The loaded-cost comparison
Permanent senior engineer in London (typical)
- Base salary: £80,000
- Employer NI + pension: £12,000
- Equity allocation amortised: £8,000/year
- Benefits, health, wellness: £4,000
- Office / equipment: £6,000
- Total annual loaded cost: ~£110,000 (~$140,000)
- Monthly: ~$11,700
Permanent senior engineer in Berlin (typical)
- Base salary: €85,000
- Employer social contributions: €18,000
- Benefits, equipment: €5,000
- Total annual loaded cost: ~€108,000 (~$117,000)
- Monthly: ~$9,750
Nearshore staff augmentation senior in Romania
- $65/hour × 160 hours = $10,400/month
- All-in (no hidden overhead): $10,400/month
- Annual: ~$125,000
The time-to-value gap
- Permanent hire: 4–6 months search + 2–3 months ramp = 6–9 months to full productivity
- Staff augmentation: 2–4 weeks from request to day-one productivity
For a 12-month period, permanent gives you 3–6 months of productive output; staff augmentation gives you 11+ months.
Sunk costs of permanent hiring
- Recruiting fee: 20–25% of base salary (£16k–£20k for an £80k role)
- Internal interviewing time: 40–60 hours of engineering and management time
- Onboarding ramp cost: 2–3 months of half-productivity
- Risk of mis-hire: 15–25% of permanent hires don't pass year 1
When permanent still wins
- Roles core to long-term product knowledge
- Critical IP creation needing 3+ year retention
- Equity story matters to candidate motivation
- Local presence required (regulated industries)
