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I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility.
There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly.
I would have loved to stay at my first organization. Interesting work and research. I was PI and PM for interesting projects by the time I left. Now I make almost double. The thing is, my current salary at my original organization isn't unheard of for that level of responsibility at all, the problem is that getting that kind of adjustment is impossible. It's possible to be hired in at that salary, though. I've noticed this is true for most organizations I've worked at.
While the times are definitely changing, a lot of people are still very averse to finding a new workplace.
This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person.
For the company this means a large amount of extra profit year in year out.
The odds of you saying "Nevermind, I'm out" when they don't budge from a 2% raise are from the employers side pretty low. The odds of a new hire saying "Nevermind, I'm out" when unwilling to budge on salary negotiation is a lot higher.
Hence it becomes easier to give some additional leeway in that situation. Also if companies already have a large workforce, giving a raise to all current employees is a whole lot more expensive than giving more money to all new hires.
Lastly, there has been plenty of research that has shown that salary is not that big of a predictor of whether people stick around or leave in any given year. Whether that research is also true for software developers is up for debate, but it is what most companies rely on.
Lastly an anecdote, I was told by a manager once that if I wanted to get a significant raise, I could quit and come back as a contractor or "Senior Developer" after 6 months. At that time I was considered a junior, and promotion to senior was only possible after 10 years experience internally.
> While the times are definitely changing, a lot of people are still very averse to finding a new workplace.
This is one thing I've coached career-focused and executive aspiring women on.
If they are worried about being assertive and being called a "bitch" at their current organization then they are already playing at a disadvantage.
The competition is full of men that got called "cocky" and self absorbed at many organizations, before landing in one at a senior level in a different place that needed someone new to shake things up or "make the hard decisions".
I don't really see that factored in to the outcomes.
Whether this idea results in a bunch of women finding that no organization wants their assertive attitude? Time will tell. A level playing field definitely involves normalizing behavior.
>This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person.
As someone in their 30s who has spent in-person time at about a dozen companies (a stint in consulting will do that) ranging from start-ups to large enterprise, this is exceedingly rare from what I've seen. Hardly anyone makes it to a single decade, much less multiple. Maybe at a law firm, but not in a development role.
I don't doubt these people exist but I'm a bit skeptical they are that significant in number to the point of defining the equilibrium as mentioned in the OP post.
I forgot to mention, my experiences are all based on EU countries. When we worked with US companies, we would occasionally joke that a 2 year tenure is considered long at the US companies we worked with. There would be people joining / leaving their teams every single month.
In the teams I've been part of, average tenure at the company was over 5 years in every single case. In one case over 15 years.
These are all development positions. Management positions and marketing positions did tend to move around a bit more often.
Hardly anyone makes it to a single decade, much less multiple. Maybe at a law firm, but not in a development role.
I’m guessing you’re a webdev and this is normal for that industry but in more “traditional” fields programmers behave much more like other white-collar workers. I’ve met plenty with 20-30 year stunts at the same company.
I used to work in medical devices, where I saw more along the lines of what you're referring to. But while you'd occasionally see 10+ year stints, "multiple decades" was still rare.
Regardless, the number of developers at these companies is much fewer than in tech; therefore, they cannot be setting the equilibrium referred to by OP.
I don't know how to put it less bluntly here it goes, in my experience at non-faang orgs the software developers who stay over 5 years are not competent and likely won't pass the interview.
My experience has been the opposite. I've worked for large hospitals and oil and gas companies, and on any given team 50% of our senior engineers had been there over a decade.
I used to work in medical devices and hospitals, and while it's _more_ true in those industries, the numbers of developers employed is less than in Tech. In other words, it isn't the Energy or Medical industries defining the equilibrium for developers. Jumping around in medical device/hospitals also results in smaller raises than in the Tech industry. Can't speak for Oil & Gas on that part.
At my company, there are developers who have been there 30+ years. They have seen a lot...
Insurance companies change slowly. We still have COBOL, mainframes, etc. Applications that cost $10k/minute if they're down.
Part of the equation is job security. You eat enough shit, put up with enough mgmt BS, but you get a steady paycheck, decent benefits, and little threat of downsizing.
I just spoke to my former coworker for the first time since around 2008. When he left the company we both worked for, he went to an insurance company. He’s been there for a decade. They actually have a pension.
I’ll be on my sixth job since then starting in July.
I have another friend who graduated in 1995. A year ahead of me. He was hired as Cobol programmer. 25 years later, he’s still writing COBOL.
Or, we could have an actual social safety net where if you lose your job and can't find one for a few months, you don't lose your health insurance, your home, and your ability to eat. Most people do not have sufficient savings to cover an extended job search, UI simply doesn't cut it, COBRA is prohibitively expensive, and Medicaid only kicks in at absurdly low income levels.
Yeah...I mean I think money is genuinely this necessary evil we've built a society around and I am constantly questioning it.
How interesting that we can build a system that can fluctuate enough to upend lives both good and bad. You become so focused on it, it is seen as this brass ring. Once you have it, you question everything.
I realize this is a bit philosophical and idealistic. You appear to have a similar viewpoint as mine in terms of a society that supports the whole, I just wonder if you can do that effectively when you have a source of power so specific like money.
There are some very revolutionary thinkers/philosophers/minds that were somewhat detached from money (in that they came from such wealth they didn't have to care or they chose a life detached from it) Plato, Aristotle, Wittgenstein...many more. I'm curious if there is a connection or merely just a representation of the population.
This is something I've rolled in my head for a while but first time I've said it out loud so a lot of people are now coming to my mind now that were not wealthy.
I cannot necessarily see it going away but perhaps more of a direct representation of what it means...our time/energy.
What makes you think some people’s dream might not be to work from 9-5 go home to their spouse, 2.5 kids, their house in the burbs and get money to put into their account every two weeks?
I think you are using satire to make a point although you may be serious.
To play devils advocate to my own point:
There are some jobs that between those hours of 9-5 it is a dream come true. I ran an R&D team, we could buy any technology, kick off any project, success wasn't "Making a unicorn" but merely understanding something and providing guidance/insight to our executives.
It went well for several years...the party ended after leadership changed and they had new opinions on what R&D meant.
It was my dream and theirs for a period of time...then it was no longer my dream, just theirs.
I left to find my dream....I now make 5x as much doing something I love.
I’m very serious. It has never been my desire to start my own business. I go home and sleep well at night not worrying about customers, investors, funding.
It went well for several years...the party ended after leadership changed and they had new opinions on what R&D meant.
It was my dream and theirs for a period of time...then it was no longer my dream, just theirs.
And when that happens, I email recruiters and get another job usually paying more within a few weeks. The shortest time from looking for a job to having an offer is 4 days. The longest is about 7 weeks. But I only applied for one job. The process just takes a while for $BigTech.
Which brings up an even better example. The company I work for announced an across the board pay cut because our customers were losing money because of Covid. The company is having to cut prices, come up with payment arrangements, get money from the government, etc. I bet the owners aren’t sleeping well at night.
The next day after they announced the pay cut, a recruiter from $BigTech reached out to me about a remote role. I applied for the job, got it, with a 50% pay bump and I still sleep well.
I left to find my dream....I now make 5x as much doing something I love.
Survivorship bias. Statistically how will most software developers make more money over a lifetime - starting their own company or in the immortal words of r/cscareerquestions, “learn leetCode and work for a FAANG”?[1] Or depending on where you are living, just bring your run of the mill “Enterprise Developer” in any major city in the US that’s not on the west coast.
[1] Not that I went down that road to “work for a FAANG”. I took another route that pays as well to get into $BigTech.
