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"If a company is losing money from employing an engineer at a below-market rate, that means the company likely has a bad business model, not that the engineer i

"If a company is losing money from employing an engineer at a below-market rate, that means the company likely has a bad business model, not that the engineer is paid more than they're worth." I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business. It's okay if your business model isn't as profitable as Google's. Heck, a lot of the companies that are paying market salaries have no meaningful revenue o even a business model. They're investor-subsidized. "employees should go work in environments that maximize their value." A lot of people work in "environments that maximize their value" and they're miserable. I have friends who make half of what they could make in SF/SV. You would say that their current employers aren't maximizing their value, but most of them own their own homes, live very comfortably and are home by 5-5:30. I don't know many $120,000/year+ engineers in SF/SV who can say that. A lot of the high-paying jobs in SF/SV that are compensating employees at their highest theoretical value aren't as glamorous as the people who have caught the grass-is-greener-bug would like to believe they are. A lot of the people in these jobs trade whining about salary to whining about the hours, the lack of interesting work, their crazy/incompetent boss, the fear of funding running out, etc. etc. etc. Pick your poison wisely.

roel_v 13y ago
"I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business." Uhm, by definition, no. If your business model requires a resource for which the market rate is higher than what your business will sustain, you do not have a profitable business. I could have a very profitable gold selling business if only I could buy gold at 50$ per ounce. Which I can't, hence it's not a profitable business.
- throwaway022014 13y ago
  "Market rate" is a meaningless phrase. I run a dev shop in San Jose. I hear all the time that the "market rate" is a good 40-50% higher than what I pay my engineers but I have all the engineers I need. Are they the best engineers in the world? If we're talking about pure talent no, but we're not doing anything exotic. We build modestly complex web applications for enterprise clients. Have I lost engineers? Yes. In the past 3 years I lost 2 of my favorite employees. I was disappointed but it wasn't a surprise and I supported their decisions. They were superb engineers and I knew that they would one day go on to do great things. It wasn't just an issue of not being able to match the salary of a publicly traded tech company. These engineers were destined to work on the type of things we just don't do here. So why would I want to hold them back? On the flip side I have one engineer right now who I know is looking to leave. He told one of our other employees that he's unhappy with the pay and thinks he can get a better job at a big tech company. Guess what? I heard about this 8 months ago and he's still here. I know he has interviewed elsewhere but you see, for every engineer who can get a $$$$ job at a tech giant or rocketship startup there are 50 engineers who THINK they can. And then they find out they can't. There is no shortage of engineers. The big names often get 100s of applicants for every open position. But you need to be really, really good, not just at your job, but at the interview process. The interview process at some of these companies is so difficult that a lot of very good people get filtered out. So I have no problem finding engineers at "below market" and still manage to deliver good work product to our customers at good margin. Apparently I'm doing the impossible!
  - mathattack 13y ago
    This is very true. You can't run a business competing against, "I heard person X got offer Y." The market only works that way for a few huge firms.

roel_v 13y ago

"I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business." Uhm, by definition, no. If your business model requires a resource for which the market rate is higher than what your business will sustain, you do not have a profitable business. I could have a very profitable gold selling business if only I could buy gold at 50$ per ounce. Which I can't, hence it's not a profitable business.

throwaway022014 13y ago
"Market rate" is a meaningless phrase. I run a dev shop in San Jose. I hear all the time that the "market rate" is a good 40-50% higher than what I pay my engineers but I have all the engineers I need. Are they the best engineers in the world? If we're talking about pure talent no, but we're not doing anything exotic. We build modestly complex web applications for enterprise clients. Have I lost engineers? Yes. In the past 3 years I lost 2 of my favorite employees. I was disappointed but it wasn't a surprise and I supported their decisions. They were superb engineers and I knew that they would one day go on to do great things. It wasn't just an issue of not being able to match the salary of a publicly traded tech company. These engineers were destined to work on the type of things we just don't do here. So why would I want to hold them back? On the flip side I have one engineer right now who I know is looking to leave. He told one of our other employees that he's unhappy with the pay and thinks he can get a better job at a big tech company. Guess what? I heard about this 8 months ago and he's still here. I know he has interviewed elsewhere but you see, for every engineer who can get a $$$$ job at a tech giant or rocketship startup there are 50 engineers who THINK they can. And then they find out they can't. There is no shortage of engineers. The big names often get 100s of applicants for every open position. But you need to be really, really good, not just at your job, but at the interview process. The interview process at some of these companies is so difficult that a lot of very good people get filtered out. So I have no problem finding engineers at "below market" and still manage to deliver good work product to our customers at good margin. Apparently I'm doing the impossible!
- mathattack 13y ago
  This is very true. You can't run a business competing against, "I heard person X got offer Y." The market only works that way for a few huge firms.