Opportunity costs

Opportunity costs are so often missed in a myriad of different areas.

For software engineering we of course have them too.

If you've not read The Mythical Man Month, you may have at least heard its central premise:

Adding resources to a late software project makes it later

Or perhaps more likely:

9 women can't make a baby in 1 month

When a resource is added to a project, someone from the existing team needs to take the new person under their wing and help them get up to speed. That person could be doing something else instead that more directly adds value: this is an opportunity cost. That cost is excluding the time cost due to extra lines of communication that the aforementioned book primarily focuses on.

The same is of course true for a new hire. You have to make sure that new person is worth the time - the opportunity cost - of the senior person who will be mentoring them up to speed. That cost is in addition to the more obvious recruitment costs (the fee) and the immediate direct cost (the new hire's salary).

This is why when I am recruiting, be it for a permanent role or even a contractor, I insist on a technical test. A couple of the recruiters we were working with for our most recent contractor hire were not too impressed by that. Their thinking was that it would be easy for us to replace that person within a week or two.

For me though, I always had the opportunity cost at the forefront of my thinking. With a deadline on the horizon it was vital to ensure we hired a capable contractor from the get-go, and the time invested getting them up to speed wasn't wasted. The last thing we could afford was to double the opportunity cost. Especially not when a simple technical test was enough to separate the wheat from the chaff.