4 ms·

There is almost no one that is worth tens of thousands per hour. Most "big companies" overpay for people with fancy titles that produce a lot of noise but not a

by tensor 6y ago

There is almost no one that is worth tens of thousands per hour. Most "big companies" overpay for people with fancy titles that produce a lot of noise but not a lot of output. Small companies have no choice but to be highly efficient and that's why they have lower levels of pay inequality. Chances are that 95% of people is what is bringing in 95% of the value of your company.

nevertoolate 6y ago
Agreed, if the top contributors fell in the 95% bucket :) Imo EVERY senior/principal engineer is underpayed if compared to juniors based on contribution value. And this is OK
exolymph 6y ago
> There is almost no one that is worth tens of thousands per hour. Sure, but there are plenty of business problems worth solving even if it takes millions. You're not paying for the person, you're paying for someone to solve your problem.
- bryanrasmussen 6y ago
  A couple years ago I was approached for a consulting job for a company using DSSSL with some arbortext extensions for generating their user manuals, I was unfortunately already committed on a project, darn the luck. I don't know who they found to take the task, but I have to assume they charged them quite a lot because you're just not going to find very many people to solve that particular problem. Certainly not 10000 per hour, but a significant amount given the Danish market.
- hogFeast 6y ago
  This reminds me of a story a friend told me: he locked himself out of his house, he calls up the emergency locksmith, locksmith takes a look, and says it will be £150. My friend (annoyed) asks what is he going to do. Locksmith pulls out a bent coathanger. My friend gets angry. Says he could do it himself, he has a coathanger upstairs, he doesn't need the locksmith, £150 is a total rip off, calls him every name under the sun. Locksmith: "Okay mate, you have a coathanger now?". Friend says no, agrees to pay him. Door opened. £150 well spent. I think too many people here perceive tech as something that meets their needs when it should be about providing a service to others.
  - joeraut 6y ago
    That anecdote applies to more than locksmiths or tech. A MacBook repair shop may replace a $0.50 transistor, but charge $200+. What you're paying for is the knowledge and experience in identifying and solving the problem. It's unfortunate that so many consumers don't understand this principle.
littleweep 6y ago
This seems like such a narrow viewpoint. Consider a business problem -- like a misconfiguration of an Amazon S3 bucket -- that is needlessly costing a company an extra $30k per month. Say you don't have the expertise on your team and hire an expert for 1 hour @ $20,000/hour to fix it. It would be well worth it to stop the bleeding.
- Ididntdothis 6y ago
  This example sounds a little like the examples to justify torture because they guy you have caught knows how to defuse the ticking bomb. Sounds good but never happens in reality.
  - bryanrasmussen 6y ago
    other than torture is immoral and paying someone for expertise is sensible this analogy is spot on. I agree that 20000 for one hour is pretty unlikely but 10,000 a day for 2 days seems like it might happen.
  - tomp 6y ago
    This is business, not saving human lives. Remember, whenever a company pays you something, you're leaving money on the table - they're still making a profit overall, otherwise they wouldn't be doing this! Same goes with buying, of course - any car discount you fail to negotiate, is profit for the dealership.
  - giantDinosaur 6y ago
    It's perhaps uncommon for such values with respect to S3 bucket engineering experts, but I've come up against many problems where paying an expert $600 an hour to solve something within a day would have saved thousands. The real problem is picking an expert who'll actually have it solved quickly, while avoiding the consultants who will drag out a day of work into multiple days/weeks, or leave you with working but deficient solutions. Difficult!
  - exdsq 6y ago
    I actually organised this once (not torture, paying a large amount for an hour or twos work). I was made tech manager at a startup and that included the on-site infrastructure where we had ~10 support agents taking calls for our main client. We were having VoIP issues (dropped calls) due to a misconfigured router/switch and I just couldn't solve it after spending a week investigating (I was ~2 years into my career with very little sysadmin experience). I hired a contractor to remotely fix it at £375 an hour (took two hours) and was entirely worth it. P.S. It was an inflated amount to get an immediate fix based on his daily rate knowing it'd only take an hour or two - not because sysadmins working on ~30 person networks reguarly earn ~£3k a day.
svaha1728 6y ago
"It's perfect!" she gushed. "You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?" "Five thousand dollars," the artist replied. "But, what?" the woman sputtered. "How could you want so much money for this picture? It only took you a second to draw it!" To which Picasso responded, "Madame, it took me my entire life."
hogFeast 6y ago
It depends how you define almost no one. I agree almost no one is worth that much...but that was my point. There are people with hourlies in the hundreds of thousands. I wouldn't call tens of thousands particularly high. And no...that just isn't correct. It does vary by industry. Very generally, capital-intensive businesses have smaller productivity differences...but even then it is probably far less than you think (in some of those industries, experience curves are per employee). But, given the subject of the post, then yes...productivity can vary that much. What is perhaps confusing you, and many companies get this wrong, is that they treat every employee like a superstar when (by definition) they can't be. It is far more profitable to hire five below-average people and teach them to be average than hire one superstar. My point wasn't really about what companies should or should not do but how they should look at those decisions. Wages really don't matter. I will pay someone $1m tomorrow if they can generate $5m in sales. Simple. But companies should think carefully before they go down this route. It mostly isn't worth it because most companies aren't very good at hiring and will lose the employee if they can't continuously provide a high productivity environment. Some places can retain staff but, again, there is an 95/5 rule about workplaces just as there is employees.
ska 6y ago
This is the wrong way of thinking about it. There is almost nobody who is worth even 1k/hour full time in most scenarios. If 20 hours of someones time saves you 2 million though, it's a no brainer to pay them 20k to do it. Some people absolutely do specialize in this sort of engagement, and do well at it. It's really important to remember that. $N/hour usually doesn't mean $N*2000/year salary. Often hourly rates go up because of the nature of the work means the ratio of billable hours to hours put in isn't great (see, e.g. many independent lawyers). Also worth noting that most people contracting at this level don't in fact charge hourly but that's a different aspect.
marcinzm 6y ago
>Small companies have no choice but to be highly efficient and that's why they have lower levels of pay inequality. Only if you discount equity, small companies are very unequal because the owners/founders will make orders of magnitude more in the event of a sale.

