5 ms·

Most SF programmers are overpaid

16 points by dotBen 16y ago

aaronbrethorst 16y ago
Bad title. The key piece of the argument is: "I get frustrated when an inexperienced candidate looks at a 200 person company against my 25 person company, says they will pay $10K more and takes that job because I won’t match their offer. That’s frustrating, because I know, as many others do, that the basis for the decision is wrong. I can’t say if it’s right or wrong, but it’s certainly being made based on bad metrics." That sounds a lot more like 'inexperienced developers are accepting jobs to get a little more money while I'm offering them a lot more equity.' To make a rather cynical counter-argument, one might say that these inexperienced candidates are actually being quite savvy, and taking a much more sure bet (a very well-financed company that's offering more money right now) instead of taking the riskier one that they think has worse odds of panning out.
- davidu 16y ago
  Yes, it's a bad title, I just made a comment down below on the post about that. I'm adding a note at the top. My real beef is that inexperienced candidates make their decisions based on incomplete understanding of the metrics and not knowing the metrics that really matter. As to your counter-point, empirical evidence argues against that. $150K/yr today that lasts six months is worse than $100K/yr that lasts a year (and often the delta is much smaller). People also often forget that usually one month of not taking home a paycheck is greater than the delta between offers. But as with everything, ymmv.
  - starkfist 16y ago
    A higher salary is always better for the employee unless the company is going to have a liquidity event in 18 months. Personal cashflow is a pretty good metric. What other metric matters?
    - strlen 16y ago
      > A higher salary is always better for the employee unless the company is going to have a liquidity event in 18 months. Personal cashflow is a pretty good metric. What other metric matters? Did you mean "metric" in the sense of measurable quantities or in the sense of "things that matter"? While they very hard to quantify (and thus aren't "metrics" in the true sense of the word), I am pretty sure I am not alone when I say that peers, autonomy, challenging work and capacity for continued learning and technical growth are more important than monetary benefits.
      - starkfist 16y ago
        Sure, I agree with that. I am just saying that in 2010, every startup claims to offer those benefits. In fact every startup I've worked at since 1998 has claimed to offer those benefits. And from what I know, you can even get those benefits at huge companies like Google. So really you still have to compete with compensation, or else have a project that the person REALLY wants to work on. My problem with the article is that the author is assuming that the engineer is too naive to truly understand tradeoff between salary and the "startup benefits." The founder has a lot of emotional attachment to his startup. The engineering hire does not - perhaps he's the one with the more rational viewpoint.
        strlen 16y ago
        > In fact every startup I've worked at since 1998 has claimed to offer those benefits. And from what I know, you can even get those benefits at huge companies like Google. There's a difference between saying you do and actually doing it. No one will say "no, you don't have autonomy -- we don't hire top talent so we have to micromanage; we work very strict fixed hours; you'll be writing CRUD screens for sales people" (I've seen companies claim flexible hours in that "you're have come strictly at 9, but you can leave at 5, you don't have to come in at 8 or stay till 6!"). A start-up can say many things, but e.g., if one place is doing very routine database driven webapps and the other is actually solving far more interesting problems (makes systems software vs. "yet another website", or if they're a web site writing their own search stack and other interesting infrastructure, or does serious machine learning development, leads open source projects, etc...) it's pretty obvious. Plenty start-ups also hire PHP script kiddies (while talking about hiring "rock stars") and other assorted bozos (because they have a project to finish by a specific deadline), while others are more rigorous than Google (from what I heard, Kosmix is one such example). Google is a large company and obviously there are many boring but business crucial jobs to do there. Nonetheless, at least now, they're fairly explicit what area you'll be working on (e.g., systems programming vs. application programming, sometimes even down to a specific team). Free food and drinks are nice, but that's not why I would still (if I were looking for job) apply there, knowing well others likely give better salaries and fancier titles; the long interview process is a discouragement when other companies are extremely aggressive about getting you to sign an offer, but it has changed now.
  - nostrademons 16y ago
    For a lot of bright, ambitious young grads, $150k/year for six months is better than $100k/year for a year. They have opportunity costs too: for that time that they're not collecting a paycheck, they also aren't working. That's time that they could be doing other things, like founding a startup or working at another startup. (Assuming you're actually attracting top grads, they won't have a problem finding another job; someone who's good at programming in the Bay Area is not going to be sitting there sending out resumes for a month, unless they get stuck in the Google interview quagmire).
- megablast 16y ago
  If you are just out of school, and not sure whether you would like working in a smaller upstart, or a larger company, then you judge on money. People put a lot of stock in company life and such, but these things are hard to tell until you take the job and start working for a while. Also, when you first start earning your own money, it can be all about the money. Maybe you should start looking at older candidates?
