Should I Hire My Own Software Developers?

I am a great believer that from time to time, everyone should examine their own reason for existing, their “raison d'être”, as our beloved French neighbours like to put it. Therefore, from time to time, I ask the question, “Why does Poole Software exist? What does it solve? What good does it do? Who cares? What value does it bring?” Only this time, I decided to think aloud, I hope you don’t mind.

Poole Software Limited provides Bespoke Software Development and Support services. And the big question facing us when pitching for business of course, is, “So what? We can hire our own developers.”. And if you don’t want to get into trouble, you must, from time to time, put yourself in your customer’s shoes, and have a very good look at yourself from their prospective. What is it about you and your services that they should engage you? And indeed, why would anyone else, for that matter?

The choice for our past, present and future customers is always the same “Should I hire my own developers, or not?” To hire or not to hire, that is the question! And the short answer of course is, “I don’t know! Should you?”. It is the same analogy as buying a car. Should you buy a car, or should you not buy a car? The answer is, “I don’t know! Should you buy a car?”

Let’s use the car analogy here for a bit. When deciding whether you should buy a car or just hire a car, you need to ask yourself questions such as, “Do I need a car?”, if so, “What kind of a car do I need?”, “Can I afford the kind of car I need?”, “How many cars do I need?”, “Will I be able to maintain and up-keep the car(s)?”, etc. So, should you buy a car? – I don’t know! I see people that can afford 100 cars, but don’t own one. And I see people that cannot afford a decent car, and yet own (or pay the credit off on) two cars.

So, should I hire my own software developers? Well, let’s answer some questions first and see if we can work out if Poole Software should stick around or not. Having been a software developer for 17+ years, and in the course having managed software developers, hired / fired many of them, and delivered some reasonably big systems, maybe my “2 cents” might help answer the question we are facing.

Do I need any developers?

For many businesses, some tasks that they require doing, day in and day out, they can find solutions “off-the-shelf”. There are so many platforms, software packages, Apps, etc., these days, that in many cases, you will not need a developer. Do yourself a favour, just buy of the shelf and be done with. There are times when the package on the shelf fits your business operational requirements about 95% and the other 5% proves to be a thorn in the foot. I call it the “the 95%-there syndrome” and every now and then we come across business that suffer with that, but in most cases, please have a very good look at the shelf and save yourself a bundle.

What kind of a developer do I need?

Software developers come in many different shapes and sizes (both literally and figuratively speaking). You have front-end developers, you have back-end (not joking) developers, full-stack developers, etc. Then, you have, junior developers, mid-level developers, senior developers, system-architects, cloud developers, etc. So, which one do you need? They all come at different costs. In most cases, if you are not a software house, and you are just thinking about hiring your own developers, you will need at least one senior developer, someone who knows what they are doing. A senior developer would, in most cases, have a reasonable amount of experience to deal with most scenarios. But be warned, there are imposters out there, junior developers dressed in senior developers clothing. I interviewed a few of them. They are full of confidence and talk a good walk, but dig a bit below the surface and you will not be impressed. Make sure you have a very good assessment process to ensure you are hiring a true senior developer. We do offer technical interview services if you need someone in the room during the interview process.

One very important point to note here is the experience. There are developers that might be better but have no experience in the market you are operating. That will affect their productivity and the quality of the deliverables. So, when asking what kind of developers I need, it is important to match them to relevant experience, otherwise there will be need for handholding and redundant work. Experience is key, because experience can see further ahead and that in most cases is invaluable.

How many developers to I need?

Well, this one is tricky, because software developer, just like all people, do get sick, go on holiday, or even quit a job if they get bored (this is code-speak for someone else offering them more money). I had a case where an IT Director of a leasing company turned me down because her was going to “hire his own developers”. Two months later he called asking me if we had any capacity. Apparently, the contractor they got, left for greener pastures mid-way during a project. Needless to say, the IT Director was a bit desperate. Anyway, what do you do, if you have an emergency with the system and the developer is unavailable? In most cases if, your system is critical to your business, you may during your indepth risk analyses undertaking, identify your single developer as a single point of failure risk. With systems, very often, there needs to be a comprehensive knowledge transfer exercise when switching developers, which, if not done properly, could result in trouble. Therefore, for any business worth its salt, you would need at least 2 developers, maybe a senior and a good mid-level. That way, when one quits, there is the other to hold the fort until a suitable replacement is found and gets up-to-speed with things.

Can I afford all the developers that I need?

