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Why Don't Tech Companies Pay Their Engineers to Stay?

• deleted 2y ago
  [deleted]
• colesantiago 2y ago
  It is simple. Because they have no money. For startups, they want engineers to take a pay cut to work 996-like hours. Especially in the UK, where there is a running joke where companies complain about a “skills shortage” when in reality companies cannot find engineers at top universities that want to take a pay cut and work for less pay.
  • linotype 2y ago
    What do you think the UK could do to make the situation better aside from increasing pay? Or is that the only issue?
    • colesantiago 2y ago
      UK companies do not respect software engineers or reward them properly (not even stock), even interns in other places get paid 5x more than a senior engineer in the UK. There is a also a huge cost of living issue in the UK which makes it dead on arrival for any software engineering job in the UK. I could say there should be more VC funding in the UK for startups but I don't think this would help either due to the above issues especially pay, as I don't see this at all. So there is nothing the UK can do to make the situation better other than talented engineers should either go into finance / hedge funds, leetcode hard and compete for FAANG jobs only or move to the US and don't look back.
      • jnwatson 2y ago
        Simply put, UK needs more companies run by software folks. Only software folks respect other software folks enough to pay them well.
        • colesantiago 2y ago
          Precisely and this requires funding (as per my other point) but since the UK has a very very very risk averse culture to starting companies I do not see this changing unfortunately.
      • mmarq 2y ago
        > UK companies do not respect software engineers or reward them properly (not even stock), even interns in other places get paid 5x more than a senior engineer in the UK. In monetary terms this is not true. A good software engineer can make 150-200K in the UK without going into finance or FAANG. In real terms you are better off making 50-80K in Germany, Spain, France, Poland, Italy, etc…, especially if you have children and don’t own property.
        • philipwhiuk 2y ago
          Name a company paying 150-200K that’s not finance or FAANG?
          • mmarq 2y ago
            According to levels.fyi: Personio, Deliveroo, Samsara, Atlassian, monday.com (and others, including my employer) I know many consultants that make 150K+ (which is 600£ per day)
            • m_rpn 2y ago
              Good for you, i work in finance in london and don't quite make that much, none of my friends in other places like JP, Goldman Sachs, Amazon, Instagram ecc does make 200k pounds/year base, maybe in tc yes. Skill issue probably. I would say 90-120k pounds/year base for a mid-senior engineer in FAANG/Finance is what most of us is being offered right now in London, based on my recent experience. What i feel is that many of us are being heavily undercut right now, me included, while consultancy keeps it's pace and everywhere outside London it's a bloodbath.
              • mmarq 2y ago
                RSUs and bonuses are part of compensation.
            • colesantiago 2y ago
              Apart for consultants which is what I recommend people get into for a high paying job, even looking at levels.fyi, the average pay is actually lower in the UK. Take Samsara, on average basis an entry level engineer in the US pays higher than a semi-senior SWE (SWE II) in the UK, taking into account the base as well for a senior also looks dismal for UK engineers. Even when these companies are public, UK salaries just don't seem to be competitive or appealing and this all just proves my point. Just go to the US, FAANG, finance or just be a consultant.
    • whitehexagon 2y ago
      IR35 was enough for me to leave the UK and never look back. Doesn't matter how much they pay if you have tax/legal uncertainty.
      • dzonga 2y ago
        where did you go to if you don't mind ?
  • yen223 2y ago
    The no-money argument is less convincing to me, because I see this happen in well-financed companies. A very common scenario is that some person leaves, and is replaced by a new person who ends up getting paid more for doing the same role. The old person was on an old outdated rate and the new person is on a new corrected salary (that usually is higher) I suspect it's inertia. Companies don't make the effort to update old rates to match new market rates, because that requires active effort on part of the company.
• gkoberger 2y ago
  This is from 2021. Since then, they hired their Head of People a month later, and ~6 months later published a follow up: https://www.goethena.com/post/a-public-and-transparent-formula-for-engineering-salaries-ethena/ https://www.goethena.com/post/a-public-and-transparent-formu...
  • yen223 2y ago
    My previous company did something similar. They had employee pay structure listed in their handbook and is available to all employees. If I knew what level you were at, I knew how much you were making. I really liked it. They rarely had the problem where people felt they were under-compensated for doing the same job - a problem that I have since learnt is prevalent in other companies.
  • jnwatson 2y ago
    This is of course hogwash. "Ethena provides generous equity in addition to cash compensation, but the details of equity are a bit trickier to make public." Publishing a formula for half your comp isn't useful.
