The existing answers are good, and I agree with most of the price ranges that are mentioned. There is a huge range in rates and they are most affected by the region and the type of organization you are dealing with.
For example, a small shop in E. Europe that is exceptional in Ruby and has professional management, great communication skills, and the ability to work agile (for real) is going to cost in the high 30's. A company in the same region but with less mediocre communication skills will get you into the 20's, but it won't be the same experience. In India, it's similar but the entire price range is a bit lower.
In order to understand how much you should pay, we use a simple approach like this:
- we figure out what kind of client you are. are you a bootstrapped startup? are you techy? can you manage it from your end? Do you have time to take on a lot of QA? are you experienced with this?
- knowing your client profile we can determine what kind of vendor will be successful with you. if you are an experienced client, have outsourced before, and know the ins and outs of software development you can work with freelancers, boutique shops, etc. if you are inexperienced with software and haven't managed this kind of thing, we might look for more of an agency type shop that will provide really good PM and awesome communication, etc. If you are pretty experienced and going long-term, you might consider an ODC model, too.
- Knowing the type of client you are and thus, the type of vendor you need allows us to recommend a region and specific development shops for you. When we know what/where we're looking for, it becomes easy to answer that magic question ,'how much should I pay?'.
This is basically the process that our entire business is based on :) Check out this video series that explains the process in more detail (complete with 2014 pricing numbers).
Good luck, and feel free to reach out if you need any help choosing that perfect development shop. They are out there.
Assuming that the company is reputable and they have:
A. already accomplished multiple similar nature projects,
B. enough project management and risk management experiences,
C. proper Agile or Scrum development strategies,
D. clear reporting mechanisms for their clients (in this case for you)
E. at least some sort of PPS (post production support) to fix the first and important bugs before your lunch your product
I think anything from $25-30/hour for 2 person team can be a good hourly rate for you.
Also based on my experiences finding a decent ROR developer is much harder than for iOS/Android developers or those working with other web technologies. This applies both for North American as well as for offshore resources.
Myself I have been an inside sales manager for Armenia based software development company for over a year, worked also in India in their IT hub Bangalore for 4-5 months Currently I am doing marketing consulting for some of the biggest software development companies from North America.
I would be happy to have a call if you want to know the best sources to find your developers as well as most important aspects to look at before signing your contract with them.
I would ask a few questions up front.
1. Is this a one time project?
2. Will this project need updating in the future?
3. Have you done any outsourcing before?
4. Are you sure you can manage the project within that 4 month period.
You can definitely get a firm to outsource your project for you at between 20-40 dollars an hour. However, if you just hire remote employees full time it will usually cost you half the price of the firm and you'll be able to manage the people yourself, won't be abandoned when the project is 'done' and can have them refine features as your needs change.
For a legitimate small to mid-sized software development shop that focuses on RoR (you don't want too large a firm that won't treat you as important and you don't want a firm that says they do anything and hires to your specs) you should pay 20-30 (US$) in Asia, 25-35 in East Europe and 30-40 in Latin America. The key is to make sure they are experienced and passionate about Ruby, large enough to scale but small enough to care, they can leverage experience to maximize your efficacy, their culture matches your expectations, they have proven agile best practices, they are ethically and financially vetted, there are safeguards to protect your IP and they have business continuity processes. Those are the key factors.
We help companies, primarily startups, ISV's, small and mid sized companies select the right offshore Software dev company for their needs. We've assessed over 1500 such small to mid-sized service providers and currently we have 45 such partners in 24 countries. 12 are assessed expert in RoR and 13 are assessed experienced in RoR.
Our matching service is Free to clients. Your relationship will be direct with your partner and you will negotiate and expect to pay the above prices directly with your partner. We earn commission but because we are matching you up with an ideal fit, the service provider's risk is lower and thus you can expect to pay globally competitive pricing while working with a truly legitimate, assessed, professional software development partner.
Let me know if we can help.
Here are a couple sites that will help you with your question -
Hourly rates vary a lot depending on the quality of the developer so its hard to say how good a developer is just from a range of experience. The second component is that offshore developers will have different costs of living depending on which city you outsource to.
The first thing I would do is vet the developer to make sure they are really great at what they do. Then based on location and experience talented offshore developers will charge from as low as $40 per hour up to around $100 per hour.
But again I would focus first on vetting the developers to ensure that they are really great beyond just the '3-5 years of experience' as that does not actually say how good they are. You will find some developers that have coded for 2 years full time and have really dedicated themselves to it to be better than other developers that claim that they have 5 years of experience. # of years of experience alone is not sufficient to make a decision regarding whether or not the developer is really good.