Yeah, I actually was going a slightly different route.
I got into generating passive income. I am now in a position where I can maintain a lifestyle I enjoy and homeschool my small children.
I could pay for the best schools and keep track but I love education...I love passing that on. If I built a company it would be around that. I would not like the money struggles that you talk about so I would probably aim for something non/not for profit assuming it would lessen that burden.
I don't know that I care so much about money but before when I struggled, it was my singular focus.
It may seem like a silly question but if you had all the money in the world would you show up to work? If the answer is yes I hope you have that job for a lifetime, if the answer is no I hope you have all the money you need for a lifetime.
Edit: As a side note...perhaps because of the R&D nature of my previous role I had an advantage in the low barrier to entry of this. I saw a lot of acquisitions. Companies that were startups, bought, cannibalized, and then repurposed as a product. Sometimes these products internally thought up by us or other LoB's. They were all rough, prototypical in nature... Realizing that millions was "exploratory money" whether internally developed or purchased to have a product that looks and feels like something became a realization that you can profit on ideas...not full blown products bulletproof and cemented into history.
There are many that are not in it to make a legacy, just to get the thing airborne and sell.
The first time I saw a group spin up ten webpages of fake products to market test a brainstorming session was a lightbulb on what is happening under the surface in many areas.
If I had made $better_life_decisions when I was younger and/or graduated in the era of $BigTech instead of the mid 90s, I could definitely have lived frugally, made $BigTech money, saved and invested in stocks, moved to a low cost of living area and done contracts every now and then just to refill the coffers.
As it is now, why wouldn’t I enjoy my job? I get to work remotely in a relatively low cost of living area making $BigTech money.
Will I be where I am for the rest of my life? Statistically, probably not. I can’t see that far ahead for a change. But 3 of the 5 biggest technology companies offer similar roles and if the local economy ever recovers there will be local companies.
I think it's a pretty straightforward equilibrium. Most people, including good performers, don't want to bounce around jobs and consider it a reasonable personal cost to change their commute, learn new systems and processess, build up relationships with new colleagues, and so on. A significant portion of the labor market will bear tolerable adjustments, between barely enough not to get totally ticked off and enough to feel somewhat justly rewarded for effort. That will keep them happy and motivated and in-place, so it's rational to do it.
A smaller number of people are actively willing to take the personal cost and move around, and in a near saturated market those people end up defining the price of new labor. But paying everyone that rate would be irrational because the cost (to the business) of them moving, hiring and integrating their replacement and the opportunity costs loss, is less than what it would cost to pay everybody that rate.
Having another firm offer that you are absolutely willing to take is also the best way to get a raise where you already work, so there is also an intermediate option to handle some of the pressure of willing-to-movers without giving everybody a raise.
There have been studies of Silicon Valley, and your experience is the common case.
Some of it has to do with stock based compensation. I’ve not heard of any companies that, by default, renew RSUs at a dollar value comparable to what they gave the employee as a new hire (even if they’ve promoted the person!)
Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior).
I’ve heard people call this effect the “salary cliff.” I know a manager at $bigco that has an elaborate system to push it out a few years by gaming the system. The idea is to get a few extra years out of people before they switch jobs.
I’m not sure why this is the equilibrium the system has chosen. It might be that people put a large monetary value on having a stable set of coworkers.
More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management.
Stock based compensation may be the norm in Silicon Valley, but it isn't par for the course across different roles and industries. But the ~3% raise seems to be pervasive. This tells me that it doesn't have to do with stock based compensation.
~3% a year is a cost of living increase. If anyone gets 3% for a promotion they could ask where that number came from. If they recently got a 3% bump that means the promotion put them ahead by ~12 months of work at the company in the prior position. Does that make sense? If they haven't gotten a raise for close to a year, it means the promotion didn't really come with a pay bump at all if that's what they normally get.
Questioning these things when offered is probably the best way to get the employer to change them, or at a minimum it may make it clear what your future prospects at the company are.
I've only ever had it referred to as an annual merit increase, but it's definitely more aligned with the national cost of living.
Regardless of what it's called though, the question remains. Why does your value to other companies increase faster than your value to your own company? Presumably you're learning more about your company's business and your specific domain problems, which should make you more valuable to your company than it would to others. Is that assumption not valid?
> Why does your value to other companies increase faster than your value to your own company?
I think there's a lot that goes into this, which also shows how complex the topic is.
- There's your actual value and your perceived value
- When you're there and filling a niche, there may not really be a lack for a specific skill set which (might exist if you left) which there might be at the other company.
- Companies aren't always good and managing their desire to pay the least amount possible to retain an employee (natural, to keep costs down) with the employees willingness to leave, if they even have any inkling of the latter.
- An employees willingness to leave can have many inputs, some of them nothing to do with work, so it's hard to judge (e.g. lack of ability to work from home some days can go from a small annoyance to a reason to look for alternate employment depending on what else is going on in their life).
etc.
As to whether your skill should always be increased to the company you're at, I think that's generally true, but may not be in the specific instance. People get complacent, and sometimes the work environment can cause a excellent employee to perform in a mediocre manner, and vice versa.
At FAANG you typically get RSU new hire grant and then annual RSU refreshers. And you are right that companies do not renew initial hire RSUs grant.
However you will only hit salary cliff if your initial grant was bigger than what would be your annual refresher at the end of year 4 at company (both initial RSUs and annual refreshers vest over 4 years). If your annual refresher is same as your initial grant your salary will not increase that year (which you might still consider not great, because until now your salary was increasing every year due to RSU refreshers).
> Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior).
If employee became more senior that would mean they got promotions (base salary increase in double digits, bonus increases) and their annual refreshers are much bigger now (they almost double between levels [1]).
If they did not get promotion over past 4-5 years (that's only possible for senior roles, grad and junior levels need to get promotion in certain time frame otherwise they are out) there's quite low probability they would get hired to more senior role at other FAANG (though they might be offered big initial RSU offer)
> More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management.
Same salary rules apply to management, so they could also walk out if they hit salary cliff. However if you are manager/director/VP you will be higher level and your annual refresher might be high enough to keep you there.
Outside of HR pay band constraints, I’ve often wondered if there’s some psychological anchoring at play [1]. No matter how many more duties you take on, your monetary value may be heavily anchored by what you were previously paid.
However, a new employer doesn’t have access to this information so they can make a more objective determination of worth without being biased by this pay anchoring aspect.
Which is part of why it's not that uncommon to see people who bounce from job to job every year or two in the Bay Area. It rapidly boosts salary. I've also seen where people leave for a top paying company, which sends their compensation right to the moon, then come back after a short stint.
Netflix seems to be a rare example of a company that is proactive enough with pay raises to counter this (any Netflix folks here that can confirm/refute?). Not sure why more companies don't do that, at least when they're well capitalized.
The guidance given to managers at Netflix is to calibrate each employee's compensation to "what they (the manager) thinks they could make if they went elsewhere." It's an extremely time-consuming exercise that every manager goes through every year.
They even encourage engineers to interview elsewhere and see what the offer is if they feel they are miscalibrated, and they will adjust appropriately.
Finally, a question they encourage engineers to ask their managers is: "if I had a job offer elsewhere, would you fight to keep me?" It's a scary question to ask, but a great way of getting feedback.
Not a Netflix employee, but one of my best friends is. He got in at a mid/upper 200ks range salary, and within a single year got a double digit percentage bump.
Netflix just seems to be an extreme outlier in terms of base (cash) compensation. I think the only companies that could beat it are some rare and elite financial firms (i.e. Jane Street) that are even tougher to get into than FAANG.