sliverstorm 16y ago
So if these candidates are so unsophisticated and misunderstand, do you really want to hire them anyway? Maybe you should highlight in the interview process (if you do an interview with them) the potential in regards to equity, so on and so forth?
- davidu 16y ago
  A great engineer is not expected to know how their impact on a 25 person company will be different than a 200 person company. Moreover a great engineer may not yet know that not having that impact may be a really important loss to them. I'd still want to hire than engineer though. But when they decline, I'd rather them not tell me it's because the other offer was $10K higher. I'd rather they tell me they see more room for personal growth, more interesting technology, etc. There are reasons to decline, and that's okay -- but $10K is a really stupid one.
  - tpz 16y ago
    A great engineer is not expected to know how their impact on a 25 person company will be different than a 200 person company. Moreover a great engineer may not yet know that not having that impact may be a really important loss to them. A great engineer had bloody well know how their impact will be different, and they'd damn well know how that difference will affect them. Whatever kind of engineer you are referring to is most certainly not great and, worse, they are the kind you should strive to weed out of your hiring process before they end up getting hired and creating a lot of grief for both themselves and the company. Among other things, they have a strong tendency to bring to the table solutions that are mismatched in scale, complexity, delivery style, etc. relative to what would serve the company best. (your 10k point is entirely valid, of course.)
    - mkelly 16y ago
      I couldn't agree more. An embryo can afford to be good at engineering and have no understanding of the context, but anyone who's really excellent must understand how what they do fits into everything else.
strlen 16y ago
I wholeheartedly agree with you on this. When I was being made an offer at my present company, I very specifically told them not to use a higher salary to incense me: I wanted to make a decision based on factors that compound over time. These factors are quality of peers, challenge of work, autonomy: all of these translating to "will I do work that I find fulfilling, will I learn something at this job that will make me more useful myself to future employers, my profession of Computer Science/Software Engineering and society as a whole". I don't mean "will I learn a shiny new technology X", but rather will I learn new concepts (from work itself, from interacting with people smarter than me and with different skill sets) that change the way I approach existing problems and allow to me approach new ones. Unfortunately, many start-ups are (justifiably) high on the former (no legacy constraints, chances to use better tools) but low on the latter. Other factors are often also a combination of these: working hours is a function of autonomy and ability to work from home (or come in and leave at times when there's no traffic) can mitigate a bad commute. Under no circumstances, however, do I say engineers should be underpaid: the salary shouldn't impose a burden, it should allow you to (when living within your means) save towards retirement (without counting on winning the IPO sweepstakes), towards your family, towards (if you're inclined that way) a mortgage (1). However, pretty much every offer I've had matched those criteria very well. Decisions had to be made by other parameters. Shares are a very complex topic: while it's important that employees be a share holder (tying your own financial success to the company's), the number of options, the strike price and even the stated equity percentage are often meaningless when stated _without a context_. There's different kinds of liquidity, there's reverse splits, follow on funding rounds, different types of stock, different vesting agreements. Just because someone told you "you have 0.25% of the company stock", it doesn't imply that you'll be a millionaire if they sell at a $400 mm valuation. Work is where you're spending the majority of your waking hours. While an eager recruiter may tell you "what's the worry, just spend two years here and then we'll have an exit and you'll be rich!", it's a tremendous decision (especially if you're enthusiastic and passionate about your field of work, as most on HN are) that can't be boiled down to any single number. (1) One exception here is for fresh graduates. Public, prestigious technology companies do occasionally [edit: added occasionally, per a comment] underpay them (much more so, in practice, than funded startups: there are established procedures and formulas for determining salaries) and the pay off (in terms of skills learned, confidence gained, exposure to smart and experienced colleagues) is often worth it if you pick the right team and the right project.
maigret 16y ago
On a side note, I like how the referenced blog almost masks the user names in the comments. Sorry for the off-topic ;)
chrisbennet 16y ago
@Davidu, I understand your frustration but youth will always insist on learning some things "the hard way" - didn't we? When you are hiring an experienced developer, do you ask what they were making at their last job? Of course you don't, that would be hypocritical. However, other employers do ask what your previous salary was so they obviously place some value on salary as a metric. It's only reasonable for inexperienced candidates to go for the larger salary because they know it will be used as metric that will effect their income for many years to come.
- davidu 16y ago
  That's a really interesting point. I sometimes do ask what people were making, but you're right, it doesn't matter. I already know what I want to offer.

