Developer Retention: The Costs of Onboarding Software Developers

Tech talent shortages pose a major challenge to businesses of all sizes, but people often overlook the costs associated with high employee turnover. And even if you find and hire talented developers, itself a difficult task, there’s still no guarantee they will stay. In the software development industry, it can be even more challenging to retain talent than it is to hire them, with the US Bureau of Labor Statistics reporting that the demand for software engineers with the right skill set is expected to grow 22% from 2019 to 2029.

There is an average of 13.2% employee turnover among tech companies, rising to 21.7% for embedded software engineers. That’s significant considering it takes one to two months on average to bring a developer up to speed. More importantly, there’s the phenomenon of Institutional Memory Loss–where companies lose key knowledge from the people that leave, which more often than not means a significant rework of products or processes.

Developer retention should be a strategic initiative. It must become a business priority aimed at attracting and retaining the best talent, empowering them to perform, and giving them the resources and autonomy they need to succeed. 

Many seasoned developers leave their job because they are not satisfied with the company's work culture. A major reason for this is a lack of career growth opportunities. They may feel that they have reached an impasse, and there are no prospects of moving up in the company any time soon. These people might be very experienced, but their skill set does not align with what the company needs at the moment- leading to feelings of dissatisfaction which impacts employee retention. A Gartner study has found that 40% of departing employees cited a lack of future development as a key driver in leaving their employer.

Additionally, companies may not offer enough vacation time or flexible schedules for employees seeking a better work-life balance. This will also make them unhappy and ultimately lead them out the door if nothing changes within these parameters. Leaders who don’t value their employees’ input or recognize efforts make employees feel unappreciated. This results in negativity which can quickly infect entire teams and makes it difficult to retain top talent.

Developers are like artists. They need to be inspired and have a sense of purpose or they will leave for more dynamic pastures. They will quit because they feel stifled, a feature of an over-rigid development firm. Most developers thrive in open spaces that allow their creativity to flourish. Allowing time where they're able to explore these ideas is important for long-term success.

Employees don’t leave the company, they leave their boss or co-workers.

Each person has their own unique needs, and those needs are constantly evolving. Managers have to identify those needs quickly and manage them smartly. When leaders pay enough attention to employees’ level of engagement and proactively address the issues developers have, the chances of retaining employees are higher.

An organization’s institutional memory—that collective set of facts, concepts, experiences, and know-how accumulated by an organization—is a valuable company asset.

Veteran employees are of great value to a company. This isn't new. Retaining those employees, though, is vital to preserving the knowledge and experience they have but not every business does this as well as it should.

Product innovation development is one of the most important ways for companies to maintain their competitive edge in an ever-changing business environment. The collective knowledge creates a pool of information that can spur innovation and creativity while improving problem-solving capabilities.

Organizational information also plays a role in a company’s productivity. When companies have vast data sources at their disposal, they can rely on that information to avoid making repeated mistakes. It also has the additional benefit of enabling employees to perform routine tasks more quickly.

What happens when a veteran employee leaves the company? Companies that don’t have a plan to retain this information, simply lose all that knowledge. Once lost, it’s often difficult to replace and especially true when it comes to experience-based best practices and know-how.

Most companies have this knowledge spread across a variety of locations, including workstations, veteran employees, file shares, and physical manuals. As a result, the information is often misplaced. Although storing information digitally is the optimal solution, only 50% of corporate data worldwide is stored in the cloud.

Turnover is expensive. Companies could lose up to 250% of the annual salary for each employee lost. And, it's not just the smaller companies that face this problem. The average tenure for employees at Google, for example, is 1 year.

Employee attrition negatively impacts staff morale, dulls focus, and puts pressure on your senior staff as they have to go back to the dreaded hiring process. Additionally, when key employees leave, companies lose valuable information which requires considerable recovery efforts.

It takes on average 35 days to hire a new developer. With this comes the costs of background checks, onboarding, and training.

A developer has to spend time getting familiar with the specifics of the product they’re developing: the codebase itself, the architecture, the coding conventions of the development team, and other elements that are specific to each company. Productivity will thus only peak after some time for any engineer. There is also a drag on the rest of the team any time someone is getting up to speed with a software baseline, which likewise can lead to productivity dips.

When employees leave, it forces existing employees to pick up the workload. Overworked employees may decide to leave as well. If the cycle continues, companies will continue to face issues with productivity and revenue loss.

A LinkedIn study has found that lack of career opportunities (45%) is the number one reason employees leave. Some 41% of employees quit because they are unhappy with leadership, 36% look for greener pastures as a result of work environments not measuring up to their expectations, and 36% hit the job boards seeking more challenging work.

But this summation by Aaron Decker, a full-stack software engineer from ERE, perhaps captures the essence of why developers walk out of jobs:

“Many companies don’t give developers challenging work. As a result, projects fail, work becomes unfulfilling, and employee experiences turn into death marches… Software engineers are addicted to learning. New technology, challenges, languages, paradigms. Programmers like it when you throw this stuff at them. What they don’t like is stagnation.”

Then, there’s low morale, feelings of being overworked, and of course, office politics.