I dunno, my friend seems to love it there, and claims it is much easier and laid back than his previous company.
Granted their culture sounds very demanding with the whole "pro sports team" mentality, but I can see that being a positive thing too. I wish my team/company was more like that.
That said, it seems it might be different for each team/department, as my friend claims there's still people there who are not very good but still around for a long time.
This class of characterization gets around, though usually the coverage is more directly about the "culture of fear." Please consider how terrible a job is when you're constantly afraid and working yourself to the bone to avoid being fired; it's probably in line with that.
The WSJ had a piece in 2018 which sparked a bunch of follow-on coverage:
"Mr. Hastings’ ring of top executives take the keeper test seriously. At a meeting in late spring of Netflix public-relations executives, one said every day he comes to work he fears he is going to get fired. Karen Barragan, the vice president of publicity for original series, asked how many other people felt that way. A number of hands went up. “Good, because fear drives you,” Ms. Barragan said, according to people familiar with the meeting."
How does anybody tolerate that kind of work environment? Maybe I'm weak but no amount of money could compensate for that kind of stress and misery IMO. I work for a well-known company that's below FAANG tier but is basically the anti-Netflix. It's just so freaking NICE that I never want to leave even though my salary is slightly below market. I never feel guilty taking time off, employees are encouraged to take sick days which are unlimited and don't count towards PTO, people are out of the office at 6 on the dot, benefits are some of the most generous I've ever seen, and almost everyone is just straight up kind and supportive to one another. Even for things like on call schedules it's understood that it's universally unpleasant but everyone handles it with a positive "we're all in this together" attitude. It sounds corny but these things really do make a great workplace. There are a few people who seem to be institutional dead weight because it's not easy to get fired, but dealing with a few underperformers is a small price to pay to feel happy and relaxed at work every day and live life without perpetual fear of the hammer. Thanks for this reminder that the money is always greener on the other side!
I imagine the money helps. Compensation at a FAANG or other top tech company seems to be on monumentally different tier than the next level down.
You could splurge it, but you could also manage it well and potentially retire early? My friend seems to be on this path.
You could use your time at a FAANG to get experience, accumulate money, and have the FAANG brand on your resume to leverage for future job prospects?
Also from everything I hear, working as a SWE at FAANG and other top tech companies are still more pleasant to work at than as a SWE in other industries - i.e. finance.
No, not good. Not good at all. "...because Fear drives you..." yes it does. It drives you to a heart attack, or to the offices of a different employer once you wise up and realize that is a terrible way to life your life, and you are borrowing time from your lifespan due to the increased stress.
I despise employers who play psychological games like this. Despise it. Are these people who burned ants with magnifying glasses as children?
I think like any company of a decent size, the truth is it depends. On the team, particular individual etc. At least in the engineering side of things, I haven't seen a culture of fear. There is a bit of anxiety going in, because of the reputation, but pretty soon I realized it was pretty exaggerated.
But Netflix pays real money, right? FB and G heavily compensate with stock that has historically been valuable, but could always tank with a cooling ad market or strong privacy regulations.
FB and G stock grants vest monthly and employees often have them setup to sell immediately on vesting. While there is some volatility in exactly how much you get paid its much closer to Netflix than to compensation at startups and not yet IPO'd companies where you can't realize the stock options until much later.
FB vests quarterly for all employees, regardless of how many shares they are scheduled to receive.
GOOG vests monthly, but if you're going to receive less than 1 share that month, then I guess they might round that down to 0 and effectively vest less frequently.
The stock has been historically more valuable than an equivalent amount of cash. For the most part, the historical trend of these stocks has been up and to the right.
Well, if you make 400k at Netflix instead of 200k of cash + 200k of FB stock at Facebook, you can just buy FB stock by yourself with the Netflix cash...
This analysis is missing the appreciation of the grant during vesting, which is material. The 200k of FB stock was granted as 800k over 4 years. So if the stock goes up just 10% a year, by the time the 1st year vests it's actually worth 220k, the 2nd year is 242k, 3rd year is 266k, and 4th 290k in stock comp due to appreciation. If it goes up more than 10%, effect is even more pronounced, plus with refreshers, you get a genuine golden handcuffs type situation.
It's not missing that analysis. The GP said if given $400K cash you could buy $200K worth of stock. Yes, FB stock will appreciate during vesting, but that's no different from me buying $200K of FB stock and simply holding on to it for a few years. The benefit of cash up front and you buying the stock is you can buy any stock and play this game, not just your own company's.
There's a difference, because you are given a number of RSUs at hire with some monetary value, so on this example you would be given RSUs worth of 800k at the time of hire, which would be 200k per year (they vest over 4 years). If we run this example just for 2 years you will start to see the difference:
Year 1:
At Netflix you get 400k in cash, you buy 200k of FB stock, so you have 200k cash, 200k worth of FB stock
At FB you get 200k of cash and 200K worth of stock
Year 2 - FB stock goes up by 10% so 200k of FB stock from last year is now worth 220k:
At Netflix you got another 400k in cash and you will buy another 200k worth of FB stock. So now you have 400k of cash and 420k worth of FB stock
At FB you get 200k of cash and 220k of FB stock, so now you have 400k of cash and 440k of FB stock.
Also RSUs vests quarterly so you can (and should) sell it and invest in other things to diversify.
There is certainly pros to having cash as pointed out. The appreciation of stock though can be a benefit in that your 200k is still going to be 200k next year, while the 200k of RSU could be worth say 300k. So second (and third and forth) year you get 300k a year worth of RSUs, while still 200k worth of cash. So while yes first year of RSUs vs stocks you buy appreciates the same, subsequent years RSUs are worth more (if it keeps going up) because the # of shares granted is locked in. Of course the inverse is also true, if the stock price falls, the # of shares granted is still locked and the value drops.
It's for the same reason that large financial institutions hire entry level engineers as "VP's"
There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world.
The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employees yearly, associate this to overhead, and report back to shareholders. This trickles down to managers as "room to work with their employees." If someone gets rewarded, this means someone else is getting punished. Need an exception....take it to the top.
Now you have a system of incentives and disincentive...want to get more for your people, take from others or take on more work.
You now have potential for lost information at your inability to display value (doing work quietly and not advocating for yourself), your manager (overloaded/ignorant of effort), the process (outdated or accounting for a percentage of unhappiness), and arguably the stock market....
You can get very analytical with game theory here which I think can be very interesting. If you find that interesting you may find Thalers "Guessing Game" and Keynes "Beauty Contest" interesting as well.
My opinion has been the more layers, the more places to lose information. These companies are accounting for external factors/information on the hiring front, once you are inside, it is internal factors/information.
There's a fair amount of theory work around institutional economics, behavioural economics, information economics ... basically, a lot of economics deals with non-market as well as market systems of human activity. A good textbook is *
Economic Approaches to Organization* by Douma and Schreuder.
> I would have loved to stay at my first organization.
Have you considered going back to the original place you liked eventually? I speak from experience. A bit less than a year ago I started back at somewhere I worked previously. If you left on good terms, it can be an extremely easy and low-stress transition compared to starting at a new business, and hiring can be easier too, as the company already knows for the most part whether you're a good cultural and skill fit (depending on how similar the job you're applying for is to what you did previously).
> The thing is, my current salary at my original organization isn't unheard of for that level of responsibility at all, the problem is that getting that kind of adjustment is impossible.
Sometimes it's easier to leave and come back later to reset expectations like that. Hiring salaries seem to be completely disconnected from promotion salary adjustments at some locations, or at least engender a different mindset.
