As the CEO of what might look like a normal digital agency at first glance, I get tons of emails from outsourcing companies that want to offer their development services to us. Two things that usually come up as key benefits are low WordPress developer rates and a wide range of technologies offered besides WordPress.
We’re not a potential client for these outsourcing companies (digital agencies hire WordPress developers from us), but if I was then those two benefits are not on the top of my list. Most digital agencies have decided to go with WordPress as their primary CMS, and a low rate can easily lead to fewer profits unless done right.
Less cost, less profit?! Let’s break this down.
WordPress developer rates in the US vs rest of the world
An article by Colin Newcomer for Elegant Themes’ blog provides a nice summary of resources that have examined WordPress developer salaries in the USA on a yearly basis, and freelance rates across the globe. He concludes that the data points to:
- Average yearly salary for a WordPress developer: $50,000 – $72,000
- Freelance WordPress developer hourly rates (although I doubt this is the US only): $10 – $60
From the Indeed database of web developer salaries in the US, it’s clear that the state where the developer lives make a difference. The highest average salaries are reported in Delaware and California with close to $90,000 per year, and the lowest average salaries are reported in Mississippi and Arkansas with around $40,000.
From discussions with US agencies that work with us, we have also heard WordPress developers being paid as much as $100,000 – $150,000 in some cases. It’s been a combination of highly skilled developers and an attractive location in these cases.
When it comes to freelancers and local development companies, there’s a big difference between Western Europe and the US on the one hand and outsourcing companies and freelancers in lower-cost countries on the other. For Western Europe and the US, I mostly hear figures of around $80 – $150 per hour for temporary contracts and projects, while outsourcing companies and freelancers on Upwork from Eastern Europe and Asia are more often in the $10 – $60 range.
Judging WordPress developer rates against the value created
Any ‘Sales Tactics 101’ book will tell you not to speak about pricing before you’ve convinced the potential customer about the high value of your offer. It’s not just a sales trick, it has merit for how you should think about your business.
What value does a WordPress developer bring to your agency?
The main value that a developer brings is to take designs and deliver a working website in a timely manner. However, there are other skills and tasks that a WordPress developer might work on depending on the types of projects you have and the distribution of responsibilities in your team:
- Provide input to designers and project managers on how to plan and design the website
- Solve problems quickly and effectively for clients that have issues on their existing sites
- Tell you that all meetings are not necessary and it’s better to get to work
These are typical roles of developers that work inhouse, as a team player that weighs in on decisions in general and build relations with partners, etc. For a smaller agency or a highly technical agency, these values can be central to the business. Hence, their rates are usually quite high. The more technical the project, the higher the budget and the more value can be contributed by the developer.
When development becomes a form of production
However, for larger agencies that have specialized roles in the team and a lot of experience, development itself becomes more a matter of “production” where value creation is a bit different.
A professor that I had the privilege to work with at my previous job told me that while product development is all about value creation, production is about preventing the destruction of that value while building the product.
I’m paraphrasing here, but the central idea is both harsh and brilliant.
When the designs for a product or a website are ready, the next activity is to bring them to life just as they were imagined. Production is prone to flaws, and quality management will tell you that no product will ever be 100% like the designs (if you look close enough). So the ideal result is that there are no surprises at all, no quality issues but just a website as it was intended.
How do you then judge the value of the developer?
- The first thing would be the time it takes to finalize the result. Usually, there’s an added value to your agency’s client if the timeline can be shortened.
- The second value is in the quality of the website itself to ensure it performs well and can be properly maintained.
- The third value is that it doesn’t create any extra costs for others involved.
This third value is more related to cost, so let’s shift our attention to the cost side.
The total cost of development depends on more than WordPress developer rates
Let’s look at the total costs for development of a WordPress website, defined as the activities happening after designs and briefs are handed over to development up until the site is ready for the content team or for going live, depending on your process.
- Time to plan development
For a 40-100h build, planning is probably 2-8h of work for the developer.
- Time to write the code
The time it takes to code is highly dependent on the experience of the developer, where a junior developer could take up to twice the amount of time compared to a senior developer on a typical website project.
- Time to inspect quality
Most developers will tell you that it’s impossible to inspect your own work, so it’s good practice to assign someone else to run a check of all pages for the most common browsers and devices. The more issues, the more time for inspection.
- Time to correct defects
The developer will need to spend more time correcting the defects, which could end up taking a lot of time or being a quick fix. In my experience, big issues only happen because of insufficient briefs, lack of planning or mismatch between the developer’s experience and the project complexity.
- The developer’s rate
The multiplier for all time spent by the developer.
- Your team’s rate
The multiplier for all time spent by the rest of your team to inspect and communicate with the developer.
- External costs of quality
If the internal inspection fails to catch all major defects, the biggest cost of all could be that the client finds them and will want a discount on the project, or even worse be less likely to buy more services or recommend your agency to others.
Let’s run a simple calculation for a typical project. Let’s first assume we want to compare three developers that have the same skill level but differ in rate: $150/h, $50/h, and $15/h.
Project budget (what your client pays you): $15,000
Costs for non-development activity (design, project management, sales, overhead, …): $5,000
If the rate were $150/h instead, it would mean a loss of $1,550 on the project. If it were $15/h, you’d have a nice $8,170 profit.
BUT, it’s likely that the efficiency and quality of developers charging an hourly rate of $150, $50 and $15 respectively are very different. Let’s account for that in a new calculation.
The calculation above is based on rough estimates and assumptions, and I encourage you to use your own numbers from experience to find how this calculation looks for your business.
The main point is that the rate plays an important role in the total cost of your project, but it’s way more complex to find the “lowest total cost” setup for your agency.
My recommendation is to start with the general vision and business plan that you have and match the profile of a developer that you need with the value they can reasonably bring to your projects.
If you have a production-like setup, you’ll be looking at optimizing quality and efficiency around $15 – $75 for WordPress developer rates, and if you’re going after fewer high-margin high-complexity sites you probably need to be looking at $75 – $150 as the hourly developer rate.
“Start with the general vision and business plan that you have, and match the profile of a developer that you need with the value they can reasonably bring to your projects.”
Don’t forget the indirect costs
The developers you find with an hourly rate of $15 are probably working in a different area and in a different constellation than those that charge $150 per hour.
If your agency is small and nimble enough to handle uncertainties of working with remote freelancers, you can try to find the lowest-bidders that still live up to your standards. However, if stability is important for your operations and you need a whole team of developers, you need to also be looking at the costs of hiring and training new developers, administrative costs and office space costs if they’re internal.
For external developers, the cost of maintaining a good relationship with your outside agency will need to be factored in, as well as the value of being able to lean on them to allow you to sell more projects without taking on extra risk.
“If stability is important for your operations and you need a whole team of developers, you need to also be looking at the costs of hiring and training new developers, administrative costs and office space cost if they’re internal.”
Despite sharing the job title of “WordPress developer”, you will see a widespread of rates charged for what appears to be the same service provided. This article argued that it’s not really the same service provided, and you’ll need to consider the efficiency and quality that you get before knowing what’s the most cost-effective solution for your agency.
Outsourcing companies will offer you lower rates than your local development company, but finding the right balance between rate, quality and stability has proven very challenging to many agencies.
We’re in this spectrum ourselves and we position our services to primarily be a great fit for the larger agencies that have a holistic view on cost and value. It’s in our mission statement: “best total value”.
If this is not your goal then we have little chance at being your preferred development partner. And we’re not afraid to admit it since it allows us to be a better partner for those who look for what we provide.
Send us a message if you want to know more about the value we can bring to your agency and what our rates are.