How to Hire a CTO: Cost, Skills and Best Practices

Updated 01 May 2024

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Hiring CTO (Chief Technology Officer) is an important step in any business's lifecycle. A well-qualified CTO may assist you in:

  • Defining primary tech strategy that alings with your busines goals
  • Seamlessly integrating innovations within your tech environment
  • Optimizing investment through careful resource allocation and strategic planning

However, how do you hire a CTO who will accomplish your unique technical needs and will become a level up to your business's future improvements?

Keep diving deeper into this article to find out about 8 steps to hire a CTO, its cost and best practices to find a perfect tech executive that’s going to be the best fit for you.

What Is Chief Technology Officer (CTO)?

The Chief Technology Officer (CTO) is a specialist who leads your technological business. This person also assists you in integrating technical and business goals, helps you decide what tech solution is worth investing in, and advises you on ways to integrate it organically within your business environment.

CTO creates the architecture of each tech solution. Software architecture acts as a blueprint for building a software product, that outlines essential interactions, and overall structure to represent how separate software components will work together. Besides ensuring that the developed architecture meets your tech standards and objectives, a CTO works closely with the development team providing guidance during implemetation.

Anyway, the CTO hire works closely with your development team not only during infrastructure creation but also all the time. It includes checking on set task completion, engaging soft skills to promote smooth communication and mutual understanding within the team, evaluating the efficiency of the work outcomes of team members, and much more. This is performed by facilitating meetings and mentorship to identify potential pain points and areas of improvement within a team.

Types of CTO

Before hiring a CTO, it’s important to establish what are your business’s goals and what exact specialist you need to not conflict with your business structure. There are 4 the most common subtypes of CTO you can consider:

  • Chief innovation officer. This kind of specialist focuses on driving innovation and fostering a culture of creativity within the organization by constantly exploring new technology tendencies and pushing boundaries to create new solutions.
  • Business technology officer. Works on aligning technology initiatives with the company's overall business strategy. In other words, business technology officers enable the achievement of strategic objectives through the effective use of technology
  • IT operations officer. Manages the company's technology infrastructure-related operations and ensures IT systems are reliable, secure, and scalable enough to support day-to-day operations
  • Business technology liaison. Bridges the technology team effort and the business side of the company by focusing on driving customer value through technology and ensuring alignment with customers' actual needs and market trends.

Skills Required by CTO

While the CTO’s areas of responsibility are quite comprehensive, the question about skill set may still be unclear due to CTO's wide range of competencies. Discover 5 main skills that required by CTO:

Business vision

It’s vital for a CTO to possess a keen understanding of the business landscape and be able to translate technological solutions into clear strategic advantages for the company. They should have a clear vision of how technology can drive your business growth, improve operational efficiency, and enhance customer experience.

Solid tech expertise

A strong technology background is essential for you when hiring a CTO. They must have extensive knowledge, expertise and practical experience in various areas of technology relevant to your niche and goals. This includes understanding software development methodologies (Agile software development methodology, Waterfall, Scrum, etc.), cloud computing, cybersecurity, and data analytics. Knowledge of currently evolving technologies like Artificial Intelligence and Machine Learning may be a benefit too.

How to find a CTO for a startup? Learn about how to ensure compatibility of your business goals with your future CTO hire in our article

Leader mindset and team management

Effective leadership and management skills define a great CTO, enabling them to oversee, lead and inspire the technology team successfully. This includes the ability to motivate and mentor team members, foster a culture of collaboration and innovation, and align the team's efforts with the company's overall goals and vision. Strong leadership skills enable the CTO to build and empower high-performing teams, drive organizational change, and navigate complex challenges.

Adaptability and learning agility

Today technological landscape is flashy fast, meaning your CTO must be adaptable and open to absorb new knowledge. This includes staying abreast of emerging technologies, industry trends, and best practices. The ability to quickly adapt to changes, leads the organization technological transformations, and consequently to automatizatin and workflow clarity and simplification.

Risk management

No matter how well you’ve managed to establish a smooth and error-free workflow, unpredictabilities still happen. In this way, a CTO for hire has to be equipped with knowledge of how to mitigate risks in various areas, including:

  • Cybersecurity threats
  • Technology malfunctioning
  • Privacy compliance
  • Data breaches
  • Hardware failures, etc.

A CTO shouldn’t be afraid of challenges and must be able to handle any situation by quickly reacting to potential risks and trying to provide the most effective solution possible.