I have a friend that noted at a prior place they worked (I believe it was SAP) that they encouraged, or at least maybe accepted and understood, that employees would leave to work at other places, and had programs in place to encourage them to come back with those new experiences and skills. If a company is large enough to have opening often and expects to be around in 10-20 years, it probably makes a lot of sense to have a program like that. As a company, why not take advantage of other companies paying and training your good employees for a few years (when the alternative is to just assume them lost forever)?
> How come every time I switch jobs I get a 30-40% raise
Here's something that doesn't get mentioned a lot on HN: That "every time" will eventually come to an end. It will eventually plateau unless you change careers (become a manager or exec or something). I'm a little more than 20 years into my career. My first job change as a fresh grad + 2 years got me about a +50% raise! My next one was about +30%. Every job change I've had since has been less than +10%, and my last job change was pretty much flat +0.5% MAYBE.
This idea that job changes are always/necessarily huge salary increases is largely an artifact of the age demographic here on HN.
EDIT: To put it another way, let's say my first salary as a software engineer in 1998 was $45K (it was!). If I changed jobs every two years and consistently got a +30% raise each time, I'd be making over $800K now, which would put me in what, the top 0.001% of software engineer salaries?
I can tell you as a manager the salary bands are generally set by HR for the whole company. I was told point blank at a previous employer that we payed the 70th percentile. I asked how they knew what that was - apparently there are companies that aggregate this data (legally?) and sell it back to HR orgs for $xx,xxx+ a year. HR for some reason wouldn't deviate from this band for top talent (discrimination maybe?)
I remember many, many years ago my boss at IBM explaining that I did not qualify for a raise because I was just over the industry median pay for my band. Honestly, if they had just kept giving me 3% raises every year, it might never have occurred to me to wonder whether I could be making more elsewhere.
The weird thing about paying at the 50% line is that it means that your policy is, in effect, "we do not want any above average programmers."
Honestly being given anything under 2.5% is just insulting. Pay freeze or COL adjustment in line with inflation is for a few years in bad recessions imo, like 2009-10 or, probably the upcoming 12-18 months.
Being given 3% is in the neighborhood of "better than nothing", but nowhere near what it should be for an employee trying to get ahead and putting in the required effort.
Yup. Our team is only allowed to have one person with "Exceeds standards." One. A bastard form of stack ranking. So the mgr picks based on his gut feelings, and then justifies it with a vague review.
The lucky team member gets a 5% raise, everyone else is usually ranked as "Meets standards" which merits a 2.5% raise. A few people who need time in the penalty box get a 1% raise.
So what happens is your actual performance doesn't matter unless you make the boss look great, or look terrible. He's a non-tech person, so he can't effectively evaluate you on any other criteria.
This leads to employees doing enough work to avoid being fired, or (as is usual with Stack Ranking) sabotaging other workers.
I'd take 5% in a heart beat. But I'm not willing to run the interview gauntlet, especially as I get older. There's age discrimination, and everyone wants/expects you to be an expert on ephemeral technologies.
Compensation data from companies like Radford comes with three challenges
1. Your internal leveling scheme for SDEs needs to have been sorted out. External titles like "senior" are pretty meaningless, so one reasonable solution is mapping SDEs to an internal numerical tier so you can differentiate between "senior" and actual "senior".
2. Radford data comes with a trillion job titles. You need to identify the relevant ones and how your internal tiers map to them.
3. In markets where compensation is exploding (Seattle a few years ago), compensation data is a trailing indicator of what market rates you need to pay for new hires. You get fresher, but noisier, signals from candidates who reject your offers and from your personal network.
As others have mentioned, Radford[1] is one company that sells that sort of data. Many providers of HR management and payroll systems also have secondary revenue streams by repackaging that data for uses like that. This[2] is one offered by ADP, one of the largest payroll providers in the US.
As a manager, one way to get yourself some wiggle room in the situation you mentioned is using that strict policy against them. Request as detailed a list of roles and compensation bands as possible[2], then creatively interpret the job duties such that you can justify opening the requisition with whatever role provides the most favorable "70th percentile" salary band to attract the talent you want to bring in.
Success varies between companies, but it's not uncommon for larger companies to have latent roles/titles set up in the system that are rarely used, but exist in the benchmark data and have far more favorable salary bands than the roles you'd typically use for your reqs. Or if you can get the full benchmark data itself, you can look through it all and try to get HR to add a net new one to the system based on what you find.
I worked at a large insurance company in a previous life, this was their stance as well.
They will deviate if the field is hot enough and it translates to money for them. They were paying FAANG money to AI/Data Science fresh out of college.
The McKinseys/Gartners/etc of the world talk about the coming advantage...exec hears it and they become more open to these "critical sectors"
Yes those salary survey's are just a way for businesses to enhance the information asymmetry in negotiations.
I think if software engineers ever decide to collectively bargain, and they want to include comp as an area to bargain on, the easiest thing to do is buy these same datasets and share with members.
IIRC, that's the one they used. This struck me as kinda crappy and anti-competitive. Perhaps this is too idealistic, but I would prefer a more transparent and open market for talent.
This is common practice. There are many salary surveyors that will collect, anonymize / aggregate and sell back the data to companies. At Levels.fyi we're trying solve issues that typically plague these salary surveys (ex. data staleness, leveling / title normalization, etc). We do this by flipping the model and collecting data directly from employees. We've also mapped levels to a fluid range rather than rigid step-wise increases. Crowdsourcing has it's own challenges (validity, normalization, etc). That said we've had several high-profile employers sign up for our new data subscription: https://www.levels.fyi/offerings/
Bands are usually per level - if someone is sufficiently good you bring them in as a Principal/Staff/Magic Unicorn/whatever.
This leads to the same phenomenon where you need to work for 2 years to get promoted but if you jump ship your new manager will set your level in line with your salary expectations. And of course the levels are largely meaningless outside of compensation and office politics.
At my original company I was performing Senior-level work (like, literally according to the staff level formalism from HR). But I was told by my manager that to be classified as a Senior-level staff, you have to have been performing Senior-staff level work for at least a year. Therefore being promoted within the organization is a long process. Moreover, with the usual 1-3% raise, you're still in the (low-end) of the pay band for Senior staff, so from management's point of view there's no real problem.
.. and then of course, if you're hired in, you just have a few phone calls, couple of interviews, discussion with the hiring manager and you're at a pay-level and job-level far ahead of existing employees even with identical experience.
This exact scenario happened to me - I was a "senior manager" by HR title but I was actually just promoted to team lead in practice. I meant to illustrate the setting of compensation happened almost entirely without engineering input at a company level (in my experience, where I worked, etc.).
Your current company will promote (and compensate) you based on your performance in the past cycles.
Your new company will offer you a level (and compensation) based on your expected performance in future cycles.
If you're on a growth trajectory, jumping jobs will usually give you a bump because your new company treats you differently than your current company. And it doesn't matter much whether you're coming from company A to B, or from B to A!
It's a completely different negotiating situation. 1) The company knows exactly how much you're currently being paid. 2) The company doesn't have to tempt you over an activation energy hump to change what you're doing. 3) Unless things have changed radically over the past year, you're probably doing pretty much the same job as when you started, so you've not got much leverage, and the company knows you'll likely just carry on doing it. 4) The company knows that if you do want to change jobs, that's effort you need to put in over and above your current exertions, and most people won't bother.
Ask yourself, did you provide a 40% increase in value in the last year compared to the year before? Probably not.
For another company, that possibly desperately needs a new employee, you might have the value that without you the added income will be zero, with you... More then that.
