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Analysis of dev agencies with hourly rates, team size and tech stack

devquarterly.com

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Re: Analysis of dev agencies with hourly rates, team size and tech stack

#61

Post by lvice »

yulaow wrote: post #29
lvice wrote: post #12

Hourly rates seem very off for Italy as well, as the real average is much much lower to the declared $80/hr (web&software). It is especially suspicious that France ($64/hr) and Germany ($55/hr) have a much lower hourly rate, when in reality salaries and rates in these countries are at least 20-30% higher than Italy.

Agencies like Reply, Accenture, Avanade and Engineering are quite overcharging other companies for their consultants in Italy, taking advantage of the fact that a lot of big companies are hostile to keep devs in house (almost all of the big banks for example). I had the chance to see for how much I was being sold as a consultant some years ago and it was almost 3x the salary I was going to get (3 x 32k before taxes).

I work in one of the companies you mentioned in Italy and, although it's true what you said, the rate paid by the customer still is around 350-550 Euro/day, which is $46-$73/hr, and these are the rates at top tier consultancy companies. $80/hr average still seems very high to me.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#62

Post by thomk »

yonaguska wrote: post #56
thomk wrote: post #49

Earlier quoted context omitted.

However if you have architects that design software properly in the U.S. and pass those specifications to outsourced staff, then it's akin to a NYT writer dictating his notes to be typed in and proofread by someone overseas. My point being; there's an efficient way to utilize cheap labor.

Right, but that proofreader might not totally understand nuances in language and how words take on different meanings to different audiences, even if they are the same words used. Back to the programming reality from the analogy, I've seen outsourcing happen, for businesses that revolve around American customer bases and rules and regulations- now the code is outsourced, but the basic understanding of how business lo…

Agreed. So in that case, I would not use an outsourcer for that particular piece. The problem is American developers treat outsourcers like they are American developers. Don't do that.

Treat them like 1) there is a language barrier and 2) they will not know there is a language barrier and they will forge ahead in the wrong direction.

Some of the best developers and PMs I have worked with were born in a country you barely know about, it just took a little time to get to know them and their skillset.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#63

Post by edpichler »

The first pages made me very skeptical, so I stop to read this. Beyond that there is no data intelligence on these reports, the numbers are weird. It's showing Colombia's hourly rate more expensive than Sweden's. Also, I know very much my homeland market, I am sure that it's wrong. I did not go further.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#64

Post by Alex3917 »

tcgv wrote: post #57
Alex3917 wrote: post #45

Earlier quoted context omitted.

The concept of outsourcing for a writing job is weird. You don't see The New Yorker outsourcing their essays to Pakistan, Hollywood outsourcing their scripts to Ukraine, the NYT outsourcing their reporting to the Philippines, etc. Tech seems to be the only industry that thinks that hiring writers from overseas to produce content is somehow going to result in anything viable.

It's not that weird if you consider that a large chunk of software engineering is CRUD apps and digital plumbing, which doesn't require a lot of creativity. Nevertheless, I'm sure India, Ukraine and other countries have tons of talented developers that due to global economics are willing to work for a lower pay. Maybe the problem with the outsourcing model in these cases is that it's being poorly executed. It's alrea…

> a large chunk of software engineering is CRUD apps and digital plumbing, which doesn't require a lot of creativity

The issue is more precision and lucidity of thought and language, and the ability to communicate ideas and emotion to others from a given culture and socioeconomic background.

Consider that when development velocity grinds to a halt because of "technical debt", this is almost always just a euphemism for developers not being able to read each other's code. (I understand there is an actual idea behind technical debt, I'm just talking about what's almost always happening in practice.)

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#65

Post by sheeshkebab »

edpichler wrote: post #63

The first pages made me very skeptical, so I stop to read this. Beyond that there is no data intelligence on these reports, the numbers are weird. It's showing Colombia's hourly rate more expensive than Sweden's. Also, I know very much my homeland market, I am sure that it's wrong. I did not go further.

It’s a clickbait article... any article that claims something about rates, salaries, sales is basically that. They are often completely inaccurate, with data coming from either self reported numbers (best case), or a guess based on a sample of job postings they scraped from somewhere.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#67

Post by rakamotog »

yourapostasy wrote: post #51
tootie wrote: post #40

Earlier quoted context omitted.

Are these freelancer rates or bill rates to clients? Usually there's at least a 20% margin added to bill rates by agencies.

In this kind of discussion context, typically the OP's rates are the bill rates to clients (the OP's company). I normally see the smaller agencies clear 40-50% margin, and the big names are clearing 50-80%, so I wouldn't be surprised if those agencies in Ukraine and India were paying their teams in the $60-75 per hour USD range at most, which is considered really good in those parts of the world.

Margins are much higher. Large scale IT Services pay around 40$-60$/day for skilled specialists. I briefly worked in a specialised consulting role where the charge to company was $2000 per day and my cost to the company was $55/day.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#68

Post by ska »

rakamotog wrote: post #67
yourapostasy wrote: post #51

Earlier quoted context omitted.

In this kind of discussion context, typically the OP's rates are the bill rates to clients (the OP's company). I normally see the smaller agencies clear 40-50% margin, and the big names are clearing 50-80%, so I wouldn't be surprised if those agencies in Ukraine and India were paying their teams in the $60-75 per hour USD range at most, which is considered really good in those parts of the world.

Margins are much higher. Large scale IT Services pay around 40$-60$/day for skilled specialists. I briefly worked in a specialised consulting role where the charge to company was $2000 per day and my cost to the company was $55/day.

This is why it's not hard to bill $1000-1500/day as a freelancer with the right skills. One of those skills has to be sales, though.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#69

Post by csolorio »

sacks2k wrote: post #31

I oversee the hiring of dev shops for a mid-sized company in the US and the rates for e-commerce/web development are all in the $120-$150/hour range. The funny thing is that some of these companies outsourced to the Ukraine and India and the rates didn't change. I would have thought that we would at least see some of the cost savings. Both companies that outsourced ended up being complete disasters (we are still clea…

I manage an outsourced team having worked in Latin America. I agree with the other commenters here. It will fail if there's no quality control and no filtering. Just like in the US, there are good devs and bad devs. It's up to the agency to actually manage and help them grow.

Re: Analysis of dev agencies with hourly rates, team size and tech stack

#70

Post by superasn »

ravedave5 wrote: post #2

Page layout is not great, got to the end and saw founders pictures so I thought that was the whole article. I'm interested so I reopened to double check and there's more on the left.

Yeah i was feeling so out of the loop wondering wth everyone is taking about.. where is the carousel? Checked the page 2 times before I saw that button under everything else. It looks like the sort of thing companies do when they don't want you to click on something! It's such a bad theme.

edit: after checking out the entire article now, it is quite insightful to be honest. Lots of interesting research and data. I think they should just make a simple html version like the craigslist website and it will be a super hit.

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