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Why You Make Less Money
- amykhar 14y agoThey forgot one. Gender.
- fecak 14y agoYes. I probably could have mentioned race/ethnicity, age, and even citizenship status as well.
- aridiculous 14y agoDon't forget conventional attractiveness
- s_baby 14y agoDon't forget Marital Status + Gender. Big indicator, statistically.
- reinhardt 14y agoMarital status? Meaning there's a bias towards singles or the other way around?
- s_baby 14y agoSingle women make more than their male counterpart. Married men make more than their female counterpart. Several reasons for why this might be true including married men are more likely to work overtime while married women are more likely to work parttime. A married man is committed to his job in the same sense that he is committed to his family since he is more likely to play the provider role. He is a dependable presence in a company.
- chrisbennet 14y ago"As a recruiter I typically handle salary discussions for my candidates, and I know that for most engineers that particular service is considered most valuable. " When I've worked with recruiters I appreciated the fact that they would negotiate on my behalf. That said, don't forget that when it comes to salary, a recruiter's interest and yours are not really aligned. They don't care about how high a salary they get for you as long as they you get hired.
- yellow 14y agoSame logic with Real Estate agents. My friend's agent tried to get him to sell his house with every low-ball offer that came in...
- the_watcher 14y agoOnly a bad real estate agent would do this. Their commission is percentage based, so a good agent will try to get you the most possible for your home. Also, it's unconventional, by try an agent who is open to dual-agent sales (represents both the buyer and seller). Their interest in that case is to get the most fair deal to each party.
- potatolicious 14y ago> "Their commission is percentage based, so a good agent will try to get you the most possible for your home." That discounts the value of time. If it takes, say, 40 hours of work to sell your home for $300K, and another 40 hours of negotiations to bump that to $400K, it is not in the realtor's interest to pursue the $100K - he/she can simply pursue another $300K sale in the same time. A commission based structure tends to have weird cliffs like this subject to the details of the field.
- btian 14y ago+1. Freakonomics a chapter on this topic.
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- jiggy2011 14y agoNo mention of price-pressure from outsourcing?
- potatolicious 14y agoThat wouldn't really make sense. The hypothetical engineer of questionable skill is just as susceptible to outsourcing pressures as you are. If said engineer is able to compensate for that outsourcing pressure and you cannot, it is better explained by the points made in the article - negotiation savvy, domain knowledge, externalities like goodwill, etc.
- jiggy2011 14y agoYes, that's true. I skipped the opening paragraph and interpreted it as "why don't programmers as a whole get paid more".
- mnicole 14y agoAn issue we've talked about here before that I've experienced myself is that recruiters often don't understand that titles in this industry are often meaningless and don't know enough about the lingo and the languages to competently place someone somewhere where they should be making the money they deserve based on their skillset. I met with a local recruiter that claimed to be the best at what it did -- working with technical people -- and they couldn't parse my résumé except to say that they didn't see anything that said "senior" and therefore they couldn't help me. Given the fact that the types of jobs they were bragging about placing for was icanhascheezburger and other equally worthless entities, I'm fine with the fact that they don't get it, but experiences like that could be damaging to someone that doesn't understand their worth to begin with and would be willing to settle for less because people paid to help them don't actually understand what they can do.
- fecak 14y ago100% agreed, many are just looking for buzzwords. The best way to avoid being underpaid is to know what you are worth. Some recruiters will be better than others at understanding the market and where an individual's experience/skill/etc place them. After talking to a new candidate for about 20-30 minutes, if we haven't discussed compensation yet I'll usually throw a guess at them. I've been off by 50% on either side, but usually I'm within 10%. Part of that accuracy is based on my having a specific niche, to the point where I'm quite aware of which employers pay more than others in my market. I'll adjust my guess based on their employer, which is something more generalist recruiters probably couldn't do.
- steveklabnik 14y agoThis is where I plug http://www.recruiterspam.com/ http://www.recruiterspam.com/ , even though it's not my project: the stats are interesting. I myself am always back and forth on the value of recruiters in general. In the abstract, it seems like a perfectly okay idea for some circumstances. In real life, though, I've only ever talked to one recruiter (out of dozens and dozens of requests to 'connect on linkedin'), and that's because the salary they were offering was so high I figured it might be a joke.
