$20K Per Month: The Real Cost of Lost Productivity During Engineer Onboarding

General
1

I’ve been tracking the true cost of engineer onboarding, and the numbers are eye-opening.

The direct costs (what most people track):

  • Hardware, software licenses, IT setup: $8,000-10,000
  • Recruiter/HR time: $2,000-3,000
  • Training materials and sessions: $2,000-5,000

The hidden costs (what actually matters):

Here’s where the real expense lives: lost productivity.

Timeline Productivity Level Monthly Cost (at $15K/mo salary)
Week 1-4 ~25% productive ~$11,250 lost
Month 2-3 ~50% productive ~$7,500/mo lost
Month 4-6 ~75% productive ~$3,750/mo lost

Total lost productivity over 6 months: $40,000-50,000 per engineer.

That’s in addition to the $15-20K in direct onboarding costs.

The multiplier effect:

It’s not just the new hire’s lost productivity. Consider:

  • Senior engineers pulled into mentoring (10-20% of their time)
  • Managers doing extra 1:1s and check-ins
  • Code reviewers spending more time on early PRs
  • Production incidents from unfamiliarity with systems

The retention cost:

If the engineer leaves within 12 months (which 20% do within 45 days), you’ve lost:

  • All onboarding investment
  • 6-9 months of their salary in replacement costs
  • Another 6 months of ramping their replacement

The bottom line:

Every engineer you onboard poorly costs $60-100K in the first year. Every engineer who leaves early costs you double that.

Are you tracking these costs? How do you justify onboarding investment to leadership?

2

The hidden costs you’re describing are actually understated when you factor in opportunity cost.

What most people miss:

  1. Delayed project delivery - If you hired this engineer to work on a critical project, every month they’re not fully productive is a month the project slips. What’s the business value of that delay?

  2. Team morale impact - When senior engineers are constantly pulled into mentoring and firefighting for new hires, it affects their own productivity and job satisfaction.

  3. Quality debt - Code written by engineers still learning the codebase often needs to be refactored later. That’s future work you’re creating.

  4. Knowledge fragmentation - Every time you answer a question verbally instead of documenting it, you’re creating technical debt in your onboarding process.

The calculation I use:

We estimate the “fully loaded” cost of poor onboarding at 2x the engineer’s salary for the first year.

For a $180K/year engineer, that’s $360K in total cost when you factor in all the hidden expenses.

The flip side: Good onboarding can compress that ramp time to 2-3 months instead of 6-9. That’s $100K+ in savings per hire.

3

Here’s how I justify onboarding investment to our finance team and board:

The comparison framework:

I present two scenarios for a year where we hire 20 engineers:

Scenario A: Current state (poor onboarding)

  • Average ramp: 6 months to productivity
  • Lost productivity: $50K per hire × 20 = $1M
  • Early attrition: 20% leave within 45 days = 4 engineers
  • Replacement cost: $100K × 4 = $400K
  • Total cost: $1.4M

Scenario B: Improved onboarding

  • Investment: $200K (tooling, dedicated onboarding lead, documentation)
  • Average ramp: 2 months to productivity
  • Lost productivity: $20K per hire × 20 = $400K
  • Early attrition drops to 5% = 1 engineer
  • Replacement cost: $100K × 1 = $100K
  • Total cost: $700K

ROI: $700K savings for $200K investment = 3.5x return

What finance actually responds to:

  1. Concrete numbers with conservative assumptions
  2. Comparison to industry benchmarks
  3. Risk reduction (attrition is a board-level concern)
  4. Competitive advantage in hiring

The best part: once you build the onboarding infrastructure, it scales. Year 2+ ROI is even better.

4

Let me share what poor onboarding actually feels like from the engineer’s perspective:

My last job’s onboarding:

  • Day 1: Laptop arrived, but no VPN access. Spent the day reading generic company policies.
  • Week 1: Still waiting for GitHub access. Couldn’t even read the codebase.
  • Week 2: Finally got access. No documentation. Asked my “buddy” 50 questions a day.
  • Month 1: Made my first PR. It sat in review for 2 weeks because nobody explained the review process.
  • Month 3: Still discovering critical systems nobody told me about. Production incident because I didn’t know about a dependency.

The emotional cost:

  • Felt incompetent constantly
  • Worried I’d made a mistake taking the job
  • Hesitated to ask questions because I felt like I was being a burden
  • Considered leaving by month 2

What would have helped:

  • Environment setup automated (should be one command)
  • Architecture documentation with context
  • A designated mentor with scheduled time (not just “ask anyone”)
  • Clear first projects with defined scope
  • Explicit expectations for 30/60/90 days

The productivity cost is real, but so is the human cost. Nobody wants to feel useless for 6 months.