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"The reason people are quitting today is because the labor market is so competitive that the only way they can get a significant increase in income is by quitti

"The reason people are quitting today is because the labor market is so competitive that the only way they can get a significant increase in income is by quitting and going to another job." Well, no, the opposite is true. Employees have to quit because companies stubbornly refuse to be competitive on salary. The reason for that is mismanagement - managers and HR would be personally criticized for "being soft" if they offered raises, regardless of the benefits to the company of doing so.

swagasaurus-rex 8y ago
This is the real answer. Companies have been stubbornly refusing to grant raises in line with market rates. It makes sense on the balance sheet. A large fraction of employees (33% if we take the article at face value) are unwilling to exercises their market options, and will stay at a company that underpays them. The rest leave for greener pastures, and are replaced with new hires that are paid as much as a promoted position would be paid. But this way, companies can hold on to those 33% that never see a raise that exceeds inflation. Large companies don't factor in things like loss of domain expertise, retraining, or loss of productivity due to hiring in their spreadsheets. So they will continue to do this and the only way to negotiate a true raise will be to leave; or threaten to leave. They hope you'll just be passive.
- 0x445442 8y ago
  Domain knowledge? Heck, at most of the places I've worked they don't even do a cost benefit analysis on whether or not the dev costs will produce a positive ROI.
kraftman 8y ago
I've seen this so much now that I feel like I must be missing a piece of the puzzle. You work for a company for X amount of time, and you gain domain knowledge of the company, and general industry experience. Some other company looks at your CV, and without knowing you, and probably without caring about your specific company domain knowledge, decides you are worth say 20% more than you are earning. You then go to your current company, and say 'my general skills are worth 20% more on the market, you know how well I work, and you know I have extra domain knowledge specific to this role, I would like more money' - and the company refuses. They then spend time and money finding someone with similar skills to what you have, but without your domain knowledge, and probably at a similar amount you asked for since that's the market rate. How is it not in the companies best interests to just keep you on and give you a raise? How do they justify all that wasted time and money every time? Do they just not measure it?
- Alex3917 8y ago
  > How is it not in the companies best interests to just keep you on and give you a raise? Better to be less profitable than bankrupt due to lack of cashflow. Mark Zuckerberg would have been a great hire for any company even at a salary of a billion dollars a year, but any startup that hired him for that salary would immediately go bankrupt.
  - kraftman 8y ago
    This is assuming that they hire someone else to replace you, which is usually the case, so they're only saving a couple of months of salary, but now they have less staff developing the product, the staff they have are busy doing interviews, and they then have to pay a recruiter fee.
- gjm11 8y ago
  Suppose salaries are going up, and the average person at FooCorp could get 10% more by changing jobs. You are more underpaid than most; you establish that you could get 20% more by moving, and say to your manager at FooCorp that you'd like a 20% pay rise. Suppose they say yes. What happens next: other people hear about it and go to their managers saying "I think I'm underpaid; give me a 20% pay rise". If the answer is yes, then FooCorp is paying 20% more in salaries for the same work as before. If the answer is no, then those people have a concrete motivation to go and interview elsewhere, and probably a bunch of them will then leave even if they get counteroffers at FooCorp once they've demonstrated that they could earn more elsewhere. Suppose they say no. What happens next: most likely you leave for that better-paid job; others at FooCorp hear about this and understand that they aren't going to get paid more at FooCorp even with a job offer in hand. Some of them will decide to move, but maybe fewer than in the first scenario (because they haven't had the specific motivating experience of asking for more money and getting turned down, and because they don't feel like they have the lower-risk option of interviewing elsewhere, getting a counteroffer, and thus being paid more without having to move jobs). And the ones who don't move can go on being paid less. It's not obvious to me that the first of those scenarios is better for FooCorp than the second, if all they care about is maximizing their profits.

swagasaurus-rex 8y ago

This is the real answer. Companies have been stubbornly refusing to grant raises in line with market rates. It makes sense on the balance sheet. A large fraction of employees (33% if we take the article at face value) are unwilling to exercises their market options, and will stay at a company that underpays them. The rest leave for greener pastures, and are replaced with new hires that are paid as much as a promoted position would be paid. But this way, companies can hold on to those 33% that never see a raise that exceeds inflation. Large companies don't factor in things like loss of domain expertise, retraining, or loss of productivity due to hiring in their spreadsheets. So they will continue to do this and the only way to negotiate a true raise will be to leave; or threaten to leave. They hope you'll just be passive.

0x445442 8y ago
Domain knowledge? Heck, at most of the places I've worked they don't even do a cost benefit analysis on whether or not the dev costs will produce a positive ROI.

kraftman 8y ago

I've seen this so much now that I feel like I must be missing a piece of the puzzle. You work for a company for X amount of time, and you gain domain knowledge of the company, and general industry experience. Some other company looks at your CV, and without knowing you, and probably without caring about your specific company domain knowledge, decides you are worth say 20% more than you are earning. You then go to your current company, and say 'my general skills are worth 20% more on the market, you know how well I work, and you know I have extra domain knowledge specific to this role, I would like more money' - and the company refuses. They then spend time and money finding someone with similar skills to what you have, but without your domain knowledge, and probably at a similar amount you asked for since that's the market rate. How is it not in the companies best interests to just keep you on and give you a raise? How do they justify all that wasted time and money every time? Do they just not measure it?

Alex3917 8y ago
> How is it not in the companies best interests to just keep you on and give you a raise? Better to be less profitable than bankrupt due to lack of cashflow. Mark Zuckerberg would have been a great hire for any company even at a salary of a billion dollars a year, but any startup that hired him for that salary would immediately go bankrupt.
- kraftman 8y ago
  This is assuming that they hire someone else to replace you, which is usually the case, so they're only saving a couple of months of salary, but now they have less staff developing the product, the staff they have are busy doing interviews, and they then have to pay a recruiter fee.
gjm11 8y ago
Suppose salaries are going up, and the average person at FooCorp could get 10% more by changing jobs. You are more underpaid than most; you establish that you could get 20% more by moving, and say to your manager at FooCorp that you'd like a 20% pay rise. Suppose they say yes. What happens next: other people hear about it and go to their managers saying "I think I'm underpaid; give me a 20% pay rise". If the answer is yes, then FooCorp is paying 20% more in salaries for the same work as before. If the answer is no, then those people have a concrete motivation to go and interview elsewhere, and probably a bunch of them will then leave even if they get counteroffers at FooCorp once they've demonstrated that they could earn more elsewhere. Suppose they say no. What happens next: most likely you leave for that better-paid job; others at FooCorp hear about this and understand that they aren't going to get paid more at FooCorp even with a job offer in hand. Some of them will decide to move, but maybe fewer than in the first scenario (because they haven't had the specific motivating experience of asking for more money and getting turned down, and because they don't feel like they have the lower-risk option of interviewing elsewhere, getting a counteroffer, and thus being paid more without having to move jobs). And the ones who don't move can go on being paid less. It's not obvious to me that the first of those scenarios is better for FooCorp than the second, if all they care about is maximizing their profits.