11 ms·

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get mo

• ed312 6y ago
  I can tell you as a manager the salary bands are generally set by HR for the whole company. I was told point blank at a previous employer that we payed the 70th percentile. I asked how they knew what that was - apparently there are companies that aggregate this data (legally?) and sell it back to HR orgs for $xx,xxx+ a year. HR for some reason wouldn't deviate from this band for top talent (discrimination maybe?)
  • t3rabytes 6y ago
    Yep, Radford is one of those companies.
    • ed312 6y ago
      IIRC, that's the one they used. This struck me as kinda crappy and anti-competitive. Perhaps this is too idealistic, but I would prefer a more transparent and open market for talent.
      • ghaff 6y ago
        OTOH the sectors where compensation is probably most open and transparent in the US such as public sector tend not to be the best-paying.
  • blahbhthrow3748 6y ago
    Bands are usually per level - if someone is sufficiently good you bring them in as a Principal/Staff/Magic Unicorn/whatever. This leads to the same phenomenon where you need to work for 2 years to get promoted but if you jump ship your new manager will set your level in line with your salary expectations. And of course the levels are largely meaningless outside of compensation and office politics.
    • ed312 6y ago
      This exact scenario happened to me - I was a "senior manager" by HR title but I was actually just promoted to team lead in practice. I meant to illustrate the setting of compensation happened almost entirely without engineering input at a company level (in my experience, where I worked, etc.).
      • Aeolun 6y ago
        Damn! This explains why my company has so many senior managers. Sometimes with just one report :P
    • vbtemp 6y ago
      I've noticed this exactly. At my original company I was performing Senior-level work (like, literally according to the staff level formalism from HR). But I was told by my manager that to be classified as a Senior-level staff, you have to have been performing Senior-staff level work for at least a year. Therefore being promoted within the organization is a long process. Moreover, with the usual 1-3% raise, you're still in the (low-end) of the pay band for Senior staff, so from management's point of view there's no real problem. .. and then of course, if you're hired in, you just have a few phone calls, couple of interviews, discussion with the hiring manager and you're at a pay-level and job-level far ahead of existing employees even with identical experience.
  • CobrastanJorji 6y ago
    I remember many, many years ago my boss at IBM explaining that I did not qualify for a raise because I was just over the industry median pay for my band. Honestly, if they had just kept giving me 3% raises every year, it might never have occurred to me to wonder whether I could be making more elsewhere. The weird thing about paying at the 50% line is that it means that your policy is, in effect, "we do not want any above average programmers."
    • antisthenes 6y ago
      Average inflation over the last 20 years is 2.1% Honestly being given anything under 2.5% is just insulting. Pay freeze or COL adjustment in line with inflation is for a few years in bad recessions imo, like 2009-10 or, probably the upcoming 12-18 months. Being given 3% is in the neighborhood of "better than nothing", but nowhere near what it should be for an employee trying to get ahead and putting in the required effort.
      • greedo 6y ago
        Yup. Our team is only allowed to have one person with "Exceeds standards." One. A bastard form of stack ranking. So the mgr picks based on his gut feelings, and then justifies it with a vague review. The lucky team member gets a 5% raise, everyone else is usually ranked as "Meets standards" which merits a 2.5% raise. A few people who need time in the penalty box get a 1% raise. So what happens is your actual performance doesn't matter unless you make the boss look great, or look terrible. He's a non-tech person, so he can't effectively evaluate you on any other criteria. This leads to employees doing enough work to avoid being fired, or (as is usual with Stack Ranking) sabotaging other workers.
        • Aeolun 6y ago
          Even 5% is nothing to write home about. Still far under the amount you would get if you switched jobs. But then you’d have to run the interview gauntlet again, and frankly that’s just so distasteful that I don’t want to.
  • nieksand 6y ago
    Compensation data from companies like Radford comes with three challenges 1. Your internal leveling scheme for SDEs needs to have been sorted out. External titles like "senior" are pretty meaningless, so one reasonable solution is mapping SDEs to an internal numerical tier so you can differentiate between "senior" and actual "senior". 2. Radford data comes with a trillion job titles. You need to identify the relevant ones and how your internal tiers map to them. 3. In markets where compensation is exploding (Seattle a few years ago), compensation data is a trailing indicator of what market rates you need to pay for new hires. You get fresher, but noisier, signals from candidates who reject your offers and from your personal network.
  • ones_and_zeros 6y ago
    Yes those salary survey's are just a way for businesses to enhance the information asymmetry in negotiations. I think if software engineers ever decide to collectively bargain, and they want to include comp as an area to bargain on, the easiest thing to do is buy these same datasets and share with members.
