Stop comparing salaries. Start comparing what it costs to ship code.
Your offshore vs. local developer cost analysis is missing half the equation. That $150K developer actually costs $280K+.
I’ve helped 60+ CTOs make this offshore vs. local developer cost decision. Want to know the most common mistake?
They compare a $150K local salary to a $60K offshore rate and think they’re being smart.
They’re leaving out $130K in hidden costs. Meanwhile, that “risky” offshore developer’s true cost? Just $76K all-in.
I’m going to show you the math your competitors already figured out. Fair warning: your CFO might hate you for not doing this sooner.
Industry Reality: Stack Overflow’s 2024 Developer Survey reveals 65% of developers are actively job hunting. Average tenure dropped to 18 months according to the Bureau of Labor Statistics, 2024.
The True Cost of Hiring Developers: What Your CFO Doesn't See
Here’s what kills me about most developer hiring cost comparisons.
Everyone starts with a base salary. That’s where the amateur hour begins.
Your offshore vs. local developer cost calculation should look like this:
This iceberg shows why your current offshore vs. local developer cost comparison is wrong. You’re only seeing 44% of local costs and 79% of offshore costs.
The reality shocks every CFO who sees it.
Now let’s break down exactly where your money disappears—and why offshore vs. local developer cost isn’t what you think.
Local Developer: The $337,500 Two-Year Reality
Ready for the real numbers on this developer hiring cost comparison?
| Cost Category | 🏢 Local Developer (2-Year Period) |
🌍 Offshore Developer (2-Year Period) |
|---|---|---|
| Base Salary/Compensation | $150,000 | $60,000 |
| Benefits & Insurance (35%) | $52,500 | — |
| Management Overhead (15%) | — | $9,000 |
| Recruitment Fees (25% of salary) | $37,500 | — |
| Hiring Delay Cost (3 months avg) | $37,500 | — |
| Onboarding Investment | — | $2,400 |
| Office Space & Equipment | $15,000 | — |
| Communication & Collaboration Tools | — | $1,200 |
| Quality Controls & Code Reviews | — | $3,600 |
| Turnover Risk (18-month avg tenure) | $45,000 | — |
| TOTAL 2-YEAR COST | $337,500 | $152,400 |
💰 Your Actual Savings
Translation: For every offshore developer you hire instead of going local, you save enough to hire 1.2 additional developers. That's not cost-cutting—that's strategic scaling.
Reality Check: That local developer costs 343% more than the offshore option. And here’s the part nobody wants to admit: there’s a 65% chance they’re already updating their LinkedIn profile.
But what about those offshore risks everyone warns about? Let’s put dollar signs on fear.
The Hidden Costs Nobody Calculates (Until The Bill Comes)
Local Hiring’s Dirty Little Secrets
Let me walk you through what actually happens when you “play it safe” with local hiring.
Recruitment Theater: You’ll burn $25K-$40K on recruiters. Know what you get? The same recycled LinkedIn profiles you could’ve found yourself. The process takes 3-4 months minimum.
Meanwhile, your competitor with an offshore team? They shipped three features you’re still “staffing up” to build.
The Turnover Tax: Here’s a question nobody asks: What’s the real cost of that 18-month average tenure?
Just when your developer finally understands your codebase, they’re interviewing at the startup down the street. Replacement cost? Another $40K in recruiting fees and 4 months of lost productivity.
You’re not building a team. You’re running a training program for other companies.
Benefits Bloat: Health insurance, 401k matching, stock options, gym memberships, unlimited PTO, mental health days, the standing desk, the second monitor, the mechanical keyboard they “need” for productivity.
Add 35% minimum to that base salary. Your $150K developer hits $202K before writing a single line of code.
Offshore’s Actual Risks (With Real Price Tags, Not Horror Stories)
Let’s be brutally honest about offshore challenges in this developer hiring cost comparison. Because, unlike every other article, I’ll actually show you what they cost.
Communication Overhead: Yes, time zones exist. Budget 15% for additional management time—that’s what this offshore vs. local developer cost analysis should include. On a $60K developer, that’s $9K annually. Still cheaper than one month of a local developer’s salary.
Quality Controls: Code reviews, documentation standards, testing protocols. Add $300/month. That’s your daily Starbucks budget.
Integration Investment: Proper onboarding takes 2 weeks of focused effort. One-time cost: $2,400. Less than what you spent on standing desks last quarter.
Here’s What Nobody Tells You: Offshore “risks” have price tags—and they’re tiny. Local hiring risks? They’re eating your budget alive, and you don’t even see it happening. The “safe” choice is actually the one bankrupting you $10,937 per month per developer.
The Framework: Your 3-Minute Offshore vs. Local Developer Cost Reality Check
After running this offshore vs. local developer cost calculation for 60+ companies, I built a framework anyone can use.
The Real Cost Calculator
Local Developer True Cost =
(Base Salary × 1.35 for benefits) + $37,500 recruitment + (Salary × 0.30 turnover risk)
Offshore Developer True Cost =
(Base Compensation × 1.15 for overhead) + $3,600 quality controls + $2,400 onboarding
Your Actual Savings =
Local True Cost - Offshore True Cost = The number that changes everything
Quick math for the skeptics in the room:
Senior Developer Comparison Over 2 Years:
- Local total investment: $337,500
- Offshore total investment: $76,200
- Difference: $261,300 (77% cost reduction)
That’s not a typo. You could hire 3.4 additional offshore developers with your savings.
Want to tell me again how local hiring is the “safe” financial decision?
💰 True Cost Calculator
See the real numbers behind local vs. offshore hiring decisions
Your Actual Savings with Offshore
📊 Per Developer Breakdown
When This Offshore vs. Local Developer Cost Math Works (And When It Doesn't)
Here’s something most articles won’t tell you: sometimes local hiring makes sense.
