Rising Turnover Threatens Custom ServiceNow Integrations

Companies often use in-house development efforts for their first ServiceNow integration. This custom standalone integration can initially work well as a one-off integration. The tools and APIs provided by ServiceNow make it fairly easy to build simple, point-to-point integrations.

The company may have ServiceNow-certified engineers and developers with extensive experience. Through this experience, they gain further knowledge and develop their expertise. But it is knowledge and expertise that leaves with them when they switch jobs. This exit often leaves behind a complex mess of custom developments that nobody else understands but which has to be maintained.

To replace such an employee, the company incurs turnover costs. These include hiring, onboarding, and training – along with less visible turnover costs such as lower skill levels, more risk of errors, and disengagement by the remaining employees. In addition, a new hire generally takes months to fill. This vacancy in knowledge and skills can endanger operational continuity until a new employee is hired and has learned enough to sufficiently monitor and maintain the integration.

Even as businesses consider dozens of retention strategies to keep turnover from happening, they are in fact having to deal with turnover more than ever.

Turnover Costs Jumping in 2021

According to Microsoft’s most recent Work Trend Index, 41% of employees are considering leaving their jobs this year. Among Generation Z workers, that figure rises to 54%. “We nearly have a doubling of job switching-intent,” says LinkedIn Senior Editor-at-Large George Anders. Additionally, this report highlights threats to retention such as a burned-out workforce, a disconnect between leaders and employees, and employees insisting on more from the companies they work for. 

Technology has some of the highest turnover rates. So the percentage of employees in technology who are considering an exit from their positions in 2021 is likely higher than 41%.

The Cost of Replacing an Integration Engineer/Developer

The cost of replacing an employee can range from half to double the employee’s annual salary. Software engineers in particular have high-demand skills, making these roles expensive to replace. The replacement cost for a software engineer is estimated to be 91% of that engineer’s salary. And when a top-performing engineer leaves, it costs the company 130% of the salary. 

According to Indeed.com, the national (USA) average salary with bonus for a software engineer is $108,608. Nelson Frank reveals data showing that hiring a ServiceNow developer likely costs even more ($129,000). But let’s assume the more conservative Indeed figure. If replacing that engineer costs 91% of their salary, that’s a turnover cost of $98,833.

What if 2021 is just an anomaly? Well, even before the pandemic, the annual voluntary turnover increased every year for at least 8 years.

Will turnover decrease next year? Perhaps. But if so, a fluctuating or unpredictable turnover rate is not exactly a compelling reason to rely on in-house integration development.

It’s Just One Factor in Total Cost of Ownership

The turnover rate has already risen every year for several years. With 41% considering a switch, this rate could spike dramatically this year. Because the skills of software engineers and developers are in high demand, each of these expensive replacements costs about $100,000.

Even if an even replacement in hiring were possible, the speed of the replacement is also vital. Companies often sign on with us at Perspectium, for example, because they cannot afford to abandon management of the integration – and to leave the business hanging – every time they need to replace their integration developer.

These high turnover costs are just one factor in the total cost of ownership (TCO) for custom ServiceNow integrations. The challenge of building timely, secure, and low-maintenance integrations – with predictable costs and without neglect – prompts many companies to take another look at their integration TCO.