Are you getting the most value from your engineering time?
Calculate how much your engineering time is worth, so you can improve return on investment.
Why did I make EngineerWorth.com?
I noticed my clients and past co-workers made engineering investment decisions without running the numbers. EngineerWorth is meant to make life easier for my EngineerOverflow.com clients.
This is written specifically for CTOs. Engineering managers and engineers will also find this useful.
Engineer return on investment (ROI)
If an engineer's salary is $k USD ⇆, their fully loaded cost is x ⇆, approximately $ USD. This engineer's return on investment should be at least x ⇆, meaning $ USD annually.
We will use this engineer's fully loaded cost as the basis for the rest of our calculations. Drag ⇆ the blue numbers to make adjustments. Your changes do not leave your computer.
For reference, Google makes ~$1,200,000 USD in revenue per employee.*
How much is an engineer's time worth?
- 1 hour is worth $ USD.
- 8 hours are worth $ USD.
- 5 work days are worth $ USD.
- 3 months are worth $ USD.
- 1 year (48 weeks) are worth $ USD.
Do not compare this with a consultant's rates: their value can much be higher and they are very different from employees.
How much is a project worth?
A team with engineers should eventually be working on a project with more than x return on investment, meaning >$ USD upside annually.
How much is maintenance worth?
Enterprise companies expect to spend of the cost of the project in maintenance. If the project took -engineers to create over months time, then you should invest $ USD annually to keep the project running. In other words, ~ engineers doing maintenance.
How much does a one-on-one meeting cost?
A minute one-on-one costs $ USD. One-on-ones are an important part your engineering organization. One-on-ones should always have an agenda.
How much does a meeting cost?
A minute meeting with engineers costs $ USD. Meetings should always have an agenda.
How much do tests cost?
Tests which take minutes, and run times a day cost $ USD per engineer per day. This costs a -engineer team $ USD annually. Yes, engineers do work while their tests are running, however we're usually unable to continue coding until tests finish.
How much is a candidate worth?
There are a few ways to look at this:
- The candidate's future value to you
- The cost to extend an offer
- The value of referrals from the candidate, whether or not the candidate is hired.
Let's say you extend offer to every engineering candidates. of your offers are accepted, and the engineer becomes a full-timer. By these numbers, each candidate has an expected future value of $ USD annually.
How much is replying to an engineering candidate worth?
A candidate you never reply to will never refer their friends to you. It takes minutes to graciously reject a candidate over email, costing you $ USD. If in refer a friend because they were impressed by your interview process, you stand to make $ USD on every gracious rejection.
How much is an on-site worth?
engineers doing interviews for minutes each costs you $ USD. The candidate's time is worth $ USD. The total investment in an on-site from both parties is $ USD.
If you invest engineering hours total on your interview process, that's $ USD.
How helpful was this?
Email me and tell me: david åt dtrejo.com
david åt dtrejo.com
Brown Computer Science grad
Past engineering experience includes Cloudera, Voxer, and Neo
Based in San Francisco
Need help hiring engineers? EngineerOverflow.com
Get help from an engineer who knows what experienced engineers want out of their careers ☛ EngineerOverflow.com.
PS Special thanks to Jonathan Stark, Sam McAfee, and Jorge Colon for their feedback. Also, thanks to Bret Victor for Tangle.
PPS Want to do these calculations yourself? Check out Guesstimate, a probabilistic spreadsheet for when you're uncertain (not my project).
* via Business Insider / Company Filings