by tensor 6y ago

nevertoolate 6y ago

Agreed, if the top contributors fell in the 95% bucket :) Imo EVERY senior/principal engineer is underpayed if compared to juniors based on contribution value. And this is OK

exolymph 6y ago

> There is almost no one that is worth tens of thousands per hour. Sure, but there are plenty of business problems worth solving even if it takes millions. You're not paying for the person, you're paying for someone to solve your problem.

bryanrasmussen 6y ago
A couple years ago I was approached for a consulting job for a company using DSSSL with some arbortext extensions for generating their user manuals, I was unfortunately already committed on a project, darn the luck. I don't know who they found to take the task, but I have to assume they charged them quite a lot because you're just not going to find very many people to solve that particular problem. Certainly not 10000 per hour, but a significant amount given the Danish market.
hogFeast 6y ago
This reminds me of a story a friend told me: he locked himself out of his house, he calls up the emergency locksmith, locksmith takes a look, and says it will be £150. My friend (annoyed) asks what is he going to do. Locksmith pulls out a bent coathanger. My friend gets angry. Says he could do it himself, he has a coathanger upstairs, he doesn't need the locksmith, £150 is a total rip off, calls him every name under the sun. Locksmith: "Okay mate, you have a coathanger now?". Friend says no, agrees to pay him. Door opened. £150 well spent. I think too many people here perceive tech as something that meets their needs when it should be about providing a service to others.
- joeraut 6y ago
  That anecdote applies to more than locksmiths or tech. A MacBook repair shop may replace a $0.50 transistor, but charge $200+. What you're paying for is the knowledge and experience in identifying and solving the problem. It's unfortunate that so many consumers don't understand this principle.

littleweep 6y ago

This seems like such a narrow viewpoint. Consider a business problem -- like a misconfiguration of an Amazon S3 bucket -- that is needlessly costing a company an extra $30k per month. Say you don't have the expertise on your team and hire an expert for 1 hour @ $20,000/hour to fix it. It would be well worth it to stop the bleeding.