16 points by dotBen 16y ago

Bad title. The key piece of the argument is: "I get frustrated when an inexperienced candidate looks at a 200 person company against my 25 person company, says they will pay $10K more and takes that job because I won’t match their offer. That’s frustrating, because I know, as many others do, that the basis for the decision is wrong. I can’t say if it’s right or wrong, but it’s certainly being made based on bad metrics." That sounds a lot more like 'inexperienced developers are accepting jobs to get a little more money while I'm offering them a lot more equity.' To make a rather cynical counter-argument, one might say that these inexperienced candidates are actually being quite savvy, and taking a much more sure bet (a very well-financed company that's offering more money right now) instead of taking the riskier one that they think has worse odds of panning out.

davidu 16y ago
Yes, it's a bad title, I just made a comment down below on the post about that. I'm adding a note at the top. My real beef is that inexperienced candidates make their decisions based on incomplete understanding of the metrics and not knowing the metrics that really matter. As to your counter-point, empirical evidence argues against that. $150K/yr today that lasts six months is worse than $100K/yr that lasts a year (and often the delta is much smaller). People also often forget that usually one month of not taking home a paycheck is greater than the delta between offers. But as with everything, ymmv.
- starkfist 16y ago
  A higher salary is always better for the employee unless the company is going to have a liquidity event in 18 months. Personal cashflow is a pretty good metric. What other metric matters?
  - strlen 16y ago
    > A higher salary is always better for the employee unless the company is going to have a liquidity event in 18 months. Personal cashflow is a pretty good metric. What other metric matters? Did you mean "metric" in the sense of measurable quantities or in the sense of "things that matter"? While they very hard to quantify (and thus aren't "metrics" in the true sense of the word), I am pretty sure I am not alone when I say that peers, autonomy, challenging work and capacity for continued learning and technical growth are more important than monetary benefits.
    - starkfist 16y ago
      Sure, I agree with that. I am just saying that in 2010, every startup claims to offer those benefits. In fact every startup I've worked at since 1998 has claimed to offer those benefits. And from what I know, you can even get those benefits at huge companies like Google. So really you still have to compete with compensation, or else have a project that the person REALLY wants to work on. My problem with the article is that the author is assuming that the engineer is too naive to truly understand tradeoff between salary and the "startup benefits." The founder has a lot of emotional attachment to his startup. The engineering hire does not - perhaps he's the one with the more rational viewpoint.
      - strlen 16y ago
        > In fact every startup I've worked at since 1998 has claimed to offer those benefits. And from what I know, you can even get those benefits at huge companies like Google. There's a difference between saying you do and actually doing it. No one will say "no, you don't have autonomy -- we don't hire top talent so we have to micromanage; we work very strict fixed hours; you'll be writing CRUD screens for sales people" (I've seen companies claim flexible hours in that "you're have come strictly at 9, but you can leave at 5, you don't have to come in at 8 or stay till 6!"). A start-up can say many things, but e.g., if one place is doing very routine database driven webapps and the other is actually solving far more interesting problems (makes systems software vs. "yet another website", or if they're a web site writing their own search stack and other interesting infrastructure, or does serious machine learning development, leads open source projects, etc...) it's pretty obvious. Plenty start-ups also hire PHP script kiddies (while talking about hiring "rock stars") and other assorted bozos (because they have a project to finish by a specific deadline), while others are more rigorous than Google (from what I heard, Kosmix is one such example). Google is a large company and obviously there are many boring but business crucial jobs to do there. Nonetheless, at least now, they're fairly explicit what area you'll be working on (e.g., systems programming vs. application programming, sometimes even down to a specific team). Free food and drinks are nice, but that's not why I would still (if I were looking for job) apply there, knowing well others likely give better salaries and fancier titles; the long interview process is a discouragement when other companies are extremely aggressive about getting you to sign an offer, but it has changed now.
- nostrademons 16y ago
  For a lot of bright, ambitious young grads, $150k/year for six months is better than $100k/year for a year. They have opportunity costs too: for that time that they're not collecting a paycheck, they also aren't working. That's time that they could be doing other things, like founding a startup or working at another startup. (Assuming you're actually attracting top grads, they won't have a problem finding another job; someone who's good at programming in the Bay Area is not going to be sitting there sending out resumes for a month, unless they get stuck in the Google interview quagmire).
megablast 16y ago
If you are just out of school, and not sure whether you would like working in a smaller upstart, or a larger company, then you judge on money. People put a lot of stock in company life and such, but these things are hard to tell until you take the job and start working for a while. Also, when you first start earning your own money, it can be all about the money. Maybe you should start looking at older candidates?

