4 ms·

if this consultancy found a specialist niche within which it could charge not $165/hr but rather $220/hr, you would not expect to see developer wages increase c

by nkurz 8y ago

if this consultancy found a specialist niche within which it could charge not $165/hr but rather $220/hr, you would not expect to see developer wages increase commensurately It depends on the definition of "commensurately", but assume that only some of their developers are able to fill the new lucrative niche. Would it not be in the company's interest to be willing to give those employees something like a proportional 25% raise? If they don't, isn't it likely that a competitor will eventually poach those select employees, causing the company to lose access to the niche?

tptacek 8y ago
Maybe? That's why you want to ask the market about this, not a first-principles analysis on HN.
- joshka 8y ago
  Speaking from experience and having seen a few of these data points personally (possibly over-indexed on a small amount of data), often this comes down to making a choice of 220 with a 50% utilization vs 165 with 70%. Pretty much the same revenue for the company in the end, but with enough slack to put some extra short term gigs in there. Alternatively, in a situation where the company is confident of higher utilization, getting long term work, locking in a higher rate later, or being able to add extra bodies to the contract this is about $130 at 90% utilization (52 weeks - 4 weeks leave - 2 weeks public holidays). All these are common in .au govt contracts. The mentioned 80-120 range seems like a feasible answer to this. Push for more (or strong bonuses) if utilization is generally high. Obviously the 140% depends a bunch on location / taxes / cost of doing business etc., find out what these are in your neck of the woods and exploit it to negotiate your salary.
  - tptacek 8y ago
    I don't think working back from your bill rate to your W2 FT comp is ever a good idea. You're as likely to under-sell yourself as over-sell. It is not your problem if your employer can't make a unit economics case for your comp; your comp is what the market says it is. Firms can and do keep people on staff that are on paper not worth in billings what they cost to keep around, for all sorts of reasons.
andrei_says_ 8y ago
It will likely be cheaper to take the risk and counter-offer for the few employees where this actually happens. This gives them a discounted rate until this moment.

by nkurz 8y ago

tptacek 8y ago

Maybe? That's why you want to ask the market about this, not a first-principles analysis on HN.

joshka 8y ago
Speaking from experience and having seen a few of these data points personally (possibly over-indexed on a small amount of data), often this comes down to making a choice of 220 with a 50% utilization vs 165 with 70%. Pretty much the same revenue for the company in the end, but with enough slack to put some extra short term gigs in there. Alternatively, in a situation where the company is confident of higher utilization, getting long term work, locking in a higher rate later, or being able to add extra bodies to the contract this is about $130 at 90% utilization (52 weeks - 4 weeks leave - 2 weeks public holidays). All these are common in .au govt contracts. The mentioned 80-120 range seems like a feasible answer to this. Push for more (or strong bonuses) if utilization is generally high. Obviously the 140% depends a bunch on location / taxes / cost of doing business etc., find out what these are in your neck of the woods and exploit it to negotiate your salary.
- tptacek 8y ago
  I don't think working back from your bill rate to your W2 FT comp is ever a good idea. You're as likely to under-sell yourself as over-sell. It is not your problem if your employer can't make a unit economics case for your comp; your comp is what the market says it is. Firms can and do keep people on staff that are on paper not worth in billings what they cost to keep around, for all sorts of reasons.

andrei_says_ 8y ago

It will likely be cheaper to take the risk and counter-offer for the few employees where this actually happens. This gives them a discounted rate until this moment.