- redmattred 14y agoGreat article. Stepping back, I love the approach Dave is taking as a recruiter where he is sharing real career advice that technologists can benefit from without any hard pitches. Great recruiters are few and far between, but the best ones out there can add a huge amount of expertise and value to your job hunt.
- fecak 14y agoDad? :) Thanks for the kind words. It can be depressing to be in an industry that is so hated, and I'm generally trying to give candidates actionable advice and insight into conversations that many are simply not privy to. I use the word transparency a ton when discussing recruiting - secrecy seems to be one way recruiters try to make money, but transparency and sharing ideas is another way to really differentiate yourself in the recruiting business. Thanks!
- suyash 14y ago#recruiterSPAM
- martinced 14y agoAnd yet another aggressive article with a title trying to diminish other people. Can we please stop voting up all these: "Why you're doing it wrong", "Why nobody cares about your skills", "Why your product won't succeed", "Why plumbers are earning more than you" (not that there would be anything wrong with being a plumber), "Why you are a slave working for the 1%", "Why you'll never get hired at Google", "Why you failed your interview", etc. Please? This is really, really, really getting tiring. All this aggressive psychology bullshit and mental masturbation is getting on the nerves of quite some HN readers. Can we please focus on technical stuff and startup news?
- dmourati 14y agoThis article misses several key points that help explain why a "geek" might make less than his/her peers: 1. Failure to research the industry. This is the main reason people are underpaid. Sure, talking to friends is great but go broader than that. Glassdoor.com provides anonymized salary information on a per-company basis. Job sites like indeed.com contain salary ranges. LinkedIn can also be consulted. Finally, the stalwart salary.com provides a bell cure of salary for a specific title. 2. No B.A.T.N.A.[a] Best Alternative to Negotiated Agreement. Leverage. Fall back position. Multiple irons in the fire. Call it what you will. Having a good "plan B" gives you the upper hand. Even if the recruiter is negotiating for you, you need to negotiate with the recruiter. a. http://www.pon.harvard.edu/freemium/batna-basics-boost-your-power-at-the-bargaining-table/ http://www.pon.harvard.edu/freemium/batna-basics-boost-your-...
- dmourati 14y agoBetter link on BATNA: http://www.beyondintractability.org/bi-essay/batna http://www.beyondintractability.org/bi-essay/batna
- fecak 14y agoI thought my mention of the bullet point 'Market knowledge' addressed that, but I didn't mention research specifically. Most geeks should have that instinct to seek more data, regardless of what kind of data they get from friends. I never have seen BATNA before, interesting. I'd lump that in with negotiation. If you have multiple irons in the fire, that should be part of your negotiation tactic. If you know what you are worth and you have value above what you are being paid, you should make that clear and negotiate based on those facts. A recruiter negotiating on your behalf mainly serves as a buffer - to prevent either side from souring a deal that should happen. If my client tells me they are going to offer 80K as a first pass to someone making 100K, I'll encourage them to make a better offer for fear of ruining their chances to present a higher offer later. If a candidate tells me to ask for 150K even though they will accept 100K, I'll educate the candidate that this tactic may prevent an offer from ever being made.
- ritchiea 14y agoHe left out communication skills and ability to get along well with your co-workers.
- fecak 14y agoYes he did. I lumped those in my mind with 'similarly skilled', thinking of both hard and soft skills. But I certainly could have parsed that out.
- davidvaughan 14y agoI think the chief reason why some people make more than others is because they want more. The reasons given in this article are interesting but they strike me as rather technical embellishments to the fundamental variable: the desire for money. I make no moral judgement about that desire; I simply recognise that some people have it more than others.
- fecak 14y agoYou could potentially distill all of these reasons to desire. Someone desired more money, so they decided to go into consulting and learned a rare skill while negotiating better and speaking at conferences and so on. No argument here.
- auctiontheory 14y ago"Long tenure at big companies" can result in higher or lower compensation than the market.
- fecak 14y agoAgreed. My theory on this one was based on some large companies in my area that had engineers with 20+ years of experience making 150K, that were horrified to learn that they were worth only 100K based on their skills. They became 'valuable' to their own company, but didn't have that value to anyone else due to specific skills that didn't necessarily transfer (think proprietary langs and frameworks). Long tenures can work both ways.
