Software engineers have emerged as highly sought-after professionals in the ever-evolving world of technology. Their specialized skills can be leveraged across diverse industries The demand for software engineers is persistent, driven by the constant need to develop applications and systems that enable businesses to thrive in a digital environment​​.

In 2023, the demand for software engineers is going strong. Despite changes in the market, including rising inflation, shifts in consumer buying habits, and changes in sales cycles, the demand for software development for software development skills remains robust. Big tech companies and a wide array of industries continue to need these specialized skills, emphasizing the pivotal role of software engineers in today’s digital economy​.

Moreover, software engineering is a top career choice that offers substantial financial benefits. Software engineers in the US can earn up to a six-figure salary on average; these figures can vary based on factors such as experience, location, industry, and education. 

The state of the tech industry in 2023 has also seen some significant transitions. For example, Ruby on Rails has surfaced as the most in-demand skill for software engineering roles, generating 1.64x more interview requests for developers proficient in it. Also, the highest average salaries for remote engineers have been in the San Francisco Bay Area, Seattle, and New York, with slight differences for local roles​​.

While the right developer can save a company time and money while creating a product

that clients love, a mediocre developer can cost their employer

over $400,000 between hiring, training, firing, and repairing their errors.

The Landscape of Software Development Hiring in 2023

The landscape of software development hiring continues to evolve, with 2023 showcasing several prominent trends and influencing factors. Here are some key points:

High Demand for Specialized Skills: Software engineers remain highly sought-after professionals in various industries, such as finance, healthcare, e-commerce, and entertainment. Despite changes in the market, software development retains its position as a top career choice. This demand extends beyond big tech companies and permeates a wide range of industries, illustrating the universal necessity of these skills​1​.

Popular Programming Languages: Ruby on Rails emerged as the most in-demand skill for software engineering roles in 2022, generating 1.64 times more interview requests for proficient developers​​.

Salaries and Locations: In remote work, the highest average salaries for engineers were reported in the San Francisco Bay Area, Seattle, and New York. These markets were the same for local roles, although the wages varied slightly​.

Emerging Specialties: Natural Language Processing (NLP) engineers saw the highest salary growth year over year, with a 10% increase. Fueled by a thriving crypto market, Blockchain engineers commanded the second-highest salaries, followed closely by Security engineers in third place​​.

The Costs of Hiring a Developer in the US

When considering the addition of a developer to your team in the US, it’s essential to understand that the costs extend beyond the base salary. For example, the expenses involved in hiring a developer encompass many factors, including benefits, training and onboarding, equipment and workspace, and recruitment and turnover.


A developer’s salary in the US can vary significantly depending on their experience level, the job’s complexity, and the position’s geographical location. As of 2023, the median annual wage for software developers in the United States is $120,000. However, salaries for highly specialized roles or positions in high-cost areas such as San Francisco or New York City can be significantly higher, up to $180,000 and $169,00, respectively.


In addition to salary, employers typically offer a range of benefits to attract and retain top talent. These benefits can include health insurance, retirement plans, paid time off, and sometimes more unique perks such as stock options or wellness programs. The cost of these benefits can add 20-30% to the base salary.

Training and Onboarding

Investment in training and onboarding is essential for ensuring a smooth transition and maximizing a new hire’s productivity. This can include costs for training programs, mentorship, and the time spent by other employees to bring the new developer up to speed. These costs can vary but generally represent a significant investment in the early stages of employment.

Equipment and Workspace

Developers need the right tools to do their job effectively. This includes computers, software licenses, and potentially specialized equipment, depending on the nature of the work. Additionally, the cost of providing a workspace should be factored in, whether office space or support for a remote working setup.

Recruitment and Turnover

Finding the right developer can be a time-consuming and costly process. Recruitment costs can include advertising the position; time spent screening and interviewing candidates, and potentially the fees of a recruitment agency. Additionally, the cost of turnover, should a developer leave, can be substantial – including the loss of productivity and the repeat of the recruitment process.

In 2023, we are seeing rising salaries due to increased demand for developers and a greater emphasis on remote working setups, which can influence equipment and workspace cost. The competitive market for talent has also increased the importance of attractive benefits packages and effective recruitment strategies.

The Benefits and Costs of Nearshore Outsourcing

Nearshore outsourcing is an increasingly popular strategy for many companies needing software development services. This approach involves contracting with firms or individuals in countries that are geographically close but offer a more favorable cost structure. The benefits and costs of this approach vary depending on several factors, including the specific location and the nature of the work involved.

Nearshore outsourcing can offer several key benefits:

Given the high demand and substantial costs of hiring a developer in the US, nearshore outsourcing emerges as a highly attractive alternative. While with its challenges, this strategy offers numerous compelling advantages that companies should seriously consider.

In terms of cost, nearshore outsourcing is considerably more affordable. Lower wage costs in nearshore countries mean companies can access high-quality work at a significantly reduced expense. This cost efficiency extends beyond base salary to also encompass benefits, training, and overheads, enabling companies to optimize their budget and allocate resources more effectively.

Risk management is another area where nearshore outsourcing shines. By adopting multi-partner strategies, companies can mitigate risks associated with reliance on a single vendor or team. This diversification is akin to a financial portfolio, spreading the risk and ensuring continuity of service even in the face of unforeseen circumstances.

Moreover, nearshore outsourcing can alleviate the substantial time and resources spent on recruitment, training, and retention. With the current developer shortage in the US, securing top talent can take time and effort. Nearshore partners, however, often have a large and qualified talent pool, thereby mitigating the turnover time and stress on your internal team​1​.

The time zone alignment and cultural similarity offered by nearshore outsourcing facilitate smoother communication and collaboration compared to more distant outsourcing locations. This proximity enables more synchronized working hours, enhancing productivity and reducing time lag in communication.

Cultural and Language Similarity: Nearshore locations often share a similar cultural background and language with the hiring company, facilitating communication and reducing misunderstandings. Also, this makes it more scalable: Nearshore outsourcing can offer greater flexibility in scaling teams up or down as project requirements change.

Finally, the shift towards hybrid teams provides an avenue for increased employee satisfaction and productivity. Companies can tap into a wider talent pool without geographical restrictions, fostering a more diverse and innovative team. This flexibility is not only beneficial for employees but can also lead to higher-quality outcomes and increased innovation.

Our take

While each company’s circumstances will differ, the benefits of nearshore outsourcing in terms of cost, risk management, time efficiency, and access to talent make it a powerful strategy to consider in the current tech industry. By adopting nearshore outsourcing, companies can not only navigate the challenges of the current market but also position themselves for greater success in the digital economy.

If you are not convinced that a nearshore outsourcing solution is right for you, there is no cost in a meeting with us, and let us walk you through the process. For example, you could see the CV of the candidates we could provide your company and even try one developer for a couple of months; you will only pay what you use.

Mahisoft has a wealth of experience providing high-quality software development services to clients across various industries. We have a proven track record of delivering cost-effective solutions, reducing risks, and streamlining development processes. Our talented pool of developers are not just experts in their field but are committed to understanding and aligning with your business objectives to ensure optimal outcomes.

Don’t let the challenges of hiring locally limit your company’s growth and innovation. Embrace the potential of nearshore outsourcing with Mahisoft. We’re ready to work closely with you to understand your needs and to assemble a dedicated team of developers that will help propel your business forward.

Take advantage of our expertise and resources. Let’s explore how our nearshore services can bring about transformative results for your business. Contact Mahisoft today and let us help you navigate the journey to digital success.

Please contact us if you’d like to discuss your needs or want to learn more about our nearshore outsourcing services. Our team is ready to assist you.

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