25 min read
How to Find Developers for Startup: How to Hire Developers and Form a Dream Team
Probably the most valuable asset of each company is its people. Developers are the ones who convert your ideas into actual existing products. A typical startup often needs a strong dedicated team of talented developers that will be able to handle all the tasks entrusted. At the same time, emerging businesses face more hiring difficulties than the bigger and more mature ones.
When a business looks for an answer to the question “How to find a developer for your startup?”, it usually means they need to hire several completely different highly skilled software engineers. No one company seeks the answer on how to find developers interns for startup.
At this time you, as the typical software development business looking for how to find developers for your startup, might not have:
- Experts on hand to check the skills of potential employees. To check the developer’s technical skills, you must have at least the same skilled developer. This can be, for example, a technical co founder.
- Required hiring skills and established HR processes. On average, recruiters spend 23 hours for initial CV screening for a single position. Usually, there are hundreds of them, and HRs spend just about 30 seconds on each. They must be experts to make it efficiently at such a fast pace. Also, there are various sources, tactics, and activities of hiring that require specific skills and polished recruiting processes.
- Enough time to wait. The spread of remote work brought an increasing number of human resources. In theory, they should satisfy the growing demand better. However, we have seen a shortage of software developers in recent years. Recruiters deal with thousands of candidates and candidates, in their turn, respond to hundreds of vacancies. LinkedIn claims that the average engineer hiring process lasts 49 days.
- Sufficient hiring budgets. According to CodeSubmit industry research, the average hiring cost of a full-time developer in the USA lies between $28,548 and $35,685. The cost of hiring a software developer includes sourcing, vetting, recruitment, hiring, training, retention costs, etc. For startups, especially at early funding stages, such costs are often unbearable.
- Enough money to cover local appetites. Sometimes hiring the locals seems unacceptable due to their heavy rates. For example, a US-based early-stage startup has a $50,000 budget for MVP launch. The MVP implementation scope is estimated at 1,200+ hours. American devs cost even $120 per hour plus options plus insurance, etc., and obviously won’t finish the job within the budget. At the time, the startup is able to hire Asian devs just for $15–25/h or European devs for $35–45/h, which allows you to build an MVP for ~$50k.
- Enough flexibility to let go of the developers who don’t fit in. Employee job termination is usually leading to massive severance packages and other compensations. Sometimes it might result even in a lawsuit against unjustified termination.
As you can see, the problem deserves close attention due to its high importance and unclear solution. Let’s research the topic and answer all the questions that will help us understand how to find software developer for startup.
Challenges of the Remote Era
Before starting our journey, we should say a few words about how the remote work adoption phenomenon changed the hiring world. For your convenience, we’ve covered the info in a table, comparing the pros and cons.
|Access to a global talent market: you have a greater choice of experts from all over the world
|A lack of in-person communication: discussing work-related issues face-to-face is usually more effective
|Substantial cost savings: no need for office space, furniture, maintenance, etc. Additionally, up to 3x savings on salaries when hiring in countries with lower wages
|Complicated observation and control: you can’t come to your team’s office and check what they do; startup developers consider activity tracking an inappropriate practice
|More often increases productivity: about 62% of workers surveyed claimed they feel more productive when working remotely
|Harder to build a company culture: building a community within the company is essential for motivating and retaining employees, which is harder for remote teams
|Higher employees’ confidence, motivation, and joy: a survey revealed that remote employees improve their work-life balance and feel less stressed than their on-site colleagues, thanks to a flexible schedule, more time with the family, etc.
|Different time zones: often the time zones between the main office and the remote have just a few hours of overlap
Hiring Software Developers: Options a Typical Startup Has
Typically, each startup has several options on how to find a developer partner for a startup:
- Hiring in-house. It’s a quite challenging and long way even if we speak about how to find a web developer for startup, as well as any other developer. We’ll cover the technical side of the hiring process below.
- Hiring freelancers. This approach has many cons like low talent quality and reliability issues. However, there are various ways how to find the best freelance developers and work with them safely.
- Hiring using vetted developer marketplaces. This approach allows you to avoid most of the challenges of other approaches like outsourcing or freelancers.
- Use recruiting agencies. Using external expertise gives faster results but is more expensive than in-house.
- Use outstaffing agencies. Augmenting your team with external employees is a relatively fast and efficient way to find new team members.
- Outsource the whole scope. You can entrust the development process to an outsourcing contractor.
