How to Set Software Development Rates
Developing software is like magic. A software developer sits at a desk and writes lines of source code that get translated into some bit stream that a machine or machines somewhere in the world know how to turn into pictures, text, sounds or even mechanical motion. Setting a price tag on this ability is difficult, but not impossible.
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Instructions
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Determine if you need junior-, middle-, or senior-level talent. All software developers make mistakes and forecast imperfect estimates of their workload. However, in general, senior-level developers make fewer mistakes, give the most accurate estimates, do their work faster through coding efficiencies and write software that's the easiest to maintain. If you can live with a few bugs, coding inefficiencies and a longer development timeline, you can get by with the less-expensive junior or mid-level talent.
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Use an online salary estimator such as salary.com for software developers to see average and extremes of development rates. The seniority level will help drive this. If the rate shows up as an annual rate, divide by 2000 to get to an hourly rate.
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Adjust rates higher for rarer talent. By virtue of supply and demand, the average web developer earns less than the average real-time embedded firmware developer because the latter talent is harder to find. If your salary estimator accounts for the specific talent you seek, you can skip this step since your rate range addresses your development needs.
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Set the initial rate at the low end of your estimates.
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Advertise the position(s) and interview candidates. If you find your talent at the low end of the rates, you're done. If not, raise the rate, review and improve the position description and advertise and interview again.
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References
- Photo Credit computer image by blaine stiger from Fotolia.com
