Calculate The Cost Of Your Technical Debt

We all know that technical debt has an impact on velocity, software product quality, and team morale - and that it ultimately has a monetary cost. But how much exactly does technical debt cost your company?

If you had to guess, what price tag would you put on your tech debt? A thousand dollars? A million dollars?

Well, now you don’t have to.

We’ve looked at the latest research and industry insights from Glassdoor, Raygun, DevsKiller, and Stripe and created the technical debt calculator that will tell you how much your company is spending on tech debt each year.

It is crucial for all software development teams to understand the real cost of their technical debt, stop ignoring it and start acting.‍

See how much technical debt costs you in just one click.

How does the tech debt calculator work?

To see how much technical debt is costing your company, you need to enter the number of Engineers working at your company.

There are 4 other variables that are prefilled according to sources such as Glassdoor and Stripe. You can adjust these variables to make the number more precise for your specific case.

How did we come up with the variables? 

There are 7 variables that allow us to calculate the cost of technical debt:

• Number of engineers

This is the main variable as it allows us to estimate how much time is spent on maintenance and bug fixing .

• Average proportion of time spent on maintenance

According to Stripe, the average time spent on maintenance is 17.3 hours per week, 13.5 of which are spent on technical debt:

• Time spent fixing bugs per dev each month (hours)

Based on a 40 hour work week, the average software developer spends 32 hours each month fixing errors and replicating issues. Taking the average wage of $95,841, this equates to $1472 worth of development time per month spent on reactive work. If you have 50 developers, the combined 1,600 hours of reactive work could potentially ramp up the cost of software errors to $73,600 in lost time per month. This is time spent away building regular features for customers. Reducing 1,600 hours by 50% to 800 hours would save your company $36,800 every month in time while increasing overall product and software quality.

Source: Raygun

• Cost of losing one engineer

By eliminating one of the most frustrating pain points for a development team (tech debt) and by allowing staff to focus on the work they love to do, companies will enjoy reduced attrition and overall improved job satisfaction. By reducing attrition by one dev, companies can save over $30,000 in recruitment costs and over $33,000 in productivity losses.

Source: DevSkiller 

• Time to onboard an engineer (months)

It takes up to 6 months for a newly hired developer to reach peak productivity and get familiar with the product.

Source: Codementor

• Yearly employee churn rate

According to Quarsh’s research, 20% of new hires leave in 12 months. For high growth companies who have been known to double their headcount within a year, this means that out of 500 new hires, 100 will be gone within 12 months.

Source: DevSkiller

Estimated cost of problems linked to tech debt

Technical debt causes software maintenance problems, bugs, and employee churn. While it is not possible to say how much time and money are wasted due to technical debt alone, we can say with confidence that reducing technical debt will reduce the cost of each of these problems.

This is still a conservative estimate, as these calculations ignore  the opportunity cost that comes with engineering resources being spent fighting fires caused by tech debt instead of shipping new features, and the impact of technical debt on the rest of the company.

See how much you can be saving by reducing technical debt by just 10%.