To calculate ROI (Return on Investment), we estimate the additional costs incurred by hiring developers.
These costs include:
- salary fund,
- taxes on the labor fund, even if you work with individual entrepreneurs, this tax is implicitly your expenses),
- premise rental and utility costs,
- communications,
- office expenses (paper, coffee, water, etc.),
- legal support,
- administration (accounting, personnel management, etc.),
- IT administration,
- amortization of PC, network and computer equipment,
- medical insurance (a competitive market requires it).
In addition, there are one-time expenses:
- the cost of recruiting (even if you do not pay the recruiter, but place a vacancy on a free website - this is time, which means money),
- project competencies training (not always one-time),
- penalty payment while dismissing an employee.
We do not take into account the costs of increasing loyalty and motivation in the form of training, subscriptions to a fitness club, compensation for family relocation, expenses for corporate events, kitchen staff and other improvements to the programmers' lives with high competition in this market.
In addition to winning savings on these costs, there is an additional profit. It emerges if the project is outsourced to be completed earlier, and the software produced, the website, the mobile application brings profit from its use (its sales, the services, etc.).
Certainly, ROI of outsourcing services depends on a lot of parameters and it is difficult to give a universal model, but it is often useful to make a quick rationale for quantitative benefits, for example, when developers sell their services to potential software development customers.