sliverstorm 16y ago

So if these candidates are so unsophisticated and misunderstand, do you really want to hire them anyway? Maybe you should highlight in the interview process (if you do an interview with them) the potential in regards to equity, so on and so forth?

davidu 16y ago
A great engineer is not expected to know how their impact on a 25 person company will be different than a 200 person company. Moreover a great engineer may not yet know that not having that impact may be a really important loss to them. I'd still want to hire than engineer though. But when they decline, I'd rather them not tell me it's because the other offer was $10K higher. I'd rather they tell me they see more room for personal growth, more interesting technology, etc. There are reasons to decline, and that's okay -- but $10K is a really stupid one.
- tpz 16y ago
  A great engineer is not expected to know how their impact on a 25 person company will be different than a 200 person company. Moreover a great engineer may not yet know that not having that impact may be a really important loss to them. A great engineer had bloody well know how their impact will be different, and they'd damn well know how that difference will affect them. Whatever kind of engineer you are referring to is most certainly not great and, worse, they are the kind you should strive to weed out of your hiring process before they end up getting hired and creating a lot of grief for both themselves and the company. Among other things, they have a strong tendency to bring to the table solutions that are mismatched in scale, complexity, delivery style, etc. relative to what would serve the company best. (your 10k point is entirely valid, of course.)
  - mkelly 16y ago
    I couldn't agree more. An embryo can afford to be good at engineering and have no understanding of the context, but anyone who's really excellent must understand how what they do fits into everything else.

strlen 16y ago

I wholeheartedly agree with you on this. When I was being made an offer at my present company, I very specifically told them not to use a higher salary to incense me: I wanted to make a decision based on factors that compound over time. These factors are quality of peers, challenge of work, autonomy: all of these translating to "will I do work that I find fulfilling, will I learn something at this job that will make me more useful myself to future employers, my profession of Computer Science/Software Engineering and society as a whole". I don't mean "will I learn a shiny new technology X", but rather will I learn new concepts (from work itself, from interacting with people smarter than me and with different skill sets) that change the way I approach existing problems and allow to me approach new ones. Unfortunately, many start-ups are (justifiably) high on the former (no legacy constraints, chances to use better tools) but low on the latter. Other factors are often also a combination of these: working hours is a function of autonomy and ability to work from home (or come in and leave at times when there's no traffic) can mitigate a bad commute. Under no circumstances, however, do I say engineers should be underpaid: the salary shouldn't impose a burden, it should allow you to (when living within your means) save towards retirement (without counting on winning the IPO sweepstakes), towards your family, towards (if you're inclined that way) a mortgage (1). However, pretty much every offer I've had matched those criteria very well. Decisions had to be made by other parameters. Shares are a very complex topic: while it's important that employees be a share holder (tying your own financial success to the company's), the number of options, the strike price and even the stated equity percentage are often meaningless when stated _without a context_. There's different kinds of liquidity, there's reverse splits, follow on funding rounds, different types of stock, different vesting agreements. Just because someone told you "you have 0.25% of the company stock", it doesn't imply that you'll be a millionaire if they sell at a $400 mm valuation. Work is where you're spending the majority of your waking hours. While an eager recruiter may tell you "what's the worry, just spend two years here and then we'll have an exit and you'll be rich!", it's a tremendous decision (especially if you're enthusiastic and passionate about your field of work, as most on HN are) that can't be boiled down to any single number. (1) One exception here is for fresh graduates. Public, prestigious technology companies do occasionally [edit: added occasionally, per a comment] underpay them (much more so, in practice, than funded startups: there are established procedures and formulas for determining salaries) and the pay off (in terms of skills learned, confidence gained, exposure to smart and experienced colleagues) is often worth it if you pick the right team and the right project.

maigret 16y ago

On a side note, I like how the referenced blog almost masks the user names in the comments. Sorry for the off-topic ;)

chrisbennet 16y ago

@Davidu, I understand your frustration but youth will always insist on learning some things "the hard way" - didn't we? When you are hiring an experienced developer, do you ask what they were making at their last job? Of course you don't, that would be hypocritical. However, other employers do ask what your previous salary was so they obviously place some value on salary as a metric. It's only reasonable for inexperienced candidates to go for the larger salary because they know it will be used as metric that will effect their income for many years to come.

davidu 16y ago
That's a really interesting point. I sometimes do ask what people were making, but you're right, it doesn't matter. I already know what I want to offer.