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Hiring cost

Dedicated developer vs direct hire: what you really pay for

A "dedicated developer" or "dedicated development team" from a vendor is usually billed as a monthly or hourly rate that sits on top of the developer's pay, for as long as they work for you. Hiring directly means you pay the developer yourself and pay any hiring fee once. If your staffing firm adds a markup every month, the way out is to find and hire developers directly. On Arca.ph, that means one fee of 15% of first-year pay, once, on hire.

This page explains how the dedicated model works, compares it with a direct hire using sourced numbers, and lists the steps to move a role off a monthly markup.

What does "hire dedicated developers" actually mean?

A dedicated developer works full-time on your product, under your direction, but is employed by a vendor. The vendor bills you; the vendor pays the developer. Full Scale, one vendor that sells this model, puts it plainly: in a dedicated team, "the vendor owns everything about employing the people, and the product stays yours to direct." It also says that "a dedicated team is staff augmentation with more than one person" (Full Scale).

So "dedicated development team," "dedicated developers" and "staff augmentation" mostly describe the same thing: you rent a developer's time from a company that employs them. For more background, see What is staff augmentation?

What does the vendor's rate cover?

A vendor's rate isn't all profit. It typically pays for:

  • The developer's pay.
  • Employment. Contracts, benefits and HR in the developer's country.
  • Overhead. Office, equipment, account management and invoicing.
  • The vendor's margin.

Full Scale, for example, describes "a fully-loaded rate of $35 an hour per engineer" and says that single rate "covers employment, benefits, HR, and overhead" (Full Scale). Most vendors don't tell you how much of the rate reaches the developer. That gap is the markup.

How does a direct hire compare?

Here's a comparison. The vendor figure is Full Scale's published rate; the direct-hire figures use Arca.ph's published fee.

Dedicated vendor, at a published $35 an hour. At 40 hours a week for 52 weeks (2,080 hours), that's $72,800 a year for one engineer, every year the engineer stays. That figure includes employment and overhead.

Direct hire through Arca.ph. Say the developer's pay is $3,000 a month, or $36,000 for the first year. The success fee is 15% of first-year pay: $5,400, paid once. In year one, you pay $36,000 in pay plus the $5,400 fee. In year two, there's no fee, just the developer's pay.

The difference isn't all savings. When you hire directly, you take on the things the vendor rate was covering (see below). But you can see every cost, and none of it repeats as a margin.

How do I move off a monthly markup and hire directly?

  1. Read your current contract first. Look for clauses about hiring the vendor's developers directly, notice periods and any fees for doing so. Some contracts restrict it; some allow it for a fee.
  2. Decide what you'll handle yourself. Who will hold the contract with the developer, and how will you pay them? Many teams use a contractor agreement.
  3. Write a short brief. Skills, monthly pay range, the hours you need to overlap, and which proof matters.
  4. Get started on Arca.ph. Create an account with your work email. Profiles are free to view.
  5. Let your AI assistant search and sort. Grok Bot, Claude or ChatGPT searches the profiles and sorts them against your brief. Your assistant builds the shortlist. Arca.ph doesn't shortlist for you.
  6. Ask for an introduction and any proof you need. After an introduction you can ask for proctored tests, such as a coding test with no AI allowed, a 2-hour build project with AI allowed, or the Fire Drill (live pair programming on a real-world problem), plus recorded reference checks.
  7. Hire and pay once. 15% of first-year pay, charged once, only if you hire someone Arca.ph introduced within 1 year of the introduction. Every hire includes a 3-month replacement.

What do you take on when you hire directly?

  • The contract. You sign the agreement with the developer.
  • Paying the developer. You pay them directly each month.
  • Day-to-day management. The same as with a dedicated developer, since the work was already yours to direct.
  • Finding a replacement if it doesn't work out. On Arca.ph, every hire includes a 3-month replacement if the developer you hired isn't the right fit.

For a full comparison of the two pricing models, see Success fee vs hourly markup.

When is a dedicated team still the right call?

A vendor can make sense if you have no way to contract or pay developers yourself, if you want someone else to handle replacements and HR entirely, or if you need several roles filled and managed as one unit. If you'd rather Arca.ph run the search for you, Done-for-you is 35% of first-year pay, charged once on hire. It's still a one-time fee, not a monthly markup.

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FAQ

My staffing firm charges a big markup every month on my developer. How do I hire directly instead?

Read your contract for terms on hiring the firm's developers directly. Then decide how you'll contract and pay a developer yourself, and search for candidates directly. On Arca.ph, your AI assistant searches free profiles, and you pay one fee of 15% of first-year pay, once, on hire.

Is a dedicated development team cheaper than hiring directly?

Usually not over the long run. A dedicated team's rate covers pay, employment, overhead and the vendor's margin, and you pay it every month. A direct hire costs the developer's pay plus any one-time fee, though you take on the contract and payments yourself.

What does "hire dedicated developers" cost?

It depends on the vendor. Full Scale, for example, publishes a fully-loaded rate of $35 an hour per engineer. Ask any vendor how much of the rate the developer actually receives.

Is a dedicated team the same as staff augmentation?

Largely, yes. Both mean a vendor employs the developer and you direct the work. Full Scale itself calls a dedicated team "staff augmentation with more than one person."

What does Arca.ph charge to hire a developer directly?

On the marketplace, 15% of first-year pay, charged once, only if you hire someone Arca.ph introduced within 1 year of the introduction. Profiles are free to view. Every hire includes a 3-month replacement.

What happens if a direct hire doesn't work out?

On Arca.ph, every hire includes a 3-month replacement. Tell Arca.ph within the first 3 months, and Arca.ph searches its network around the world again, with no second fee.

Sources

  1. Full Scale, "Dedicated Development Team: The 2026 Hiring, Cost, and Onboarding Guide": https://www.fullscale.io/blog/dedicated-team-model/
  2. Arca.ph, Pricing: https://arca.ph/pricing