How to Hire Developers for Tech Startups

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Money is the primary challenge that tech startups face. Every entrepreneur with some innovative ideas searches for the ways on how to start a software company with a little or without any investment. The software outsourcing has made it possible to start a software development company without any big investment.

In this article, let’s talk about the main challenges of starting a software development company, how to hire a developer through the most suitable way of IT staffing, and what is the most suitable way to hire a developer cheaply in the marketplace.

Starting a software development company

Starting a custom software development company is a dream of every technical entrepreneur in the fertile field of technology in the present day marketplace. According to the GEM Global Report data, more than 100 million businesses started annually across the globe.

If we divide this number into days, the number of businesses starting on a daily basis will be about 274 thousand globally. The average ratio of tech startups stands at about 1.4%, which makes it about 1.4 million technology-based startups annually in the global marketplace.

It takes time and experience to get to know how to run a software company. It is a very complicated job for an entrepreneur taking into account the major industry challenges that pose threat to the success of the startup business.  Despite the huge number of tech startups kicking off every year, the total number of successful tech startups every year is very low.

There are about 472 million entrepreneurs worldwide planning to start a business, according to the global survey reports, but a very small ratio of that figure of entrepreneur population turnarounds.  Launching a startup business can involve many factors, but how to create software developers’ dedicated team is one of the major factors.

Major Types of Development Team Building

Numerous ways are adopted to hire software developers or a team of software development engineers in the marketplace. Two major types of team building include the remote team building and in-house team building. The remote team building is further divided into multiple ways of hiring models, as explained below.  

In-house Team Hiring for Tech Startups

In-house team building is a traditional way of team building in which the developers are hired either from the local markets or hired from another market and relocated to the business location to work in an in-house development team. This type of talent hiring is very costly and is associated with numerous procedures and legal compliances. The process of staff augmentation is very difficult and lengthy in this form of team building. This form of hiring is more suitable for the companies with large budgets and well-defined business goals.   

Freelancer Hiring

The freelancer hiring is a very cheap and fast process of hiring and building a team for the startup software development. It is a form of the remote hiring process that has its own downsides too. It is an unreliable form of team building which fully relies upon the attitude of the freelancer hired for the project. He/she can withdraw at any time without any prior notice. It is suitable for the companies with very low budgets and sufficient time to complete the project.


Outsourcing has been so popular in the marketplace for quite a few decades now. In this form of the remote team building of developers, the entire business process or the software development project is outsourced to the offshore software development company located at any suitable location locally or abroad. In this type of team building, all activities and controls are handed over to the technical and management team of the contractor company, which fully manages all processes, infrastructure, and team administration.

This is a very costly type of team building mostly suitable for the large corporations and big organizations.


Outstaffing is another form of remote team building. In this model, the remote team is developed dedicatedly for a specific project with fixed charges. The provisioning of entire development infrastructure, local administration, office management and the software developers is accomplished by the third-party contractor. Third-party contractor guarantees that everything agreed in the contract will be %100 done and helps you to complete the project on time and, if agreed, with a fixed budget. This is very suitable for small and medium-sized businesses that care about quality and reliability as well as about development cost.

Software Developer Hiring Challenges

The software industry faces numerous challenges while hiring a software development team both locally and remotely. Those challenges put the entrepreneurs as well as hiring managers in dilemma. The major challenges that industry faces include:

Increased Salaries

The salaries of the software developers are increasing very fast, which creates many problems for the startups and small businesses. The average salary increase is more than 3% to 4% in different countries of the world. The solution is to this challenge is to hire dedicated remote developers at low cost.

High Demand

The demand for software developers is very high in many major economies. According to the US Bureau of labor statistics, the demand for software developers is the highest of any other jobs in the market. The supply is comparatively less in the global market.

Attitude and Motive of Developer

The developer attitude and motive pose a substantial challenge for the hiring manager. How will developer deal with the project, its quality and testing? What is the motive of developers for a certain position, how will he maintain quality of the code and many other similar kinds of questions are major issues for the hiring managers.

Culture and Language

The culture and language pose great challenges in building remote teams. It is very difficult for the managers to manage remote teams with diverse cultures, languages and work ethics.

What Makes Outstaffing the Best IT Staffing Solution?

Outstaffing is the best for startup software development projects due to the following reasons:

  • Dedicated resources powered by local administration
  • High-quality development infrastructure
  • Fully managed hiring process
  • Low development cost
  • Full guarantee of successful completion of a project on time
  • Full control over the development team

Final Takeaway

While a large number of tech startups are emerging in the market, high development cost, increasing demand for tech talent and effective team management are the major challenges they are facing. Freelancer, outstaffing and outsourcing are the most popular models for remote tech talent hirings.