This doesn't track, though, because this happens within the same company. It's not uncommon to struggle to get a small raise, and then have the same manager hire someone new for a much higher salary.
I think the issue is that there isn’t an agreement on your worth. If you’re willing to leave, your employer would pay you that higher salary if they truly believe that’s your worth. I also think it’s not correct to frame it in terms of what it’s worth to you (my coworkers, my knowledge, my job). That isn’t particularly relevant. What matters is how well you solve a particular set of problems and how important those are to the organization.
What I think is a more interesting question is why is there such wide discrepancies between companies regarding a specific employee’s worth?
Because nobody knows how to quantify the benefit that an engineer brings to a company. It is, in most cases, impossible (or at least excruciatingly difficult) to put even a rough dollar amount on the worth of a knowledge worker. Because of this, companies tend to use very vague strategies for coming up with offers, like "the lowest they'll accept", or "X% below the maximum we can afford". In those cases, the numbers will vary wildly depending on the company's budget, the subjective "value" that they put on knowledge work, and the negotiation skill of the candidate.
The reason most companies don't pay FAANG salaries is largely some combination of: 1) they don't have the money; 2) they objectively get less value from those skills; 3) they subjectively don't put as much weight on the skill set (think "sticker shock"); 4) they low-balled their first few engineers and nobody asked for more. I'd bet that last one is more common than you'd expect, especially with junior devs who don't know how much they could be making elsewhere.
Do you feel like this problem is unique to engineers?
I can see how other positions like sales can be more quantitatively measured in terms of contribution but my hunch is that many positions fall into this area of nebulous value estimation.
Or perhaps is more pronounced in software because of the amount of margins these companies work with
I think it's mostly unique to knowledge workers, which is a broader category than just software engineers, but does not include most jobs. I think the effect is more pronounced in software engineering because of high demand, as well as the margins for software, like you mention. (Anecdotally, I have seen the same effect with friends in other industries, like electrical engineering and chemistry, just to a lesser degree.) With that said, I think it's significantly easier to put a monetary value on, say, an HR person or office administrator than an engineer or scientist.
There is also the issue that the value of two different knowledge workers, even at the same company, may be wildly different depending on their specific skills and the project they are working on. For instance, someone working on product features at a software company is much more valuable than someone maintaining an internal reporting tool, even at the same company and even if their skills and the type of work are nearly identical.
The point is, there are a ton of variables at play here, most of which can't really be measured, so everyone plays a guessing game to determine what engineers are "worth". The asymmetry of information also doesn't help, because it's hard to know how much you could make if you don't know what anyone else is offering—many people take salaries well below their potential and don't even realize it.
Not every job is about the money. Sometimes a job is worth keeping even if you know that you're leaving money on the table. That doesn't make this practice any less shitty, though.
Yeah it's a little harder when you're not in SanFran or NYC or another hub. Like, I got options, but they're going to involve planes, trains, and moving companies. Might totally be worth doing, but that's a whole lot different than changing my morning commute by 10 minutes.
I don’t live in a tech hub. My company cut pay across the board because of Covid. I interviewed for $BigTech, got a job that’s fully remote - even post Covid.
> Ask yourself, did you provide a 40% increase in value in the last year compared to the year before?
It’s more that I’ve been providing 200% value for 40% of the cost for a while, so they have plenty of space to raise my salary significantly without losing any money.
I think there's an anchoring mechanism. You come in at a level and maybe promote after a couple years but then every promotion becomes harder, they are used to you and there's the other engineers with their salaries and there's a lot of mental inertia to see that John should be now a staff engineer when he's already promoted (is he really so outstanding compared to the other engineers?).
But you interview with another company and you reinvent yourself. They have a problem to solve and you have experience in it. You interview well, now you are a principal engineer with a big raise.
Yup, you nailed it. Most companies are content to let this kind of anchoring and psychological inertia let them lose out on capitalizing on their investments, but let's remember that this isn't necessarily unintentional. Companies continue their ability to function sustainably by adequately utilizing and providing career trajectories for the majority of employees that work there, for many of whom the stress and risk management of trying to figure out how to get promoted "up or out" is not worthwhile. For some companies, it's important enough to retain high performing outliers that they put in place recapture, recalibration, or boomerang mechanisms (as another commenter wrote somewhere in this thread). But for others, it may just not be necessary.
My experience (I have been involved in salary/bonus/raise decisions) is usually salary is set based on the necessary amount to secure the engineer, which usually means at least their previous salary + compensation for taking the risk of a new environment with new people. I should note that I've mostly worked with small companies where these decisions are somewhat ad-hoc and non-standardized.
Raises and bonuses are based on how much can keep the engineer motivated and prevent them from looking for new work (I don't want to sound too cynical here, I think when it comes to measuring how much someone deserves in a raise/bonus is essentially how much it takes to keep the engineer providing this level of work, more or less) (based on management's assessment, and often constrained by general salary policies).
That's how I approach these discussions in broad terms, although keeping an engineer motivated and preventing them from looking for new work are not simple things to analyze
I've always assumed its because of sticker shock. +40% is a lot, and as a salary it's right there on paper. As a rehire, the equivalent amount is hidden in several dozen smaller costs. Also if yesterday you made 14 widgets for 10 money, paying 14 money for 14 widgets is hard to justify, nevermind that when you were hired you made 10 widgets a day. The obvious solution for the dev is to go hunt for a job that reads "paying 14 money for someone with experience making 14 widgets a day".
anchoring and information asymmetries (+ information hiding). they're everywhere and especially all over labor markets. where there is information, it's thinly dispersed and often of dubious quality. anchoring is an easy heuristic to fall back on in those kinds of situations (on both sides).
plus, margin contribution is basically impossible to determine on an individual level, and wages therefore devolve into fundamentally political arguments (as in, expressions of power and influence).
you're expecting a (more) rational market response, when the labor market is anything but fair, free, and transparent, and coerced into that form over centuries by those in power.
A lot of companies have budgets allocated to salary increases, so raises are capped. Why that’s the case I have no idea.
It’s also strange to me that companies aren’t willing to give a nice raise to an engineer, say from 150k to 180k but are completely fine with hiring a replacement at 180k.
> It’s also strange to me that companies aren’t willing to give a nice raise to an engineer, say from 150k to 180k but are completely fine with hiring a replacement at 180k.
This is literally the story of my professional life.
Which is fine but the budget needs to go up by inflation every year. Most places it doesn't. I've switched jobs before because my salary didn't meet inflation. Yes I was near the max for my grade and my responsibilities didn't deserve the next grade. However if I'm losing to inflation I'm gone: that is a pay cut. (I was able to transfer)
I'm actually even ok with losing to inflation if that's the market rate. My main issue is internal raises seem to be detached from market rates. I mean, why would you want to pay your engineers that are already familiar with the system and domain less than an external hire?
Maybe there is some math done somewhere that says the money saved from underpaying from reduced raises is more beneficial than the risk of losing an engineer that's already familiar only to be replaced by a more expensive engineer that's new.
It can get worse than that in a region too. Even if they adjust those tables for inflation, they’re likely not adjusting them for regional cost of living changes which are harder to determine. Cost of living in seattle has gone up considerably more than the national average, but since there’s no official number like there is for the CPI, lazy orgs are just going to use that number.
My understanding is that the pay schedules are designed to slow down your raises when you cross the median pay for that band. When you get hired, you can negotiate for any position in that band.
Imagine a bell curve, the system is designed to try and keep everyone in the same role towards the middle of the bell curve. When you get hired, you just have to fit within the bell curve, not near the center. Changing companies lets you reset to somewhere else under the curve, though you may get smaller YoY raises.
