Hiring talented developers is crucial for the growth of any startup, but it can be expensive and time-consuming. Reducing your cost per hire (CPH) while maintaining quality is a balancing act every company, especially startups, needs to master.
In this article, we’ll break down what CPH is, how to calculate it, and why it matters. We’ll also share key strategies to reduce your hiring costs and show how FatCat Coders and Serbian developers can offer a cost-effective solution.
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What is Cost Per Hire?
Cost per hire is the total investment made to hire a new employee, including recruitment, administrative, and onboarding costs. It gives you a clear understanding of how much you’re spending to bring talent into your company.
How to Calculate Cost Per Hire?
To calculate CPH, use the following formula:
Cost per Hire = (Total Internal Costs + Total External Costs) / Total Number of Hires
Internal costs: include expenses like recruiter salaries, referral bonuses, and time spent interviewing.
External costs: are fees for job boards, advertising, and any third-party recruitment agencies.
Monitoring your cost per hire is crucial for your financial health. High CPH can drain resources quickly, especially for startups trying to scale their teams.
Reducing this cost can improve your bottom line without sacrificing talent quality.
Why Reducing Cost Per Hire is Important
For startups, where every dollar counts, reducing the CPH directly impacts your cash flow.
For instance, if you're a startup in the USA or EU looking to expand your team with vetted developers, overlooking the Cost Per Hire (CPH) can lead to unnecessary expenses.
It allows you to allocate resources more efficiently, speeding up your business growth. A high CPH means fewer resources for marketing, development, and other key areas, slowing down your progress.
Lowering your CPH is also a competitive advantage. The less you spend to hire quality developers, the faster you can build your dream team without stretching your budget. Let’s explore some strategies that can help you achieve this.
1. Streamline Your Hiring Process
An efficient hiring process means less time and money spent on each candidate. Start by evaluating your current recruitment workflow:
Use applicant tracking systems to automate repetitive tasks like screening and interview scheduling.
Reduce the number of interviews to avoid dragging out the process and increasing internal costs.
Prepare clear job descriptions to attract the right talent early on.
By reducing inefficiencies, you’ll lower the time and costs associated with each hire, ultimately bringing down your CPH.
2. Embrace Remote Hiring
Hiring remotely is no longer just a trend—it’s a proven strategy to reduce costs while tapping into a broader talent pool. When you hire remotely, you cut down on relocation expenses, office space costs, and travel fees.
Additionally, remote work allows you to hire developers from regions with lower average salaries, without compromising on skill. This is especially beneficial for startups where budget constraints are a common challenge.
3. Leverage Referral Programs
Internal referral programs can significantly reduce your cost per hire. Employees tend to recommend qualified candidates, speeding up the hiring process and cutting down external recruitment costs.
Offer incentives for employees who refer successful hires.
Encourage your team to share job openings within their network.
Referral hires often have higher retention rates, meaning you also save money on long-term recruitment and onboarding.
Ofcourse, there are also really useful tips on how to optimize hiring process with our Headhunting PRO tips for LinkedIn.
4. Hiring Partners
Outsourcing to agencies that specialize in finding developers can save time and money. While there’s an upfront cost, you save on internal resources, and agencies usually provide pre-vetted candidates.
For startups, this can be particularly helpful if you’re hiring for technical roles like developers, where expertise is critical.
Look for partners that understand your industry and offer coders for hire tailored to your needs.
Check out what kind of costs you can save if you opt for FatCat Coders!
What FatCat Coders Cover?
Legal, payroll, and administration;
The employee on- and offboarding;
Office space in Belgrade;
High-quality equipment;
Learning and development,
Employee benefits
and more...
5. Consider Nearshore Development Teams
Hiring developers from countries with strong tech talent but lower costs—such as Serbia—offers an excellent balance between quality and budget.
These nearshore developers work in compatible time zones and often have a high level of technical expertise.
Why Serbian Developers Are the Optimal Choice
Serbia has emerged as a global tech hub, providing a strong workforce of highly qualified developers at competitive rates. The country’s focus on technical education ensures that Serbian developers are well-versed in modern programming languages and frameworks.
By hiring Serbian developers, startups can maintain high standards while drastically reducing their cost per hire.
Additionally, Serbian professionals are known for their strong English skills and cultural compatibility with Western companies, making collaboration seamless.
FatCat Coders: Your Solution to Reducing Cost Per Hire
At FatCat Coders, we understand the challenge of finding and hiring top talent while staying within budget. Our team of Serbian developers offers the ideal blend of cost-effectiveness and skill.
Expertise: With years of experience in international markets, our developers are highly skilled in technologies like React, Shopify, Node.js, and more.
Affordability: Serbia offers competitive developer rates, allowing you to hire a developer without the hefty price tag typically associated with U.S. or Western European developers.
Flexibility: We offer developers for short-term projects, long-term engagements, and everything in between, helping you keep your hiring costs low.
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What Afterwards? How to Onboard New Hire?
After successfully hiring skillfull developers at a reduced cost per hire, the next crucial step is ensuring they integrate seamlessly into your team. A
An effective onboarding process sets the stage for your new employees to become productive and satisfied members of your organization.
Begin by outlining a detailed onboarding plan that includes both technical and cultural orientation. Introduce them to your company's values, mission, and team dynamics. Ensure they have access to the necessary tools and resources to do their job effectively from day one.
Tech Setup: Ensure all required hardware, software, and access credentials are set up before their start date. This minimizes downtime and makes their first days more efficient.
Cultural Assimilation: Schedule introductory meetings with key team members and offer a brief overview of company history and ethos. This helps new hires feel part of the team and understand how their role fits into the bigger picture.
If you would like to assess candidates yourself, we have prepared free first-hand materials for you by our experts. Here you can find:
Screening Template - IT Recruiter, Milica Rikić
Technical React Cheat Sheet - CTO, Luka Patarčić
Teamwork Cheat Sheet - People Manager, Katarina Stojković
How to Manage Timezones and Differences?
Effectively managing time zones is crucial for successful remote collaboration. Here are key strategies to consider:
Leverage Technology: Use tools like World Time Buddy for timezone conversions and shared calendars like Google Calendar for scheduling.
Prioritize Communication: Encourage asynchronous communication through platforms like Slack and plan necessary synchronous meetings with Zoom.
Embrace Flexibility: Offer flexible working hours to accommodate different time zones and be culturally sensitive to your team's needs.
Strategic Scheduling: Identify overlapping hours for critical meetings and consider rotating meeting times to share the convenience burden.
Seek Feedback: Regular check-ins ensure ongoing improvement in time management strategies, allowing your team to adapt and thrive despite timezone challenges.
Build international team
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These practices help transform timezone differences into a collaborative advantage, enabling your team to work smarter and more harmoniously.
Conclusion
Reducing your cost per hire doesn’t mean sacrificing quality. By implementing these strategies—streamlining your hiring process, embracing remote work, utilizing referrals, outsourcing recruitment, and hiring nearshore talent—you can optimize your hiring budget while building a strong team.
FatCat Coders and our talented Serbian developers are ready to help you meet your hiring goals without breaking the bank. With competitive rates, high expertise, and flexibility, we’re the perfect partner for startups looking to scale affordably.
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