- sps_jp 14y agoI recently updated my resume on linkedin and dice and I am shocked by the response. I haven't actively searched for a new job for about 10 years so I didn't really know what to expect both in terms of available positions in my geographical area, Tampa, FL, and salary. In the last 3 weeks I've received 5-10 phone calls and/or emails per day from recruiters with salaries that are all over the board, but higher than my current salary. I have several years of .NET experience, but switched to ROR about a year and a half ago. 90% of the available positions I am contacted about are for .NET, which I don't really want to go back to. However, this makes me wonder if the wise career move would be to go back to .NET and just keep ROR as my side project language. Any advice for someone not living in a start-up or technology hub?
- pekk 14y agoWith that .NET experience, outside a startup hub to drive a lot of Rails demand, it seems like you will earn more with .NET than with Rails, doesn't it?
- fecak 14y agoThe 'outside a startup hub' is probably the biggest factor, but I'm guessing the Rails experience is what accounts for the prices being quoted?
- sps_jp 14y agoBeing in Tampa, FL is definitely a limiting factor in my desire to continue working professionally with Rails. However, I really do not want to relocate at this time. I guess I've been lurking on HN too long, because the availability of .NET jobs and lack of ROR jobs in my area was still surprising.
- danielweber 14y agoI've asked before: has anyone compiled a list of how various skillsets get paid in our world? If I could get a job doing X or Y, and be happy at either, but X is $20,000 more than Y, I'd love to know that so I can work on those opportunities more.
- ninjakeyboard 14y agopretty good article. I've seen some strange things with money and disparity. The one thing that I've always found, though, (common to urban myth) is that effort is reciprocated with more money - I find people have always looked out for me from the higher layers even when everyone around me who worked half as hard complained about no raises. At that time I was a little underpaid relative to my peers. So good resources will get the money balanced out over time if they are really truly good imho. Good will aside - that's a separate issue of course.
- jhartmann 14y agoOne thing that is not mentioned is stressing exactly how valuable your skills have been to previous employers. Stating exactly how you saved X amount of money or added X amount of new revenue is a really powerful reason that some get paid more then others. patio11 has a really great post about this: http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-programmer/ http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro... Remember businesses are about making money. The way to get paid more is to demonstrate you can make them more money.
- fecak 14y agoThe bullet point about self-promotion and tooting your own horn were perhaps not detailed enough, but giving concrete and quantifiable examples is very effective.
- nandemo 14y agoIt's not nearly as simple as that. That might work for a freelancer, but it's not so easy if you're getting a regular job. Even if you could prove you saved/added $X in your last job (how?), most companies will not pay much above what they're paying employees in a similar position.
- icelancer 14y ago>most companies will not pay much above what they're paying employees in a similar position. And most companies are not worth working at. If you are in a position to negotiate in such a manner as described by the parent post, you aren't hurting for work.
- regerg 14y agoI laugh off every resume that claims to have saved/earned the company $Xmillion based on some BS accounting that I couldn't verify even if it wasn't obviously fake. Tell me how you can save/make me money, and I'll listen. Tell me that "You reduced IT spend my $5million" dollars and I won't have any reason to believe you. Same for people who take sole personal credit for building something that obviously is the work of dozens.
- tmoertel 14y agoThe actual reason you make less money is that you were offered less money and said yes. So why did you say yes? Pondering that question will reveal a lot about yourself and what you value, and it will also suggest what you should do if you're not happy with your current situation.
- fecak 14y agoWell there are several ways to go with this beyond just why you said yes. What if you are consistently offered less? At some point it may not become a choice.
- mfringel 14y agoCompletely neglecting systemic observations is just as pointless as completely neglecting individual agency.
- tmoertel 14y agoCan you explain what makes you believe my explanation fails to account for systemic conditions? Are they not accounted for by the beliefs and preferences of the person saying yes?
- nilkn 14y agoYou're missing half of the equation. > So why did you say yes? The other question, which is just as important, if not more so, is this: Why were you offered less?
- tmoertel 14y agoIsn't the answer to that question always going to be that you were offered what you were offered because that was the least amount they thought you might accept? That is, nobody pays you what you're worth to them. If they did, their profit from hiring you would be zero. Therefore, they pay you the least amount they can get you to accept.