Below we’ve compared these approaches on how to find app developer for startup. All the values are relative and used for comparison purposes.
|Vetted developer marketplaces
|Hiring process costs
|Time to hire
|Project success chances
|Cost of termination
+ — low,
++ — average,
+++ — high.
Software Development Company Recruiting Funnel at a Glance
Below you can find an example of a recruiting funnel.
Case Study: Going Through a Funnel and Hiring Three Elixir Developers
The recruiting funnel above is a real example.
We have a client — an EU-based startup that builds an AI platform for call centers. The company just raised Series B and had 20+ people on its development team already.
Their platform has a microservice architecture and the high-load part of it is written in Elixir. The biggest problem for their internal recruiting department was finding the right people because Elixir is a very rare stack. In addition, investors forced them to cut costs in the middle of 2022, so they had a very small cap for Senior developers in a rare stack: $6,500/month gross.
Their internal recruiting department couldn’t close these positions for 6 months. Some candidates were asking for $9,000–10,000/month. Outsourcing firms offered some candidates for $11,000–12,000/month each.
Then, they found Expert Remote. Here’s what we did:
- We helped them hire one developer from our existing talent pool within the first week.
- We successfully sourced and vetted two more developers within the next five weeks.
- And we found all three candidates within the $6,500/month salary cap (with our fee included).
We achieved that by effectively sourcing and screening candidates in Poland, Romania, Serbia, Georgia, and Ukraine. All the developers hired could work in the same CET timezone with the client but remotely.
Sourcing: How to Build a Pool of Candidates
Sourcing is the process of identifying your potential employees, contacting them, and engaging with them. This is a proactive process: you’re actively searching for potential employees rather than waiting until they will get in touch.
However, there are also inbound channels of sourcing, which cover organic candidates from a website SEO, guest posts, advertisements, etc.
Where to Find the Right Developers
There is a variety of approaches and places where you can find your potential developers. Let’s review them.
- Sourcing channels
- Networking. The first and most obvious approach to finding candidates is networking. Start with telling your mates, former colleagues, or any other people you know about open positions at your startup. Who knows, maybe it could be a chance for someone to find their dream job.
This approach is by far the cheapest: just talk to people you know. Moreover, having references from such people allows you to validate candidates faster and with less effort.
- Social media. Not only LinkedIn but any other social media services can be used as a source of potential employees. According to a study conducted by CareerArc, 96% of people seeking a job use social media for this purpose. Experienced recruiters can source candidates from Facebook, Twitter, Instagram, Reddit, and even Tinder.
- Job boards. Among the most popular job boards are Indeed, Glassdoor, ZipRecruiter, Lensa, CraigsList, etc. Primarily being a social media, LinkedIn is also often considered as the job board. There are also some boards with a sharp focus on engineering jobs like CodersRank, as well.
Some of the boards offer free position postings and others can be used on a paid basis only. But before buying access, you should understand whether this specific job board is appropriate for your vacancy or not. For example, if you need an employee with rare skills like, hmmm… Fortran programming language, it will be hard to find them on smaller boards due to a lower number of engineers with this skill.
- Freelance marketplaces. The annual contribution of freelance software engineers to the US economy has reached $1.35trln in 2022 (what is +$50bln year-to-year), according to Upwork research. These figures show both the high level of significance of this approach and its growing role.
Typically, freelancers are easier and faster to find. You also shouldn’t spend on employee-related taxes, office rent, insurance, retirement plans, hardware, etc. however, freelancers can leave your project at any moment without warning, breaking your development plans. Or exaggerate their skill sets.
- Recruitment agencies. This approach makes it possible to hire in-house faster than on your own. With recruitment agencies, you shouldn’t hire your own recruiters. The second main advantage is the expertise offered by professional recruiting companies. Their skills help you avoid most of the hiring challenges you highly likely will face acting independently. For early-stage startups, having a dedicated HR/recruiter in-house is often a luxury.
The flip side of the coin is the higher cost of hiring. On average, agencies charge from 15% to 25% of the annual salary of an employee they hire. For a $100,000 yearly salary, the cost will be a $15,000–$25,000 one-time fee.
- Vetted candidate sources
- IT outsourcing or outstaffing firms. The number of IT services companies globally is huge. Both outsourcing and outstaffing models are quite mature and still efficient in certain situations. But the COVID-19 pandemic has changed the game rules, offering businesses better leverage to hire remote developers on their own.