  • cosmie 6y ago
    As others have mentioned, Radford[1] is one company that sells that sort of data. Many providers of HR management and payroll systems also have secondary revenue streams by repackaging that data for uses like that. This[2] is one offered by ADP, one of the largest payroll providers in the US. As a manager, one way to get yourself some wiggle room in the situation you mentioned is using that strict policy against them. Request as detailed a list of roles and compensation bands as possible[2], then creatively interpret the job duties such that you can justify opening the requisition with whatever role provides the most favorable "70th percentile" salary band to attract the talent you want to bring in. Success varies between companies, but it's not uncommon for larger companies to have latent roles/titles set up in the system that are rarely used, but exist in the benchmark data and have far more favorable salary bands than the roles you'd typically use for your reqs. Or if you can get the full benchmark data itself, you can look through it all and try to get HR to add a net new one to the system based on what you find. [1] https://radford.aon.com/surveys https://radford.aon.com/surveys [2] https://apps.adp.com/en-US/apps/79131/benchmarking-powered-by-adp-datacloud/overview https://apps.adp.com/en-US/apps/79131/benchmarking-powered-b...
  • Zaheer 6y ago
    This is common practice. There are many salary surveyors that will collect, anonymize / aggregate and sell back the data to companies. At Levels.fyi we're trying solve issues that typically plague these salary surveys (ex. data staleness, leveling / title normalization, etc). We do this by flipping the model and collecting data directly from employees. We've also mapped levels to a fluid range rather than rigid step-wise increases. Crowdsourcing has it's own challenges (validity, normalization, etc). That said we've had several high-profile employers sign up for our new data subscription: https://www.levels.fyi/offerings/ https://www.levels.fyi/offerings/
  • mcnichol 6y ago
    I worked at a large insurance company in a previous life, this was their stance as well. They will deviate if the field is hot enough and it translates to money for them. They were paying FAANG money to AI/Data Science fresh out of college. The McKinseys/Gartners/etc of the world talk about the coming advantage...exec hears it and they become more open to these "critical sectors"
• the_gipsy 6y ago
  Maybe it's that "rotation" is viewed as normal, and nobody is really blamed if someone goes. If employees suddenly leave en masse, it's normally not due to salary. But growing personel count on the other is definitely a concrete objective/bonus for someone. That someone will allocate whatever possible budget to get his bonus or praise.
• Reedx 6y ago
  Which is part of why it's not that uncommon to see people who bounce from job to job every year or two in the Bay Area. It rapidly boosts salary. I've also seen where people leave for a top paying company, which sends their compensation right to the moon, then come back after a short stint. Netflix seems to be a rare example of a company that is proactive enough with pay raises to counter this (any Netflix folks here that can confirm/refute?). Not sure why more companies don't do that, at least when they're well capitalized.
  • decafninja 6y ago
    Not a Netflix employee, but one of my best friends is. He got in at a mid/upper 200ks range salary, and within a single year got a double digit percentage bump. Netflix just seems to be an extreme outlier in terms of base (cash) compensation. I think the only companies that could beat it are some rare and elite financial firms (i.e. Jane Street) that are even tougher to get into than FAANG.
    • blahbhthrow3748 6y ago
      The Netflix philosophy is basically that the job sucks and they will drain the life out of you but they pay above market. YMMV
      • exdsq 6y ago
        I read it was like a sports team and they paid for the best but wouldn’t hesitate to fire people once their performance starting slowing down.
      • yibg 6y ago
        This is the first time I’ve seen a job at Netflix characterized this way. Total comp at Netflix also isn’t any higher than say Facebook or google.
        • ForHackernews 6y ago
          But Netflix pays real money, right? FB and G heavily compensate with stock that has historically been valuable, but could always tank with a cooling ad market or strong privacy regulations.
• sgtnoodle 6y ago
  I imagine it has to do with avoiding resentment within the team. Folk don't share their starting compensation, but they sometimes share their raise percentage. If they give one person a big raise, they have to give others a big raise too, or suffer a morale hit. Also, from a beancounter perspective, there's no reason to pay more than needed for something. As long as folk aren't quitting, they are paying you enough. I work at a company that tries to prioritize employee well being, and I have gotten very considerate compensation adjustments that track the value I add to the company. Places like that are out there, but they are a bit rare.
  • Pfhreak 6y ago
    Plenty of folks these days are sharing both their starting and current compensations, both internally and externally. I (personally) believe it's super healthy to do.