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- just2n 14y agoThe taboo about discussing let alone being open about salary information has no impact here? I believe most people are reasonable. If I see that the people I work with make more or less than me, a decision was made by someone. If that decision is reasonable, the difference is reasonable. I wouldn't be upset, but I would then know what I could do to improve my value, which would make me a better employee. On the other hand, if employees remain clueless about the compensation of others in their company, they don't know when they could be worth more, and won't be motivated to make it happen. Perhaps companies like this, but they shouldn't, because it removes a very key motivator from your employees. Saving $20k on a few employees isn't worth much if those employees could earn that $20k by providing more of what you want (especially if that nets you significantly more in business value than the difference in their salary). This is why I don't understand keeping salaries private. Sure, some people are being severely under or over paid, and they'd have to regress closer to the norm or risk upsetting happiness levels of others, but I don't see any serious issues with this.
- fecak 14y agoI gave some thought about this taboo when writing the post, and I originally had some language about being taught as a child not to ask people how much money they make. I'm not sure if parents still stress this with their children, but I'm rarely asked what I make. In my line of work, I generally am required to ask everyone what they make, and some are more hesitant to tell me than others. Some companies are much more transparent about comp than others, but as a rule individual comp is regarded as something not to be shared with others at your company. The hypothetical discussion I allude to in the article could easily be between two people who do not work together, or that used to work together, making the sharing of salary information more of a private matter instead of a company matter. If employees had the rare ability to fairly critique their performance vs that of others, making salary transparent shouldn't be an issue. Imagine a baseball team that always paid their best player (highest average, value over replacement, some agreed upon statistic) the most money - it would be hard to argue with that. But in companies with multiple employees and no common metric for measurement, it's nearly impossible to expect Employee A to accurately assess his/her own performance related to Employees B, C, and D. Most would have a tendency to think they are a bit more qualified or a bit more productive than they are relative to their peers.
- michaelochurch 14y agoWe're smack in the middle of an uncanny valley between two economic periods. The industrial era gave everyone a mediocre income through repetitive work. The technological era brings much more income volatility and (when it reaches maturity, probably late in this century) will inevitably require a Basic Income. It's about concavity versus convexity: http://michaelochurch.wordpress.com/2013/03/14/gervais-macleod-9-convexity/ http://michaelochurch.wordpress.com/2013/03/14/gervais-macle... Concave work is that where the difference between top-notch stuff and mediocrity is small-- maybe 1.2x or 1.5x. Convex work means that excellence is so far superior over mediocrity (10x, maybe more) that mediocre work has almost no value. What we do is convex because we automate all the concave processes. If the work can be commoditized, a good programmer will automate it away. That leaves the hard, creative stuff. So we have a convex input-output profile. That's part of the fun-- you can add 20% more value by being just a little better-- but it's also pretty terrifying to realize how close we are to a "natural" celebrity economy where a few stars are extremely well-paid and most get nothing. We, however, have a few things that play differently. First, no one except a superior programmer (who become rare as one moves along) can evaluate us. Most CEOs are not only in the dark themselves, but unable to evaluate a CTO, who's unable to evaluate VP/Eng, who's unable to evaluate programmers. It's a classic Design Paradox. I think it's pretty random whether a non-technical CEO gets a decent CTO. Second, even we are in the dark about what makes a great programmer. Is it talent, or experience? Obviously, it's a mix of both... but the rarity of great programmers suggests that either few have the talent, or quality work experience is thin on the ground. We're unlike most people in the corporate world in that we deeply want to get better at our jobs (independent of being more rewarded) and yet the path to that is very opaque. How do you become a great programmer? Get great projects. How does one do that? It's not easy. The complete opacity of programmer skill and development helps and hurts us. No one knows what we're worth. We don't even know.
- toomuchtodo 14y agoAs a VP of Operations trying to hire 3 support engineers right now, this post is spot on. I'm paying you what I think you're worth, and that's a stab in the dark based on what other support engineers in $locale are making, how sharp I think your skills are, and most importantly, how much potential I think you have (I expect one of my candidates to grow into my position at some point when I leave to be a CTO at my next org). TL;DR People are the hardest part, and we're all still learning how to do it right. Interesting times such as now don't help.