Strategies For Reducing Recruitment Cost When Hiring Software Developers 2023

Did you know that companies in need of software developers spend 42 days on average to fill the position?

Not only is hiring qualified software developers long, but it also may lead to unnecessary expenses and reduce your team's performance. According to SHRM research, the approximate cost to hire a developer is over USD 4,000. However, this number doesn’t include the hidden cost of the recruiting process.

We asked Red Jumpers  –  partner agency for IT companies to throw light on what is the ‘cost-per-hire’ in recruitment and the ways to acquire software developers for your project cost-efficiently.


What is Cost-Per-Hire and How to Calculate It?

‘Cost-per-hire’ is a recruitment metric that evaluates how much it costs to hire one employee.

This metric allows recruiters to evaluate the efficiency of the recruitment pipeline, make data-driven decisions, and better align the company's recruitment budget.

To calculate the cost-per-hire you need to add your external and internal expenses related to the recruitment process and divide the result by the number of hires made for a particular period. The formula looks like this:

(Internal expenses + External expenses) / number of hires = Cost-Per-Hire

Now, let’s look closely at the internal and external expenses you might need to consider when hiring software developers.


External expenses

External cost for recruitment implies third-party organizations' fees to find, attract, and filter candidates. For example, if you spend money on advertising, post open positions on job boards or hire a recruiter for consultation, those will be external expenses. The list of external expenses also includes but isn’t limited to:

  • attending job fair,
  • assessment tasks for candidates that run on third-party platforms,
  • background check,
  • relocation expenses, etc.


Internal expenses

Internal expenses are overall spending inside your organization spent on recruitment. When hiring a developer, you’ll want to engage the team lead of your dev team in interviewing candidates.

The hours spent by a team leader on recruitment should be monetized and added to the ‘cost-per-hire’ calculation. If you run a referral program, compensations paid to your employees for the hires are also internal spending on recruitment. Besides, don’t forget to add the in-house recruiter's salary to the calculations.


The Average Cost of Recruiting a New Employee in Different Countries

Besides spending on recruitment, hiring more employees means increasing annual spending on job perks, healthcare, and employee taxes which, according to several estimates, can comprise from 20% to 50% of an employee's annual salary.

So, considering the country from which to hire developers could be a winning strategy for your organization. Below, you’ll find a table that compares the cost per hire of a developer depending on the country and the ways to recruit developers.

Cost to hire a software developer
Freelancers In-house Outstaffing
From free to recruitment expenses + employee pay Recruitment expenses + taxes, healthcare, perks + employee salary Recruitment expenses  + employee salary.

Job perks are flexible.

The United States approx. USD 4k + hourly rate (USD 80) up to USD 30k from USD 4K to 6k
Western Europe approx. EUR 5k + hourly rate (EUR 65) up to EUR 25k from EUR 4K to 6k
Eastern Europe approx. USD 2k + hourly rate (USD 55) up to USD 6k From USD 2k to 4k
Latin America approx. USD 2k + hourly rate (USD 55) up to USD 30k From USD 2k to 6k



5 Efficient Ways to Reduce Recruitment Cost

So, you’ve calculated the cost-per-hire within your organization and want to reduce expenses on the recruitment process. Here are five ideas on how to spend less and receive quality hires.


Partner Agency For IT Companies

Companies that need software developers, can become a part of a community that shares experience and expertise. You can hire developers from the bench of other software development companies for your project. That way you’ll get a dedicated staff under your management and avoid expenses on taxes, health insurance, etc.

The partnership works both ways. If you would ever struggle with the bench, you could get your developers out staffed to other companies and get paid. And the bridge between you and other companies is an agency, such as Red Jumpers.

Red Jumpers vet each community member, so you don’t have to worry about the quality of devs' work. You’ll also have a personal manager to support you at each milestone. Learn more about the benefits of working with Red Jumpers.


Implement Referral Programs

If you want to save money on attracting candidates, ask your team for help. Your current employees may know someone interested in your open position. Encourage your staff to share information with potential candidates by implementing a referral program.

Referral programs are cost-effective because they shorten the stages of the recruitment process and bring you candidates that meet your requirements. Besides, the compensation for bringing a hire is far less than cost-per-hire.


Embrace Automation in Recruitment

A typical recruitment pipeline includes searching for candidates, CV screening, interviewing, and assessing candidates’ skills. Each stage requires time which can be eliminated with automation tools for recruiters.

For example, you can implement automatic CV screening and an application tracking system to enhance recruitment. The skill assessment process can also be improved with chatbots, or skill assessment software.


Use Social Media to Attract Candidates

Social Media such as LinkedIn and Facebook are cheap ways to acquire talent. If your company has social media profiles, sharing information about open positions there will encourage candidates to reach out to you. Besides, being present on social media allows candidates to learn more about your organization and build trust in your brand.

Ad campaigns on social media are great to connect with so-called passive candidates, who aren’t directly looking for a new project but may consider your offer if it happens to catch their eyes.


Build a Talent Pool

Recruiting can be difficult if you start the process from the beginning each time you need new employees. Make it continuous, and you’ll build a talent pool that’s easy to reach out to whenever you have an open position.

If you want to save time on looking for perfect candidates, access the talent pool of software developers created by Red Jumpers. They carefully assess each partner to ensure all the members meet quality standards.



Hiring IT experts isn’t a walk in the park. Although, we hope that the mentioned-above ideas will help you to hire quality developers at reasonable prices. Just remember to focus on the candidate’s professional qualities, and you’ll lay the foundation of success for your organization.


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