12,78
Feldmoching – Hasenbergl	12,19
Avg. rent	15,11
Approx. additional costs	4,00
Avg. total rent	19,11

Source: immobilienscout24.de

Workspace furnishing, groceries, leisure (approx. €3.000 saving)

Staff motivation is one of the most important thing in maintaining of productive ecosystem. Team buildings, trainings, leisure and groceries, all this is necessary to make employees happy at work and productive. While using outstaffing these expenses are on shoulders of Ukrainian companies, who have their own qualified HR managers. Let’s try to calculate if these costs are on your side.

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
Total cost	3096

Source: hubspot.com

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.

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