Hire a developer or hire a consultant?
A hired developer often costs about 1.5 times the gross salary per year once payroll taxes, tools, training, and overhead are included. A consultant costs more per hour but can be let go once the need ends. Hiring pays off once there's a lasting need with high utilization – for temporary or uncertain needs, the consultant wins.
The salary looks cheap next to the consultant’s hourly rate – until you calculate the full annual cost and the time it takes to recruit. Here’s the breakdown that shows when hiring actually pays off, and when a consultant is the economically smart choice.
The real annual cost of an employee
The gross salary is just the start. A useful rule of thumb is that a hired developer costs about 1.5 times the salary per year. Here’s what that can look like for a developer earning SEK 60,000 a month:
| Cost item | Roughly per year |
|---|---|
| Gross salary (12 × SEK 60,000) | SEK 720,000 |
| Payroll taxes (just over 31%) | ≈ SEK 226,000 |
| Occupational pension and insurance | ≈ SEK 50,000-80,000 |
| Tools, licenses, and equipment | ≈ SEK 20,000-40,000 |
| Training and conferences | ≈ SEK 20,000-40,000 |
| Office space and other overhead | ≈ SEK 30,000-60,000 |
| Total | ≈ SEK 1.05-1.15 million |
The figures are a worked example, not a quote – but the order of magnitude holds for most companies. And that’s before counting management time, recruitment cost, or the risk that the person leaves.
What does the consultant cost for the same year?
A full-time consultant bills roughly 1,600-1,700 hours a year. At an agency hourly rate of SEK 950-1,600, that comes to SEK 1.5-2.7 million; a freelancer at SEK 700-1,200 lands at SEK 1.1-2 million. Full-time, year-round, the consultant is clearly more expensive.
But the consultant cost is variable. You only pay when the need exists, skip employer obligations and notice periods, and can swap in different skills as the project changes phase – an app developer this spring, an integration specialist this fall.
The hidden price of recruitment
Recruitment typically takes three to six months from decision to start, and then further time before the person is fully productive. During that time, the need often goes unmet – or is covered by consultants anyway. Add advertising or search costs and internal time for interviews.
The truly expensive risk is a bad hire: the wrong person in the wrong role is often only discovered after several months, and then the process starts over. A probation period limits the legal risk, but not the lost momentum. Also count on your most senior technical person tying up time in every recruitment – time that would otherwise be development.
The break-even point: calculate the utilization rate
An employee costs roughly the same regardless of how much development work actually exists. The consultant costs by the hour. That’s where the break-even point sits.
Worked example: the annual cost of the employee above, about SEK 1.1 million, corresponds to roughly 1,000 hours with a consultant at SEK 1,100 an hour. So if you have a lasting need exceeding around 1,000 development hours a year – year after year, within the same area of expertise – hiring starts to pay off economically. Below that level, or when the need is uncertain and shifting, the consultant wins despite the higher hourly rate.
Remember that the calculation assumes you can recruit the right person, manage developers, and offer an environment where they stay. If you can’t, the “cheaper” hire quickly becomes more expensive.
The economics aren’t the whole picture either. An employee builds domain knowledge that stays in the company, shapes the culture, and is still there next year. The consultant takes the knowledge with them when the assignment ends – unless you actively require documentation and handover. If two options are economically equal, it’s often that dimension that should tip the decision.
How to choose in practice
- Lasting need over 1,000 hours a year, same expertise: hire – but count on a 3-6 month ramp-up.
- Temporary, uncertain, or shifting need: consultant, with a clear agreement on ownership and documentation.
- Urgent now but hiring long term: consultant as a bridge while you recruit at a calm pace.
- Need for several skills in smaller doses: agency collaboration rather than a single employee expected to cover everything.
- Unsure of the volume: start with a consultant and measure actual usage over six months – then the hiring calculation becomes a computation instead of a guess.
At Weapp we staff both sides of this calculation – as a consulting team and as a bridge until an internal team is in place. Want to talk through your situation? Get in touch.
Frequently asked questions
How long does it take to recruit a developer?
Count on three to six months from decision to first day: defining the role, advertising or search, interviews, notice period at the current employer. Add ramp-up time before the person is fully productive in your codebase and domain.
What does a bad hire cost?
Add up the salary cost during the probation period, the recruitment cost that has to be repeated, and the development time lost – the total easily exceeds half a million kronor. The biggest cost is still often the time: half a year later, you're back at square one.
Is a consultant always more expensive than an employee?
Per hour worked, yes – a consultant's hourly rate is higher than an employee's hourly cost. Per year, it depends entirely on utilization. A consultant brought in for three months to cover a peak load is cheaper than an employee sitting idle the rest of the year.
Is there a middle ground between employee and full-time consultant?
Yes, several. A part-time consultant, say two to three days a week, gives continuity without full-time cost. A retainer agreement with a time bank covers ongoing needs, and some agencies offer teams shared between clients. That's often the right level for smaller product companies.
Can a consultant become an employee later?
It happens and can be an excellent path: you've seen the person work before hiring them. Check the contract, though – most consulting agreements have recruitment clauses with a fee or a waiting period, so raise the question openly with the agency instead of going around it.