Nowadays, the remote has become the new black even if you don’t work remotely, you surely have friends or colleagues who do. That’s especially true for tech startups whose employees’ work equipment consists of a laptop with a good internet connection. If you don’t need specific tools, your workplace can be anywhere: in a cozy cafe, on the morning beach, or at your friends’ cozy duvet.
Such freedom is pretty much craved and expected. Numerous startups abstain from the office routine sparing rent costs and letting their employees be the masters of their own time.
However, many founders are still unsure about offshore, strained by the traditional worldview where one can work decently and regularly only in a proper (i.e., office) surrounding.
Some tech moguls even request their remote staff to return to the office for fear of losing control or productivity decline (see the relatively new story about Elon Musk and his Tesla workers). They fail to acknowledge that remote work has its perks for employers money savings being among the main ones.
Nevertheless, the future belongs to the remote first of all, thanks to its cost efficiency.
Recent research by Lemon.io (a talent marketplace for vetted offshore developers) showed that tech startups choosing remote work save $10,600 per worker yearly.
What stands behind this figure? Let’s break it down and analyze each part deeper!
Laws tell us that work areas should be at least 120 square feet per employee. The average private workstation should measure about 50 square feet, whereas the remaining 70 square feet will be allocated for storage, meeting rooms, kitchens, walking spaces, and office equipment.
Price for a square foot of a rented office in top-10 US technological hubs oscillates from $25,41 in Pittsburg, Pennsylvania, to $87,18 in San Francisco (the market average equals $46,5 per square foot) resulting in $5580 of annual rent space per employee. Quite a solid chunk of money, isn’t it?
The total annual sum of the operating costs in a commercial office space equals about $17.68 per square foot.
It includes repairs and maintenance, utilities, and other expenses.
How expensive will the utilities be for one employee, then?
1 employee $2,121/year (120 $17,68)
Coffee and snacks
There’s much more to work than just a routine. Onsite employees need coffee and tea pauses, water cooler talks, and snack parties. Otherwise, they will be bored to death and unproductive. $5 for an employee’s daily snacks turn into $1300 spent for each employee per year.
Let’s find out how much an employer spends on basic work equipment. That’s a one-time inevitable outgoing. Every member of the office squad certainly needs a desk (’35’50$), a chair (’40’60$), and a laptop (‘1000’1500$). Their total price conservatively adds up to an 1100’1600$ one-time expense.
Some benevolent employers offer compensation for cell phone plans, team lunches, internet costs, and utilities used for work. As a rule, they don’t exceed $100 per month. Some more cover co-working rent ($200’400 a month) or offer a one-time allowance of up to $500 to help set up the home office.
Some extremely caring companies even offer compensations for activities that help you take a pause and recharge such as gym memberships, massages, or personal development courses.
‘Each quarter, you can reimburse $150 for our monthly Fresh Air Friday days. I’ve bought sneakers, and my employee bought a guitar and a subscription to a meditation app. The only catch is you have to upload pictures of your Fresh Air Friday day (no need to show the purchase) to our Slack channel monthly,‘ says Matt Darrow, CEO and co-founder of Vivun, a global provider of Buyer Experience (BX) softwareThe reimbursement sum generally doesn’t exceed $100/month or $500 one-off payments.
Now, let’s turn to rates for the remote. An employer wishing to hire remote developers for their startup won’t bother about all the aforementioned expenses since remote workers aren’t tied to the office and don’t demand any office-related outgoings.
Hiring offshore developers from outside of the US unlocks tremendous money-saving opportunities. Think for yourself: remote hiring allows startups to look for talent in any location including favorably taxed nascent markets, which are often full of world-class specialists with lower salary expectations.
Let’s look at the average hourly rates in different European countries for 2022!
- US: $50.64
- Ukraine: $30
- Romania: $32
- Poland: $35 (source)
As you see, the Ukrainian IT market is much cheaper than the American one (and slightly less pricey than the markets of nearby Poland or Romania). However, the local IT professionals are well-educated, and most have good oral and written command of English. They are by no means worse than their US counterparts but a lot cheaper.
