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Choosing the location is a commercial decision, not a cost one

Cost per head is where everyone starts and rarely what decides the outcome. What actually does.

Location decisions usually begin with a cost comparison across countries, and that comparison is real — the differences are large enough to change what a company can afford to build. It is also, on its own, a poor predictor of whether the team will still be working well in two years.

The reason is that the salary difference between two candidate countries is a fixed, known quantity, while the cost of choosing badly is variable and mostly invisible: re-hiring, lost context, coverage gaps, work redone, and senior time spent managing a structure that does not fit. Those costs do not appear in the model that justified the decision.

Five factors decide the outcome more often than price does.

Depth of supply for the specific skill

Not "is there a technology sector here" but "how many people in this market have done this particular work, at this level, and how many of them are available." A market can be strong in software engineering broadly and thin in the specific specialism you need — regulatory reporting, a named platform, a particular integration discipline.

Depth matters more than availability, because depth is what lets you replace someone. In a shallow market your two hires are irreplaceable in practice, which means every retention conversation is conducted from a weak position and one resignation is a delivery incident.

Real timezone overlap, counted in hours

Count the actual overlapping working hours with the people this team must collaborate with — and if they serve customers directly, with those customers too. Complex work needs synchronous time: a question answered in an hour rather than tomorrow, a design discussion, an escalation handled while the customer is still on the call.

Four hours of genuine overlap is a functioning team. One hour is a handover relationship with a team attached, and no amount of process discipline converts one into the other. This is also the factor most often assumed rather than counted.

Retention, and what drives it locally

A market with intense competition for the same skill will churn regardless of what you pay, and the loss is not the salary — it is six months of accumulated product and customer context walking out. Ask what typical tenure looks like for this role in this market, who else is hiring for it, and what the counter-offer culture is.

Retention is also strongly affected by whether the person is treated as part of your organisation or as an external resource. That is a structural choice you control, and it frequently outweighs geography.

Employment practicality at your actual scale

Many countries are straightforward to employ in at fifty people and awkward at two. Minimum entity requirements, mandatory local benefits, notice and severance rules, the availability of a credible EOR, and whether small-scale arrangements are normal there or exotic. A market that is excellent for a delivery centre can be the wrong answer for a two-person specialist team, and the reverse is also true.

Language and working culture, judged against the work

Written fluency is not the same as the ability to run a difficult conversation with a frustrated customer in real time. If the role is customer-facing or requires challenging a stakeholder, the bar is conversational and cultural, not grammatical. If the role is internal and technical, a lower bar is entirely workable. Set the bar per role rather than per country.

How to weight it

The weighting changes with the role, which is why a generic country-comparison table is not the analysis. A customer-facing implementation consultant is decided largely by overlap hours and language. A backend engineering pod is decided by skill depth and retention. A support function is decided by coverage windows. Cost then chooses between the two or three markets that clear the bar on the factors that matter for that role — which is the correct use of cost, and a very different exercise from starting with a cost ranking and filtering downwards.

One more thing worth stating: the market that is right for your first two people is not automatically right for the next twenty. Decide for the requirement in front of you, and keep the arrangement reversible enough that the second decision can be made on its own merits.