10 ms·

This is just wrong. What exactly do think companies are spending 500k on per engineer beyond the TC package?

throwaway98797 2y ago
office space of course!
andruby 2y ago
HR, marketing, sales, management, office space, servers, licenses, insurance, etc. It seems on the high end, but not too unrealistic.
- hug 2y ago
  It’s wildly and hugely unrealistic. The rule of thumb that employees actually cost a business roughly twice their salary is based on two things: 1. Retention. Hiring costs are “huge”, and so if you have a higher or lower average retention, may make up a disproportionate cost compared to salary. Ramp up time and institutional knowledge loss is no joke either. 2. A spread of average wages. 500k is not average, and a huge number of the costs are relatively fixed. $1,000 a month worth of software licensing isn’t an uncommon number and is fully 1/3 of the salary of a $3k a month or $36k/year junior clerk. It’s peanuts when you look at it next to a $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.
  - purplepatrick 2y ago
    Non-salary cost such as payroll taxes, benefits, workers comp, training, equipment, space add another 25-50% typically.
    - MrDarcy 2y ago
      They don’t, those are fixed. Even taxes are capped because TC includes equity. For a 500K dev GP is correct, additional expenses will never reach 50K for someone making 500K.
- Loudergood 2y ago
  US Health Insurance is stupid expensive as well.
  - xeromal 2y ago
    It's really not at scale. It's on the order of 500$ a month per dev for "gold" level care for a company of 50 people. I'm sure it's less the larger you get.
    - dgoldstein0 2y ago
      It might depend on the state and the age pool but I have to pay a percentage and based on that it's more like $10k/year. So you are almost 2x undercounting ... But maybe if the average employee of a company is 25 they could get a better deal
- jesseendahl 2y ago
  I haven't traditionally seen these areas of spend rolled into Eng costs in the budgeting process.
hiddencost 2y ago
Nope. 2x total comp is standard fully loaded cost.

office space of course!

HR, marketing, sales, management, office space, servers, licenses, insurance, etc. It seems on the high end, but not too unrealistic.

hug 2y ago
It’s wildly and hugely unrealistic. The rule of thumb that employees actually cost a business roughly twice their salary is based on two things: 1. Retention. Hiring costs are “huge”, and so if you have a higher or lower average retention, may make up a disproportionate cost compared to salary. Ramp up time and institutional knowledge loss is no joke either. 2. A spread of average wages. 500k is not average, and a huge number of the costs are relatively fixed. $1,000 a month worth of software licensing isn’t an uncommon number and is fully 1/3 of the salary of a $3k a month or $36k/year junior clerk. It’s peanuts when you look at it next to a $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.
- purplepatrick 2y ago
  Non-salary cost such as payroll taxes, benefits, workers comp, training, equipment, space add another 25-50% typically.
  - MrDarcy 2y ago
    They don’t, those are fixed. Even taxes are capped because TC includes equity. For a 500K dev GP is correct, additional expenses will never reach 50K for someone making 500K.
Loudergood 2y ago
US Health Insurance is stupid expensive as well.
- xeromal 2y ago
  It's really not at scale. It's on the order of 500$ a month per dev for "gold" level care for a company of 50 people. I'm sure it's less the larger you get.
  - dgoldstein0 2y ago
    It might depend on the state and the age pool but I have to pay a percentage and based on that it's more like $10k/year. So you are almost 2x undercounting ... But maybe if the average employee of a company is 25 they could get a better deal
jesseendahl 2y ago
I haven't traditionally seen these areas of spend rolled into Eng costs in the budgeting process.

hiddencost 2y ago

Nope. 2x total comp is standard fully loaded cost.