    • Loughla 6y ago
      I agree in theory that it's super healthy to do, but the reality is that people have, what I would argue are, incorrect attitudes about who to blame. I work in a field that posts salary publicly (higher education). It is public knowledge what we all make, with databases devoted to this. When someone is hired at more than a current employee, instead of getting mad at the employer for their compensation plan that takes advantage of existing employees, people inevitably get upset at the new employee. I don't know why it happens, but it has happened in 100% of the cases at my institution. Every single one.
      • loopz 6y ago
        Over many years, the current leadership have set the culture. They decide who to keep and who to let go. People may nibble at the hand that feeds them, for necessary upwards feedback, but they generally refrain from outright biting it. So fresh bait straight from college is always easiest prey. In essence, how people treat newcomers, especially vulnerable ones, speaks volumes about the values and culture already set in the organization. There are organizations and countries where people can expect nothing good from leadership.
• Pfhreak 6y ago
  My understanding is that the pay schedules are designed to slow down your raises when you cross the median pay for that band. When you get hired, you can negotiate for any position in that band. Imagine a bell curve, the system is designed to try and keep everyone in the same role towards the middle of the bell curve. When you get hired, you just have to fit within the bell curve, not near the center. Changing companies lets you reset to somewhere else under the curve, though you may get smaller YoY raises. If we had a tech workers guild, we could push for much more transparency in all this.
• christiansakai 6y ago
  It is the fault of FAANG/unicorn salaries. Engineers always aspire to have FAANG/Unicorn salaries, so no matter how much the companies try to increase it, if it doesn't match them, then the engineers will eventually move on. Therefore companies know that their engineers will leave anyway, so they chose not to increase the salaries.
  • eloisant 6y ago
    The thing is - if the engineers leave, it's because they find a better salary elsewhere. Since not all engineers get offers from FAANG, there must be something else.
• amflare 6y ago
  I've always assumed its because of sticker shock. +40% is a lot, and as a salary it's right there on paper. As a rehire, the equivalent amount is hidden in several dozen smaller costs. Also if yesterday you made 14 widgets for 10 money, paying 14 money for 14 widgets is hard to justify, nevermind that when you were hired you made 10 widgets a day. The obvious solution for the dev is to go hunt for a job that reads "paying 14 money for someone with experience making 14 widgets a day".
  • Twixes 6y ago
    Ah, yes, think I'm gonna go make some widgety widgets now, to grab that valuable widget-making experience
• deleted 6y ago
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• xigency 6y ago
  I got a pretty good tip from a longer working employee on this. They told me to go to HR rather than my supervisor and ask for a market salary adjustment based on my position and expertise. It actually did work for getting an intermediate raise, but still not the same as switching companies.
  • zebnyc 6y ago
    I am pretty sure they would have circled back with your supervisor(s) before handing it out to you.
• bumby 6y ago
  Outside of HR pay band constraints, I’ve often wondered if there’s some psychological anchoring at play [1]. No matter how many more duties you take on, your monetary value may be heavily anchored by what you were previously paid. However, a new employer doesn’t have access to this information so they can make a more objective determination of worth without being biased by this pay anchoring aspect. [1] https://en.m.wikipedia.org/wiki/Anchoring_(cognitive_bias) https://en.m.wikipedia.org/wiki/Anchoring_(cognitive_bias)
  • pascalxus 6y ago
    Absolutely. This.
• hedora 6y ago
  There have been studies of Silicon Valley, and your experience is the common case. Some of it has to do with stock based compensation. I’ve not heard of any companies that, by default, renew RSUs at a dollar value comparable to what they gave the employee as a new hire (even if they’ve promoted the person!) Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior). I’ve heard people call this effect the “salary cliff.” I know a manager at $bigco that has an elaborate system to push it out a few years by gaming the system. The idea is to get a few extra years out of people before they switch jobs. I’m not sure why this is the equilibrium the system has chosen. It might be that people put a large monetary value on having a stable set of coworkers. More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management.
  • vbtemp 6y ago
    Excellent point
  • my_username_is_ 6y ago
    Stock based compensation may be the norm in Silicon Valley, but it isn't par for the course across different roles and industries. But the ~3% raise seems to be pervasive. This tells me that it doesn't have to do with stock based compensation.
