Understanding Costs of Turover for Key Swe 2023 10 30

Context

The cost of turnover for key software engineers is a significant concern for businesses. While it’s often said that no one is irreplaceable, the impact of losing a tenured software engineer can be detrimental to a company’s success. I will share insights and data from my experience as a CTO of a previously sold company that I worked at. I’ll not go deeply into the data, but walk through some differences and highlighted numbers. With nearly fifteen years in the tech industry, I’ve observed a common pattern across different teams and organizational structures: teams with tenured software engineers consistently outperformed their counterparts. In this article, we’ll explore how retaining key software engineers can directly influence a company’s goals and success.

The Value of Tenured Engineers

In my experience, the most efficient engineering teams have one thing in common — a tenured software engineer who has been with the company for three years or more. These engineers often hold more senior roles, but this isn’t a strict rule. The efficiency of engineering teams can be measured through key performance indicators (KPIs) like cycle time, change failure rate, DDR (defect detection ratio), code churn, and deployment frequency. Teams with tenured engineers typically outperform others by approximately 70% in areas such as code churn, bug rates, and DDR, indicating higher quality and value delivery to the company.

Context and Value

It’s easy to attribute the success of tenured engineers to their deep contextual understanding of the company’s operations. However, there’s another aspect to consider. Tenured engineers don’t need to constantly prove their worth to the company, which contrasts with new employees who may feel the need to continuously validate their value. This difference can lead to higher bug rates, increased DDR, and greater code churn among new engineers. For instance, teams with new engineers may initially show a 20% increase in cycle time, but this soon escalates to a 50% slow down within a quarter, accompanied by a nearly 70% rise in unplanned work, including fixing production bugs and code churn. This can be particularly problematic when your company’s OKRs (Objectives and Key Results) are directly tied to your ability to deliver features.

Key Points to Consider of having tenure software engineers

Avoid Mistakes from the Past: Tenured engineers bring historical context that can help avoid repeating past mistakes.

Focus on Delivering Value: Tenured engineers are more focused on delivering business value, rather than proving themselves, contributing to improved overall efficiency.

People Develop People: The exchange of knowledge and experience between tenured and newer team members fosters growth and development, benefiting the entire team.

Hire and Onboarding Costs: Hiring and onboarding new talent can be costly and resource-intensive. Instead of investing excessive energy in these processes, consider retention as a means of enhancing hiring efficiency.

That said, what you as a leader of a software engineer team might do? In a nutshell, I highly recommend you focus your energy on retention and succession plan, that said, here are some tips to help you keep these valuable team members engaged and motivated:

Competitive Compensation and Benefits:

Ensure that your salary and benefits packages remain competitive in your industry and region.

Offer performance-based bonuses and raises to reward tenure and exceptional contributions.

Professional Development Opportunities:

Provide ongoing opportunities for skill development and career growth.

Support employees in attending conferences, taking courses, and obtaining certifications.

Flexible Work Arrangements:

Allow for flexible work hours or remote work options to accommodate work-life balance and personal preferences.

Recognition and Appreciation:

Acknowledge and appreciate the contributions of tenured engineers through regular recognition and praise.

Celebrate work anniversaries and milestones.

Provide regular feedback and performance evaluations.

Challenging Projects:

Assign tenured engineers to meaningful and challenging projects to keep them engaged and motivated.

Work-Life Balance:

Encourage a healthy work-life balance to prevent burnout.

Implement reasonable working hours and discourage excessive overtime.

Strong Company Culture:

Foster a positive and inclusive company culture that values teamwork, collaboration, and diversity.

Create an environment where employees feel respected and comfortable.

Employee Involvement:

Involve employees in decision-making processes and allow them to have a say in company policies or projects.

Mentorship and Knowledge Sharing:

Encourage tenured engineers to mentor junior team members, fostering knowledge sharing and collaboration.

Retirement and Succession Planning:

Develop a plan for transitioning the knowledge and responsibilities of retiring tenured engineers to younger team members.

Non-Monetary Perks:

Consider offering non-monetary perks like extra vacation days, wellness programs, or team-building activities.

Open Communication:

Maintain open and transparent communication channels, so employees can express concerns and ideas.

Long-Term Vision:

Share the company’s long-term vision and goals with employees to help them understand their role in the organization’s future.

Remember that the key to retaining tenured software engineers is to make them feel valued, supported, and continuously challenged in their roles. Regularly assess their job satisfaction and implement improvements based on their feedback to ensure their continued commitment to your company.

Conclusion

Whether you’re managing an engineering team or leading a company as its founder or CEO, it’s crucial to recognize the importance of retaining key talent. The impact of losing a tenured software engineer goes beyond just filling a position; it can significantly affect your company’s productivity, quality, and ultimately, its ability to achieve its goals. Prioritizing retention as a key strategy can lead to long-term benefits for both your team and your organization.