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If you are an employee there is little to no relationship between your output and your compensation. Employer employee relationships are based on the cost to th
by donavanm 4y ago
If you are an employee there is little to no relationship between your output and your compensation. Employer employee relationships are based on the cost to the employer to secure equivalent or better output.
Secondly, yes $10M per employee of revenue or cash flow is pretty reasonable for similar companies. The prioritization is NOT “how many employees per $MM.” The allocation is “what opportunity is the highest $MM return per available employee.”
- closeparen 4y agoRelatively few companies have the scale or the efficiency for it to be profitable to hire engineers at Silicon Valley wages.
- donavanm 4y agoSure. Lots of companies and employees are located elsewhere. And software + services is a heck of a financial drug. I dont think that changes the underlying message of how to think about employee comp or business opportunities.
- closeparen 4y agoCompensation is negotiated up and down marginally by the cost of hiring someone else, but bounded above by profitability. You could be the best price:performance employee in the world for a small business, there's just not all that much they could pay you. A huge mega-profitable tech company can pay whatever it takes for top talent and also get away with sometimes inefficiently overpaying rest-and-vesters.