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It's just basic math. You can't increase salaries up to the market rate for all 10,000 employees. Most employees will stay and accept 3% yearly increases and on
by myth_drannon 4y ago
It's just basic math. You can't increase salaries up to the market rate for all 10,000 employees. Most employees will stay and accept 3% yearly increases and only few will leave and then the company will pay higher salary for the newly hired employee. #replaced employees < #lifers.
- avisser 4y agoNot to be too pedantic, but you showed 0 math. If the company's revenue grows at or above 3%, there is no math "problem".
- myth_drannon 4y agoMy Fields prize worthy math... salary increase on average by 30,000$ to 10,000 employees = 300 million vs hiring new employees to backfill that left with higher salary 30,000$ * 1000 = 30 million + cost of replacement 70000$*1000 = 70 million. total 100 million. 200 million difference is not a small change, that can be given as a bonus to executives.
- avisser 4y agoThanks for obliging me. But I think the math ended up being superfluous. It's about the rich getting richer. Which makes sense to me, unfortunately.
- wilde 4y agoLol of course they could. Netflix does. But like you said market rate includes the cost of interviewing, which is usually enough to deter 80% of folks so why would you overpay.
- wpietri 4y agoThat's ridiculous. Most companies can do it. You're just saying you don't want to because you can get away with exploiting employees' aversion to changing jobs. Pretending that greed is "basic math" is just deflection.
- marktangotango 4y ago> Most companies can do it. Compensation is a Huge lever on earnings. There would certainly be a consequence on the stock price if margins diminished due to overly extravagant raises, which they most certainly would in a most if not all cases.
- oblio 4y agoAny medium or large company can very easily find out current market rates. If they focus on those, it wouldn't be "overly extravagant raises", just... "staying up to date".
- wpietri 4y agoYes, that would be the greed part I was talking about. If the current stock pricing depends upon worker exploitation, then obviously ceasing to exploit workers would cause the stock price to fall, at least in the short term. (In my experience, treating workers well pays off in the long.) But that doesn't turn the continued exploitation into "basic math".
- edmundsauto 4y agoFor big tech, a lot of your comp is in stock. So this would diminish the salary increase effectively by reducing the stock price. IME, people are a lot more sensitive to lowered stock prices than meager annual increases. The latter doesn’t feel emotionally like a loss.
- wpietri 4y agoI don't think that's generally true for people in big tech. Just the highest strata. And to the extent that causes problems, I expect they'll be much smaller than the sorts of market fluctuations we're seeing lately, which companies already have tools to deal with.
- edmundsauto 4y ago