If we had a tech workers guild, we could push for much more transparency in all this.
I got a pretty good tip from a longer working employee on this. They told me to go to HR rather than my supervisor and ask for a market salary adjustment based on my position and expertise. It actually did work for getting an intermediate raise, but still not the same as switching companies.
Some companies are exceptions. Netflix didn't play that game, at least not during the years when I was there. The level of increase year over year was nothing less than shocking, compared with any other company I knew.
Not OP, but I did some job-hopping right after college in the late 90's. That was a glorious damned time to be a programmer: I doubled my salary twice in four years, changing jobs four times between 1995 and 1999. Then, around early 2000, I decided it was time to do it again (I was young and inexperienced, and it never occurred to me that anybody would have a problem with me job hopping). All of a sudden, I found it really hard to find a new position. Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year. I did finally find something, and started staying at jobs for much longer periods of time (four years is my shortest stint since), but when my last company shut down suddenly and I found myself looking again, the four-jobs-in-four-years from 20 years ago came up as a negative in the interview process again.
Things were still hot but there were at least storm clouds on the horizon at that point.
>Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year.
A year means that, to exaggerate just a little, you were basically starting to look for a new job as soon as you started the old one. But, yeah, if someone has moved between jobs like clockwork every year or two, the working assumption of the hiring manager has to be that this time won't be the charm and you'll hop again. Whether they're OK with that doubtless depends on the role.
You might consider just leaving those right out of school jobs from 20 years ago off. If someone really wants to see them, you can tell them but it's not unreasonable to age stuff off your resume if you have lots of jobs.
- You're growing as a professional so you're worth more. But your current company doesn't necessarily see that, some colleagues might still see you as the intern you were when you joined
- The market of developer salary have been growing steadily for more than 10 years, but you can only capture that growth by changing jobs
So if you've been working for 10 years, you could do about 3 years at each company and have a 30% increase each time - the point is that 10 years ago you were junior with a 2010 salary but today you're senior with a 2020 salary.
Or course things could change if developers salaries stop growing (or even shrink).
What you're paid has nothing to do with your productivity or business value, it's about how much they have to pay you not to leave (or for a new job, to accept)
Inertia means that you have to pay someone more to change their life and come work at a new place. You don't have to pay someone very much more each year to have them continue on the same path.
Maybe it's that "rotation" is viewed as normal, and nobody is really blamed if someone goes. If employees suddenly leave en masse, it's normally not due to salary.
But growing personel count on the other is definitely a concrete objective/bonus for someone. That someone will allocate whatever possible budget to get his bonus or praise.
It is the fault of FAANG/unicorn salaries. Engineers always aspire to have FAANG/Unicorn salaries, so no matter how much the companies try to increase it, if it doesn't match them, then the engineers will eventually move on.
Therefore companies know that their engineers will leave anyway, so they chose not to increase the salaries.
I imagine it has to do with avoiding resentment within the team. Folk don't share their starting compensation, but they sometimes share their raise percentage. If they give one person a big raise, they have to give others a big raise too, or suffer a morale hit. Also, from a beancounter perspective, there's no reason to pay more than needed for something. As long as folk aren't quitting, they are paying you enough. I work at a company that tries to prioritize employee well being, and I have gotten very considerate compensation adjustments that track the value I add to the company. Places like that are out there, but they are a bit rare.
Plenty of folks these days are sharing both their starting and current compensations, both internally and externally. I (personally) believe it's super healthy to do.
I agree in theory that it's super healthy to do, but the reality is that people have, what I would argue are, incorrect attitudes about who to blame.
I work in a field that posts salary publicly (higher education). It is public knowledge what we all make, with databases devoted to this.
When someone is hired at more than a current employee, instead of getting mad at the employer for their compensation plan that takes advantage of existing employees, people inevitably get upset at the new employee.
I don't know why it happens, but it has happened in 100% of the cases at my institution. Every single one.
Over many years, the current leadership have set the culture. They decide who to keep and who to let go. People may nibble at the hand that feeds them, for necessary upwards feedback, but they generally refrain from outright biting it. So fresh bait straight from college is always easiest prey.
In essence, how people treat newcomers, especially vulnerable ones, speaks volumes about the values and culture already set in the organization. There are organizations and countries where people can expect nothing good from leadership.
It's a learned behavior. It benefits employers to have employees squabbling with each other over pay rather than uniting and saying, "We'd like to talk with you, together, about pay". For some reason, the US in particular has a hard time with this.
I've been at companies with a culture of compensation transparency and companies with a culture of opacity. Anecdotally, the transparent workplaces had relatively high occurrences of drama and morale problems centered around structured performance evaluations, while the opaque workplaces were more laid back and focused on direct feedback and mentorship.
One helpful perspective: a company hiring an individual has a specific problem they want to solve. If they hire you, you are the best candidate out of many they interview. You will bring a lot of value to them immediately.
Not true in large companies. Managers are often just empire building, but new hires still get top of band. Real morale killer, makes tenured employees want to look for a new job.
Maybe companies try to gamify growing inside the company, make it look like an achievement.
I've worked at a company where most engineers have been in the team for 2/3+ years, maybe more, some of them first and only job, so far.
Most of them were probably low-ish to medium salaries but they were happy with the team and the company. Had no plans to leave or try to argue for salary raises.
confortable
Some people simply don't care so much about money and will be happy to have a nice stable environment they're comfortable with.
I've heard from a lot of people at certain companies who know that if they want a certain salary bump, they need to leave for a year or two and come back. So if you're still interested in your first organization, don't discount going back there. Generally, it's way easier to get hired the second time as you're a known commodity, and assuming you can demonstrate your skill improvement over that time period, you can get a 20-40% bump from your current job.
It's manager myopia in many cases. I am sure there are some situations where a company may not be able to pay someone in a given role more than X dollars. That company may not view you as capable of the adjacent and more senior role that would increase your comp. But maybe you are on the edge and otherwise a solid employee that they would like to retain, but they feel it would not be fair to other employees in your role to adjust your comp "out of band". It is actually very hard as a manager to structure compensation in a way that is "fair" to everyone. So bands for roles are used. I mean, we do that at our small company. It works okay for the most part. Where it gets tricky is, you want to hire someone that you think given a year will grow into a senior role, but they are only an "entry level" player when you hire them. But they have comp requirements that look like the senior role's band. What do you do then? I think a lot of companies fall into this trap when they are inflexible with their comp bands. So, you may be up for that "big" promotion or adjustment in a year or two, and the employer thinks nothing about making you sit in your current band.
This leads to predictable issues for companies with rigid compensation bands. You get frustrated because you feel you are doing the more senior role job now. You express this frustration or sentiment to your "manager". They tell you that you are doing great, but maybe you need a little more of X before they promote you. Maybe they see things in you that make them feel you should not be promoted to the next role / salary band at that time. This causes you to hunt around. Another company that really needs someone who can do what you can do will just hire you to the senior band because, on paper, they see you look effectively ready for the senior role, whereas your current managers may [right or wrong for their situation] think you are not ready for it. Maybe it is myopia and they should just promote you and that is the right call, but maybe you really aren't quite ready, by their standards, for the role yet.
My experience with all of this has taught me that a big chunk of people are an "edge case" with special circumstances. Like, maybe this one guy who is not ready for the senior role because of performance issues can just go to a competitor and get a job there in the senior role. And maybe they do great in that role in the new environment. Maybe they fixed the flaws they had or they put in that extra effort at at new job, etc. There are so many nuances to this. But I think I would trace a lot of it to imperfect information on both sides. One employer may not be willing to promote you for whatever reason, another one hungry for talent is happy to pay you more and give you a shot because you are "almost" there anyway.
