When an employee leaves, it disrupts the typical day-to-day operations for your business. How does developer turnover impact your business’s financial health? Let’s find out.
Employee retention is always a recurring and expensive HR concern. Among the many HR challenges you face, developer turnover significantly affects your team’s productivity and finances.
There are warning signs that you can note to know if a developer is at risk of leaving. The good thing about it is that you can have data that you can observe and track. With that knowledge, you can improve processes and increase employee satisfaction to prevent developer turnover.
In this article, we’ll discuss the common reasons for developer turnover and its impacts on business. Here is the list of topics we’ll cover today:
Prevention is better than cure. So, it is best to understand the common reasons why developers leave. Let’s discuss the top reasons that trigger developer turnover.
Why Developers Leave: 11 Reasons
A survey by Stack Overflow revealed that 62.1% of employed software developers in the US are also open to new opportunities. This shows that many developers are either unsatisfied with their current jobs or are looking for better opportunities. Let’s further discuss these top reasons.
1. Salary and Benefits
Companies that offer high wages and benefits are most likely to have high employee retention rates. That is only one of the many reasons why your employees may decide to leave. Other companies might poach your top performers and lure them with a higher salary and better benefits. How can you avoid that?
You can continually improve employee satisfaction by providing incentives for their hard work. Another way is to reward loyalty with an annual increase. You can also check other companies and see how much they are offering for hard-to-fill jobs.
There are so many ways for your employees to feel financially rewarded. All you have to do is monitor, take notice, and reward the fantastic work they do for you.
2. Work and Life Balance
We all have different priorities. While we are working on getting money, it is also crucial to maintain a certain level of satisfaction outside work. Your organization must encourage work and life balance.
Some companies are notoriously bad at asking their development teams to work 50-70 hours a week. Some companies force their developers to be on-call 24/7. Others require late-night daily meetings with offshore teams. These factors will cause developers to burn out eventually.
Sometimes, it might be necessary to ask them to work more than 40 hours a week, overtime, or weekends. Whenever that happens, check in with them regularly to gauge how it affects them.
3. Little to No Opportunity for Growth and Development
People will discover growth opportunities once they get onboard. Over time, your employees will be able to determine their career path and future with your company. You must create a culture that nurtures their growth; this is one way to manage existing talent effectively.
Developers aspire to move up their seniority levels or career paths into leadership roles. Be sure to check in regularly with what they want to do long-term to help foster their growth.
4. Developers Need to be Challenged
Software development is all about problem-solving. Developers enjoy a good problem and a good challenge to solve. You need to ensure that your developers are not bored working on the same project for too long.
Consider moving developers around the company to different projects to give them a new challenge. Make sure you keep them learning!
5. Flexible Work Arrangements
Due to the COVID-19 pandemic, working remotely has become the new norm. Developers are now resigning from companies that are forcing them to go back to the office.
Meanwhile, some are tired of working remotely and ready to work in an office every day. Consider having a flexible work environment and allow your developers to work under their preferred setup.
6. Focus on Speed and Not Quality
One of the biggest frustrations with developers is not producing a high-quality product. Nothing is more stressful than your boss telling you to ship an incomplete product that is not thoroughly tested.
Working in this type of environment adds pressure to developers and demotivates them to work.
7. Constant Change in Requirements or Projects
Nobody likes to work in an environment where the top priority changes every day. Creating software takes time.
Nothing is more frustrating than getting projects 80% done and then being advised to switch to a different requirement. You especially can’t do this in the middle of a planned sprint. At least, let the developers finish the current sprint!
8. Disagreement over Product or Architecture Direction
A lot of developers put their heart into what they do. At times, a developer may leave because they don’t agree with the product direction or architecture. This also happens when the developer is excited to work on new technology, and the management team won’t let them.
For example, the team wants to modernize an application by converting it to use Angular. Because management never allows it, the developer leaves to learn and do Angular somewhere else.
9. Desire to Do Something New
Continuing the theme of the previous item, developers often leave because they want to do something new. Developers want to keep their skills current.
They don’t want to do Perl or Cobol development and then several years later can’t get a job anymore. Developers are likely to move to new jobs to work on current, modern, and cutting-edge technologies.
10. Frustration with Company Culture or Communication
Some employees are huge on company culture and communication from the leadership team. This is especially true in startups where developers always wonder how the company is doing, impacting their job security. It is vital to create a good work culture for your employees and have open communication with them.
You can start by giving them an overview of where the company is at and where it is going. Having transparency will entail trust for both parties.
11. Too Much Stress or Burnout
Software development can be stressful. This is evident for companies with crazy timelines and constantly shipping updates of buggy products. Developers quickly get tired of putting out fires every day.
Another common problem is developers who try to do much instead of delegating to others. They work extra hours and try to solve every single problem. This causes them to burn out eventually. It is essential to monitor your employees to gauge their stress levels.
When software developers decide to leave, there is a broad spectrum of reasons for the root cause. Get a better picture of what they need and how you, as an employer, can help support them.
You can do this by monitoring performance and checking in with your employees. Now, what are the implications of a developer turnover?
The Effects of Developer Turnover
When an employee leaves, the first thing that you will notice is a change in employee morale. Not only do you lose an employee, but the ones who stayed might also have lost a valuable friend.
An Officevibe study found that 70% of employees agree that having a work friend increases their work satisfaction. This contributes to happy work life.
