Cheaper Talent Hypothesis

MF Bliki: CheaperTalentHypothesis.

Martin Fowler’s commentary on why cheaper talent is more expensive !

Naturally better programmers cost more, either as full-time hires or in contracting. But the interesting question is, despite this, are more expensive programmers actually cheaper?

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If the cost premium for a more productive developer is less than the higher productivity of that developer, then it’s cheaper to hire the more expensive developer. The cheaper talent hypothesis is that the cost premium is indeed less, and thus it’s cheaper to hire more productive developers even if they are more expensive.

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The trouble is that that assumption assumes productivity scales linearly with team size, which again observation indicates isn’t the case. Software development depends very much on communication between team members. The biggest issue on software teams is making sure everyone understands what everyone else is doing. As a result productivity scales a good bit less than linearly with team size. As usual we have no clear measure, but I’m inclined to guess at it being closer to the square root. If we use my evidence-free guess as the basis then to get double the productivity we need to quadruple the team size. So our average talent team needs to have forty people to match our ten talented people - at which point it costs twice as much.

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Agile development further accelerates this effect. A talented team has a faster cycle time than an average team. This allows the full team to explore options faster: building, evaluating, optimizing. This accelerates producing better software, thus generating higher value. This compounds the time-to-market effect. (And it’s natural to assume that a talented team is more likely to produce better software in any case.)

Faster cycle time leads to a better external product, but perhaps the greatest contribution a talented team can make is to produce software with greater internal quality. It strikes to me that the productivity difference between a talented programmer and an average programmer is probably less than the productivity difference between a good code-base and an average code-base. Since talented programmer tend to produce good code-bases, this implies that the productivity advantages compound over time due to internal quality too.

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So I understand the situation but don’t accept it. I believe that if the software industry is to fulfill its potential it needs to recognize the cheaper talent hypothesis and close the gap between high productivity and higher compensation.