    • kbenson 6y ago
      ~3% a year is a cost of living increase. If anyone gets 3% for a promotion they could ask where that number came from. If they recently got a 3% bump that means the promotion put them ahead by ~12 months of work at the company in the prior position. Does that make sense? If they haven't gotten a raise for close to a year, it means the promotion didn't really come with a pay bump at all if that's what they normally get. Questioning these things when offered is probably the best way to get the employer to change them, or at a minimum it may make it clear what your future prospects at the company are.
• modzu 6y ago
  this isnt an answer to your question but it just got me thinking, the opposite thing happens too: i had an engineer leave who was earning a good salary -- and i ended up being able to hire 2 new engineers each making half
• colmmacc 6y ago
  I think it's a pretty straightforward equilibrium. Most people, including good performers, don't want to bounce around jobs and consider it a reasonable personal cost to change their commute, learn new systems and processess, build up relationships with new colleagues, and so on. A significant portion of the labor market will bear tolerable adjustments, between barely enough not to get totally ticked off and enough to feel somewhat justly rewarded for effort. That will keep them happy and motivated and in-place, so it's rational to do it. A smaller number of people are actively willing to take the personal cost and move around, and in a near saturated market those people end up defining the price of new labor. But paying everyone that rate would be irrational because the cost (to the business) of them moving, hiring and integrating their replacement and the opportunity costs loss, is less than what it would cost to pay everybody that rate. Having another firm offer that you are absolutely willing to take is also the best way to get a raise where you already work, so there is also an intermediate option to handle some of the pressure of willing-to-movers without giving everybody a raise.
• bitexploder 6y ago
  It's manager myopia in many cases. I am sure there are some situations where a company may not be able to pay someone in a given role more than X dollars. That company may not view you as capable of the adjacent and more senior role that would increase your comp. But maybe you are on the edge and otherwise a solid employee that they would like to retain, but they feel it would not be fair to other employees in your role to adjust your comp "out of band". It is actually very hard as a manager to structure compensation in a way that is "fair" to everyone. So bands for roles are used. I mean, we do that at our small company. It works okay for the most part. Where it gets tricky is, you want to hire someone that you think given a year will grow into a senior role, but they are only an "entry level" player when you hire them. But they have comp requirements that look like the senior role's band. What do you do then? I think a lot of companies fall into this trap when they are inflexible with their comp bands. So, you may be up for that "big" promotion or adjustment in a year or two, and the employer thinks nothing about making you sit in your current band. This leads to predictable issues for companies with rigid compensation bands. You get frustrated because you feel you are doing the more senior role job now. You express this frustration or sentiment to your "manager". They tell you that you are doing great, but maybe you need a little more of X before they promote you. Maybe they see things in you that make them feel you should not be promoted to the next role / salary band at that time. This causes you to hunt around. Another company that really needs someone who can do what you can do will just hire you to the senior band because, on paper, they see you look effectively ready for the senior role, whereas your current managers may [right or wrong for their situation] think you are not ready for it. Maybe it is myopia and they should just promote you and that is the right call, but maybe you really aren't quite ready, by their standards, for the role yet. My experience with all of this has taught me that a big chunk of people are an "edge case" with special circumstances. Like, maybe this one guy who is not ready for the senior role because of performance issues can just go to a competitor and get a job there in the senior role. And maybe they do great in that role in the new environment. Maybe they fixed the flaws they had or they put in that extra effort at at new job, etc. There are so many nuances to this. But I think I would trace a lot of it to imperfect information on both sides. One employer may not be willing to promote you for whatever reason, another one hungry for talent is happy to pay you more and give you a shot because you are "almost" there anyway. Maybe other companies just have very different comp structure and available cash. Maybe the manager is being stubborn or they just don't have good, objective criteria to measure your performance and you deserve that comp bump. I do think it is easy to not "see" someone and the great work they do when you work with them and manage them every day. IDK, at the end of the day at my company we try to be as fair as possible, and we are willing to, and have often, made big comp adjustments once someone has proven themselves [in a relatively short amount of time 1-2 years or less] for that exact fear. Someone we trained up, like working with, etc. It would be a shame for them to go to a competitor for a 10-20k pay raise. One final reason not to be overlooked is plain old greed. Some companies just don't care. They will suck every last thing out of a junior developer or consultant type role and keep you in that pay band for the longest time they can, or maybe they never actually intend to promote you, but they just won't tell you that and figure you will see the writing on the wall eventually and leave. And that is fine with them. Anyhow, I have seen all of these scenarios play out in various forms over the years as a manager and employee. So, it is a multi-faceted problem that doesn't have one obvious answer. I don't know about the game theory aspects, but I assume on a large scale companies that don't adjust to "market" wages ultimately are forced to adjust to market wages or go out of business because enough people leave and they can't hire new people if their comp is too far from market wage.