CTO basic skills

CTO for hire skill set

CTO for Hire: Average Cost

The cost of hiring a Chief Technology Officer (CTO) can vary depending on several factors. Namely, they are as follows:

  • Location
  • Company scale
  • Business domain
  • Previous experience
  • Qualification level

On average, the hourly rate for a CTO can range from $150 to $300 or more, depending on the factors mentioned above. However, it is essential to note that these figures are estimates and can vary widely based on the individual candidate and specific circumstances.

To provide a general understanding of the salary range for CTOs in different countries, we conducted an analysis of annual CTO salaries sourced from platforms such as UpWork, Clutch, and Glassdoor. Here is a compiled table showcasing the approximate annual CTO salaries across various regions:

Average CTO payrolls by regions

RegionAverage salary (annual)

USA

$333,167

Canada

$144,700

Western Europe

$127, 081

Central and North Europe

$139,000

India

$37,700

Australia

$200,000

As you can see, the numbers are very different. North America possesses the highest salaries. However, it doesn’t always result in superior quality. Asia has the lowest payrolls and usually can supply you with surprisingly qualified experts, but cultural differences may result in cooperation flow breakdowns.

At the same time, hiring CTO in Central and Eastern Europe is considered to be a golden mean. There you can find tech executives with reasonable price tags, excellent English knowledge, and deep proficiency in diverse range of technologies.

How to Hire a CTO For a Startup: 8 Steps

If you wonder how to hire the right CTO, below you can find 8 comprehensive steps:

  • Step 1. Define your business needs a CTO
  • Step 2. Outline responsibilities of CTO
  • Step 3. Identify CTO skills and experience
  • Step 4. Develop CTO job description
  • Step 5. Find a trustworthy vendor
  • Step 6. Interview tech executives
  • Step 7. Assess CTO soft skills
  • Step 8. Evaluate CTO hard skills

Let’s now take a closer look at each step:

Step 1. Define your business needs a CTO

Before starting a CTO recruitment process, ask yourself, ‘What for does my business need a CTO?’. It’s an important step, as the more specifically you outline your needs and expectations, the more easily it’ll be for you to state your requirements concisely in the job description. This will significantly minimize potential confusion and enable you to avoid dealing with underqualified specialists.

Step 2. Outline responsibilities of CTO

Following from the previous step, clearly outline the CTO roles and responsibilities within your organization, including their key responsibilities, their reporting structure, and desired qualifications. Determine what your CTO should focus on more: tech leadership, strategic planning, or both?

Step 3. Identify CTO skills and experience

It’s always better to cooperate with a CTO who already has an extensive history of working in a domain similar to yours. For example, if your company is engaged in the healthcare field, a CTO hire with experience in logistics simply won’t be able to accomplish your demands, being unfamiliar with tech stack or regulatory compliance. To avoid that, determine the knowledge of specific technologies you seek from a candidate, experience in your or similar domains, and leadership qualities.

Step 4. Develop CTO job description

Write a comprehensive job description that accurately reflects the role and expectations for the CTO position. Include details about your business, its purpose and specification, culture, as well as specific qualifications and responsibilities for the role. Even though particular details may differ depending on your unique needs, here is the short list of things you should include into your CTO job description:

  • Job title and short summary
  • Your company description
  • CTO Responsibilities
  • Qualifications and requirements
  • Education of certificates
  • Benefits and perks (if any)
  • Description of the application process

Step 5. Find a trustworthy vendor

While you still can search for a CTO for hire on your own, it’s highly advisable to utilize CTO as a service option. In this way, you’ll need your requirements for a CTO candidate to an IT vendor who’ll help you find the perfect match. Besides effectiveness and full dedication to your projects, such CTO’s act as tech executives and understand your business’s struggles.

Hiring a CTO remotely enable you to save costs, as you won’t have to allocate resource for physical collaboration attributes. Apart from this you receive an ability to collaborate on a temporarily basis if you don’t need full-time CTO.

In Cleveroad, we also provide CTO as a service. Feel free to contact us and get to know more about how our experienced tech executives help you transform your business vision into innovative and convenient software solutions.

Need to hire a CTO?

Our tech executives will consult you on the creation of cost-effective and user-friendly solution, and will help you create one, quickly engaging with your business needs

Step 6. Interview tech executives

You and your IT provider will identify experts who meet the required qualifications and experience. This will include conducting initial phone screenings to assess candidates' communication skills and fit with your company culture. You’ll be able to interview top candidates to delve deeper into their experience, skills, and suitability for the role.