Companies that accept turnover as a normal business occurrence are losing employees unnecessarily. According to a recent survey, 52% of employees said their managers could have done more to prevent them from leaving.

What’s more, 90% of Millennials say they would prefer new or additional benefits and perks over a pay raise, according to a survey by Glassdoor. Clearly, money isn’t the only factor in attracting and retaining top talent, but there are steps you can take to help retain your best and brightest.

Developers want the option to manage their work schedule to accomplish things in a manner they see fit. In addition, employees value a work-life balance. They don’t want a job that completely isolates them from their family and life at home. Giving developers the option to work remotely will help them feel more connected to their families while remaining productive at work.

Technology evolves rapidly and developers want access to new tools to help them solve problems more efficiently. They also value new technology in keeping their skills current. Without these opportunities, their skills may become outdated. As a result, they lose the ability to keep up with new technologies that can drive innovation.

Developers have to meet very tight deadlines, which very often, are set by people who don't fully understand the complex nature of the job. This can lead to a stressful work environment that can quickly lead to burnout, especially among employees who are expected to work overtime on a regular basis with few opportunities for time off.

“I see a lack of appreciation for employees as contributing to high turnover rates. Something as simple as providing performance-based incentives or recognition programs can help your staff to feel like they have a future with the company,” notes Darrell Rosenstein, founder of The Rosenstein Group.

Keeping developers engaged and productive at work should be a strategic priority designed to unleash developers’ creativity, provide opportunities to learn new skills, and respect the desire to work autonomously.

The challenge with innovation is finding sources of creativity. Successful companies draw upon employee knowledge and creativity to discover new ideas. Thus, retaining software developers needs to be more than simply assigning tasks and assuming that paying a good wage is enough. They need to empower their employees to take risks, explore ideas and make decisions that can drive innovation.

Developers don’t want to be micromanaged. Doing so stifles their creativity and lowers their motivation. Give employees the freedom and space to explore their ideas for solving problems and implementing solutions.

Not all risks lead to failure. Allowing employees the freedom to take risks could result in solutions that may not have emerged with a risk-averse approach.

Sometimes risk-taking can lead to mistakes. Managers should view these as opportunities to grow and create an environment that drives innovation, mistakes, and all.

Take a genuine interest in your employees as individuals, but mostly, let them do their jobs and manage their own time.

As Sir Richard Branson once said: “Train people well enough so they can leave. Treat them well enough, so they don't want to."

According to Innovation Consultant Paul Sloane, the goal for empowerment is to “have everyone think of themselves as an entrepreneur who has the right and the duty to solve problems and seize opportunities—not to offload them to others.”

Developers don’t want to rely on managers to dictate their tasks, how to accomplish them, or make decisions that affect their work. Managers should give them enough freedom to lead themselves towards completing these tasks.

Managers should encourage developers to be a part of the decision-making process. Their ideas and insights show them that you value their opinion, skills, and expertise.

It can be frustrating for a developer to be assigned a task without the proper resources and support. Help them (and the company) succeed by giving them what they need when they need it. That includes technology, training, access to key leaders, and relevant documentation.

Give employees autonomy when assigning work. Set boundaries and expectations, but allow them the space to accomplish tasks in a way that works best for them. Overall, it is the finished product that matters more than the process of getting there.

Opportunities to grow are critical to retaining software developers. Employees want the opportunity to advance their skills. They want to feel that their skills are relevant and that they are equipped to handle their work.

Here are some ways to give developers the learning opportunities they need to thrive.

Mentorship is a valuable aspect of professional development in the tech industry in general, more especially vital in a rapidly evolving field like software. Learning is continuous for developers. They code by trial and error, ask questions on Stack Overflow, read blog posts, and learn from their peers. Having a good mentor can make this everyday learning process easier and more focused. Most importantly, it is a crucial tool for career growth.

When employees learn at their own pace, they can take the time they need to digest new concepts. Instead of feeling rushed to meet deadlines, they can grasp concepts at a pace that works for them. This way, employees set their own outcomes based on their specific needs and aspirations. They’re able to keep a pulse on their progress and determine whether they are on track, and can adjust accordingly. The key to keeping your top talent content is giving them ample opportunity to grow and cultivate their skills.

Employee training is not a one-off event. It should be repetitive to the point it is habit-forming. When companies foster a culture of learning, it encourages continued growth that enhances employee skills and better equips them to solve problems. Offer your employees incentivized training in relevant new technologies and encourage them to conceive innovative tech solutions.

Employee retention is a high priority for managers in today’s marketplace and high retention levels begin with high-quality employees who are culturally compatible with the organization. If you find that many of your new hires leave before they hit the six-month mark, revisit your recruitment process or recruit from new talent pools.

Companies that foster hiring longevity conditions are better positioned to improve employee retention rates as the need for software development and development talent continues to grow. Building a strong collaborative culture can also improve employee loyalty and job satisfaction.

Balancing developer retention with attrition is an expensive problem that can be avoided. Companies must foster developer retention by providing employees with flexible work arrangements, the resources they need, and growth opportunities.

Growin ticks all the boxes, and when you partner with us, you’re assured of getting a team of highly experienced, dedicated, and invested developers so you can benefit from improved scalability and efficiency.