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People stay at a job for all kinds of reasons, money is only one of them. If you have stayed at a job a while it is strong evidence that you are happy with tho

People stay at a job for all kinds of reasons, money is only one of them. If you have stayed at a job a while it is strong evidence that you are happy with those other factors. You like the company, or you like your boss, or you like what you do. Another employer knows they have to offer you a strong incentive to switch jobs. You are taking the risk that will go form a job you like to one you don't. Or they won't like you, which is a still a risk to the employee switching jobs. I don't think it is so much that employers don't appreciate existing employees, or that they worry raises beget future raises. It's mostly that if you have been a job for awhile they think you are somewhat happy.

Viliam1234 6y ago
One problem I have with this hypothesis is that employers often carelessly destroy the things that make their employees happy. For example, a company decides to move to the opposite part of the city, despite the fact that many employees chose it because it was conveniently close to their homes. Or, there is a team where the colleagues have great synergy (their personalities are compatible, their strenghts balance each other's weaknesses), and when they finish a project, instead of giving a new project to the same team, they are randomly assigned to different teams. If the company is aware that they are paying the below market rate and their employees are staying there for non-financial reasons, why would they destroy those reasons? Therefore, it seems to me more likely that the employers mostly just don't have a clue... either about market rates, or the things that make their employees happy. They pay existing employees less, because they can; and they pay new employees more, because they must; but there is no grand strategy like "make them happy and then they will be willing to stay here for less", only short-sighted paying everyone as little as possible.

Viliam1234 6y ago

One problem I have with this hypothesis is that employers often carelessly destroy the things that make their employees happy. For example, a company decides to move to the opposite part of the city, despite the fact that many employees chose it because it was conveniently close to their homes. Or, there is a team where the colleagues have great synergy (their personalities are compatible, their strenghts balance each other's weaknesses), and when they finish a project, instead of giving a new project to the same team, they are randomly assigned to different teams. If the company is aware that they are paying the below market rate and their employees are staying there for non-financial reasons, why would they destroy those reasons? Therefore, it seems to me more likely that the employers mostly just don't have a clue... either about market rates, or the things that make their employees happy. They pay existing employees less, because they can; and they pay new employees more, because they must; but there is no grand strategy like "make them happy and then they will be willing to stay here for less", only short-sighted paying everyone as little as possible.