Maybe other companies just have very different comp structure and available cash. Maybe the manager is being stubborn or they just don't have good, objective criteria to measure your performance and you deserve that comp bump. I do think it is easy to not "see" someone and the great work they do when you work with them and manage them every day.
IDK, at the end of the day at my company we try to be as fair as possible, and we are willing to, and have often, made big comp adjustments once someone has proven themselves [in a relatively short amount of time 1-2 years or less] for that exact fear. Someone we trained up, like working with, etc. It would be a shame for them to go to a competitor for a 10-20k pay raise.
One final reason not to be overlooked is plain old greed. Some companies just don't care. They will suck every last thing out of a junior developer or consultant type role and keep you in that pay band for the longest time they can, or maybe they never actually intend to promote you, but they just won't tell you that and figure you will see the writing on the wall eventually and leave. And that is fine with them.
Anyhow, I have seen all of these scenarios play out in various forms over the years as a manager and employee. So, it is a multi-faceted problem that doesn't have one obvious answer. I don't know about the game theory aspects, but I assume on a large scale companies that don't adjust to "market" wages ultimately are forced to adjust to market wages or go out of business because enough people leave and they can't hire new people if their comp is too far from market wage.
much easier to dodge ineffective HR (whether by their own incompetence or organizational inertia) and insecure managers by jumping ship (and optionally asking for a life raft if you want to come back)
Can you just rejoin the organization again? They (used to?) say that the fastest way to get promoted in Microsoft, for example, is to leave for a competitor and then rejoin in 2 years.
this isnt an answer to your question but it just got me thinking, the opposite thing happens too: i had an engineer leave who was earning a good salary -- and i ended up being able to hire 2 new engineers each making half
Companies don't want to pay you more just because there is a perceived value. They will only pay you once you threaten and you are good for it (supply demand) or you change jobs (supply demand again).
I have thought about this hard. Both as an employee back in the day and now for 6+ years as a business owner. As an employee, I thought the same as you but then stopped expecting from current employers. When I was ready to jump, I jumped. Period. No ifs. No negotiations with current company. As a business owner though, I definitely understand why I am not just going to give someone a 30% raise. Now, if you are a small company and there is no a whole lot of management red tape (like my company), I encourage anyone to ask for a 30% raise and be ready to be able to justify it. If you are worth it (capitalism), I would do it. But if you never ask, I absolutely won't give you a 30% raise. Remember, you are not the only one in the company.
employees don't threaten, they simply leave. Why would someone go through the arduous process of finding another job just to 'threaten'. If you 'threaten' they will agree at that point and fire you later.
Capitalism should account for that. So thats not it.
The article's title is pure click-bait. It would be more accurate if it were "How to Keep Your Engineers Interested in Sticking Around"
Very little of the article says anything about how much to pay engineers. I only found 2 paragraphs about engineering compensation:
> The most comprehensive study, though, is Daniel H. Pink’s Drive, which is summarized in this animation from the RSA. Pink suggests that money isn’t the main driver for highly skilled workers who choose to stay in their jobs. Instead, he identifies a combination of three factors: the ability to be self-directed, getting better at the job, and having a purpose in one’s endeavors. In other words, once a person’s basic financial needs are met, money starts to become less and less relevant as a criterion for job satisfaction, especially compared to purpose, self-improvement and self-direction.
> Unsurprisingly, this conclusion mostly matches my own experience with engineers. Whether companies pay at market level or 20%-30% above market makes very little impact on staff retention. You might stretch retention slightly in the latter case, but the investment is often not worth the net result. Keeping your engineers engaged and motivated makes a much more substantial difference, so that’s what we’re going to look at next.
Even these paragraphs are primarily about how money is not the primary way to keep engineers engaged and motivated.
Be careful though. For example, I don't really care that much about money, but I do care very strongly about fairness. So if you try to cheat me by paying me unfairly (for example, compared to coworkers), even if I would be happy with the money all things considered, I could be unhappy just because you're being unfair.
Place was great to work, brilliant team, laid back culture. But refusing to give me an annual raise, on top of paying me below market value (and below my peers) for my experience and skill set was precisely what triggered my departure a month later for a nearly 90% raise. Sacrificed other things, but at the end of the day, "thank you's", "good jobs", and a kegerator doesn't feed my family.
Money isn't everything, but competitively compensating engineers is still a big factor for retention imo.
> paying me below market value (and below my peers) for my experience and skill set was precisely what triggered my departure a month later for a nearly 90% raise.
I'm curious - how did you end up accepting that job in the first place that was underpaying by nearly 100% ?
They offered me nearly the same kind of raise over the position I was in before it.
The first company I worked for paid me $36k/yr. Given I don't have a degree, and it was the first offer I received (was my break-into-the-industry offer), I took it. After nearly two years, I was still below $40k/yr. Couldn't afford to rent a two bedroom apartment by myself, let alone support a then pregnant girlfriend.
That's when the next company offered right below market value, but when I started with them, it seemed like a fair offer given I had to learn new frameworks, containerization, etc. After a year, and the value I'd added to the company, I assumed I'd receive a raise.
Low and behold, it didn't happen, so like the previous position, I found somewhere offering a median salary for my region.
Still not where I should be with all the responsibilities and skills I have now, but at least the financial stress isn't nearly as bad as it used to be. Plus, I'm secure in my position, so that's helpful.
I'll even add that engineers should understand the value they bring to the company and adjust their concept of fair not just against their peers but against what the company is earning from their labor.
That isn't how salaries work. If there are many people who are willing to do the work at a given salary, it doesn't matter if the company earns 5x from that labor.
Supply and demand are obviously not the only factors, but they are very important and must be considered when looking at compensation for employment.
This is one of those things that sounds reasonable but is impossible to compute. Does the company earn more from the developer who makes the product, or the infra engineer who keeps it online? Well, without either they're not making anything...
Also, if the company makes a bit less money this year vs last year, are you willing to take a pay cut?
It might be impossible to compute, but we still want to compute it.
Or rather, get some agreement. I would say not only it is impossible to compute, the question of relative human pay for different types of work is a meaningless question, like asking, what is more important on a car, tires or engine?
Pink suggests that money isn’t the main driver for highly skilled workers
Consider that the people who benefit from convincing engineers that other engineers aren’t motivated by money are those who hoover up that money for themselves.
Or alternatively, managers aren’t “highly skilled”, can’t have it both ways!
yes, this is explicitly taught in business school--that companies and managers should strive to develop intrinsic over extrinsic motivation (lke pay), to both increase productivity and create a good working environment (whether students paid much attention is a different matter).
I’ve previously read the the number one employee complaint is not pay but feeling under-appreciated. I think the difficulty for managers is knowing an employee’s particular language of appreciation. One may value being lauded in front of the company with an award or snazzy new title while another couldn’t care less and would rather be shown appreciation through a behind-the-scenes bonus.
yes, that's part of the underpinnings of intrinsic motivation, that you'll be rewarded appropriately for achievement, not just monetarily, but also in status and esteem. expectancy theory [0] is one of the frameworks for understanding this.
as others have pointed out, pay is inextricably tied with perceptions of fairness, so it's a highly relative measure. if programmers are paid 30k on average, then getting 35k seems fair to you. but if the average is 60k, then 35k seems insulting.
I like being praised for my work, and would be annoyed if I was never congratulated for doing a good job. But if I'm often praised and never see a compensation increase, that will make me feel the praise is fake: if my work is so valuable, why am I not being compensated for it?