• YetAnotherMatt 6y ago
  While the times are definitely changing, a lot of people are still very averse to finding a new workplace. This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person. For the company this means a large amount of extra profit year in year out. The odds of you saying "Nevermind, I'm out" when they don't budge from a 2% raise are from the employers side pretty low. The odds of a new hire saying "Nevermind, I'm out" when unwilling to budge on salary negotiation is a lot higher. Hence it becomes easier to give some additional leeway in that situation. Also if companies already have a large workforce, giving a raise to all current employees is a whole lot more expensive than giving more money to all new hires. Lastly, there has been plenty of research that has shown that salary is not that big of a predictor of whether people stick around or leave in any given year. Whether that research is also true for software developers is up for debate, but it is what most companies rely on. Lastly an anecdote, I was told by a manager once that if I wanted to get a significant raise, I could quit and come back as a contractor or "Senior Developer" after 6 months. At that time I was considered a junior, and promotion to senior was only possible after 10 years experience internally.
  • oarabbus_ 6y ago
    >This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person. As someone in their 30s who has spent in-person time at about a dozen companies (a stint in consulting will do that) ranging from start-ups to large enterprise, this is exceedingly rare from what I've seen. Hardly anyone makes it to a single decade, much less multiple. Maybe at a law firm, but not in a development role. I don't doubt these people exist but I'm a bit skeptical they are that significant in number to the point of defining the equilibrium as mentioned in the OP post.
    • JamesBarney 6y ago
      My experience has been the opposite. I've worked for large hospitals and oil and gas companies, and on any given team 50% of our senior engineers had been there over a decade.
• yibg 6y ago
  A lot of companies have budgets allocated to salary increases, so raises are capped. Why that’s the case I have no idea. It’s also strange to me that companies aren’t willing to give a nice raise to an engineer, say from 150k to 180k but are completely fine with hiring a replacement at 180k.
  • vbtemp 6y ago
    > It’s also strange to me that companies aren’t willing to give a nice raise to an engineer, say from 150k to 180k but are completely fine with hiring a replacement at 180k. This is literally the story of my professional life.
  • bluGill 6y ago
    Which is fine but the budget needs to go up by inflation every year. Most places it doesn't. I've switched jobs before because my salary didn't meet inflation. Yes I was near the max for my grade and my responsibilities didn't deserve the next grade. However if I'm losing to inflation I'm gone: that is a pay cut. (I was able to transfer)
    • milesvp 6y ago
      It can get worse than that in a region too. Even if they adjust those tables for inflation, they’re likely not adjusting them for regional cost of living changes which are harder to determine. Cost of living in seattle has gone up considerably more than the national average, but since there’s no official number like there is for the CPI, lazy orgs are just going to use that number.
    • yibg 6y ago
      I'm actually even ok with losing to inflation if that's the market rate. My main issue is internal raises seem to be detached from market rates. I mean, why would you want to pay your engineers that are already familiar with the system and domain less than an external hire? Maybe there is some math done somewhere that says the money saved from underpaying from reduced raises is more beneficial than the risk of losing an engineer that's already familiar only to be replaced by a more expensive engineer that's new.
• InfiniteRand 6y ago
  My experience (I have been involved in salary/bonus/raise decisions) is usually salary is set based on the necessary amount to secure the engineer, which usually means at least their previous salary + compensation for taking the risk of a new environment with new people. I should note that I've mostly worked with small companies where these decisions are somewhat ad-hoc and non-standardized. Raises and bonuses are based on how much can keep the engineer motivated and prevent them from looking for new work (I don't want to sound too cynical here, I think when it comes to measuring how much someone deserves in a raise/bonus is essentially how much it takes to keep the engineer providing this level of work, more or less) (based on management's assessment, and often constrained by general salary policies). That's how I approach these discussions in broad terms, although keeping an engineer motivated and preventing them from looking for new work are not simple things to analyze
• agensaequivocum 6y ago
  > How come every time I switch jobs I get a 30-40% raise. I see this frequently. I have a question: how many times have you done this? Don't you hit a limit at some point fairly quickly?