This is always the sticky point for many people. The maths here is not quite an exact science, but it is near enough. A genuine senior developer is expected to be earning anywhere from £60K - £90K depending on where in the country you are and of course experience. A mid-level developer is anywhere between £45K-£55K, again depending on where in the country you are and experience. Reed.co.uk did a survey and the average salary in the UK came in at £53,915, but that is from juniors to seniors. If you are curious, just ring a recruitment agency and ask them how much would a senior developer cost to both hire and salary.

So armed with those numbers, let’s use The Cost to Hire Calculator found at: https://www.castuk.com/resource/cost-to-hire-calculator to see how much would it cost us to hire two developers at the current average salary of £53,915.

• Salary: £53,915.00
  Don’t get your hopes up too much when paying average salaries, but this is good enough to illustrate a point.
• National Insurance: £6,184.47
  This will soon go up. Labour have increased the rate.
• Pension: 3% Let’s assume minimum requirement. I have seen companies offer 5% - 10% to attract good candidates.
• Holidays (inc. bank holidays): 28 Again, let’s assume minimum requirement. If you want good candidates, you will need to rethink this.
• Sick Days: 4
  If you are lucky.
• HR / Onboarding: £3,000
  Agencies charge 15% - 20% of the end salary to hire a candidate. At our current salary, that is near £10K, given that developers stick around on average for 2 – 3 years, £3K per year is a fair number. Remember, if the candidate only stays for a few months, your £10K are gone and you will need to find another £10K to find the next candidate. If you think you can find a good candidate without agencies, then you don’t know what I know.
• Equipment: £1K
  Software developers enjoy their toys (sorry, tools), and those tools are quite expensive these days. Last laptop I purchase for work was over £3K and id does the job. Then add all the software licenses and so on, it soon adds up.
• Training: £???.?? Perks: £???.?? Office Costs: £???.??

Let’s stop here and regroup. So far, we are not far off £65K per year, for an average salary developer. We went for minimum in all departments. For two developers, we come in at £130K+ per year as a minimum.

Let’s assume, that you have found the best candidates, not the kind that crawl into the office at 09:00, have 10 cups of tea, 10 cigarette breaks, and then shoot out the door at 17:00 like a bullet and you better not bother them outside office hours. I have met some developers like that, so we are assuming the best here, with a high level of productivity.

Can I maintain or manage the developers?

The perks packages to attract the best developers are getting fancier and fancier. You will have to promote your company culture and your fresh coffee, and so on to ensure developers are reasonably happy. You will have to put their salary up all the time because otherwise, someone else will. Remote work is a big thing now. If you think that you will hire your own developers so that you can have them chained to your office desk, then think again. Flexy-time is big as well. Also, you will have to have someone who is reasonably technical to challenge some of their decisions. I have been involved in a situation where the person in charge was not technical, the lead developer said they would do it one way, and the non-technical person in charge could only ask “how long will it take?”. There was no questioning about the approach or the technology stack, or the architecture choices, or nothing. For a well-run software development department, there needs to be questions and challenges raised to ensure the interests of the company are upheld. At times developers want to play with the latest technologies whilst for the company that is not the best choice. A non-technical manager will be at the mercy of the developers and their fancies.

We can go on here about work-culture, team-culture, but if you have a developer doing tickets all day every day, sooner or later, they will move on, unless they are overpaid, of course. You may have a project now, which is great, but what happens when the project is finished? A software development department needs maintaining and running during and after the project. Word of caution, try to hype up the life after the project, because otherwise the exciting candidate that the agency has referred to you will be thinking about their job safety after the project is done.

Conclusion

So, should you hire your own developers? “I don’t know! Should you?” We have some customers which pay us only for 2 – 3 days a month for software support. The average software development daily rates from software development companies in the UK currently are from £700 - £1K per day. The average rates for a freelance / contractor (someone who walks up to your office with their hands in their pockets and you have to cater for all things) are about £500 per day. If we take the average between £500 - £1K, which is £750, times that by 3 day a month, we get £2,250, then times that by 12 months, we get £27K per year. That is not far from a third of the cost for an average developer. All that for a 24/7 support line and software development / modifications included, is why some customers have chosen us. A big saving, of course.

Now, what about the reason for Poole Software’s existence? Given the above, you may say “the jury is still out”, but for as long as the jury is still out, we are sticking around. However, if you are clear on what developers you need, you can afford them, and you can maintain and manage (keep busy and motivated) them well, then I think you should hire your own developers.