Full cost-component comparison
| Cost component | In-house (London) | Augmented (Romania) |
|---|---|---|
| Base / billable rate | £80,000 | $65/hour × 160 × 12 = $125,000 |
| Employer taxes | £12,000 | included |
| Benefits | £4,000 | included |
| Equity (amortised) | £8,000 | none |
| Office / equipment | £6,000 | included |
| Recruiting (amortised) | £4,000 | included |
| Annual total | ~£114,000 | ~$125,000 (£100,000) |
What changes the math
- Tenure: in-house equity amortisation shrinks over 4-year vesting; augmented stays flat
- Geography: Berlin and Amsterdam in-house ~15% cheaper than London; CEE augmented ~10% cheaper than Romania
- Seniority: the gap widens for senior+ roles, narrows for junior
Hidden costs of augmented teams
- Engineering manager time: 5–10% of an EM per augmented engineer
- Onboarding ramp: 2–4 weeks per new augmented engineer
- Async overhead: roughly 4–6 hours/week of additional coordination
- Retention churn: 18–24 month average vs 30–36 months for in-house
Hidden costs of in-house teams
- Recruiting cycle: 4–6 months per senior role
- Time-to-productivity: 2–3 months ramp
- Office and operational overhead: £6k–£15k per head annually
- Severance and exit risk: 1–3 months severance on involuntary exits in EU
The blended-team finding
A 60-in-house, 40-augmented split typically delivers 25–30% total cost reduction over a 24-month window versus pure in-house. The augmented portion absorbs surge capacity and flexible roles; the in-house core owns architecture and product memory.