Step 7. Assess CTO soft skills

As mention before, hiring a CTO is not about searching for the most tech-savvy specialist. Your candidate has to have robust leadership qualities, efficient problem-solving skills, and ability to align with your values. Focus on individuals who are capable of inspiring and motivating the tech team, and effectively collaborating with other departments if necessary.

Step 8. Evaluate CTO hard skills

Anyway, you can't get away from the tech part while hiring a CTO. Your IT vendor will help you administer tech assessments or coding challenges to evaluate candidates' proficiency in technologies relevant to your objective. You can also consider conducting practical exercises or simulations to check on candidates' problem-solving and decision-making skills in a real work environment.

Options to Hire CTO

So, you’ve decided to hire a CTO and want to cooperate with a skilled and talented specialist for a reasonable amount of money. Let’s discuss your options.

The modern IT market offers you three most widespread options to hire a CTO — cooperate with a freelancer, hire an in-house specialist, or find a reliable specialist from an outsourcing company.

Where to hire a CTO

CTO hiring options

Freelance CTO for hire

Freelance type of work is quite popular these days. However, it’s not the best option for a CTO specialist. CTO requires long-term cooperation, but freelancers can break up the project without finishing it.

Also, unless you’re a tech guru, it's quite complicated to check the candidates’ knowledge and skills.

Benefits:

  • There are a lot of freelancers, so you can find an appropriate specialist.
  • Freelancers have lower rates in comparison to other options to hire a CTO.
  • You don’t pay for freelancers’ sick days, vacations, and taxes.

Drawbacks:

  • Freelancers aren’t perfect for long-term cooperation.
  • Nobody can guarantee that a freelance CTO finishes the project.
  • Communication difficulties are possible because of a time zone difference and a language barrier.
  • No opportunity to check whether your CTO is only involved in your project.

Where to look for:

  • Upwork
  • Fiverr
  • Freelancer

Hire a CTO in-house

Hiring an in-house CTO can be a good option if you’ve already released the product to the market and it brings you some revenue or investment opportunities.

Having a CTO in-house, you can communicate and discuss all the issues without delays. However, this hiring option tends to be time-consuming and pretty expensive.

Benefits:

  • In-house CTO is completely involved in the project and interested in the final result.
  • CTO can help you close complicated deals.

Drawbacks:

  • A lot of additional expenses like purchasing hardware and software, paying taxes and office rent.
  • Hiring an experienced CTO is usually time-consuming.
  • In-house CTO gets a bigger salary than freelancers or specialists from outsourcing companies.

Where to look for:

  • Indeed
  • Glassdoor
  • LinkedIn
  • Dice

Hire a CTO from an outsourcing company

Outsourcing is quite popular due to affordable prices and access to a big talent pool. Eastern Europe is becoming increasingly popular as a result of many tech talents, low taxation, and government backing for the IT sector. It displays the ideal balance of low cost and constant high quality of the IT services.

IT outsourcing gives you access to a large pool of technical experts with both expertise and experience. The hiring process may be completed in a matter of days rather than months. So, hiring a certified CTO won't be too time-consuming process.

Cooperating with an outsourcing company, you can reduce the time required for interviewing candidates and end up paying less.

Learn about current IT consulting rates by industry and level of expertise in our extensive article

Benefits:

  • You can hire a CTO specialist with deep expertise in the required technologies.
  • CTOs from outsourcing companies have different business experiences.

Drawbacks:

  • You may face security difficulties. To avoid them, you should sign an NDA.
  • If you’re located in different time zones, you’ll need to set a schedule for calls.

Where to look for:

  • Clutch
  • GoodFirms
  • IT Firms

As you can see, there are enough hiring options for a CTO. To get a high dedication level and required experience, it’s better to hire an in-house CTO or cooperate with a specialist from an outsourcing company. Freelance isn’t the best option since you need long-term cooperation.

Best Practices to Hiring a CTO

You already know where to hire a CTO, how to do this, and how much it costs. However, there are still particular things you need to acknowledge before onboarding a tech executive. Here are 4 hints that’ll ensure a smoother CTO hiring process:

Cybersecurity awareness

Cybersecurity concerns are among the most important aspects a good CTO must be proficient in. Focus on hiring a CTO who prioritizes data security and has a strong understanding of best approaches for protecting your business’s sensitive information. They specialists has to have practical knowledge of implementing robust security measures (security frameworks, data encryption, access controls, network security, etc.), and raising cybersecurity awareness among other tech team members. This may help you ensure that your technology infrastructure stays resilient against cyber threats.