Outsourcing and outstaffing firms usually have high rates, especially when we speak about outsourcing the whole development scope. But, compared with hiring developers living in the USA or Western Europe, it is still much cheaper.
Onshore, Nearshore, and Offshore Development: Understanding the Terms
Onshore development. It’s called so in case the client and vendor are in the same country. The advantage is that both parties are in the same time zone and speak the same language.
Nearshore development. It’s when both vendor and client are in different countries but with close time zones. There can be some cultural and language differences, coupled with a higher level of cost savings.
Offshore development. The vendor in this case is located somewhere outside your country and in a different time zone. With a wider choice of outsourcing providers, there are better chances to find the best-suited partner and quite likely at a far lower cost. The inconvenient part of hiring offshore software developers is that such companies can be located halfway around the world with a 9–12 hours time difference, which requires stricter project planning and control.
- Vetted Developer Marketplaces like Expert Remote. This new model combines the best of both outsourcing firms and freelance marketplaces while avoiding their disadvantages.
The vetted developer marketplaces save you up to 40 hours on sourcing and vetting, allow you to hire software developers globally, provide only the best-vetted talent, allow you to hire fast because they’ve got a pool of developers waiting for projects, and it’s easy because most of such companies provide a platform as an interface to their talent pools.
Vetting: a Process of Validating Your Candidates
Once you sourced your candidates, it’s time to validate them and determine those who are really skilled enough. This process is called vetting or screening.
Developer Validation: a Tried-and-True Approach by Expert Remote
Below, we describe our own approach to vetting which we believe can be used by other companies as well.
- Application. The candidate fills in the application form and attaches their CV. This is the first vetting stage where the majority of inappropriate candidates are usually screened out.
- 30–60 seconds intro video recording. The candidate shoots a short video right within our platform. This vetting stage is aimed at a preliminary check of their basic English proficiency and showing their personality.
- A 15-minute video interview with our HR. This is the first peer-to-peer connection with a candidate who has successfully passed the previous two. At this stage, our human resource specialist conducts in-depth checks of English language proficiency and candidate soft skills.
- A 60–90 minutes technical interview with one of our tech experts. Once the previous interview has finished successfully, the next stage is a long-lasting remote communication session with a technical expert in a field of a candidate’s proficiency. This part is the hardest for candidates.
- Background check. This stage of vetting is aimed at security. Expert Remote staff members check candidates’ personal documents, and criminal records, add references to the platform, etc.
Here you can find out more about our vetting process.
Trendy Sourcing and Vetting Tools
Here are a few trendy SAAS systems that are useful for candidate sourcing and vetting.
The DNNae tool is aimed at the automation of routine operations for sourcing on LinkedIn. Powered with AI, DNNae allows recruiters to analyze huge amounts of applications in the shortest time. Comparing them with target job descriptions, the tool then builds a list of candidates, ranking them by matching.
The set of features also covers the automated sending of connection requests to the most appropriate candidates. You can also create and add personalized messages to your requests with no hassle.
At the first glance, subscription prices look high for small companies. There are two plans, starting from $489 per month, and there’s a free trial.
Loxo is a Swiss knife for recruiting. The list of features is surely impressive and includes a specialized recruiting CRM, posting and tracking jobs, CV parsing, appointment scheduling, and advanced search across various platforms.
As a result, Loxo gives access to more than 530mln candidates from all over the globe. You can use different communication channels like e-mail, SMS, LinkedIn, or phone, for automated responses.
The system offers both free and premium pricing plans. The first one lacks some important features like CV parsing, AI-powered analysis, or API. The second tariff is fully functional. To find out their costs you should talk to a sales rep, meaning the tool is not cheap.
Despite the fact Seamless.AI is a sales assistance software, it also has many valuable things for recruiters. The most notable is its AI-powered prospecting feature, making it possible to gather thousands of relevant contacts even without a need in visiting any third-party websites.
The software offers four different pricing plans, including a free one. A brilliant advantage of Seamless.AI is its free plan contains all the most interesting features. For each plan, there is a certain amount of internal credits available each month, which regulates levels of service. A monthly fee for the Basic tariff is $147, once prices for both Pro and Enterprise plans are available upon request only.
Being a Global Employer: Contracting and Payrolls
When all the sourcing and vetting activities are finished successfully, it’s time to make an offer and then, in case of success, sign a contract. Being a global employer means adhering to some requirements about contracts and payments. Let’s take a look at them and find out how to deal with them in the best way.