• nextworddev 2y ago
  Supply and demand
  • s-lambert 2y ago
    But there's no supply for the people who know your product and codebase except for your existing employees, isn't that the whole point of paying them to stay?
    • nextworddev 2y ago
      They can be onboarded and trained
      • batshit_beaver 2y ago
        In my experience it's virtually impossible to reach the same level of familiarity with a codebase as the people who originally wrote it. This is not only due to years of accumulated complexity and debt, but also the fact that code simply does not capture business intent completely, let alone correctly or with full context. This is why projects tend to be put on maintenance mode or rewritten (piecemeal or from scratch) once their original owners are gone. This can be, but isn't always, expensive for the business' owners.
      • IX-103 2y ago
        That's right. You can just replace all that institutional knowledge and established social network infrastructure for a cost so low it's negligible. Not worth mentioning even. /s
      • ath3nd 2y ago
        > They can be onboarded and trained Over a period of 6 years, until they reach 30% of the knowledge/velocity of the people who wrote the original thing. /s Basically the company: - hires a new engineer on the new market rate so they get up spending extra money - spends extra time and resources to onboard the new engineer to a fraction of the productivity of the engineer that's had tenure Over the years, I used to think that companies are taking the hit on money and productivity in order to not have "irreplaceable" engineers. Better have replaceable cogs in the machine rather than important pillars of your company, right? Workers need to know their place, even if it costs you money and productivity. Nowadays, I just think it's the sheer incompetence and the stubborn insistence of managers in thinking that giving a new engineer the same title as the title of one of your tenured engineers will somehow magically mean they both can do the same things, at the same pace. I used to think that kind of company behavior was calculated malice, now I believe it's simply brutal stupidity.
• anothernewdude 2y ago
  By the time the Engineer has gone through the effort to find some place to go to, it's well past time for the company to increase pay. They'd have to pay more than the difference, so they don't. And they'd have to be able to predict which engineers are about to leave (and churn models are terrible.)
  • ryandrake 2y ago
    I don't know. Every job I've left, I would have stayed if they counter-offered for some X factor of my new offer. Some of those companies were terrible, but that just means the factor would have to be very large. But I have to admit, the worst job I've ever had, I'd gladly go back to for, say $1M/year.
• graycat 2y ago
  "The impact" of an engineer? How to measure that? Hmm. Let me think .... Think of a new company the customers will "love". Start the company and, being a good engineer, be the CTO and CEO. "Impact"? The value of the new company. Pay? They OWN the new company.
• BadHumans 2y ago
  This entire piece starts from the conclusion that engineers leave because they aren't paid enough then works backwards from there. This is wrong from my experience. Anecdotally, I have never left a job because of money. Sure, I left jobs and got ones that ended up paying more money but the reason I started looking in the first place wasn't money. It was for other reasons that usually included frustrations with management.
  • linotype 2y ago
    This. If you leave every 3-5 years you get to flush all that frustration down the toilet to make room for new, hopefully better frustrations.
  • yieldcrv 2y ago
    > It was for other reasons that usually included frustrations with management. and here I am thinking this was a meme by HR myself and all my competition leave jobs due to - and for - money. if you're sticking around to stay in graces of your comfortable management you are contributing to the wage gap for your respective gender in the wrong direction.
    • BadHumans 2y ago
      > if you're sticking around to stay in graces of your comfortable management you are contributing to the wage gap for your respective gender in the wrong direction. I have no idea why I should care about this.
      • yieldcrv 2y ago
        privileged take
        • ipaddr 2y ago
          Wage gap for gender? There are a lot of things in life to fight for. But to fight for a meaningless stat that doesn't take into account pregnancy is probably not the best use of my limited power.
• jactoryfoe 2y ago
  [dead]
• siliconc0w 2y ago
  The people running companies are mostly "professional managers" who see engineers as a fungible resource. If anything, tenure in the same role is mostly a negative signal. Why haven't you gamed the promotion system yet? Don't you want to grow into management or 'technical leadership' and spend your days in meetings? What is wrong with you?
  • ttyprintk 2y ago
    I think the exceptions prove this rule. Bell Labs and Gore-Tex are broadly studied in business school as structures empowering technical staff to keep innovating. I believe your comment describes the case when the company is not expected to innovate.
