Hiring a dedicated development team: costs, models and pitfalls
What is a dedicated development team?
A dedicated development team is a group of engineers employed by a partner company but working full time on your product, under your direction. Unlike fixed-price outsourcing, you control the backlog and priorities; unlike hiring, you skip recruitment, payroll and notice periods. It is the model most scale-ups and enterprises use to add capacity quickly.
Dedicated team, staff augmentation or fixed-price project?
Each model suits a different situation.
- Dedicated team: long-running product work where the roadmap keeps changing.
- IT staff augmentation: specific skills for a defined stretch, such as a migration or a release.
- Fixed-price project: a well-defined scope with a clear finish line, such as a website or an MVP.
How much does it cost to hire dedicated developers?
Monthly rates for full-time dedicated engineers run from about US$3,500 to US$5,500 for junior, US$5,500 to US$8,500 for mid-level, US$8,500 to US$13,000 for senior and US$12,000 to US$17,000 for tech leads and architects. Full working-hours overlap with US, UK or EU clients adds around 10% to 15%.
How do you avoid the usual outsourcing problems?
The common failures are high turnover, weak communication and knowledge that leaves with the engineer. You interview and approve every engineer, a delivery manager tracks velocity and quality, knowledge is documented continuously, and any engineer who is not working out is replaced at no cost.