Building Talent In Tech Costs Exponentially Less Than Sourcing Talent

Posted on August 13, 2019 by BWBacon. Tagged: Resources for Entrepreneurs, For Clients

Of course, everyone understands that finding great tech team members is a huge undertaking of time, energy, and money. It's a tough world out there and many teams are doing everything they possibly can to keep their candidate pipeline full. But, not a lot of resources out there take those costs, quantify them, and then compare that cost to just building talent in the team internally... So, that's what we did! We tried to aggregate the average cost per in the tech world in terms of time, energy, money, etc. Then looked at the cost-benefit of investing in and building the skills of the talent you already have.

In this post, we will only focus on the opportunity cost and hard costs associated with finding talent using internal recruitment efforts versus third-party agencies (like ourselves), because the fee structure for agencies can vary greatly from company to company.

Cost Per Hire For Internal Recruiting Teams

So, what does it actually cost in dollars to land a new hire in tech? There are some different numbers floating around out there, but they all agree on one thing... It's not cheap! did a great job of doing some really simple math based on the time it takes to do all the steps necessary to land a new hire. Assuming the technical hiring manager has an average salary of $120K and has an expected 3X multiplier of salary to delivered value to the company, they were able to put a number to the opportunity cost... Basically between resume screening, interviews, and code reviews the number is... Ready for it?? -- $22,750! That's a lot of cheddar!

Devskiller did a similar exercise and even put together a great infographic to look at. Not only do they state that the combined opportunity and hard cash costs are roughly in the $22,000 range, but they also show that it can cost up to $8.5K of management opportunity cost on top of that.

Are you getting the picture? It's a lot of money to source new tech talent, which you already knew of course. But with that in mind lets look at the alternative of building out internal talent and the benefits that come from reinvesting.

Cost Of Building Talent In Tech Teams

Now that we have that terrifying picture front and center in our minds, let's look at the costs of building your internal talent out. Here are some Q's and A's that address some of the best options:

What's a normal annual spend that a company should expect per person on skill-development?

The cost of upskilling your developers can range from free + time with options like Codeacademy (they have a pro version too that has more course for roughly $240 a year). Or you can use a more enterprise-focused training course like Pluralsight that runs $549 a year but includes team skillset assessments, progress visibility, and analytics. Either way, exponentially cheaper that

What are the best places to spend on employee development?

The best bang for the buck for your roster code-committers is definitely in upskilling their technical prowess, but management and Scrum-developer training ($1900) can pay huge efficiency dividends as well. MIT even offers a technical management program (roughly $4,000) that can be done online if you have a contributing developer looking to shift into a developer/manager.

Benefits Of Building Talent In Tech Teams

•Employee happiness/retention length extension

Being able to create an impact on the team a developer is working on is not only directly tied to team success, but also to employee satisfaction happiness. Employee satisfaction and happiness are directly tied to retention. Makes sense, right? So, basically, empower your employees to make an impact with upskilling and you will keep them longer. It's the circle of life (thank you, Lion King).

•Mentorship opportunities (which are tied to employee satisfaction)

Going into the mindsight of being a company that is not just a product building company, but a team building company opens the doors to other major opportunities. We interviewed over a dozen rockstar candidate/developers we have worked with in the past and they all shared many similarities. One of the things they value that really stood out was mentorship opportunities. Great talent wants to share their knowledge and it helps them learn more in a different way while upskilling your team for free. It's a huge win-win.

•Greater average employee skillsets = exponentially great development efficacy

There is a number that floats around a lot in the space, which is that a highly skilled senior developer is on average 10X more productive than a junior developer. This is a huge opportunity for employers, not only do you have to spend less on talent sourcing, but you get exponentially more production for your dollar if you invest in upskilling.


The math is simple and clear. Building your tech talent internally is exponentially cheaper than having to keep finding new candidates due to churn. Please let us know if there is anything we missed in this post or if you do happen to need help finding some more rockstars.

Here at BWBacon Group, we know and live what you are experiencing as an employer or job seeker in Denver, Boulder, Dallas, San Francisco, New York City or any of the other cities we work in. We believe great recruiting starts and ends with understanding people.

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