• MathMonkeyMan 2y ago
  I wonder if what's going on is that most of the work is done by people who joined within the last two years. Or maybe somebody leaving and having to be replaced by a new hire kind of rolls the dice on headcount, which low and mid-level managers might find interesting. The answer I like the most is that, as the article says, when you hire a new person you have to pay, on average, market rate. When you're evaluating whether to change the pay of Joe Lifer, you sometimes have to pay market rate but often you don't have to. Maybe you'd save money by giving raises to Joe Lifer, but who knows? You're hiring people anyway, so if Joe Lifer wants to leave, that's a shame, pay the new guy instead of him.
• dimitrios1 2y ago
  In my experience, the job hopping for an increase only works up to senior / lead level (or engineering manager for manager counterpart). Anything after that requires time in role having a consistent, positive impact, and building up a portfolio that you can then use to sell yourself at the company for one of the coveted principal / staff / otherwise distinguished roles.
  • ryandrake 2y ago
    My first job hop was for about +33%. The next one was for +15%. The next one maybe +8%. Fast forward to today, my most recent job hop was probably even, maybe +0.5% at most. You definitely plateau at some point.
    • Woshiwuja 2y ago
      i think the plateau is the real market value, we were just underpaid before
• hintymad 2y ago
  Amazon used to have an internal Slack channel that allowed employees to share their total compensations anonymously. Thousands of people shared and the numbers were eye opening. Basically, if one was not a star and got consistently promoted every two or three years, she would not get compensated at market price. As a result, an L6 who stayed in the company for years often got lower total compensation than an L5 new hire who was actually an L4 before jumping to Amazon. Note: No L7 or above shared, or so as I knew. That said, like any large company, resources tend to concentrate to the top. L8 and plus were still compensated really well, but L7 were so so because L8 became the new L7 after waves of rapid promotions inside Amazon.
  • BobbyTables2 2y ago
    Exactly. I find companies celebrating 20-30 years of seniority to be very darkly humorous…
  • pixelatedindex 2y ago
    I can relate to this. I was hired as an L4, got a promotion after 3 years to an L5. I later found out that my L5 TC was high-mid band for new L4s. To rub salt into the wound, I had to have “consistent” L5 level output (translates to about a year) before I could even apply for promotion and compensation only kicked in at the next review cycle. The ~13% salary bump was retroactively granted but RSUs were not, which was upsetting. Why try to get promoted?
    • hintymad 2y ago
      On a personal level, promotion always means I have more freedom to do more interesting stuff (and lose freedom to some other stuff too, so there is a balance). Impact and validation of my ability are some other factors, though not that important. Now about the monetary side: the purpose of getting promoted is to get to a high enough level. Say L7 in Amazon. Since resources disproportionally concentrate to the top, L7+ got handsomely paid, especially when you are a top performer in that band.
      • 2y ago
• leros 2y ago
  I've heard the argument that an engineer who wants to go should be let go. They won't be motivated anymore even if you pay them more to stay. Not sure if that's valid.
  • bumby 2y ago
    I have a feeling it probably depends on the personality. People who are high on the conscientiousness scale will probably have a greater feeling of duty to still perform whereas people low on the agreeableness spectrum may coast out of spite.
  • jillesvangurp 2y ago
    Depends. It helps to understand why they want to go to begin with. Basically, if you are having regular one on ones with your people on their ambitions, career development, etc. and they appear to be happy, them leaving would be a surprise. But the reality is that some people leave after a certain amount of frustration has been building up for a while and they aren't being listened to. That can be with a lack of promotion; or career paths that are being blocked because the company looks outside the own organization for filling roles without even thinking to promote people. Weak leadership/management can be very damaging. The whole Peter principle is a thing. If you get stuck below some incompetent burned out leadership, the best move is to just move sideways. Companies are bad at fixing themselves. The symptom is usually high staff turnover. Throwing more money at the problem doesn't necessarily fix anything if the problem is deeply entrenched management layers protecting themselves with that money instead of using it to replace themselves with better people. I used to have a great manager. We jokingly called him the cleaner because his career path was literally being parachuted into teams to fix them. All he did was listen to his team when he came in and then not shying away from doing surgical fixes. Including removing people or moving them sideways, promoting people, and just not being shy towards management about what needed fixing and why. He was a busy man. Lots of dysfunctional teams in that company and senior management had figured out he was good at this stuff. So he'd swoop in with the backing of management and then straighten things out and bruising some egos in the process. And of course the reality is that we are in a job market with record high employment. Job security has relatively low value and is mostly an illusion. Especially if you are good at what you do. People that are insecure put up with a lot of crap. But a lot of jobs in tech are the opposite. This manager ultimately moved sideways as well. Because he couldn't fix the mess above him.
