The True Cost of Losing Engineers

Companies can't afford to lose their engineering talent, yet those same companies haven't taken the time to invest in learning & development specific to their engineering team. How much is skipping training really going to cost you?

Find Your Cost

As you answer these questions, you'll learn just how much neglecting the development of engineers is costing you.

I'm competing for talent in . My engineering organization has people in it, and last year, we lost engineer(s).

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Most engineers & engineering leaders never receive any kind of training. At Lead SV, I've made it my mission to make better engineering organizations through training engineers and their leaders. It's like having a Learning and Development team in your back pocket. Reach out and I can share how companies similar to yours got their development efforts started.

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It Costs More Than You Think

Losing even a single employee can be decimating to your productivity as a team. Based on the numbers you provide, we're able to calculate your turnover rate. However, to fully understand how big of an impact losing an engineer will be, we'll need to make some educated guesses about the replacement and ramp up costs for engineers in your company.

It costs 75% of an employee's salary to replace an engineer. Factoring into this percentage is the recruiting and sourcing costs, possible fees for external recruiting agencies, changes in price to benefits, and the possible issuance of new stock options or RSUs in addition to those outstanding. In extreme cases, the cost can be more than double!

Onboarding will take four and a half months until the engineer is fully effective. Interviews with top Silicon Valley companies estimate that new employees spend about half of their time during the first three to six months at a new company learning the systems, processes, and tools required for them to be effective. Given the large variance in responses for onboarding time, 4.5 months is exactly halfway between the extremes.

These two values, paired with data from PayScale for engineering salaries around the United States gives us insight into the real cost of losing a single engineer. With data from Gallup (1, 2, 3) about 73% of employee attrition can be attributed in some manner to growth and development, wether it's a bad leader or a lack of opportunity.

Very highly paid jobs and those at the senior or executive levels tend to have disproportionately high turnover costs as a percentage of salary (up to 213 percent)

There Are Significant Business Costs to Replacing Employees - Center for American Progress
Slightly more than half of employees (51%) say they are actively looking for a new job or watching for openings, and 35% of workers report changing jobs within the past three years.

Are Your Star Employees Slipping Away? - Gallup
Among technology titans, disruptors, and large pre-IPO companies, the longest example of employee tenure is Facebook with an average employee tenure of just 2.2 years.

The Average Tenure at Major Technology Companies - Payscale Infographic
50% of Americans have left their job to get away from their manager at some point in their career.

State of the American Manager - Gallup