I’m going to be the only person giving you honest guidance on your offshore vs. local developer cost decision.
This Developer Hiring Cost Comparison Favors Offshore When:
- You need to scale fast (weeks, not quarters)
- You’re competing in expensive tech markets (SF, NYC, Seattle)
- You have clear technical requirements and existing processes
- You value shipping speed over office proximity
- Your investors care about burn rate (spoiler: they all should)
Stick With Local When:
- You need daily physical access to specialized hardware
- You’re dealing with classified government data (actual compliance requirements, not paranoia)
- You have zero technical leadership to manage remote teams
- Your investors have outdated 1990s offshoring biases (their loss, not yours)
Most companies? They fit the offshore profile perfectly and don’t know it yet.
The Real Offshore vs. Local Developer Cost Timeline
This developer hiring cost comparison reveals an uncomfortable truth: local hiring carries a 343% premium over offshore development.
Every month you delay this decision costs you $10,937 per developer in unnecessary expenses.
This offshore vs. local developer cost timeline proves the math. Month 6? You’re already $45K ahead. Month 12? You’ve saved enough to hire another developer.
Smart CTOs who understand these economics move fast. The rest keep explaining to their board why they’re over budget.
Why 60+ Tech Companies Partner With Full Scale
When you calculate the true cost of hiring developers through our staff augmentation model, the offshore vs. local developer cost advantage compounds over time.
Here’s why this developer hiring cost comparison favors our approach:
Our Offshore vs. Local Developer Cost Advantage:
- 95% developer retention vs. 56% industry average (saves you $45K per developer in turnover costs)
- 2-week average placement vs. 6.8-month local hiring cycles (you’re coding while competitors are still interviewing)
- Direct team integration – zero middlemen, zero project managers adding overhead
- Month-to-month contracts – cancel anytime, no long-term commitment required
- U.S.-based legal contracts – IP protection guaranteed under American law
- Pre-vetted specialist network – we’ve already screened hundreds of developers
The Difference?
Other offshore companies nickel-and-dime you with “communication coordinators” and “project managers.” That’s where their margin lives.
We eliminate those layers. Your offshore team joins your Slack, your standups, your git workflow. No translation layer. No telephone game.
That’s why our offshore vs. local developer cost savings are higher than industry averages—and our retention rates crush everyone else’s.
SaaS Startup Scales from 2 to 12 Developers in 6 Months
FinTech • Series A • 75 Employees
❌ The Challenge
A rapidly growing FinTech SaaS company was losing deals because their small development team couldn't keep up with feature requests. Local hiring was taking 4+ months per developer, and they were losing candidates to larger tech companies offering higher salaries. Their product roadmap was delayed by 8 months.
✓ The Solution
Full Scale built them a dedicated offshore team of 10 senior developers who integrated directly into their existing workflows. No middlemen, no project managers—just developers who joined their daily standups, used their Slack channels, and worked as a seamless extension of their US-based team.
We were skeptical about offshore development after a bad experience with another vendor. Full Scale completely changed our perspective. Their developers are as good as—or better than—anyone we've hired locally, and they've been with us longer than most of our US hires.
📊 Measurable Results After 12 Months:
- Launched 23 new features (vs. 8 in previous year)
- Reduced average bug fix time from 5 days to 1.5 days
- Cut development costs by $890K annually
- Zero developer turnover in offshore team
- Product roadmap accelerated by 12 months
- Won 3 major enterprise contracts due to faster delivery
Want similar results for your team?
Talk to UsThe Real Cost of Waiting
Let’s do one final offshore vs. local developer cost calculation.
Every month you spend “being careful” about offshore hiring costs you:
- $10,937 in cost premium per developer (local vs. offshore)
- 1-2 lost feature releases while competitors ship
- Competitive ground lost to faster-moving rivals
- Opportunity cost of projects you couldn’t staff
After 6 months of “careful consideration”? You’ve burned $65,622 per position that you’ll never get back.
Meanwhile, your competitor who made the offshore decision in Week 1? They’re six months ahead on your product roadmap.
Stop Bleeding $890K Annually on Inefficient Hiring
Get your custom offshore vs. local developer cost comparison based on YOUR market, YOUR tech stack, YOUR situation.
These numbers come from 500+ real placements over 5 years. We track actual costs, not marketing fiction.
Your specific local vs. offshore ROI might vary 10-15%. The directional truth remains constant.
Our developer cost calculator includes everything: benefits, recruitment, turnover, and opportunity costs. Most calculators conveniently forget these.
We also add offshore-specific costs like management overhead. Total transparency builds trust.
We budget 15% extra management time for offshore teams. That’s $9K annually on a $60K developer.
Compare that to replacing a $150K developer every 18 months. Which risk hurts more?
Most clients see ROI within 3-6 months. Faster hiring alone saves 2-3 months of opportunity cost.
Add the 78% cost reduction. You’re profitable from day one.
We use staff augmentation, not project outsourcing. Direct integration, not a communication telephone.
Your developers work in your tools, attend your meetings, and become your team. Geography becomes irrelevant.
Matt Watson is a serial tech entrepreneur who has started four companies and had a nine-figure exit. He was the founder and CTO of VinSolutions, the #1 CRM software used in today’s automotive industry. He has over twenty years of experience working as a tech CTO and building cutting-edge SaaS solutions.
As the CEO of Full Scale, he has helped over 100 tech companies build their software services and development teams. Full Scale specializes in helping tech companies grow by augmenting their in-house teams with software development talent from the Philippines.
Matt hosts Startup Hustle, a top podcast about entrepreneurship with over 6 million downloads. He has a wealth of knowledge about startups and business from his personal experience and from interviewing hundreds of other entrepreneurs.
