High turnover among software developers is a persistent challenge for companies in the tech industry. With the constant demand for top talent, retaining skilled developers has become increasingly difficult, and the consequences of high turnover are far-reaching. Not only does it disrupt project stability, but it also incurs significant costs in terms of time, resources, and recruitment efforts.
Understanding the root causes of developer turnover is crucial for mitigating its impact. In this blog, we’ll dive into the factors driving turnover rates in software development, explore why it’s particularly important for startups, and discuss actionable strategies to reduce attrition. By implementing effective retention strategies, you can ensure your team stays motivated, productive, and loyal in the long run.
What is the Turnover Rate in the IT Industry?
The turnover rate for software developers in the IT industry is typically higher than in other sectors. On average, turnover fluctuates between 13% and 30%, depending on factors such as company size, location, and specific industry niche. Tech companies face constant competition to attract and retain top talent, which increases turnover as developers seek new opportunities to advance their careers, obtain better compensation, or find a better work-life balance.
Geolocation and level of experience also significantly influence turnover. For example, a junior developer in Colombia might experience a lower turnover rate due to fewer incentives to change jobs frequently, while a senior developer in the US might receive offers more frequently, increasing job mobility in that market.
These geographic and experience differences make retention more complex, and it is therefore crucial for companies to understand these variations in order to adjust their retention strategies more effectively.
Why Is Reducing Software Developer Turnover Critical for Startups?
Startups often face significant challenges when it comes to retaining software developers. Developers are key to building the product, creating the tech infrastructure, and driving the company’s growth, making their retention essential for the success of a startup. Losing a developer can not only delay progress but also affect team morale and increase operational costs. According to Gallup, replacing an employee within the first year costs companies about 33% of their annual salary in recruitment and training expenses. This becomes especially problematic for startups, which typically have limited resources to quickly find and onboard new talent.
When a developer leaves, they take their knowledge and expertise with them, which creates a knowledge gap that can take time to fill. This gap can significantly hinder a startup’s ability to scale and cause operational disruptions. Mercer’s report found that high turnover rates can directly impact productivity and growth, making it harder for startups to maintain momentum. These challenges emphasize the importance of reducing turnover and creating a stable, motivated team that can push the company forward in the long run.
Our thoughts on the pricing structure of Toptal
While it's not possible for us to find details about how much of what a client pays ultimately goes to a candidate, we believe clients looking for transparent and straightforward pricing may want to look at other alternatives.
Our opinion is that if they are charging a client more than $12,000 monthly for a developer, they should at the very least be giving $9,600 to the candidate, but it's likely that it's even less than that.
What Hiring Managers Should Ask Before Choosing a Talent Partner
Before partnering with any talent provider — whether Toptal, Teilur, or others — hiring managers should consider asking the following key questions:
- What percentage of the fee actually goes to the talent?
- Are replacement or satisfaction guarantees included in the contract?
- How are regional salary benchmarks determined?
- Is there full transparency in how rates are broken down?
- What is the long-term cost difference between hiring directly and through a platform?
These questions can help businesses make informed decisions and ensure that pricing aligns with both market realities and ethical compensation practices.
The True Cost of Developer Turnover in Tech Companies
The cost of developer turnover goes beyond the direct financial impact of hiring a new employee. It's about lost productivity, delays in project timelines, and the intangible effects on team dynamics. The total cost can range from 1.5 to 2 times a developer's annual salary.
Beyond the emotional toll and productivity loss, the financial impact of replacing a software developer is often underestimated. From recruitment and onboarding to lost knowledge and delayed projects, the total cost can quickly escalate—especially in the U.S. But when hiring nearshore developers in Latin America, companies can reduce these expenses by 40% while maintaining high retention and performance. Here's a side-by-side look at what turnover could cost your business:
Learn more about the top five advantages of outsourcing to Latin America.
Ways to Retain Your Software Developers
Retaining top software developers requires intentional strategies—not guesswork. Here are five effective ways to keep your best talent engaged and loyal:
1. Offer Competitive Compensation
Developers are highly aware of their market value. To retain them, offer salaries that reflect their skills and experience, along with bonuses, stock options, and comprehensive benefits. Don’t underestimate the value of perks like remote work, flexible hours, and wellness programs.
2. Invest in Career Development
Top developers want to grow. Provide access to learning opportunities such as training courses, mentorship, conferences, and the chance to work on challenging, meaningful projects. Career growth is one of the biggest drivers of long-term retention.
3. Build a Positive Engineering Culture
A supportive work environment can be more powerful than any paycheck. Encourage transparency, celebrate achievements, and foster a culture where developers feel heard, respected, and connected to the mission.
4. Prevent Developer Burnout
Long hours and unrealistic expectations lead to burnout—and turnover. Manage workloads realistically, support mental health, and actively promote work-life balance to help your team stay motivated and healthy.
5. Offer Flexible Work Options
Work flexibility is no longer a perk—it’s expected. Offering remote or hybrid work models and flexible schedules can significantly increase satisfaction and reduce attrition, especially among experienced developers.
Reduce Software Developer Turnover Rate with Teilur Talent
One of the biggest challenges for tech companies today is managing a high software developer turnover rate. At Teilur Talent, we help you solve that—not just by finding qualified candidates, but by keeping them engaged for the long haul.
We maintain a 90% developer retention rate because our approach goes far beyond technical matching. Before introducing any candidate to your team, we take the time to fully understand your company—your mission, culture, product, and goals. Then, we explain that to the candidates, making sure they’re genuinely excited about the opportunity. Only those who are fully aligned and motivated are presented to you.
We continue supporting both you and your developer through:
- Bi-weekly feedback calls during onboarding to detect and solve issues early.
- Ongoing support with learning resources, peer mentoring, and motivation tools.
- Salary transparency: If you offer a raise, 100% goes to the developer. Our flat 20% fee never changes.
By focusing on the developer experience, we help you build happy, productive, and loyal teams, effectively lowering your software developer turnover rate and reducing the hidden costs of turnover.
Learn more about how Teilur Talent is disrupting the recruiting industry with transparent pricing.