Ididntdothis 6y ago
This example sounds a little like the examples to justify torture because they guy you have caught knows how to defuse the ticking bomb. Sounds good but never happens in reality.
- bryanrasmussen 6y ago
  other than torture is immoral and paying someone for expertise is sensible this analogy is spot on. I agree that 20000 for one hour is pretty unlikely but 10,000 a day for 2 days seems like it might happen.
- tomp 6y ago
  This is business, not saving human lives. Remember, whenever a company pays you something, you're leaving money on the table - they're still making a profit overall, otherwise they wouldn't be doing this! Same goes with buying, of course - any car discount you fail to negotiate, is profit for the dealership.
- giantDinosaur 6y ago
  It's perhaps uncommon for such values with respect to S3 bucket engineering experts, but I've come up against many problems where paying an expert $600 an hour to solve something within a day would have saved thousands. The real problem is picking an expert who'll actually have it solved quickly, while avoiding the consultants who will drag out a day of work into multiple days/weeks, or leave you with working but deficient solutions. Difficult!
- exdsq 6y ago
  I actually organised this once (not torture, paying a large amount for an hour or twos work). I was made tech manager at a startup and that included the on-site infrastructure where we had ~10 support agents taking calls for our main client. We were having VoIP issues (dropped calls) due to a misconfigured router/switch and I just couldn't solve it after spending a week investigating (I was ~2 years into my career with very little sysadmin experience). I hired a contractor to remotely fix it at £375 an hour (took two hours) and was entirely worth it. P.S. It was an inflated amount to get an immediate fix based on his daily rate knowing it'd only take an hour or two - not because sysadmins working on ~30 person networks reguarly earn ~£3k a day.

svaha1728 6y ago

"It's perfect!" she gushed. "You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?" "Five thousand dollars," the artist replied. "But, what?" the woman sputtered. "How could you want so much money for this picture? It only took you a second to draw it!" To which Picasso responded, "Madame, it took me my entire life."

hogFeast 6y ago

It depends how you define almost no one. I agree almost no one is worth that much...but that was my point. There are people with hourlies in the hundreds of thousands. I wouldn't call tens of thousands particularly high. And no...that just isn't correct. It does vary by industry. Very generally, capital-intensive businesses have smaller productivity differences...but even then it is probably far less than you think (in some of those industries, experience curves are per employee). But, given the subject of the post, then yes...productivity can vary that much. What is perhaps confusing you, and many companies get this wrong, is that they treat every employee like a superstar when (by definition) they can't be. It is far more profitable to hire five below-average people and teach them to be average than hire one superstar. My point wasn't really about what companies should or should not do but how they should look at those decisions. Wages really don't matter. I will pay someone $1m tomorrow if they can generate $5m in sales. Simple. But companies should think carefully before they go down this route. It mostly isn't worth it because most companies aren't very good at hiring and will lose the employee if they can't continuously provide a high productivity environment. Some places can retain staff but, again, there is an 95/5 rule about workplaces just as there is employees.

ska 6y ago

This is the wrong way of thinking about it. There is almost nobody who is worth even 1k/hour full time in most scenarios. If 20 hours of someones time saves you 2 million though, it's a no brainer to pay them 20k to do it. Some people absolutely do specialize in this sort of engagement, and do well at it. It's really important to remember that. $N/hour usually doesn't mean $N*2000/year salary. Often hourly rates go up because of the nature of the work means the ratio of billable hours to hours put in isn't great (see, e.g. many independent lawyers). Also worth noting that most people contracting at this level don't in fact charge hourly but that's a different aspect.

marcinzm 6y ago

>Small companies have no choice but to be highly efficient and that's why they have lower levels of pay inequality. Only if you discount equity, small companies are very unequal because the owners/founders will make orders of magnitude more in the event of a sale.