A known problem in the WordPress industry are the $500 projects and hundreds of thousands of clients looking for free and warez plugins and themes, unwilling to pay a few pennies for a premium solution, and completely baffled by any estimate that is equal to the actual salary of a developer. They often proceed with DIY solutions or site builders, and don’t understand the cost of building a professional solution that is scaled for growth, stability, compatibility, speed and security.
And some customers simply don’t need a professional solution – they’re just starting and haven’t faced the challenges of a growing business yet.
I love the overview by Brian at Post Status on the cost of a WordPress website, which seems totally legitimate to me, but completely ignored by the majority of the population.
We are constantly approached by customers looking for eCommerce solutions, subscription-based websites, scaling large multisite networks. They ask for a custom design, a bunch of hand-crafted plugins, several meetings, revisions, iterations, some maintenance time included and what not. Which is totally fine, as long as their budget isn’t $500 – $2,000 at best. I have also shared my experience with a client asking me for a long and complex customization roadmap for a total of $15.
That said, since we’re receiving a large number of job inquiries at DevriX (even more as Forbes listed us in their Remote Companies compilation), I went over and got some numbers from the WordPress development submissions on our site.
Developer’s Expectations Everywhere are High
I won’t discuss whether payment expectations and requirements are realistic or not (as they depend on a number of factors), but there is the massive misconception that WordPress project should be cheap, WordPress developers are incompetent, and generally WordPress companies are overcharging for nothing. Additionally, people believe that offshore developers are cheap by default, and quality of work for pennies is identical to solutions built by in-house team in countries such as the US, UK, Germany, Norway, Sweden, Australia, The Netherlands.
Which is why I pulled some numbers from our database (from the last 100 or so developer applications).
Note: All of the collected numbers are specifically excluding North America and Western Europe. Cost of life, average salaries and day-to-day costs there are known to be higher than in most cities across Asia, Africa, Eastern Europe and other places in the world.
Average Monthly Salary Expectations: $4,000
Salary expectations through our job form varied from $2,600 a month to $6,500 a month. Again, none of those applications was from the US, Canada, Western Europe or any other country well-known as expensive for living or traveling (including Australia, Japan, or whatever comes to mind in the first top 10).
Most of the submissions came from developers with 2-4 years of development experience. Over 90% of the applications were sent from developers living in the following countries:
- Bosnia and Herzegovina
Salary expectations were distributed in a fairly balanced manner, i.e. none of the countries outlined any massive spike down or up that would shift the median by representing false results on our end.
Aside from that result set, US and Western Europe were generally asking for higher numbers – $5,000 – $8,000 a month, with a few exceptions within the $2,000 – $3,000 range.
From a company standpoint – and the way we measure and assess costs internally as a business – this was the core ingredient in the process of establishing the cost for a developer, based on that median number. This breakdown merely touches the cost-per-time graph, excluding skills, portfolio, or remote efficiency assessment of candidates.
Basic cost (divided by 160 hours, which does differ per month and based on national/religious holidays): $25 per hour
Cost for Efficient Work – various studies mark 6 hours a day as a realistic goal for productive hours – excluding the breaks and most standard daily interruptions and accounting for concentrated time: $33 per hour
Excluding holidays, vacations and the like (again varies depending on country laws etc): $36 per hour
As a conclusion: average full-time hourly rate for productive developer in our job queue is $36/hour NET. That doesn’t even beging to cover company taxes, insurance (or social security), pension funds and whatever else is on top of that – often 25% up to 50% on top of the net amount.
Realistically speaking, the cost of a developer asking for $4,000 a month can easily be $50/hour – $60/hour for a development company.
However, all of that means that a developer is fully utilized. In other words, the company should cover 100% of the effective time for months ahead. There is no room for mistakes or delays, every single detail and asset from the client is to be delivered upfront, projects don’t ever overlap and there is a side backup resource for every moment when a developer is sick, on a vacation, or has any other excuse not to put in 6 massively productive hours every. single. day.
How Does a Company Function?
