Best sites for finding out appropriate rates to pay contractors? (comparables?)

Renee DiResta Vice President of Business Development at Haven

March 28th, 2014

I'm thinking about hiring a contractor - he's a great JS dev with 8 years of experience. I want to be sure I'm paying him fairly. I know there are a lot of sites out there for checking comps for salaried employees, but what about contractors?

If anyone wants to share ranges for what they pay their hourly workers, I'd love to know...

Anonymous

March 28th, 2014

In the Bay Area expect to pay 30%-50% more than anywhere else based on cost of living. $85 - $120/hr is the range you should consider, but 8 yrs experience should fall around $100/hr. Even though $150 an hour is $300k annually as pointed out, the higher per hour fee is for the increased risk of not having a full time gig and no provided bennies.

There are a bunch of variables to consider as well; for example I'm willing to lower my hourly rate for shared code ownership (or the ability to open source reusable parts that aren't considered core IP).

Anonymous

March 28th, 2014

$100 - $150 per hour is generally the range you wanna be in.

When I've done contracting, I usually dislike working strictly per hour, so I usually work on a weekly basis and I have a simple formula I use that has worked well for me.

- Jonathan

Vadim Oss Co-founder at Rentini

March 28th, 2014

@Renee , it's a tough call. You will find an incredibly wide range of salaries. Everything depends on the location of the contractor and the experience.

As already mentioned here, 3 years of experience is not enough to really pass the Junior/Intermediate threshold. If you need to build things from scratch you may want someone senior, unless you're building a very basic prototype that you can dump later and rebuild.

By the way, higher rate doesn't necessarily bring you quality and experience. You really need to look at someones background to evaluate how much it's relevant. If you have a friend developer with experience asked him/her to check the code of this new candidate and their source code profile, such as github.

If you are willing to work with someone remotely you can do things very economically. You just need to find a right person. Developers can ask for $15 - $50/hour on sites like odesk or freelancer or elancer etc... There are some good people out there, but unfortunately the best are super busy.

Oh, one more thing. Don't settle on a hire because you think it's a good price - only if it's a good fit. Cheap may cost you much more than you think, expensive may not meet your expectations.

I would be happy to chat if you want. Good luck.

Marcus Matos Software Development & Information Technology Professional

March 28th, 2014

Generally a contractor will tell you what his rate is. The only times I've ever seen a contractor leave it up to the client is when they were novices or hungry for any work they could get.

Additionally, the contractor should be billing you on a periodic basis unless it's some sort of retainer agreement. Be wary of crossing the contractor/employee line - if you are defining working environment, hours, rate of pay, etc - you're crossing that line (I've seen people hire on "contractors" as an attempt to get around the need to provide employee benefits - but with employee type expectations). Here's some information on that.

Finally, I assume you meant "JavaScript" or "Front End" developer. In my opinion, $100+ an hour is basically in rock star territory but I'm not too familiar with the market you're in. Years of experience is a small part of this formula - I want to see successfully delivered projects with consistent, high quality code. This is what would help me decide whether the rate they are asking for is reasonable.

Good luck!

Anonymous

March 29th, 2014

By the way, the rationale for multiplying by 1.6 is because, beyond a salaried rate, if you were to hire a company to do the dev work, the company would need to pay for fully loaded costs (healthcare, other benefits, payroll taxes, etc.) and would expect some money to go toward overhead and margins. FLC is not a flat % markup, but in this case will be ~30% additional markup. SG&A is usually ~12% for a software company, and margin is usually ~12%.

You're hiring an individual and not a company, but the market is pretty efficient. This guy needs to sell and he has more risk than his counterparts, so usually individuals will charge a similar rate.

Anonymous

March 28th, 2014

BTW, some developers charge much higher than $150/hour. I'm just telling you the general range I've observed.

- Jonathan

Renee DiResta Vice President of Business Development at Haven

March 28th, 2014

Sorry, I misspoke. He actually has three years of experience, not eight.

By JS dev I mean a JavaScript developer (node and/or client-side app), not front end developer. Comparable salaried positions seem to be around $90-150k in the Bay Area.

Per this guy:

http://www.users.on.net/~wallala/Calculators/salary_rate.htm

... that'd be $60-100/hr.

Luis Avila Owner/Fullstack Architect at IdeaNerd LLC

March 28th, 2014

Renee,

I'm assuming you don't have a tech co-founder who can help you decide what kind developer you need and what a fair rate would be for the developer you want to hire. In lieu of that I would recommend organizing a group trusted technical advisers you can talk to and who can help you with the technical stuff... like defining requirements/needs that in turn drive the kind of talent you have to hire.

Since we don't know where you live, and likely don't know your market, and don't know your budget, and don't know how soon you want to hire, and don't know what you want to build, and don't know if it will be mockup/mvp/real product... it's hard to give a good recommendation.

As a former consultant, a mobile/web dev shop owner and founder myself I'm open to giving advice but I'd need more information. The developer rate is one thing. The better question is.. for the given rate... will you get value for your money.

There are other developer founders here too. Maybe they could engaged for more direct advice as well?

Just another way of thinking about answering your question.

Rob G

March 28th, 2014

Renee; if i were in your shoes i would connect with a local tech recruiter or 2 (or 3), send them this guy's resume (you can remove the name and contact info if you want) and ask them to give you the range of pay rates they would offer this person in their market, especially the bay area i would think. Recruiters and contracting firms typically have a pretty good handle on 'going rates' for skills in their markets. use this feedback as a point of reference - the developer should know his/her market value and s/he may decide to reduce or increase that for you based on a number of factors (their interest in the challenges/freedom/application space, etc.). check in with them periodically to be sure they continue to be engaged and interested. adjust if needed. 3 yrs of total dev experience is pretty green, but as mentioned earlier, that really becomes relevant depending on what you are building and the intent - MVP for consumer market VS rev 1.0 for enterprise SaaS, for example. $60-100/hr. seems steep to me for 3 years of JS experience and potentially little if any experience with scalability, backend, supportability, integration, etc. My $0.02 worth.

Anonymous

March 28th, 2014

@Luis De Avila:

I agree, but I think it's a really good idea to find out what the actual market rates are, and agree to something in that range. One thing you don't want is a developer who gets excited about your product, starts helping you build it, finds out they're being underpaid and their peers are making much more than them, and decides to quit. It's good to at least try to get it right beforehand ... which is of course what @Renee DiResta is doing here. For example, just because you and your potential developer agree on $30/hour, that doesn't mean it's alright ... it just means the developer is somewhat ignorant of their market and will someday find out and leave.

- Jonathan

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