The first thing you should think about after your candidate accepted the offer and became a new employee is how to craft and sign the contract. The main challenge is to make this contract fully compliant with the local laws of the country of your employee’s residence.
You must answer the next questions:
- Will it be full-time employment (FTE) or an agreement with an independent contractor (IC)?
- Is your employee a resident of the country they’re currently living in? If not, does the person have an active work permit for the country they’re currently living in?
- Do you consider all the taxes, benefits, and compensations required for the employee by local laws?
- Which additional limitations (both local and global) affect your hiring agreement?
Crafting a contract fully compatible with all the local laws and requirements is a challenging process. Once it is quite risky, the best option is to request a legal consultation from a local lawyer. Or use a special contracting service that offers compliant contract templates for each country. We’ll talk about them further.
For fast checking, you can use a free Country Explorer service created by Remote.com.
Acceptable Payment Options
Some payment systems are better adapted for international payrolls. Let’s review them in a table form.
|—One of the market leaders
|—$2.99 for local transfers—$15 for SWIFT transfer,
—$4 or 1% (up to $10) for USD and EUR transfers
|—Good reputation—Highly reliable—200+ countries covered
|—A typical transfer lasts 3–5 business days
|—The most popular payment system globally
|—3.49% + fixed fee for invoicing and checkout from domestic accounts—the same plus 1.5% for international commercial transfers
—2.99% for selling goods or services
|—Supports 26 currencies—Recognized globally
|—Relatively high fees—Strict suspension policy
|—One of the most popular business-oriented payment systems
|—Free for sending/receiving in the same currency—$5.50 for withdrawal via ACH—3.99% plus special exchange rates
|—200+ countries covered—Email or phone can be linked to your account
|—Transfers to business bank accounts are prohibited
|—The system is aimed at sending/receiving money, buying stocks, and BTC
|—Free for payments from debit cards—3% for payments from credit cards—1.5% for instant transfers
|—Cheap BTC transactions (1.76% fee)—Comparably low fees
|—Just $1,000 limit for the first 30 days—International transactions are limited to only US and UK
|—Stablecoin with a bright history and clear reputation
|—The greater one of 0.1% or $1,000 for official withdrawal—Can be withdrawn via third-party services (fees vary)
|—Compliant with AML/KYC/CFT—Stable exchange rate tied to USD
|—USDT isn’t divisible
|—30+ countries and 10+ currencies supported
|—Free for debit cards and bank transfers—2.9% for credit cards
|—Brand is recognized globally—Attractive fees
|—Transfers last up to 10 business days
Some All-in-One Platforms to Hire and Pay Internationally
There is one more way how to handle both contracting and payroll activities. We mean the usage of all-in-one Employer of Record & Contractor Management platforms. Below are some examples.
Deel is the best contractor management platform out there. You can create a country-specific contract in a minute and onboard a person in a day. It will cost you just $49 per user per month plus 2–3% for international payments. It’s amazing to employ contractors globally and pay them with Deel. Suited for both small companies and enterprises.
PapayaGlobal is the best Employer of Record company. Whenever you need to hire full-time long-term employees in different countries Papaya will help. Papaya has legal entities in all 150+ countries and delivers either through its own entities or through partners. It costs up to $1000 per employee per month but you will get the best compliance and customer service. Though it’s mostly suited for larger companies.
Gusto is the all-in-one HR+Payroll software aimed at small but growing companies with up to 50 employees. We recommend Gusto when you want to manage the whole process yourself. It helps you onboard, manage and pay employees globally. But it also means you will have to figure out compliance on your own. Gusto has several thousands of reviews at Capterra, and only a few of them are negative.
Conclusion on Hiring Developers for Your Startup
Let’s recap our today’s findings:
- Forming a new or expanding an existing development team is definitely a challenge.
- Instead of hiring in-house, there are several remote options.
- For those who consider remote, this article contains a step-by-step guide on how to set up your own process or outsource it.
- To reduce the overall process complexity, use special software tools. In case you decided to manage everything yourself.
- Vetted Developer Marketplaces is an approach to hiring staff remotely. It has many advantages over traditional outsourcing firms, recruiting agencies, and freelance marketplaces.
Remote tech teams & the future of work blog
Remote tech teams & the future of work blog
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