  • commandlinefan 6y ago
    > Don't you hit a limit at some point Not OP, but I did some job-hopping right after college in the late 90's. That was a glorious damned time to be a programmer: I doubled my salary twice in four years, changing jobs four times between 1995 and 1999. Then, around early 2000, I decided it was time to do it again (I was young and inexperienced, and it never occurred to me that anybody would have a problem with me job hopping). All of a sudden, I found it really hard to find a new position. Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year. I did finally find something, and started staying at jobs for much longer periods of time (four years is my shortest stint since), but when my last company shut down suddenly and I found myself looking again, the four-jobs-in-four-years from 20 years ago came up as a negative in the interview process again.
    • ghaff 6y ago
      >around early 2000 Things were still hot but there were at least storm clouds on the horizon at that point. >Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year. A year means that, to exaggerate just a little, you were basically starting to look for a new job as soon as you started the old one. But, yeah, if someone has moved between jobs like clockwork every year or two, the working assumption of the hiring manager has to be that this time won't be the charm and you'll hop again. Whether they're OK with that doubtless depends on the role. You might consider just leaving those right out of school jobs from 20 years ago off. If someone really wants to see them, you can tell them but it's not unreasonable to age stuff off your resume if you have lots of jobs.
      • commandlinefan 6y ago
        > just leaving those right out of school jobs from 20 years ago off Well, with any luck I won't need to look for a new job any time soon ;)
• scld 6y ago
  I wouldn't be surprised if a small part of the story is just that you only hear about big bumps from colleagues when they leave. I've gotten 20-30% raises before but I'm not going to go around and tell people that at my current job. However, if I find a new job and get a big pay bump, I'd be more likely to mention the pay bump (especially if I'm trying to soft-poach them :-) )
• clairity 6y ago
  anchoring and information asymmetries (+ information hiding). they're everywhere and especially all over labor markets. where there is information, it's thinly dispersed and often of dubious quality. anchoring is an easy heuristic to fall back on in those kinds of situations (on both sides). plus, margin contribution is basically impossible to determine on an individual level, and wages therefore devolve into fundamentally political arguments (as in, expressions of power and influence). you're expecting a (more) rational market response, when the labor market is anything but fair, free, and transparent, and coerced into that form over centuries by those in power.
• loopz 6y ago
  The straight and boring answer is budgeting. Either the system allows for it, or it does not.
• cat199 6y ago
  much easier to dodge ineffective HR (whether by their own incompetence or organizational inertia) and insecure managers by jumping ship (and optionally asking for a life raft if you want to come back)
• buster 6y ago
  Ask yourself, did you provide a 40% increase in value in the last year compared to the year before? Probably not. For another company, that possibly desperately needs a new employee, you might have the value that without you the added income will be zero, with you... More then that.
  • RussianCow 6y ago
    This doesn't track, though, because this happens within the same company. It's not uncommon to struggle to get a small raise, and then have the same manager hire someone new for a much higher salary.
    • WrtCdEvrydy 6y ago
      Leave, then. Seriously, just give two weeks and call it a day.
      • RussianCow 6y ago
        Not every job is about the money. Sometimes a job is worth keeping even if you know that you're leaving money on the table. That doesn't make this practice any less shitty, though.
        • blaser-waffle 6y ago
          Yeah it's a little harder when you're not in SanFran or NYC or another hub. Like, I got options, but they're going to involve planes, trains, and moving companies. Might totally be worth doing, but that's a whole lot different than changing my morning commute by 10 minutes.
          • scarface74 6y ago
            I don’t live in a tech hub. My company cut pay across the board because of Covid. I interviewed for $BigTech, got a job that’s fully remote - even post Covid. More roles will hopefully become remote.
• sys_64738 6y ago
  Usually when you're hiring you're trying to solve a critical business need. A pay raise to a legacy employee doesn't get you more productivity.
  • ratww 6y ago
    Usually when an employee leaves it means you have to find somebody else anyway, so that point is not valid.
    • jlokier 6y ago
      That's a bit like paying a blackmailer: "You want us to give you a 40% raise just so you won't reduce current productivity?" In terms of productivity it would be rational to pay. But there's a decidedly different quality between paying for an improvement, and paying someone to not make things worse.
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• piptastic 6y ago
  I've heard from a lot of people at certain companies who know that if they want a certain salary bump, they need to leave for a year or two and come back. So if you're still interested in your first organization, don't discount going back there. Generally, it's way easier to get hired the second time as you're a known commodity, and assuming you can demonstrate your skill improvement over that time period, you can get a 20-40% bump from your current job.
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• regularfry 6y ago
  It's a completely different negotiating situation. 1) The company knows exactly how much you're currently being paid. 2) The company doesn't have to tempt you over an activation energy hump to change what you're doing. 3) Unless things have changed radically over the past year, you're probably doing pretty much the same job as when you started, so you've not got much leverage, and the company knows you'll likely just carry on doing it. 4) The company knows that if you do want to change jobs, that's effort you need to put in over and above your current exertions, and most people won't bother.
