Turnover rates of employees in the technology industry have been reported between 9.1% and 10.6%, proving that properly onboarding and retaining developers has never been more important. Developers are in high demand and oftentimes have the luxury of switching jobs as they please, so employers need to be focusing on how to not only attract the best tech talent, but keep it as well.
Unfortunately, there’s no universally approved statistic on the monetary cost of losing a developer – it really depends on their skill level, their salary, and the company itself. Regardless, here are a few stats that help speak to the issue.
According to a talk software engineer Kate Heddleston gave on the topic of technical onboarding, the total cost of losing an employee can range from tens of thousands of dollars to 1.5 to 2 times their annual salary. Because of this, Heddleston says that “in order to create a long-lasting relationship with a new team member, onboarding needs to be a focus from the offer of acceptance/start date all the way to reliable independence.”
Dave Laribee, in a post he previously wrote for CodeBetter.com, brings up a great point about the process of replacing a developer, saying, “Yes, you might be able to replace someone at a lower annual salary, but you have to take into account the complexity of your code portfolio in how long it’ll take to make that person productive. A $60K/annum employee may very well take $120K before reaching the productivity level and contribution of the developer who left the team.”
In terms of monetary costs, you’ll need to take into account the cost of hiring a new developer (job listings, recruiting fees, and advertising), the cost of onboarding a new developer (training and management), and more. The non-monetary costs could include issues like a loss of productivity and engagement from other employees, as well as a potential loss in employee morale and subsequent increase in turnover.
If the numbers above seem scary to you, you're not alone. No one enjoys losing and replacing employees, especially those with highly-coveted technical skills needed to run your business. To help reduce these worries, take some time to review your onboarding process for new developer employees -- this one change could make a large impact on the retention of your technical talent.