What to expect from remote hiring?
Offshore employment has many apparent and covert advantages. Hiring remotely, you get access to a bigger talent pool, spare lots of money, and cater to the requirements of modern workers who prefer to save commuting time and maintain a better work/life balance.
Here’s what Kari DePhillips, the CEO of The Content Factory, states:
‘I ran the math, and on average, my team saves 500+ hours per year (each) by skipping the ‘get ready for a job you’re already ready to do’ routine + commute to a downtown office and back.’
How can we explain bigger access to the talent pool? Hiring remotely, you’re not strained by borders. You can hire anyone anywhere since remote working tools have been on the constant rise, and one can find every kind of instrument up to their liking. Moreover, the remote mode is genuinely inclusive. Not all offices are suitable for people with medical conditions (that’s why such employees often restrain from office work). Working from home, they will be able to accommodate themselves in the best possible way (and be more productive).
Downsides of remote hiring
Of course, remote employment has disadvantages although they are much fewer than bonuses.
Often, global remote hiring needs more paperwork and routine HR processes, and you should be ready for it.
Richard Mabey, CEO and co-founder at Juro legal tech company, underlines:
‘Companies need to be able to handle cross-border employment, as much as compliance issues, and manage local employee rules and regulations. Local hiring is relatively easy. Hiring specialists to work from anywhere is more complex. Employer of record model sometimes helps, though compliance with local law and regulation is still required.’
Another issue to consider is informational security. Office networks and data storages are always secure, and all the inside information won’t leak out. Providing remote access to sensitive information, the employer risks potential leakages.
Since our remote workers aren’t always operating under our robust in-house cyber security measures, even just one slip-up from an off-site working employee can have massive ramifications for our proprietary methods remaining need-to-know,’ highlights Teresha Aird, co-founder and CMO of Offices.net, an online commercial real estate brokerage.
The third influential issue we’d like to emphasize is cultural diversity (working both ways).
On one side, an assorted, multicultural and diversified team is an ideal playground for gaining new knowledge about foreign work ethics and approaches. On the flip side, there’s a steady risk of cultural gaps.
Interestingly, some countries have their geographical specifics for remote work. Marie-Agnes Deharveng, Head of People at the video engagement platform Livestorm, explained that their French bosses regularly reimburse remote employees.
‘People coming to the office and working remotely cannot have different benefits, and meal vouchers are part of the essential kit,’ said Deharveng.
Wrapping it all up
During the COVID lockdown, remote work mode has become a necessity. The pandemic went away, but many employees have already felt all the benefits of the offshore and declined to return to their familiar squeaking office armchairs.
Modern IT professionals always expect the remote option. It saves tons of time, enabling them to lead a happy, productive life and maintain a better work-life balance.
Offshore benefits for companies are also hard to ignore. Remote mode saves money and opens a broad window of hiring opportunities (frequently with very beneficial rates).
Remote is ubiquitous. Grammarly, WhatsApp, Gitlab, and Solana were all founded or co-founded by Ukrainians. Google, Samsung, and Amazon opened their R&D centers in Ukraine. Siemens, Microsoft, and Intel bet on Polish talent and proved right. IBM, HP, and Oracle have set up offices in Romania.
The recent lockdown has demonstrated that remote work can be highly effective and grant numerous possibilities. Companies can invest in processes and policies, train employees, and maintain team spirit to ease adaptation to remote work.
Lemon.io is a talent marketplace of vetted software developers created to connect global venture-backed startups with world-class talent from emerging countries. The company is now on the way to assisting a thousand engineers with a job search by the end of 2022.
Contrary to bidding marketplaces (Upwork, Freelancer, and the like), Lemon.io profoundly checks all the software engineers registered in its talent database. All the programmers should pass four vetting stages (professional network check, English proficiency check, soft and hard (coding) skills check) only 4% of candidates can do this. If you’re a startup owner eager to hire part-time developers, drop us a line. Our Sales experts will contact you in no time and offer the first candidates in 1-2 days after the intro call where you’ll be able to clarify everything you need.