• deleted 2y ago
  [deleted]
• quantified 2y ago
  From 2021.
• snvzz 2y ago
  Because it's easier to enslave them with non-competes.
• atleastoptimal 2y ago
  Hiring people is like gambling for companies, as in most tech companies hire some person on the off chance they're a 10x developer, though expect them to be a 1.5x one on average. Even if you're a 2x developer, you haven't lived up to the hypothetical 10x ideal to your employer, so they aren't willing to put in the extra money and effort to convince you to stay, there's more incentive to put that money into hiring the next potential 10x-er An analogy is, let's say you get a treasure box that can be opened for 100 dollars and may contain 1000 dollars. You open it and find 150 dollars. There is a smaller box inside which you can open for another 50 dollars which could contain at most 75 dollars but will most likely only contain 50 dollars. Do you spend those 50 dollars on opening the smaller box, or do you use the money to buy another larger chest that could contain 1000 dollars?
  • rightbyte 2y ago
    The chest need to have the risk of containing a pirate ghost that punches you in the face, for the analogy to make sense. Churn is a risk in that sense. Known average programmers have the quality of not punching you in the face.
  • kaba0 2y ago
    Frankly, this 10x dev myth should just die. There are only at most 2x developers, and most ordinary people are just below the 1x factor.
    • fragmede 2y ago
      Like other idioms in the English language, it's not a mathematically accurate statement, but it persistents. Like a ten foot pole or a dime a dozen.
    • rsyring 2y ago
      "Facts and Fallacies of Software Engineering" cited research indicating it can be as high as 28x. To get that number, you have to take into consideration terrible devs who are negative multipliers. I.e. the scale is not 1x - 10x. It's more like -10x - 10x. I've personally experienced development projects where there was easily a -5x - 5x difference between the least and most productive. I've seen productivity improve when devs have been removed from a project.
• codr7 2y ago
  Fairness. I'll work hard for less money if it feels like we're in it together and the potential compensation is fairly distributed. But if someone pays me less just because they think they can get away with it, I'm out.
• jauntywundrkind 2y ago
  With apologies, they are idiots. That they can't frelling figure out even remotely who is worthwhile to keep around or not is 300% on them, something so few orgs actually calibrate on, or do so based off awful anti-signals on, and it's embarrassing that this pathetic foolery has just gone on and on and on and on, with zero signs of improving. My boss loves me, swears I'm so full fo awesome knowledge & smarts. But every review, there's some VP pissed off I asked a question about why we were switching to OKRs or how to was going to work or how it would help or some security team pissed off because I have complained about NetSkope or their shitty undocumented USB drive blocking policies. There's always some fuck doing a shitty job offended that some engineer dare speak up, and my boss is telling me again and again it's costing me many dozens of $k in raises. It's so so so sad. Even if there aren't the dogshit losers, there's still so little discernment & taste. And there's so many people who can look busy and suck up, but actual deep knowledge is so so rarely respected. There's so many orgs that straight up deserve to fail, based on how bad they are at supporting their truest asset, their human resources.
  • mixmastamyk 2y ago
    Intelligence is not enough, one needs people skills as well. Dale Carnegie and Getting to Yes might help.
    • jauntywundrkind 2y ago
      It helps a lot! But honestly I think it's a bad disease that we say it's up to everyman to market & grow acceptance for everything they try. It should be up to organizarions to discern & navigate what their people say, to find good options collectively, collaboratively, & not based on crude lowest levels of popularity/acceptance. There's a tyrant of structureless that most companies blindly wander into, that lets things settle as they may, without trying at all to suss out what maybe perhaps possibly could be right. It's ought not be up to every practitioner to advocate for & battle alone, battle politically for right; orgs ought build in mechanisms of support. Failing that I think they deserve to die.
