How to hire developers for a startup

Following tried and true steps when hiring developers will smooth out the recruitment process and help you onboard your dream team.

When determining the hiring strategy for software developers, start by identifying what exactly your goal is. Do you need to kickstart your product with an MVP? Do a little discovery to prioritize functionalities? Accelerate time-to-market? Do some QA before launch? Do you have particular priorities within your goals, like refining your UX just a bit more before you scale? From there you’ll identify what general expertise you need, e.g., devs who have experience building MVPs or that have a track record building products at lightning speed.

OK, OK, so this one is a no-brainer, but really, make sure you have your functional and technical requirements nailed down before you start searching for and hiring devs. That baseline understanding and articulation of how your software solution should function, like its flow, user interface, data security, path from inputs to outputs, plus wireframes (ideally) will inform the talent you need. Same thing with technical requirements: Expressing, as much as you can, how the app will be built (e.g. codebase and constraints) will inform who you need on your team.

Now that you’ve nailed down your overall priorities and technical requirements, you should be ready to take a stab at identifying how many developers you need.

Generally, you’ll need the following specialists, at least to start:

• Project manager
• Tech lead
• Software developers (frontend, backend, web, mobile)
• UX/UI designers
• QA specialists

You will need devs who specialize in particular technologies (e.g., Unity or Unreal, React, Salesforce, Python, or IoT), too, depending on what you have planned. If you’re working in a particular sector like healthtech or fintech, you could well need engineers with sector-specific expertise. Fintech, for example, often requires a host of specialized knowledge about compliance or particular financial industry products, so you want to look for engineers with those particular fintech qualifications.

We’ve seen the gamut when it comes to the number of devs a startup needs — some just need 4-6 engineers, others need up to 100. Even if you’re starting on the low end, try to anticipate how you might expand your team to include not just additional engineers (like DevOps), but business analysts and product managers.

OK, so now you have a rough idea of who you need and what you need them to do. Now you have to figure out how to actually get qualified people in the door — and not break the bank while you’re at it.

There are three common options available to startups looking to onboard a roster of engineers:

An in-house squad: Hiring your own team is likely your first thought — it’s everyone’s dream. But having your own devs all in the same room at the same time requires a being shiny enough to attract the right talent (which, let’s face it, isn’t always easy) and it depends on long-term commitment and therefore sufficient, long-term funding (including enough to pay for pricey benefits and office space). Even if you have all that in place — sexiness and funding — you’re still facing an arduous hiring process that can slow you down dramatically.

A stable of freelancers: Freelancers are great! Good ones are easy to find through sites like Fiverr and Upwork, and if you hire freelance devs from overseas, you can get experienced ones at relatively low hourly rates. But consider the downsides: There’s no long-term commitment and your contractors might be lacking in passion for your project, which leads to transience, which leads to instability . . . and we all know where that winds up when you’re in a sprint to get your business off the ground.

There’s also the problem of scaling. Maybe it’s not a big deal to orchestrate the work of two or three contractors, but once you need four, or six, or ten, each one likely juggling other contracts and hunting for more work when you need them to collaborate? Then you’ve got yourself a problem.

Dedicated development teams: As a quasi-hybrid between an in-house model and freelancers, dedicated development teams are generally rooted in long-term collaboration between a company and a development team that is often in another region — typically one where hourly rates are lower than they are in your own local market. The company you partner with will have devs ready to go and can assemble an entire team (a real bonus if you’re facing a large-scale, complex project) in a couple of weeks or less, which is great if you’re up against aggressive deadlines or need to accelerate time-to-market.

We know what you’re thinking: It’s a hassle to work with remote devs who are in another time zone. Sure, that’s often the case, but in our experience (and we have a lot), the benefits far outweigh the negatives.

Sure, we’re biased, but no matter how you slice it, the advantages to going with a dedicated development team model still boil down to fewer headaches, more flexibility, lower costs, and often better results.

You know it and I know it: The in-house hiring process can be an epic, time consuming pain in the butt. Write the job description. Find a headhunter. Post the position on job sites. Post it on social media. Sift through an endless pile of resumes. Set up interviews. Do the interviews. Narrow it down to three candidates — if you can find that many who are interested. Agonize over which one is the best fit if you do have options. Make an offer. Negotiate. Once an offer is accepted, do the paperwork and the onboarding.

It’s a daunting prospect — particularly if you’re a stressed out startup founder without deep technical expertise looking to hire folks who do have it. Therein lies the beauty of collaborating with a dedicated development team provider: You’re offloading hassle and jumping right into the good part — rolling up your sleeves, building a great product, and getting it to market.

If you go with a remote dedicated teams model, you’re no longer constrained by your local IT market — the fact that there’s a shortage of qualified UX specialists within a 50 mile radius, for example, is no longer an issue. You can tap perfect match candidates — they’ll just happen to be in another country.

Eastern and Central Europe, for example, have long been known as outsourcing destinations with large pools of certified software specialists with advanced technical education, deep experience with different programming languages and tools, and fluency in English (if your partner has requirements in place to ensure fluency, which the best will).