• lazyant 6y ago
  I think there's an anchoring mechanism. You come in at a level and maybe promote after a couple years but then every promotion becomes harder, they are used to you and there's the other engineers with their salaries and there's a lot of mental inertia to see that John should be now a staff engineer when he's already promoted (is he really so outstanding compared to the other engineers?). But you interview with another company and you reinvent yourself. They have a problem to solve and you have experience in it. You interview well, now you are a principal engineer with a big raise.
  • roosterdawn 6y ago
    Yup, you nailed it. Most companies are content to let this kind of anchoring and psychological inertia let them lose out on capitalizing on their investments, but let's remember that this isn't necessarily unintentional. Companies continue their ability to function sustainably by adequately utilizing and providing career trajectories for the majority of employees that work there, for many of whom the stress and risk management of trying to figure out how to get promoted "up or out" is not worthwhile. For some companies, it's important enough to retain high performing outliers that they put in place recapture, recalibration, or boomerang mechanisms (as another commenter wrote somewhere in this thread). But for others, it may just not be necessary.
• iabacu 6y ago
  Your current company will promote (and compensate) you based on your performance in the past cycles. Your new company will offer you a level (and compensation) based on your expected performance in future cycles. If you're on a growth trajectory, jumping jobs will usually give you a bump because your new company treats you differently than your current company. And it doesn't matter much whether you're coming from company A to B, or from B to A!
• WrtCdEvrydy 6y ago
  Because new employees are an unknown quantity and we have to be competitive to the market. Existing employees are just fine getting their 1% to 3%. I self-promote myself every two years, and if anyone asks "I was looking for an interesting organization taking on interesting projects such as yours"
• PaywallBuster 6y ago
  Maybe companies try to gamify growing inside the company, make it look like an achievement. I've worked at a company where most engineers have been in the team for 2/3+ years, maybe more, some of them first and only job, so far. Most of them were probably low-ish to medium salaries but they were happy with the team and the company. Had no plans to leave or try to argue for salary raises. confortable Some people simply don't care so much about money and will be happy to have a nice stable environment they're comfortable with.
• codegeek 6y ago
  Simple answer: Capitalism. Companies don't want to pay you more just because there is a perceived value. They will only pay you once you threaten and you are good for it (supply demand) or you change jobs (supply demand again). I have thought about this hard. Both as an employee back in the day and now for 6+ years as a business owner. As an employee, I thought the same as you but then stopped expecting from current employers. When I was ready to jump, I jumped. Period. No ifs. No negotiations with current company. As a business owner though, I definitely understand why I am not just going to give someone a 30% raise. Now, if you are a small company and there is no a whole lot of management red tape (like my company), I encourage anyone to ask for a 30% raise and be ready to be able to justify it. If you are worth it (capitalism), I would do it. But if you never ask, I absolutely won't give you a 30% raise. Remember, you are not the only one in the company.
  • dominotw 6y ago
    > They will only you once you threaten employees don't threaten, they simply leave. Why would someone go through the arduous process of finding another job just to 'threaten'. If you 'threaten' they will agree at that point and fire you later. Capitalism should account for that. So thats not it.
    • abc_lisper 6y ago
      As someone on H-1B this is doubly hard. I left every single time, without even asking.
• mcnichol 6y ago
  It's for the same reason that large financial institutions hire entry level engineers as "VP's" There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world. The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employees yearly, associate this to overhead, and report back to shareholders. This trickles down to managers as "room to work with their employees." If someone gets rewarded, this means someone else is getting punished. Need an exception....take it to the top. Now you have a system of incentives and disincentive...want to get more for your people, take from others or take on more work. You now have potential for lost information at your inability to display value (doing work quietly and not advocating for yourself), your manager (overloaded/ignorant of effort), the process (outdated or accounting for a percentage of unhappiness), and arguably the stock market.... You can get very analytical with game theory here which I think can be very interesting. If you find that interesting you may find Thalers "Guessing Game" and Keynes "Beauty Contest" interesting as well. My opinion has been the more layers, the more places to lose information. These companies are accounting for external factors/information on the hiring front, once you are inside, it is internal factors/information.
  • vbtemp 6y ago
    Yeah, for a side project I want to try to model this in an agent based sim and to see if it can recreate some of these dynamics.