Note: Cleveroad is certified with ISO/IEC 27001:2013 standard meaning you can trust us with no risks for your sensitive data security and receive extensive assistance in meeting regulatory compliance.

Project management experience

Keeping the leadership of the tech team involves managing complex projects, sometimes multiple at once. While interviewing your future CTO, assess their experience with managing tech teams utilizing methodologies like Agile, Scrum, or Waterfall. Demonstration of the ability to plan, track, and deliver projects on time and within budget is crucial as well.

Data analytics

Today, data means everything, especially in a digital environment. Your CTO should understand the importance of data analytics and know how to leverage data to make informed decisions. In a perfect scenario, find a CTO who can translate data insights into clear and actionable strategies, which will be helpful in improving your business tech landscape.

Resource allocation efficiency

Hiring CTO is definitely a significant investment. However, don’t solely search for the cheapest option. Focus on the candidate's capability to be cost-effective in the long term. Besides technical skills, look for someone who can optimize your tech budget, explore the most beneficial cost-saving options, and help you get the most value out of your technology investments.

CTO as a Service from Cleveroad

Cleveroad is an outsourcing company that offers full-cycle software development (since 2011) across the most demanding market domains, such as Logistics, Healthcare, FinTech, Media, Retail, Education, etc. Our company provides a wide range of IT services, including CTO for hire meeting the needs of businesses of all sizes.

Feel free to get your benefits from our CTO as a Service opportunity:

  • Proficiency in the tech field from versatile CTO experts with specialization in your business domain to address the precise challenges of your industry
  • The business-oriented look at a project from both a software development and client perspective, definition of values and potential drawbacks of the product
  • Organizing the software development flow appropriately to boost productivity and efficiency
  • Seamless adoption of the new role into your internal processes, fitting into your budget
  • Tech roadmap that meets your business goals and needs, considering the obstacles and risks you experience to maximize cost-efficiency and scalability while also meeting customer requirements

Hire a CTO for your company

Get tech assistance from our CTO in implementing robust tech solutions that will be tightly integrated into your business structure

Frequently Asked Questions
How do I hire a good CTO?

Hiring a CTO for your startup can be a struggle if you don’t have technical expertise. Below, I’ve listed several tips that can help you choose the right candidate:

  • Step 1. Define your needs
  • Step 2. Outline responsibilities
  • Step 3. Identify skills and experience
  • Step 4. Develop a job description
  • Step 5. Find a trustworthy vendor
  • Step 6. Interview candidates
  • Step 7. Assess soft skills
  • Step 8. Conduct tech assessment
How much does it cost to hire a CTO?

On average, the hourly rate for a CTO can range from $150 to $300 or more, depending on the location, company scale, business domain, experience, level of qualification, etc.However, it is essential to note that these figures are estimates and can vary widely based on the individual candidate and specific circumstances.

How do I find a CTO for my business?

To find a CTO primarily ask yourself ‘What for does my business need a CTO?’. It’s an important step, as the more specifically you outline your needs and expectations, the more easily it’ll be for you to state your requirements. Besides basic CTO like tech proficiency or strong leadership skills pay attention to:

  • Cybersecurity awareness
  • Project management expertise
  • Data analytics knowledge
  • Resource allocation efficiency
Where is the best place to hire a CTO?

Here are some popular platforms where you can find qualified CTO candidates:

  • Clutch
  • GoodFirms
  • IT Firms
  • Indeed
  • Glassdoor
  • LinkedIn
  • Dice
  • Upwork
How long does it take to get a CTO?

The time it takes to hire a CTO may sidnfificanlty vary depending on factors such as:

  • Complexity of the role
  • Competitiveness of the job market
  • Hiring by yourself of from an IT vendor, etc.

On average, it may take anywhere from a few weeks to several months to identify, interview, and onboard an appropriate CTO candidate.

How can a non-technical founder evaluate the tech skills of potential CTO candidates?

You can enlist the support of your technical team or hire external tech consultants (from an outsourcing IT company) to evaluate a CTO experience and knowledge in relevant technologies and problem-solving abilities. You can also seek recommendations from your network or industry contacts.

What are the potential risks and challenges associated with hiring a CTO?

Here are some common challenges associated with hiring a CTO:

  • Find a competent CTO with experience required for your company
  • Budget considerations
  • Poor cultural fit
  • Ineffective leadership
  • Communication issues

To handle these risks, it’s better to contact an experienced software development company that renders CTO as a Service.

Author avatar...
About author

Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics

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