Moreover, if you go with an established dedicated development team provider, chances are you’ll wind up working with remote engineers who have experience in your industry (think fintech, healthtech, or proptech), the know-how to handle workflows and deadlines, and a full grasp of the project at hand — in short, they’ve likely worked on something similar to your project before, often with the same tech stack. Even better, dedicated teams typically include devs who have worked together before, which mitigates communication issues within the team and results in smoother product delivery.

Keep this in mind, too: A fully capable software development company will be able to pull anyone from a product manager to a QA lead to a CTO (yes, that’s possible!) into your team as needed, quickly, relieving you yet again of the task of finding and hiring qualified people.

Then there’s your budget. If you’re hiring in-house developers, naturally you have to figure in benefits and overhead, but with a dedicated teams model (or freelancers, for that matter), that bit magically goes away.

It’s not just about overhead, though — it’s also about where the devs you hire are located. Let’s do the math on how much it costs to hire a team of developers. The average hourly rate for a software engineer in the US is about $55 — that comes to $104,000/year, not counting benefits and overhead. But if you hire an equally (or perhaps even better) qualified dev from say, Poland? Expect to pay $30/hr. That’s a minimum of 45 percent savings, again just figuring the hourly rate. That savings gives you more runway: You can channel the budget you save toward other things, have your budget last longer, and have the cash to scale your team with additional devs when you need to. (More on that below.)

Remember how we talked about the time suck of hiring? If you go with a dedicated teams model, your team can be up and running within weeks, not months. That means faster time-to-market for your product. Plus, when it comes time to scale your team, you can do it quickly — your partner will always have more qualified devs waiting in the wings who will be a perfect fit.

But the reverse is true, too: If you need to scale back for any reason, like adjusting your team composition to respond to market conditions or user feedback and demand, you can do it quickly without facing painful (or public) layoffs. No startup founder wants to have to plan for that, but it is always a possibility.

Another key advantage to the dedicated teams model? You can get a team that does just what you need in the moment or switch it up when the time comes.

The project-based model best suits short-term projects with pre-defined requirements and scope of work. It works well for businesses that don’t have much experience with technology and want to experiment with working with external developers, or if they need extra hands for a side project, like updating a mobile app or a pesky integration — that way in-house staff can stay focused on core projects.

Then there’s the long-term engagement model, which is our bread and butter. In this model, your team can grow as you do and as your project requirements evolve during product development. It’s with you for the long haul and augments your in-house team with devs with particular skills. (Some of our clients have relied on this model for years, like ClassPass or the online trading provider StoneX).

OK, so imagine that you’ve decided that you want to go with the dedicated teams model (you’re budget-conscious, you dread hiring, and you’re looking for great skills, reliability, and flexibility) and you’re clear on whether or not you need project-based support, a long-term engagement, or team augmentation. Now it’s time to get rolling with finding a software development partner that can deliver the talent you need.

Websites like Clutch, which give access to thousands of independent company reviews, will help you find a reliable software development and project partner based on criteria you specify. (Pro tip: Look at Clutch reviews the same way you do Yelp reviews. Is the person who wrote the review someone you can identify with, like a senior-level leader with experience running a large project? Is the review sophisticated and detailed? Does it cite specific strengths of the team, like dedication, communication, problem solving, or elegance of the code?) You can also post on your social media and see if one of your peers pipes up with a referral.

Identify vendors that have a great track record in your market sectors and can comply with your required tech specifications. You might also look for ones that provide project management as part of the package, which can relieve you of yet another headache, as we mentioned above.

Keep in mind that a good partner can consult on the best programming languages and technology to use in your case, developer traits you can consider, and even legal advice for IP-related questions.

Once you’ve identified potential partners, reach out to their sales or biz dev teams to have a chat about what you need and costs; agree on what the work will be. (Another pro tip: Approach exchanges about costs as conversations with estimates).

Once an MSA is in place, your dev partner will present you with the CVs of possible matches. As you’re reviewing them, of course look for the right academic qualifications, training, and experience — the hallmarks of the best coders — but also look for soft skills. The highly technical nature of coding can overshadow the importance of competencies like critical and analytic thinking, communication, problem solving, and time management, which are just as important since software development is by nature such a collaborative process.

The prospect of reduced expenses might be what attracts companies to the remote dedicated teams model, once they get a taste of it, that isn’t the only thing that keeps them coming back for more: It’s that they’re relieved of a number of headaches that can hamper building an ace in-house team. Lack of technical know-how in the local market? No longer a problem. High turnover rates? Gone. Cumbersome, time-consuming, and just plain aggravating search and hiring processes that take months? Buh bye. All of that gets offloaded to the software development company they hire.

Ultimately, developing software with a dedicated team is all about mitigating risk — risk that your engineering team won’t gel; risk that you won’t have the people, budget, and runway to scale just when you need to; risk that you won’t be able to accelerate when you need to. That all adds up to the biggest risk of all: that the competition will get ahead of you.