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I've seen this happen in a large company, and it caused terrible morale issues, as there were reasons good reasons why salary couldn't just be raised across the

I've seen this happen in a large company, and it caused terrible morale issues, as there were reasons good reasons why salary couldn't just be raised across the board to match new hire rates. For most companies, this will make them less resistant to boom and bust as they'll be forced to offer big annual payrises which they won't be able to roll back when the market contracts.

tpxl 5y ago
Pray tell, what are good reasons to underpay experienced staff compared to new staff?
- lelanthran 5y ago
  > Pray tell, what are good reasons to underpay experienced staff compared to new staff? GP didn't say that there are good reasons to underpay experienced staff compared to new staff, he said that there are good reasons that salaries cannot be raised across the board.
  - tpxl 5y ago
    GP said they couldn't raise wages compared to new hires, so they couldn't raise wages of experienced staff relative to new staff, leading to experienced staff being underpaid.
    - lelanthran 5y ago
      > GP said they couldn't raise wages compared to new hires, No. This is exactly what GP said: > there were reasons good reasons why salary couldn't just be raised across the board to match new hire rates. There is not a single company I can think of (other than FAANG or unicorn startups flush with VC money) that can raise salaries across the board, they simply do not have the cash-flow to do it.
      - frumper 5y ago
        It's downright silly to pay new employees more than experienced employees for similar jobs. If you can't afford to raise wages for the experienced staff you'll soon have a bunch of inexperienced staff that costs you more.
        lelanthran 5y ago
        > It's downright silly to pay new employees more than experienced employees for similar jobs. If you can't afford to raise wages for the experienced staff you'll soon have a bunch of inexperienced staff that costs you more. I agree, but the reality is that raising salaries across the board would kill the company immediately, while having ONLY inexperienced staff might happen, and even if it did, it only might kill the company. Another factor is that a lot of the staff just won't move, even if they know they are being paid less.
      - biztos 5y ago
        OK, but then what is the long-term business justification for paying more-experienced staff less than less-experienced staff? I get that the short-term justification is "we can get away with paying the former less because enough of them will be afraid to leave." But is there another justification? In my experience, at large companies "cash flow" would not even vaguely register the difference of increasing salaries for experienced people you want to keep, and it would be a marvelous signal to the rest.
dec0dedab0de 5y ago
That doesn't sound like a good reason to me. You can use a bonus to cover fluctuations without hurting morale too much. Plus you don't have to give everyone an automatic raise If you post new jobs at a higher rate. Just give them a new title, and allow current employees to apply for them.
- sokoloff 5y ago
  “This listing is for an SWE II-Spring-2022 Hire job.”

tpxl 5y ago

Pray tell, what are good reasons to underpay experienced staff compared to new staff?

lelanthran 5y ago
> Pray tell, what are good reasons to underpay experienced staff compared to new staff? GP didn't say that there are good reasons to underpay experienced staff compared to new staff, he said that there are good reasons that salaries cannot be raised across the board.
- tpxl 5y ago
  GP said they couldn't raise wages compared to new hires, so they couldn't raise wages of experienced staff relative to new staff, leading to experienced staff being underpaid.
  - lelanthran 5y ago
    > GP said they couldn't raise wages compared to new hires, No. This is exactly what GP said: > there were reasons good reasons why salary couldn't just be raised across the board to match new hire rates. There is not a single company I can think of (other than FAANG or unicorn startups flush with VC money) that can raise salaries across the board, they simply do not have the cash-flow to do it.
    - frumper 5y ago
      It's downright silly to pay new employees more than experienced employees for similar jobs. If you can't afford to raise wages for the experienced staff you'll soon have a bunch of inexperienced staff that costs you more.
      - lelanthran 5y ago
        > It's downright silly to pay new employees more than experienced employees for similar jobs. If you can't afford to raise wages for the experienced staff you'll soon have a bunch of inexperienced staff that costs you more. I agree, but the reality is that raising salaries across the board would kill the company immediately, while having ONLY inexperienced staff might happen, and even if it did, it only might kill the company. Another factor is that a lot of the staff just won't move, even if they know they are being paid less.
    - biztos 5y ago
      OK, but then what is the long-term business justification for paying more-experienced staff less than less-experienced staff? I get that the short-term justification is "we can get away with paying the former less because enough of them will be afraid to leave." But is there another justification? In my experience, at large companies "cash flow" would not even vaguely register the difference of increasing salaries for experienced people you want to keep, and it would be a marvelous signal to the rest.

dec0dedab0de 5y ago

That doesn't sound like a good reason to me. You can use a bonus to cover fluctuations without hurting morale too much. Plus you don't have to give everyone an automatic raise If you post new jobs at a higher rate. Just give them a new title, and allow current employees to apply for them.

sokoloff 5y ago
“This listing is for an SWE II-Spring-2022 Hire job.”