Furthermore, developer turnover also decreases productivity. You will have fewer people working on a project for a period of time. In effect, the remaining employees will get overwhelmed with the amount of work they need to finish.
Employee work satisfaction may dwindle to the point where your developers might not perform at their optimum level.
Two Types of Turnover
There are two types of employee turnover: voluntary and involuntary. Voluntary turnover is when an employee leaves the organization to pursue other work opportunities.
Involuntary turnover is when employees are cut off from payroll due to poor performance. Though these types are two different situations altogether, they still achieve the same effects of a turnover.
As you can see, developer turnover affects morale and productivity. With those factors combined, you also end up losing money, not to mention the development impact it incurred. An SHRM study found that every time a business replaces a developer, they lose about 6 to 9 months’ worth of salary.
Modest turnover rates will still cost you a ton of money. Let’s say you have a hundred employees with an average annual salary of $50,000. Your turnover costs could amount to $2.6 million per year in lost productivity. This involves the costs of recruitment, hiring, onboarding, and training.
Bad Hires are Very Expensive
While replacing a good developer is costly, hiring someone who is not the right fit is also expensive. When you encounter a bad hire, there is a high probability that your clients will be dissatisfied.
Dealing with the damages costs you time and resources that will hinder you from succeeding. When you lose your best people, you lose winners.
Why does developer turnover cost so much?
Developer turnover is more than just an unsatisfied employee. Instead, it reflects your candidate experience as a whole. You must consider each milestone from recruitment, onboarding, and up to the end of their candidate journey. That’s why it is vital to prevent turnover whenever possible. What are the costs?
There are two types of costs whenever a developer turnover happens– direct and indirect. Direct turnover cost is the amount of money used to hire a replacement developer and the costs associated with training them. The goal is to get the new hire at the same productivity level as the employee that left.
You also have indirect costs, where the team’s productivity decreases because of the incomplete workforce as before. It takes between 8-12 weeks to get a replacement and a month or two to get them into the groove. During that time, members of your software team will have more work to do with the same deadline.
Additionally, your best software developer might push back with their essential tasks to train the new hire. As the turnover rate increases, your costs also increase.
Built In reports the following average costs when replacing an employee:
- You spend at least $1500 replacing hourly employees
- A potential loss of 100 to 150% of the employee’s salary who hold technical positions
- You lose up to 213% from those who are in C-Suite
Developer turnover is not easy, and you have to make sure to prevent it from happening. In conclusion, it is costly and disruptive to lose a good employee. You need to strategize how to avoid developer turnover. Let’s discuss that in the next section.
How to Reduce Developer Turnover
Maintaining employee satisfaction and retention are some of the most critical HR challenges. When it comes to recruiting and hiring, you spend so much time and money just to attract employees.
The good thing is, 75% of developer turnovers are preventable. Still, you must keep your developers satisfied by boosting employee experience. Here are some tips that you can implement in your organization today:
1. Improve your candidate experience journey
Make sure that from hiring up to employment, their journey will make an impact. It is crucial to have good relationships with your employees. This won’t push them to look for other companies.
2. Don’t be afraid to discuss pay and benefits
Pay transparency is something that will help empower you as an employer and also your employees. A study by SpringerLink revealed that transparency in wages allows employees to collaborate more effectively.
Transparency also reduces the risk of discrimination in the workplace, where women get a lower paycheck for the same roles.
Check your payroll scheme and make improvements where your developers get the right paycheck for their skillset. Do your research and match existing developers with the standard industry wages. It will only be a matter of time when you will see productivity and employee satisfaction shoot up.
3. Focus on your people and support career development
Your developers know that they need to be up-to-date with the latest technologies to be more effective in their work. You can support that by giving them access to training, lectures, and events related to their fields. This will help them build a sense of camaraderie and community in the IT space.
Moreover, promotion is not the only way to motivate your employees. You can integrate leadership programs, counseling, and career development services within your organization. Empower your employees to take control of their career path and go beyond honing their skills.
4. Offer More Flexibility
You can also offer work flexibility. It could be allowing flexible work schedules or time off. At Full Scale, we allow our employees to take extended breaks when they need them the most.
Providing reasonable time off options will help increase productivity and improve your employees’ work and life balance.
Recruiting & Hiring Developers is Time Consuming & Expensive
Handling recruitment, hiring, and retention in your organization is not an easy task. You have to determine your priorities for your business. You need all the support that you can get. Companies like Full Scale help fix HR problems by providing our clients with a qualified pool of employees.
All you need to do is set your business priorities straight. You don’t want to juggle too many moving parts of your business. If you’re going to encourage healthy working habits for your employees, you should also be able to do so yourself. One solution is to hand over hiring and HR activities to companies you can trust.
Reduce Developer Turnover Expenses with Full Scale
Using Full Scale as your offshore development partner means you don’t have to worry about developer turnover. We work very hard to ensure that your team is happy. If a team member leaves, we automatically replace them. You don’t have to worry about spending time on recruiting or paying costly IT recruiters.
At Full Scale, we nurture our top talents and help support them to live their best lives. We encourage our employees to make referrals and practice good candidate experiences for the ones under our care.
Furthermore, we want our clients to succeed, and the same goes for all members of our organization. Our amazing pool of qualified software developers and engineers is ready to work with you. We do all the heavy lifting involved in HR for you.
Book a call with our team today to learn how we can help build a software development team.