• the_jeremy 2y ago
  The issue no one here seems to be talking about is that paying people according to tenure is anticompetitive for the company on both sides. If you pay people more because they've been at your company longer (the way the follow-up post by Ethena describes[0]), you're explicitly choosing to pay them more than they can get elsewhere. You don't want to pay more than you have to for talent, so this is a hard sell to whomever manages the budget. On the flip side, if you're attempting to pay people in proportion to their worth to you as a company, you're going to be paying less than the competition, because the competition front-loads this money. A new engineer takes a few months or more to ramp up, so if you're making an attempt to pay engineers based on their impact, you will be outcompeted by companies willing to give sign-on bonuses and extra comp to convince people to switch. That's built into the plan of the four-year cliff - you pay them a lot to start with and hope you get the savings on the other side when they don't spend the effort to switch jobs later. Lastly, turnover isn't as much of a negative for the company as everyone seems to ascribe. Being forced to keep up with industry best practices and technologies to be able to recruit talent, to onboard new devs when someone leaves, and to retire unmaintainable legacy cruft when the creator leaves are not strictly negatives - they are risk reduction. That's not mentioning the benefit of fresh eyes and fresh ideas. (Honestly, I think all of this discussion on both sides ascribes too much rational decision-making to what is essentially cargo-culted hiring processes. The biggest companies copy decisions from each other to the point that it's literally collusion[1], and everyone else follows suit because they are smaller and don't have the economies of scale to make researching alternatives positive expected value. People at the top setting policies don't have lines of communication to front-line managers to be able to determine whether their particular company needs extra focus on retaining developers for business continuity reasons, so to the extent that it's a conscious decision at all, it's based on industry-wide studies or company-wide turnover statistics.) [0]: https://www.goethena.com/post/a-public-and-transparent-formula-for-engineering-salaries-ethena/ https://www.goethena.com/post/a-public-and-transparent-formu... [1]: https://www.theguardian.com/technology/2014/apr/24/apple-google-settle-antitrust-lawsuit-hiring-collusion https://www.theguardian.com/technology/2014/apr/24/apple-goo...
• gregfjohnson 2y ago
  A person close to me works at a law firm. She was feeling a bit stagnant, so she connected with a recruiter. She got a very solid offer with a significant pay bump. She gave her two weeks' notice to her firm, including appointments with the partners. One of the partners asked her for a half hour. They came back with a massive pay raise, and a promotion to partner if she would stay. She was in a state of shock, but then informed the other firm that she was staying at her current firm. By way of contrast, an engineering firm I am familiar with had an employee who had been there six years, and knew the company's very complex product inside and out, every nook and cranny. He was one of the only people who had such deep understanding of the system that he could fix any issues that might come up, hardware, firmware, software, everything. He gave his two weeks' notice, and then went to a different job. He's a very talented guy, who would command a very attractive offer, but his talent to the current company is vastly greater than his generic value on the market, because of his detailed knowledge of the product. Although he diligently documented his knowledge, the company was still left in a jam after his departure. It would have been great if the company had fought for him the way the law firm fought for the other individual described above.
  • lainga 2y ago
    What prevents engineering firms from acting like law firms?
    • Proziam 2y ago
      Management perceives people to be more replaceable than they are. Years of working in, or being the architect of, the company's core product will make you a true expert in it. But, from the company perspective, your value is based on the 'market rate' for your generically defined skills and experience.
      • ttyprintk 2y ago
        This is precisely the reason for management; when priorities are internally competitive.
    • 2y ago
• treebeard901 2y ago
  Middle and upper management never want to be put in a position to explain why they designed a team where it is not easy to just swap someone else in instead of paying more to keep someone. Usually if this happens, they will pay more to keep you until they find a way to solve this problem.
• sameermore 2y ago
  My 2 cents - I think this is also a function of the domain the organisation operates in. IMHO, there are predominantly two types of companies - one where the technology creates the business vs. one where the business uses the technology as an enabler. For the former, think of companies like Boeing, nVidia or the Windows/Office divisions at Microsoft. Here, the product of technology is what brings in the money. For the latter, think of almost any "IT company" in the world which pieces solutions for clients in various businesses by leveraging existing technology/tooling and applying some amount of customisation. The former tend to value engineers more (exceptions are always there) as there are usually less number of competitors, but the risk of the employee switching and enriching the competitor's knowledge (and hence, business) is significant. The latter tend to look at engineers as replaceable (with little to medium effort) resources, and value their payroll expenses more than retaining top talent.
  • jakub_g 2y ago
    Yep - in first IT is "profit center" and in the latter it's "cost center".
• thot_experiment 2y ago
  It's honestly wild. Just had someone leave because of an incredibly dumb money-saving corporate policy reason. The overall impact will DEFINITELY be that projects get delayed and we waste a ton of time training the new guy, it would have been much cheaper to fix by just paying him more (or fixing the actual benefits issue). It's mind boggling how short sighted some of these fucking decisions are.
• spl757 2y ago
  greed
• android521 2y ago
  if the salary of a role is 100k and you can pay seniors up to 400k (or some number). After some point, it won't make sense financially to increase salary as you can hire people for this role with much less. So the limit of the pay is set by market. If engineers want bigger and bigger pay, they would need to change to other roles that pay more.
