3 ms·

And if the market rate lowers 20%?

• maxbrown 13y ago
  Naturally a 20% salary reduction! Although occasionally this may be the case (pay cuts), it seems clear that the employer absorbs the risk of entering into contract with the employee at a certain time, with a certain market price. Interesting that the employee gets to partake in the upside but the employer gets the downside, with the exception of course of the employee getting fired. I wonder - if there were really a way to gauge the current market for X talent (sort of a glassdoor salary index) - could employers purchase "insurance" or hedge their hiring price with "employee securities"?
• PeterisP 13y ago
  In an inflationary environment, which is maintained pretty much all the time, it is much, much more common for market rate to raise rather than fall - i.e., frozen wages usually mean a loss for the employee. That being said - have you seen what happens in shrinking industries? Yes, there have been companies that renegotiate a 20% decrease in wages, and fire/replace those who don't agree; it's exactly symmetrical as growing demand professions where people either get their raises or leave and need to be replaced.