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FTE

The Math for CEOs: Web-Dev and FTE

BY White Label IQ

Math is a way of proving that certain things are true.

And that’s a nice shelter in a storm because much of what we have to deal with in our day-to-day is often quite murky. And nothing is murkier than web development. For starters, it’s done in code. You can’t see what you’re doing. It’s not like drawing a picture or writing a headline. Working in the ether underscores the degree of murk.

But math can at least clarify the business side of it… what web-dev costs a marketing agency.

For example, look at how the numbers add up with a full-time in-house dev-ops team. That is, the salaries involved with a staff full of developers (front-end and back-end) and designers and 3D renderers and SEO and sysadmin and QA and PPC and ADA and UX/UI and other supporting technicians and analysts.

This is the math on in-house:

Payroll + benefits + HR + onboarding (and offboarding) + downtime (utilization) = ay caramba

Of course, one can hire freelancers to do all of that. So instead of managing all of those in-house full-timers who are dedicated to the mutual benefit of the company, the agency is managing a bevy of disparate freelancers instead.

This is the math on freelance:

x = ay caramba2

When it all adds up to “ay caramba”, simply put, that’s a lot. But another route to take is outsourcing. Think of that as how the cost of partnering up with a trusted outsource would calculate to full-time equivalent, or FTE.

But before we jump into the equation, know that FTE is a two-factor consideration…

Factor 1: Dedicated FTE

In this Dedicated scenario, a certain predefined body of development work needs to be done. So, an outsource partner builds a team for the agency. Could be anything. Maybe it’s PHP plus Laravel plus HTML plus graphic design. Or maybe it’s just PHP and HTML. Or just PHP. Whatever it takes, the dedicated team is built to handle a specific style of work, 100 percent dedicated to the agency and that task. Working together and engaging as members of the agency team, even if located remotely… the roster is defined as dedicated.

Factor 2: Blended FTE

In this Blended scenario, the project may require a range of skill sets that have to evolve as the project evolves, changing over time. Just like in Factor 1 above, the scenario could be anything. For conversation purposes let’s say that at first it requires a business analyst and project managers. After that, maybe what’s needed is a Vue.js specialist for front-end work. Or maybe it’s a Ruby on Rails technician for back-end development. Then, in comes a sysadmin plus QA and SEO. Maybe it’s seven people or more over time that come and go as needed… in other words, blended.

Point is, dedicated OR blended. Whatever is needed. When it is needed. No surplus, no overkill, no downtime.

FTE OUTSOURCING
COMPARED TO FULL-TIME, IN-HOUSE:

OUTSOURCING:

  Average Salary Benefits Utilization (i.e., zero downtime) Effective Rate
ANY FTE: $0 $0 100% $39–$69/hr.

COMPARISON… FULL-TIME, IN-HOUSE:

Just One Employee Average Salary Benefits Utilization (i.e., 50% downtime) Effective Rate*
PHP Developer $95,000/yr. $9,500 50% $100.48/hr.
Laravel Developer $90,000/yr. $9,000 50% $95.19/hr.
Digital Artist $75,000/yr. $7,500 50% $79.33/hr.
Front-End Developer $65,000/yr. $6,500 50% $68.75/hr.

The proof is in the math. Outsourcing FTE is a transparent, variable pass-along cost that optimizes adjusted gross income at a marketing agency. Not only does it benefit the bottom line, but it’s also a great weight lifted off the shoulders of agency owners and managers who no longer have to herd cats.

Instead, they manage one single-point of contact with a trusted outsource partner.

And that outsource partner, meanwhile, handles all the job boards and project management and personnel issues for what could be up to dozens of technicians and experts. Whatever skills are needed and when. Completely remote, no agency infrastructure required. On demand… take it off the shelf, put it back on.

As an old dad-joke might suggest:

Embrace the math, it’s easy as pi

*Indeed.com, as re-shared at https://www.whitelabeliq.com/
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