First hire
Should my first technical hire be a developer or an agency?
Every page answering this is written by somebody who sells one of the two options, and not one of them does the employment arithmetic. So here it is, plus the risk that decides it more often than cost does.
What the hire actually costs
Six months to 7 October 2026, from 1,246 quoted salaries across 1,449 advertised positions — one of the sturdier samples in this dataset. Up 8.33% year on year from £60,000. London £70,000. Source: ITJobsWatch.
| First year, first developer | Amount |
|---|---|
| Salary, UK median | £65,000 |
| Employer National Insurance at 15% above £5,000 | £9,000 |
| Pension, 3–5% | £2,000–3,250 |
| Recruitment, typically 15–25% of salary | £9,750–16,250 |
| Laptop, software, tooling | £2,000–3,500 |
| First year | £87,750–97,000 |
Year two drops to around £76,000–78,000 once recruitment falls away. That is the number that has to be in the budget every year, regardless of how much work there is in any given month.
And the cost nobody puts in the table
Ramp-up. A new developer does not deliver fully from week one however good they are, because they have to learn your product, your customers and the decisions already made. Two to three months is normal. That is £13,000–20,000 of salary against partial output — a perfectly ordinary investment, just one that never appears in the comparison.
The risk that actually decides it
When there is one developer, nobody is looking at the work. The code gets written the way that person prefers, no one asks why, and nobody else knows how any of it fits together.
Day to day this is fine, and often fast. The problem arrives the day they resign: you own a product that nobody in the building understands, and the replacement spends months reading a system documented only in a head that has left. That is the single largest risk of a first hire and it is almost never costed.
It is manageable — code review by someone external, a written-down deploy process, a technical lead above the first hire. But those are exactly the things you do not have when you are hiring your first developer.
The honest split
| Hire when | Use an agency or studio when |
|---|---|
| The work is permanent and predictable | The work is a defined project with an end |
| The product is the business | The product supports the business |
| Someone technical can lead them | Nobody internal can lead a developer yet |
| You can absorb a quarter of ramp-up | You need output within weeks |
| Domain knowledge must stay in-house | The skills needed change between phases |
The row that matters most is the third. Hiring a developer with nobody to lead them is how you get the bus-factor problem above. If that is your situation, the sequence that usually works is technical leadership first and the hire second — which is what the fractional comparison page is about, and yes, I sell that, so weigh it accordingly.
The third option both sides ignore
Hire the developer and buy a few days a month of someone senior to review their work and make the architectural calls. It costs a fraction of a second hire, it removes the review problem and the bus-factor problem at once, and it gives a good first hire somebody to learn from — which is also how you keep them.
Sources. Salary: ITJobsWatch, UK permanent software developer, median £65,000, 1,449 adverts, 1,246 quoted salaries, six months to 7 October 2026, retrieved 7 October 2026. Employer National Insurance: GOV.UK rates and thresholds for employers 2026 to 2027. The first-year build-up, the recruitment and pension percentages and the ramp-up estimate are my own figures and typical practice, not measured averages.
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