  • metabagel 2y ago
    It doesn’t seem to work that way. It seems like you need to seek new employment every 4 years or so in order to maximize your salary, unless perhaps you are working at a FAANG company, in which case perhaps it might be difficult to get an offer competitive with FAANG compensation.
• VirusNewbie 2y ago
  I am making over 100k more this year than I expected at my current job due to stock increase, that’s pretty damn good retention.
• kennyloginz 2y ago
  Salary?
• jppope 2y ago
  I wrote a related Article "why aren't software developers paid more" (https://jonpauluritis.com/articles/why-arent-developers-paid-more/_ https://jonpauluritis.com/articles/why-arent-developers-paid...) the reality is that we get comp way wrong... and its related to hiring, and its related to Venture Capital and related to a million other things
  • holden_nelson 2y ago
    Article not found
    • SomewhatLikely 2y ago
      https://jonpauluritis.com/articles/why-arent-developers-paid-more/ https://jonpauluritis.com/articles/why-arent-developers-paid...
      • jppope 2y ago
        thank you... seems like a copy and paste error
• etchalon 2y ago
  1. Roles have budgets and companies only have so much cash to pay people. 2. Raises done arbitrarily to match market rates snowball across the organization. One 20% raise is going to turn into 2, or 3. See #1. 3. "Losing time" because of a junior hire is, oddly, less of a disruption than issue 2 becoming issue 1.
• ralferoo 2y ago
  I worked in the UK at a FAANG, so I was on a different bonus system, but my US colleagues had a very significant lock-in. Both your starting bonus and annual bonuses were implemented in terms of share grants that vested at 25% each year. I heard from several of these colleagues that the annual bonuses were often about the same as the base salary, so for some of these guys it was around $200k. So, at any given time they had between $150k and $200k locked up in un-vested shares that would be lost if they left the company. It's framed as a benefit rather than paying someone to stay, but ultimately it's structured this way so it serves the same purpose of providing a strong disincentive to leaving.
  • fire_lake 2y ago
    And this is why VCs love it when founders quit FAANG to work on their idea. It’s a strong signal.
  • pledg 2y ago
    Which FAANG in the UK doesn't follow the same long term incentives with RSU as their US offices? All that I am aware of do for engineers.
    • ralferoo 2y ago
      For various reasons, I don't want to name the employer, but yes it does happen. I guess it depends on your interpretation of "long term"... Those that are hired to be permanently based in the UK have an RSU-based system. Those that are hired with the intention of relocating to the US instead get a smaller lump-sum signing bonus, a small lump-sum annual bonus while in the UK and the RSU incentives only start after moving to the US, and starting a fresh employment contract. In theory, employees should only be in the UK for just over a year maximum, since if the H-1B visa petition isn't successful, you can apply for an L-1 visa instead after 12 months of employment. In my case, moving to the US got indefinitely postponed due to COVID, so I stayed in the UK for 23 months before I quit. Obviously, beyond 2 years is moot as I'd already quit, but if I'd worked another month and had RSUs from the start, I would have been about $100k better off after those first 2 years. The next 4 years would have been worse off too, as the RSU allocation for the starting bonus would have been for significantly fewer shares due to the rise in share price over those first 2 years but the dollar value of the bonus would have stayed the same.
• sceptical 2y ago
  Some companies do. At my previous company (I have since retired), I would get yearly outsized stock grants to motivate me to stay. I sincerely doubt I could have found matching compensation at another company. I never had any expectation of loyalty from the company and it didn't from me either, otherwise the stock grants would be unnecessary. I had some loyalty to my manager and had promised him to give a heads up before leaving the company. He knew I would retire once I hit my target.