    • mcnichol 6y ago
      I enjoy this line of thought. I hope you do pursue this, I'd be interested in what you create. Makes me think of the Einstein quote: "Pure mathematics is, in its way, the poetry of logical ideas."
    • jacques_chester 6y ago
      ABM for economic / social systems is a rich field: https://en.wikipedia.org/wiki/Computer_simulation_and_organizational_studies https://en.wikipedia.org/wiki/Computer_simulation_and_organi...
• yboris 6y ago
  One helpful perspective: a company hiring an individual has a specific problem they want to solve. If they hire you, you are the best candidate out of many they interview. You will bring a lot of value to them immediately.
  • vbtemp 6y ago
    This is actually a really good point. At two recent jobs where each time i got approx 40% raise, I was the right person at the right time to fill that specific niche they really needed.
  • amznthrowaway5 6y ago
    Not true in large companies. Managers are often just empire building, but new hires still get top of band. Real morale killer, makes tenured employees want to look for a new job.
• hintymad 6y ago
  Some companies are exceptions. Netflix didn't play that game, at least not during the years when I was there. The level of increase year over year was nothing less than shocking, compared with any other company I knew.
• kbenson 6y ago
  > I would have loved to stay at my first organization. Have you considered going back to the original place you liked eventually? I speak from experience. A bit less than a year ago I started back at somewhere I worked previously. If you left on good terms, it can be an extremely easy and low-stress transition compared to starting at a new business, and hiring can be easier too, as the company already knows for the most part whether you're a good cultural and skill fit (depending on how similar the job you're applying for is to what you did previously). > The thing is, my current salary at my original organization isn't unheard of for that level of responsibility at all, the problem is that getting that kind of adjustment is impossible. Sometimes it's easier to leave and come back later to reset expectations like that. Hiring salaries seem to be completely disconnected from promotion salary adjustments at some locations, or at least engender a different mindset. I have a friend that noted at a prior place they worked (I believe it was SAP) that they encouraged, or at least maybe accepted and understood, that employees would leave to work at other places, and had programs in place to encourage them to come back with those new experiences and skills. If a company is large enough to have opening often and expects to be around in 10-20 years, it probably makes a lot of sense to have a program like that. As a company, why not take advantage of other companies paying and training your good employees for a few years (when the alternative is to just assume them lost forever)?
• ryandrake 6y ago
  > How come every time I switch jobs I get a 30-40% raise Here's something that doesn't get mentioned a lot on HN: That "every time" will eventually come to an end. It will eventually plateau unless you change careers (become a manager or exec or something). I'm a little more than 20 years into my career. My first job change as a fresh grad + 2 years got me about a +50% raise! My next one was about +30%. Every job change I've had since has been less than +10%, and my last job change was pretty much flat +0.5% MAYBE. This idea that job changes are always/necessarily huge salary increases is largely an artifact of the age demographic here on HN. EDIT: To put it another way, let's say my first salary as a software engineer in 1998 was $45K (it was!). If I changed jobs every two years and consistently got a +30% raise each time, I'd be making over $800K now, which would put me in what, the top 0.001% of software engineer salaries?
  • 100-xyz 6y ago
    Agree with this.
• kgin 6y ago
  What you're paid has nothing to do with your productivity or business value, it's about how much they have to pay you not to leave (or for a new job, to accept) Inertia means that you have to pay someone more to change their life and come work at a new place. You don't have to pay someone very much more each year to have them continue on the same path.
• LatteLazy 6y ago
  Because 95% of people won't switch. So a 10% raise for you would be a 10% raise for everyone which is a 2000% raise. 20 salaries. The best thing you can do to improve pay at your workplace is leave. This is the sad truth of the free market.
• deleted 6y ago
  [deleted]
• wdb 6y ago
  Can't say I have received 30-40% raise when I found a new job recently more like a 8% pay cut.
• sershe 6y ago
  Can you just rejoin the organization again? They (used to?) say that the fastest way to get promoted in Microsoft, for example, is to leave for a competitor and then rejoin in 2 years.
• sieabahlpark 6y ago
  Your experience at varying different companies is more valuable than a single perspective of someone internally.
• scarface74 6y ago
  It’s called “salary compression and inversion” https://www.payscale.com/compensation-today/2020/05/what-is-pay-compression-and-how-do-you-address-it https://www.payscale.com/compensation-today/2020/05/what-is-... Inversion is just the extreme. When new employees come in making more than existing employees with the same experience.
• m463 6y ago
  Many friends of mine have run into this with salary, but done VERY well from stock, though grants and/or stock purchase plans.