Again, this depends a lot on how a company functions as a whole: whether it hires full-time people, part-timers or contractors; what sort of projects are in the pipeline (and how long is the planned queue), what is the management process like, what time is billed to a client, does it charge fixed-fee, or hourly, is communication included…
Moreover a development project requires other roles involved in the building process of a website, such as:
- other developers
- front-end developers
- project managers
- QA engineers
- team leader
Even if we discard the roles delivering visible work (designers, front-end developers) that is charged separately, there is still a good chunk of management overhead, distributing processes internally, quality assurance, a lot of communication, internal meetings (offline or online), iterations, refactoring.
That said, every 50 development hours can include 10 up to 35 hours of additional time spent in communication within the team and with clients, management, additional testing and non-coding activities.
Think of $60-$80 per billable hour, best case scenario.
That doesn’t even begin to cater for a ton of additional expenses for a company. I’ll list just a few general expenses that a viable company has to invest in:
- Sales staff and all related costs – mobile phones and data plans, commission fees, travel costs, management, CRM
- Marketing staff and their assets – creatives, print (brochures, business cards), a ton of online tools for social media marketing, content curation, email marketing, marketing automation, analytics, etc.
- Accounting – dealing with all of the administrative financial requirements, tax management, salary processing
- Administrative – secretaries, business assistants, etc.
- Human Resources
- Office rental, electricity bills, security
- Hardware and software equipment
- Any sort of advertisement campaign, conferences, team buildings and a number of extra expenses
None of the above expenses is directly related to the quality of work and results delivered by, say, a developer and designer, for a project. But every inquiry delivered to a similar-scale agency will likely follow a similar (certainly not identical) pattern and a set of regular expenses that sometimes double or triple the development costs alone. Think $150 per hour up to $200/hour final quote for any agency employing full-time developers at $4,000 a month.
And that doesn’t leave any margin for company growth, reinvesting in technology, ensuring that the business is in a stable shape in case something goes wrong (which happens weekly), allocating time and money on internal training, working on products or anything else.
That’s the cost of doing business.
Project Cost Summary
Our main business solution at DevriX are our WordPress Retainers, which heavily rely on billable hours. I avoid fixed estimates for various reasons, including the complex pricing described above. We do have an internal process that assigns work to developers that are most capable in a certain field – i.e. intimately familiar with an API, a library, a framework or something else in order to save development and R&D time.
We do weekly kick-off meetings in order to keep everyone in touch with what’s going on, and internal chats and conversations regarding project progress and reviews. Team leaders are responsible for managing sprints, reviewing tasks, sending feedback, verifying with QA, reassigning tasks if needed, reporting, coordinating with customers.
Since most retainers are around 30-60 hours per month, developers are spending 1-2 days a week per project (on average). Due to last-minute maintenance requests or specific time sensitive workflows, sometimes a developer spends 4 days a week instead and has a week off after the urgent work load is over. That is fairly challenging PM-wise as delegating a dedicated developer on a solo project paying for only a day a week is expensive, yet assigning 3 different ongoing clients will often turn to overlapping time frames and at least a couple deadlines at a time.
We navigate that with senior consultants (our technical leaders) who support projects with added work load, and introduce other internal strategies, a lot of active communication and dynamic estimates on-the-fly.
I often recommend freelancers or small agencies (2-3 folks) to customers asking for a solution simply because of the overhead of running a larger business. Our clients are comfortable paying our rates as they understand the specifics of running a reliable business and appreciate the added value of building and growing a professional team, providing business insight, saving a ton on management costs and being available whenever needed. They often need a team of 5-8 people with diverse skillset as well, which requires a larger company with enough team members that can work together in sync.
Our fees are usually within the $70/hour – $120/hour range depending on the work load, service level agreement and complexity of the work, yet we would probably bankrupt in a couple of months if we try to compete with freelancers charging $10/hour on Upwork.
There is an obvious mismatch between the payment expectations by developers and the budgets of many WordPress businesses, which tends to become more and more problematic as the gap grows with time.