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It's virtually impossible for most companies to manage someone out in less than six months. They're earning full freight salary for each of those six months.
by patio11 10y ago
It's virtually impossible for most companies to manage someone out in less than six months. They're earning full freight salary for each of those six months. Many of your overhead costs like e.g. recruiting fees, new machinery, training, come due within that period and are not refundable.
This only costs actual cash outlay, not opportunity cost of other team members (could be coding but are instead spinning up the new engineer), overhead from management salaries, cost to redo work of an other-than-productive employee, etc.
At Valley salaries hiring someone for a day costs you $100k++. In more moderately compensated locales, lower bound it at $40k or so.
- sethev 10y ago"Managing someone out" is a large company concept. Once they realize the mistake, the owner of a small company can get rid of somebody immediately. It can take surprisingly long to realize there's been a hiring mistake, though.
- throwaway_374 10y ago>>At Valley salaries hiring someone for a day costs you $100k++. In more moderately compensated locales, lower bound it at $40k or so. Sorry, WHAT? >>pportunity cost of other team members (could be coding but are instead spinning up the new engineer) Hey I've got news for you. Developers don't just waltz in and start coding from day 1, they need to be brought up to speed on the systems. Your business-nosed attitude needs a reality check. Developers are human capital, not robots.
- napoleond 10y ago> Your business-nosed attitude needs a reality check. Developers are human capital, not robots. You're being unnecessarily defensive. Just because people are people does not change the fact that it costs companies money to onboard them. This whole subthread is "why is it expensive to hire people?" and one part of the answer is "because you have to pay them money while you train them, and pay their colleagues while they do it". It's not a reflection of any unrealistic expectations--it's the opposite. > Sorry, WHAT? Computer, desk, office space: $5k Job ads: $500-3k per hire is not unrealistic Time spent sifting through applications: Easily 5 hours per week. If the posting is up for a month, that's 20 hours. That translates to about $1.5k in fully loaded costs for an employee with a $100k salary. Time spent conducting phone screens: Assume 50 phones screens for one position. 30 min per person (20 minute conversation, 10 minute notes/break). 25 hours. Approximately $1.8k for the same $100k employee. Further interview rounds: Assume about 10 candidates per position. Assume at least 4 person-hours per candidate, plus at least 8 hours devising evaluations (programming tests or what-not). 48 hours = ~$3.6k. Add in $1k of travel costs per candidate = $10k. Draw up an employment offer. Assume you've got a stock one, but the new hire would like to make an amendment. Run it by a lawyer. $500. We're at about $25k. It's not $40k, but it's not free, either. It would be easy to spend more time on any of those steps. If you use a recruiter, it will be higher. If you calculate based on SV salaries and costs, it will be higher.
- throwaway_374 10y agoThis is almost facetiously hyperbolic. I don't have time right now but I'll be responding later.
- sethev 10y agoThe grandparent post was pointing out that once you've decided to hire someone for one day they'll probably be around for at least 6 months. That's where the majority of the cost comes from.
- vinceguidry 10y ago> We're at about $25k. If that's the figure, then maybe bad hires really aren't that bad. Presumably the company won't have gotten zero or negative value from a bad hire, and even if it was $0, $25k isn't going to make or break any but the scrappiest bootstrapper.