In today’s market, there are companies paying between $40-80 per hour to contractors. Let’s say you are going through Series B and need to expand your team to 100 engineers. That would be a total of $128k per month, $1.53M per year.

The remote workforce cost is increasingly getting closer to what you would pay for a US-based engineer (average of $122k.)

There is one key difference to notice here: you are hiring contractors, so by definition, they are more expensive than employees. They speak English well enough, have more experience than the average software developer, are specialized in a particular technology, and need to pay taxes and other benefits by themselves.

To truly make an apples-to-apples comparison, you need to evaluate the cost of hiring employees in a different country. For example, in Argentina, the average salary for an engineer is between $15k-$20k/year. If you pay for health plans and taxes, it might double up to $30-$40k/year. Still less expensive compared to hiring contractors.

I’m not advocating that you fire your entire remote contractors’ team (put that thought away.) You need a blend of contractors and employees in different locations to scale at an acceptable cost.

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Leo Celis