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I don't think it's a bubble. A lot of people talk about top engineers being 10x (or even 100x) as productive as mediocre engineers. Assuming that's true (and I

I don't think it's a bubble. A lot of people talk about top engineers being 10x (or even 100x) as productive as mediocre engineers. Assuming that's true (and I suspect it is, but admittedly I don't have any evidence to back that up): Historically, those 10x engineers got paid maybe 2-3x. Because it's become so much easier to start software companies recently (thanks in no small part to folks like Y Combinator, but largely due to cheap servers and FOSS), those 10x engineers can now easily go seek compensation that's more proportional to the value they actually create. In turn, large software companies are finding they need to pay more to stay competitive with the alternative of striking out on your own. What we're seeing here is pay becoming more proportional to value creation. Which I think is a very good thing. As an aside, I think the rise in talent acquisitions is largely a backdoor for companies to hire top talent without needing to change their deeply entrenched pay-scales. Apparently Google is starting to figure out that it's more efficient to just pay people more instead of having them leave for a couple of years in order to take advantage of this backdoor.

yawniek 16y ago
also an interesting approach and i see more similarities to the financial industry where exactely this happens all the time. it is also the political justification of their salaries.
asmithmd1 16y ago
Also compare the recent run-up in salaries to a graph of baseball players salaries over years: http://baseballanalysts.com/archives/2010/11/mlb_salaries_ov.php http://baseballanalysts.com/archives/2010/11/mlb_salaries_ov... When you look at the linear graph it looks less like a bubble and more like settling in at a new level.
- paulbaumgart 16y ago
  Like professional sports, we'll probably see the bottom of the salary range for software engineering drop significantly, due to increased competition resulting from globalization and because the higher pay at the top of the range will make the field more attractive.
variety 16y ago
"Assuming that's true" is a big caveat, there. People have been bandying the 10x-100x saying for years, ignoring the fact that perceived productivity differences between employees are hugely subjective, and nearly impossible to quantify, in any case. As a constructive proof of this, consider that borderline prima-donna personality type we know and love: management (or those simply jealous of his stock options or reputation, but who don't know him well) might consider him a "rainmaker", the big kahuna, etc -- the classic "10x" employee. For a while, at least. Whereas those who have worked under (or with) that person for a while might have a substantially different evaluation (more like -10x). Either because they've deal with his morale-squashing abrasiveness... or because they've seen his handiwork up close. Enough to detect, let's just say, a bit of a disconnect between their material output, and the superhuman gravitas projected onto them. Also, while it may be arguably more true for tech that intrinsic employee values greater than other professions, there's not much basis for believing -- as many hackers seem to like to believe -- that this is something uniquely, or nearly uniquely true for tech people. There are all kinds of professions (not even professions that have outlandishly high salaries) where it could easily be said that certain employees contribute greatly more than others -- bartenders, chefs, and (though some may laugh here) schoolteachers come immediately to mind. Yet even though competition is sometimes quite fierce for these star performers[1], no one in those professions is in the habit of saying "so-and-so is 10x, 100x more productive than your typical bartender/chef." So to a large extent, I think the whole 10x/100x thing has a lot to do with the current zeitgeist -- and the fact that a lot of tech people, frankly, have incredibly inflated egos, and easily imagine themselves in that rarefied 10x/100x category. And not so much with the incredible, intrinsic business value of high-performing engineers. I mean realy now: 10x? Okay, maybe. 100x? Come on. [1] well, maybe not for schoolteachers, unfortunately.

yawniek 16y ago

also an interesting approach and i see more similarities to the financial industry where exactely this happens all the time. it is also the political justification of their salaries.

asmithmd1 16y ago

Also compare the recent run-up in salaries to a graph of baseball players salaries over years: http://baseballanalysts.com/archives/2010/11/mlb_salaries_ov.php http://baseballanalysts.com/archives/2010/11/mlb_salaries_ov... When you look at the linear graph it looks less like a bubble and more like settling in at a new level.

paulbaumgart 16y ago
Like professional sports, we'll probably see the bottom of the salary range for software engineering drop significantly, due to increased competition resulting from globalization and because the higher pay at the top of the range will make the field more attractive.

variety 16y ago

"Assuming that's true" is a big caveat, there. People have been bandying the 10x-100x saying for years, ignoring the fact that perceived productivity differences between employees are hugely subjective, and nearly impossible to quantify, in any case. As a constructive proof of this, consider that borderline prima-donna personality type we know and love: management (or those simply jealous of his stock options or reputation, but who don't know him well) might consider him a "rainmaker", the big kahuna, etc -- the classic "10x" employee. For a while, at least. Whereas those who have worked under (or with) that person for a while might have a substantially different evaluation (more like -10x). Either because they've deal with his morale-squashing abrasiveness... or because they've seen his handiwork up close. Enough to detect, let's just say, a bit of a disconnect between their material output, and the superhuman gravitas projected onto them. Also, while it may be arguably more true for tech that intrinsic employee values greater than other professions, there's not much basis for believing -- as many hackers seem to like to believe -- that this is something uniquely, or nearly uniquely true for tech people. There are all kinds of professions (not even professions that have outlandishly high salaries) where it could easily be said that certain employees contribute greatly more than others -- bartenders, chefs, and (though some may laugh here) schoolteachers come immediately to mind. Yet even though competition is sometimes quite fierce for these star performers[1], no one in those professions is in the habit of saying "so-and-so is 10x, 100x more productive than your typical bartender/chef." So to a large extent, I think the whole 10x/100x thing has a lot to do with the current zeitgeist -- and the fact that a lot of tech people, frankly, have incredibly inflated egos, and easily imagine themselves in that rarefied 10x/100x category. And not so much with the incredible, intrinsic business value of high-performing engineers. I mean realy now: 10x? Okay, maybe. 100x? Come on. [1] well, maybe not for schoolteachers, unfortunately.