What an empty VP of Engineering seat costs a company
Juan Molina ·
When the VP of Engineering seat is open, the saved salary is the number everyone sees. Here is a simple formula to put a monthly number on the gap, using your own payroll, roadmap, leadership time, attrition and interim cover.
When a VP of Engineering leaves, the first number finance notices is a good one: a senior salary is off the payroll. The costs show up elsewhere, spread across the CTO's calendar, a slipping roadmap and a few engineers quietly updating their profiles. None of it sits on one line, so nobody adds it up.
I have spent more than twenty years in recruiting, including senior and C-suite searches. My view is that the empty seat is one of the most underpriced problems a growing software company has. You can put a number on it in about fifteen minutes. Here is how.
The five costs of an empty seat
1. Engineering output you pay for and don't get. Engineering payroll keeps running whether or not someone is setting priorities, unblocking teams and making architecture calls. Without that person, some of that spend turns into waiting, rework and meetings that end without a decision. Only you can estimate the share. Be conservative.
2. Revenue or savings that slip. Some roadmap items have a number attached: a feature a signed customer is waiting for, a migration that cuts cloud spend, an integration sales has promised. If the vacancy delays them, count the value of each month of delay. Count only named items with a real figure behind them, not a general sense that things are slower.
3. Leadership time the CEO or CTO absorbs. Someone runs the one-to-ones, the hiring loops, the incident reviews and the planning. Usually it is the CTO, sometimes the CEO. Count the hours per month and put a price on them. The honest price is what those hours would otherwise produce, but a fully loaded hourly cost is a reasonable floor.
4. Attrition risk. My view is that engineers feel a missing leader before anyone else in the company does. Gallup's 2024 study of people who voluntarily left a job found that 42 percent said their manager or organization could have done something to prevent it (Gallup, 2024). The same Gallup piece estimates the cost of replacing a professional in a technical role at around 80 percent of their salary. You need a rough estimate of how much the vacancy raises the chance that someone leaves, not a prediction.
5. Interim or contractor cover. If you bring in an interim leader, a fractional VP or extra contractors to hold things together, that is a direct monthly cost.
Then subtract the salary you are not paying. It is a real saving, and leaving it out makes the whole exercise look like a sales pitch.
The formula
Monthly cost of the empty seat:
Cost = (P × d) + (H × r) + (N × p × c) + R + I − S
- P = monthly fully loaded engineering payroll
- d = share of engineering output lost without the leader (your estimate)
- H = hours per month the CEO or CTO spends doing the VP's job
- r = hourly value of those hours
- N = number of engineers in the organization
- p = extra monthly probability that any one engineer leaves because of the vacancy (your estimate)
- c = cost to replace one engineer
- R = monthly value of named roadmap items that are slipping
- I = monthly cost of interim or contractor cover
- S = monthly fully loaded cost of the VP you are not paying
For a weekly figure, multiply the monthly result by 12 and divide by 52.
A worked example
Every input below is hypothetical: a made-up company, used only to show the arithmetic. Replace each number with your own.
| Input | Hypothetical value |
|---|---|
| Engineers (N) | 40 |
| Fully loaded cost per engineer | $15,000 a month |
| Engineering payroll (P) | $600,000 a month |
| Output lost (d) | 5% |
| CTO hours on VP work (H) | 40 a month |
| Value per CTO hour (r) | $300 |
| Extra monthly chance each engineer leaves (p) | 1% |
| Cost to replace one engineer (c) | $120,000 (80% of a $150,000 salary) |
| Slipping roadmap value (R) | $20,000 a month |
| Interim cover (I) | $25,000 a month |
| VP cost not paid (S) | $35,000 a month |
Now the arithmetic:
- Lost output: $600,000 × 5% = $30,000
- CTO time: 40 × $300 = $12,000
- Attrition: 40 × 1% × $120,000 = $48,000
- Slipping roadmap: $20,000
- Interim cover: $25,000
- Minus VP cost not paid: −$35,000
Total: $100,000 a month, or about $23,000 a week.
Two things stand out. The salary saving is wiped out several times over. And the biggest line is attrition, driven by a 1 percent monthly estimate. That is the input I would challenge hardest in your own version. Run it at zero and at double, and see how much the answer moves. If the case only works with aggressive guesses, it is a weak case.
A few rules to keep the number honest:
- Don't count the same work twice. If a feature's delay is already in R, don't argue it also sits inside d.
- Use fully loaded costs (salary, benefits, payroll taxes, equipment), and say so.
- Write your guesses down with the date, then check them against what actually happened once the seat is filled.
How long the gap lasts
The monthly figure only means something once you multiply it by the length of the gap. Published numbers on search length vary a lot, so check where they come from.
SHRM's 2025 benchmarking found that the median time-to-fill for executive positions was roughly a month and a half, measured from job requisition to offer acceptance (SHRM, 2025). Its 2026 brief says executive time-to-fill stayed the same as the year before (SHRM, 2026). That is a median across SHRM member organizations of all kinds, not a figure for engineering leaders at software companies. I did not find a credible public figure specific to VP of Engineering searches.
Note what SHRM's clock leaves out. It starts when a requisition is opened and stops when an offer is accepted. Your gap starts the day the seat empties and ends when the new leader starts work. So add the weeks before anyone opens the search, plus the candidate's notice period. Ask about notice early. In my experience, senior notice periods in Europe are often far longer than US hiring managers expect. My view is that the time before a search formally starts is where most companies lose the most, and it rarely shows up in any benchmark.
If the hire doesn't work out
Speed has a price too. A rushed hire who leaves or has to be replaced restarts the clock. Gallup estimates the cost of replacing a leader or manager at around 200 percent of their salary (Gallup, 2024). That is a broad estimate across roles, not a measured figure for VPs of Engineering, but it is a reasonable warning against filling the seat with whoever is available first.
How to shorten the gap
Start before the seat is empty. If your VP of Engineering has told you they plan to leave, or you know the company will outgrow the current leader within a year, start the search then.
Write an outcomes brief. Before you talk to anyone, write down what this person must achieve in the first 12 to 18 months. Rebuild the billing system without freezing new features. Take the team from 40 to 70 engineers without lowering the bar. Get the CTO out of day-to-day delivery. One page of outcomes shortens every later conversation with your board, your interviewers and your candidates.
Run a structured process. Agree on the interview panel, the questions and the scoring before the first candidate call. Set the dates for each stage in advance and hold them. In my experience, searches stall on internal calendars and late disagreements about what the role is far more often than on a lack of candidates.
If you want to run these numbers on your own situation, or you have a VP of Engineering search coming up, you can register the role or send a short brief at www.exectechlabs.lat. I will tell you honestly how I would approach it, including the parts you can do well on your own.