• n_ary 2y ago
  Management Mindset: As long as the employee is not complaining, why throw more money? Besides, they can't be "that valuable and hard to replace". I have even seen management who don't even bat an eye or goes extra mile to hire some 5-10x more expensive(even compared to market value) limited time contractor but zero interest or energy in putting up a fight to give a fair pay bump to one or more severely underpaid employee(s). The tainting is a mind game: an employee suddenly hears from their friend or random recruiter about some lucrative offer(usually at least 25-100% raise in pay), tries out their luck and lands an offer, but now manager(assuming a sensible person) needs to put a fight[1] with upper management to bring that same bump(or comparable). However, the relation is now tainted: employee now feels that injustice had been done and there is no guarantee that in future further raises/promotions will not come easy[2] and the manager might be looking into replacing them soon. The manager is now also sad that, they got under pressure by a leveraged employee+upper management will push to de-leverage such assets(yes a term managers use), and seek to replace such expensive assets soon. Now, both sides are running on bad trust and it gets immensely uncomfortable, hence the employee leaves anyways or get replaced by some shiny new hire who will command more than the original employee being replaced attained at their level. [1] This is often difficult, unless your manager is politically influential, because once you have neglected an employee too long, adjustment can be bit high, it is now difficult to justify, how suddenly a particular employee became so much valuable out of the blue. Human mind is wired in such a way that, slowly ascending a hill feels less tiring compared to ascending steep jumps, as the latter takes more energy(or in case of employee big pay bump). [2] Even though the adjustment being a correct valuation, any raise/bump of significance also brings expectations of more responsibilities and higher performance which is the same ol' undervaluing again in action.
• _xiaz 2y ago
  While the conclusion that engineers leave because they aren't paid enough does hold some truth, I'm much more compelled to cite the old "People quit managers, not jobs" saying.
• red_admiral 2y ago
  As a regular reader of Rachelbythebay - I agree with the sentiment of a lot of other posters here, it's not the money that makes people quit. A classic story here is the "Sodas are no longer free" one: https://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%E2%80%93-soda%E2%80%99s-are-no-longer-free/ https://steveblank.com/2009/12/21/the-elves-leave-middle-ear... The total cost of free sodas for engineers is probably small compared to their salaries, and for the individual engineer, the new $0.50 per soda cost is probably negligible compared to their salary. But moving from free (as in free soda) to non-free signals a culture change, and so the best engineers started updating their CVs.
  • lrvick 2y ago
    100% this. In every company I have been at that was going south, the first things to go after a hiring freeze were snacks and lunch. When companies walk back any benefits of the job that cause you to pay for things out of pocket, you just got a pay cut, and should GTFO.
    • ttyprintk 2y ago
      I’ve seen two sides of this: when the company is small and 80% of the sodas are taken by 20% of the people, it’s a quirk of personality. When the company is large, removing a building’s $750/year snack budget is a trial balloon for identifying who will tolerate the much deeper cuts.
    • abc123abc123 2y ago
      Amen! This has been my experience too. When the free snacks go, it is time to move to the next job. Usually the big cuts follow 6-18 months after the first snacks have gone.
    • dagw 2y ago
      I worked at a company that bought a smaller company. That smaller company had free snacks and we didn't. Somewhere in the negotiation someone from our company had promised the employees at the smaller company that they would be able to keep their free snacks. Anyway, merger happens and no free snacks. Now there were probably several reasons why the merger wasn't a success and why basically everybody from that company left as soon as they could, but the one thing every one of them would bring up when you talked to them was "we were promised that we would get to keep our snacks and they lied to us".
• fungiblecog 2y ago
  So the new head of people will help come up with a magic remuneration formula… right…
  • thedevilslawyer 2y ago
    https://www.goethena.com/post/a-public-and-transparent-formula-for-engineering-salaries-ethena/ https://www.goethena.com/post/a-public-and-transparent-formu...
• hiddencost 2y ago
  It's challenging being in big tech right now. I spent a year applying for equivalent level jobs at peer institutions and startups. Finally got an offer from a startup that was heavily stock weighted. Took the offer to my boss and got a $100k raise within a week. TBH suspect I was being seriously underpaid.
• moritz64 2y ago
  it's the same everywhere, not just with jobs and careers. contracts for (mobile) internet are always much cheaper for new customers than for old customers. or old customers don't automatically get the better conditions of new customers. and that although old customers are even more valuable, because they have already earned their acquisition costs.
• mppm 2y ago
  It's always puzzled me why many tech companies seem so reluctant to give counter-offers to departing employees. Trying to pay as little as possible and not easily giving raises, even to their most productive employees, is at least somewhat understandable. But if a valuable employee is about to leave, possibly taking some critical knowledge with them, you'd think that a 50% raise should be on the table out of pure self-interest. So why doesn't this usually happen? Is it just part of keeping up the charade (a big raise is a tacit admission that they have been underpaying massively)? Is it to increase the barrier to negotiations (you have to actually leave rather than just get an offer)? Is it because HR people get more points for bringing in "new talent" rather than keeping the current workforce? Or is it just that neither HR nor management have any clue who their critical employees are, so they are unable to prioritize?
