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I wonder when investors will see this for what it is, a waste of money. If you are hiring the wrong people your HR\hiring process is broken. If you are hiring

I wonder when investors will see this for what it is, a waste of money. If you are hiring the wrong people your HR\hiring process is broken. If you are hiring people with lower skill levels than expected, you could make a relatively small investment into upskilling them. Cheaper than fire + severance + rehire. If you are firing people who are unmotivated you have a culture problem and are just putting a band aid over it while you burn through staff that you have invested in.

mdorazio 2y ago
How do any of these apply if you have a top-heavy workforce that is strongly overpaid relative to its output? Or if you over-hired for certain roles during a temporary economic situation and retraining to other roles is non-trivial? Over time organizations tend to collect a lot of people who aren’t worth their salary. This is one way to deal with that.
tmpz22 2y ago
The incentives are also there for middle/lower-upper management. You get to cut the people you don't like. You get to intimidate the remainder into accepting fewer promotions or raises. People are acting all confused that this is happening when it is very clearly explained by the financial incentives. Its not some giant meritocracy, its people skimming off the top.
cj 2y ago
I've been on the hiring end of the spectrum for a while (and our teams haven't done any lay offs). One thing I've definitely noticed as a repeating pattern is a lot of candidates who are laid off were making astronomical salaries compared to their years of experience. E.g. I recently interviewed a marketing manager candidate with 4 years of experience who was asking for a salary higher than an engineer with 10 years of experience. In today's current market, I'd expect the engineer to be earning 30-50% more due to higher market salaries in engineering and more yrs experience. A lot of companies prior to doing lay offs had a lot of junior/mid-level employees earning what (today) would only be offered to a senior. Companies can't go to their employees and say "Oops, we hired you at a salary that, today, is too high for the role you're in" -- I guess they could try, but that conversation wouldn't go over well with most people. I also don't really blame companies for being in this situation. They had to offer inflated salaries because the only alternative was to hire no one during the covid boom. So basically, by firing and re-hiring, you can reset an entire department's salary bands. Which sometimes can be healthy especially if people within the company share salary info with each other, and a newly hired person with 10 yrs experience finding out they earn 30% less than someone with 3 years experience, just because of the timing of when they were hired. It's kind of a lose-lose situation for everyone involved. (Including the company who in many cases would prefer not to churn the staff just to reset salaries back down to market levels)
- Aperocky 2y ago
  > newly hired person with 10 yrs experience finding out they earn 30% less than someone with 3 years experience, just because of the timing of when they were hired. That's the problem with how pay scales, job titles and performance evaluation are setup. If there are no standard way to set this for everyone then this will bound to just happen again and be a recurring pain.
  - cj 2y ago
    Unfortunately the only obvious solution I can think of is to have salaries that can go up and down like the stock market, so that employees are always paid market rates. But of course that won’t fly at any company. Every employee expects annual pay increases no matter what.
    - tmcdos 2y ago
      And these increases are based on what? His improved speed of work, or improved quality of work, or better company culture, or just the time that has been passed?
- Pet_Ant 2y ago
  > I also don't really blame companies for being in this situation. They had to offer inflated salaries because the only alternative was to hire no one during the covid boom. Then don't hire? The point of full-time is to avoid uncertainty and instability. If you want that flexibility as an employer, then pay the premium of contract developers. This is why you need to have no "right-to-work" legislation for prevent non-cause firing. And no, "I can get cheaper" is not a valid cause.
  - cj 2y ago
    If you're optimizing for job security of a country's workforce, absolutely. If you're optimizing for economic growth, telling companies to freeze hiring when wages increase is going to result in slower growth.

mdorazio 2y ago

How do any of these apply if you have a top-heavy workforce that is strongly overpaid relative to its output? Or if you over-hired for certain roles during a temporary economic situation and retraining to other roles is non-trivial? Over time organizations tend to collect a lot of people who aren’t worth their salary. This is one way to deal with that.

tmpz22 2y ago

The incentives are also there for middle/lower-upper management. You get to cut the people you don't like. You get to intimidate the remainder into accepting fewer promotions or raises. People are acting all confused that this is happening when it is very clearly explained by the financial incentives. Its not some giant meritocracy, its people skimming off the top.

cj 2y ago

I've been on the hiring end of the spectrum for a while (and our teams haven't done any lay offs). One thing I've definitely noticed as a repeating pattern is a lot of candidates who are laid off were making astronomical salaries compared to their years of experience. E.g. I recently interviewed a marketing manager candidate with 4 years of experience who was asking for a salary higher than an engineer with 10 years of experience. In today's current market, I'd expect the engineer to be earning 30-50% more due to higher market salaries in engineering and more yrs experience. A lot of companies prior to doing lay offs had a lot of junior/mid-level employees earning what (today) would only be offered to a senior. Companies can't go to their employees and say "Oops, we hired you at a salary that, today, is too high for the role you're in" -- I guess they could try, but that conversation wouldn't go over well with most people. I also don't really blame companies for being in this situation. They had to offer inflated salaries because the only alternative was to hire no one during the covid boom. So basically, by firing and re-hiring, you can reset an entire department's salary bands. Which sometimes can be healthy especially if people within the company share salary info with each other, and a newly hired person with 10 yrs experience finding out they earn 30% less than someone with 3 years experience, just because of the timing of when they were hired. It's kind of a lose-lose situation for everyone involved. (Including the company who in many cases would prefer not to churn the staff just to reset salaries back down to market levels)

Aperocky 2y ago
> newly hired person with 10 yrs experience finding out they earn 30% less than someone with 3 years experience, just because of the timing of when they were hired. That's the problem with how pay scales, job titles and performance evaluation are setup. If there are no standard way to set this for everyone then this will bound to just happen again and be a recurring pain.
- cj 2y ago
  Unfortunately the only obvious solution I can think of is to have salaries that can go up and down like the stock market, so that employees are always paid market rates. But of course that won’t fly at any company. Every employee expects annual pay increases no matter what.
  - tmcdos 2y ago
    And these increases are based on what? His improved speed of work, or improved quality of work, or better company culture, or just the time that has been passed?
Pet_Ant 2y ago
> I also don't really blame companies for being in this situation. They had to offer inflated salaries because the only alternative was to hire no one during the covid boom. Then don't hire? The point of full-time is to avoid uncertainty and instability. If you want that flexibility as an employer, then pay the premium of contract developers. This is why you need to have no "right-to-work" legislation for prevent non-cause firing. And no, "I can get cheaper" is not a valid cause.
- cj 2y ago
  If you're optimizing for job security of a country's workforce, absolutely. If you're optimizing for economic growth, telling companies to freeze hiring when wages increase is going to result in slower growth.