  • Sebb767 2y ago
    I think a lot of your points play a role, but a major one is that when the employee is handing in his resignation, it's likely they have mentally already closed that chapter in their life and won't remain happy or productive. At best they leave soon anyway, at worst you're now paying a premium for worse work.
    • rwmj 2y ago
      For the company that might still be a worthwhile trade-off. Gives the company time to train up replacements and avoids an immediate cliff-edge.
  • Arisaka1 2y ago
    I saw someone explaining how they would never accept a counteroffer because it proves how the company was fine with not giving them a raise they seemingly deserved until they finally found it somewhere else.
  • rollcat 2y ago
    Perhaps it's because the ones who stay always pick up the slack, thus a single employee doesn't actually matter that much? Maybe it's because we still feel too entitled to consider collective action?
• knallfrosch 2y ago
  The article ignores that "the market" works. Switching jobs, with new physical locations, new informal structures, new colleagues imposes a change cost on the software engineer too. That's why a lot of people stay. Additionally, paying every engineer the market rate wastes money on those that would have stayed anyway. As a similar problem, countries that pay for babies find that 98% of their money is wasted on couples that have babies anyway. The Economist says: "schemes in Poland and France cost $1m-2m per extra birth" https://www.economist.com/leaders/2024/05/23/why-paying-women-to-have-more-babies-wont-work https://www.economist.com/leaders/2024/05/23/why-paying-wome... Now that's a scale problem. Is one engineer staying really worth $10m? $1m? You'll pay way more than you think.
  • ttyprintk 2y ago
    I had to think about your argument. So the underlying collapse in birth rates is actually among 19-year-old women who have chosen college and specifically because of low social mobility. Programs to help the marginal inconveniences of new parents don’t perform as well as directing that budget at social mobility. So let’s take a four-person company: marketing, HR, CEO, and engineer. Marketing, HR, and CEO share two beliefs: (1) if the engineer goes, the product will change. (2) no company has ever existed without marketing, HR and CEO. So, it’s not like they need a program parallel to these more-babies program; they just need to feel they could adapt to selling any variation of their product. Engineering has a different belief: imagine what we could do if we had another engineer slot in to tackle this backlog. That does look a little more like the more-babies program. PS> Article is https://archive.ph/nY2b1 https://archive.ph/nY2b1
• mtsolitary 2y ago
  I think this reads a bit differently today than 2021… should be in the post title
• naffty_draw 2y ago
  How can a company effectively measure an employee's impact? In my experience, when performance metrics are tied to salary, employees often manipulate the numbers to reflect a more favorable outcome, which may not accurately represent their true impact.
• cryptos 2y ago
  I see one obstacle by this transparency approach: How to create a fair measure for "impact"? I would say that it is very hard to measure the actual impact of a senior developer. He gives advice here and there, he influences decisions in a good way, he asks the right questions, he recognizes risks early and so on. All that can hardly be measured.
• m1keil 2y ago
  All this effort, metrics, measuring impact, performance reviews, blah blah blah. You want to make sure your engineers paid top dollar? Tell them to go interview in other places. If you truely value them - beat whatever they were offered by X%.
• xilis 2y ago
  In my experience money is absolutely part of the reason why people quit. Not everyone lives in places or is in circumstances where finances don't matter that much.
• brianshaler 2y ago
  > "With a market this hot" Maybe the title should get a [2021] because it sounds like the market has cooled substantially in the last year or so. The article doesn't seem to take into consideration market cycles, assuming market rate always goes up at a rate that outpaces cost-of-living comp adjustments. While this may be the case more often than not, how are companies supposed to absorb market downturns? A salary reduction, if legal (?), seems almost as bad as redundancy except you risk being saddled with disgruntled workers who might decide to jump ship at the next moment that is convenient for them.
• yowlingcat 2y ago
  > Sep 26, 2021 > 5 min read Although it was only 3 years ago, from a macroeconomic standpoint, this feels like centuries ago. Since then, the tech industry has weathered several erosion events (SVB implosion, interest rate hikes) and it seems that aside from generative AI (which with the recent NVIDIA drop, may be showing first signs of slowdown), at least the VC funded startup space is at a local minimum in terms of market heat. Anecdotally, I've seen a lot of colleagues I've worked with at previous colleagues in hotter markets struggle with finding their next role for much longer periods of time with much more frustrating processes. The market for candidates seems tougher today than it's been in over a decade; in fact, I'm not sure what the last time was that it was this rough -- perhaps right after the 08 crash?