I hear you, but I think it depends on the context of your job.
Are you doing good work within the context of the duties in the job description? I think a good manager will praise that work but that’s essentially fulfilling your end of the work/pay contract. Expecting continuous raises for meeting agreed upon expectations comes across as entitlement beyond the scope of that labor agreement.
But if you’re consistently doing well beyond your previously agreed upon duties, then there’s grounds for expecting a pay increase because the employer is no longer upholding their end of that bargain
In accordance with the standard hierarchy of needs, culture flows down from compensation. When everyone's material needs and desires are well satisfied, they interact genuinely and naturally. When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.
You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
This is demonstrably incorrect if you look at some of the highest paying companies in SV. FAANG are of course well known for paying way way above what is necessary to satisfy "everyone's material needs and desires", and yet they are well known for still being ruthless political cultures and backstabbing.
Execs might be congenial because at that level, congenial is just how you play the game. It's still cutthroat, but overt backstabbing doesn't get you very far in a tight knit group of execs. But in other groups like a team of devs, IME high pay just attracts the kind of person who wants even higher pay and will do whatever it takes to get it.
This idea of FAANGs having a culture of ruthless political backstabbing is new to me, is it really the case?
I have heard about things like misaligned incentives (eg launching a chat app to get people promoted and then discontinuing it a year later) but that actually seems like the opposite of ruthless to me (complacent?)
I remember these articles from when they were posted. I don't know of any specific articles for Apple or Google, but I know that my friends at Google think Google is a brutal place to work for most (Google of early 2010s apparently was much more chill, but not anymore). As for Apple, Steve Jobs and Tim Cook are of course known for their incredibly ruthless management style.
Yes, those misaligned incentives mean rewarding the cutthroat psychopaths who are obsessed with claiming credit for others work, instead of genuine team players who care about delivering a quality product. There is lots of cronyism, like all Indian or Chinese teams who protect and promote each other while only hiring others to fill their PIP quota. The higher you go in the org chart the worse it gets.
> FAANG are of course well known for paying way way above what is necessary to satisfy "everyone's material needs and desires"
Do they though? Quality of Life is not just how much you make, it's relative to what you have to spend. You can't realistically afford a home -even for most of the engineers- with a decent school with a sub 30 minute commute anywhere around one of these companies unless you want to be house poor or you are a dual earning family.
Yes, they do. This comes up every time compensation gets mentioned on HN. Engineers claim that "I only make $500k/yr at Google and I'm poor because SF prices :(" which is just bullshit. In a previous thread, someone mentioned that they make $300k/yr in SF, and even after paying for housing in a nice area and food/utility expenses, they had over $11,000 per month left over in discretionary income. That is insane.
Unless your material needs and desires are to own a superyacht, even "just" $200k/yr starting salary is still far more than enough to satisfy you.
I’d be curious to know where that person got such cheap housing. $300k/yr translates to $15k/month take home. Houses are like $10k/month if you’re looking to own. Even if you rent, it’s still close to $5-6k/month if you want a decent neighborhood.
I’m not even talking about nice houses btw.
Maybe they rent an apartment and share the rent. That’s the only way I see them coming up with those numbers.
$300k/year isn’t enough for single income families in the Bay Area.
EDIT: I'm curious if you live in the bay area and where you get your notions.
In less than 5 minutes of looking I found several very nice houses for $4-5k/month in multiple nice neighborhoods.
Renting, there are actual luxury condos and apartments ready to rent for $3-4k, again in multiple nice neighborhoods.
>$300k/year isn’t enough for single income families in the Bay Area.
The median household income for SF families is less than $100k, and you're telling me three times that "isn't enough"? That's bullshit.
Responding to your edit: I don't live in SF, but prior to covid I traveled there every week for work, so I am familiar with the city. For a local example, my best friend makes ~$140k/yr, lives in Nob Hill in a gorgeous high rise apartment, and still has thousands to spend every month on fun discretionary activities. Another close friend who makes ~$250k/yr owns a great house in Inner Sunset and they certainly seem like they are able to afford any other desires they want (a boat, all kinds of tech gadgets, trips all the time, etc).
You're going to have to show listings. Last time, people were posting spam postings they found on Craigslist. If you want an apartment - you can find 1-bedroom "luxury" apartments (also known as normal apartments outside the bay area) for about $3300-4000/month. Even at $7000/month income that leaves "thousands" left over but that is a fucked ratio of expenses. You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
If you want a house, you're not finding a nice house (3+ bedrooms, central air, etc.) and in a nice neighborhood (San Carlos, Hillsborough, Palo Alto, Los Altos, Los Gatos, Menlo Park, etc.) for $4000-5000. I'd love to see the listings... I don't even bother with SF because the prices are even more outlandish for nice neighborhoods.
Familiar with the city and actually paying rent here are different. I've had coworkers who lived with their parents who are wildly out of tune with how much it costs to rent a place. I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
>Even at $7000/month income that leaves "thousands" left over but that is a fucked ratio of expenses. You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
The general guidance is that 30% of your gross income should be spent on rent. After taxes, that equates to ~40-50% of your take home goes to rent. That's normal for everyone, not just in SF. It is not a "fucked ratio of expenses" at all, and in any case, "thousands" left over after rent is still an extravagant amount of discretionary income.
>I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
I'm not going to dox my friend but I just looked up their building and there are 1br apartments for $3-3.3k/mo, and it is a very nice building/apartment. 3k/mo is easily doable on $140k/yr.
>You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
Literally the first result. Gorgeous 2 bedroom, and at 250k you'd have ~7-8k each month left over after mortgage. 7-8k per month is more money than most people in SF make period, even before paying for their homes. You're not even close to being "poor in the end with it". Also well below the "thirty percent rule" with this condo.
Second result. 3 bedrooms, central air, all the amenities. At 250k/yr. At the list price (assuming you can't negotiate lower) with a house note of 5-6k/mo, you are still within the "thirty percent rule" without even stretching your income, and you're still looking at ~6k+ in discretionary spending after paying the house note.
3 bed, 3 bath condo. All the amenities. At 250k/yr, this condo would put you at slightly above the thirty percent rule which isn't wise depending on how much you want to be able to save for retirement, but still doable without worrying about money, and certainly still not even close to worrying about being "poor".
And these are three that I picked off of Zillow in literally 10 minutes without any further research. With any actual effort and talking to an agent, the prices and options would likely be even better.
Your first listing is an apartment. Shouldn't have to explain why that's not a house.
Your second listing has an estimated sale value of nearly $1.7m. Your third is nearly $2mil. Have you ever tried to get a loan for that much at that income with a traditional 20% down? (Assuming you have 350-400k laying around) You will not get approved for a loan on that at $250k/yr. Your monthly cost on that first home is $8,375 after tax (tax is around 1.2-1.6% in CA) + insurance. That's past the maximum 36% of gross monthly income. https://www.nerdwallet.com/article/mortgages/how-much-can-i-... Try the calculator. In general, going past 4x yearly income is not going to get approved by a bank. Theoretically, you might find some lender who'd do it but I haven't seen many. Most people buying here are buying homes with cash or really large down payments.
The fact you're even mentioning negotiations on buying homes in the bay area tells me you have no idea how the market here works. There are bidding wars - there aren't negotiations.
At this point - it's obvious that you're completely out of touch. You think spending 50%+ of your take home pay on rent is sustainable and that you can somehow retire with that expense. Maybe lay off the tidepods?
If you're just going to move the goalposts, then this discussion is pointless. But in good faith, I'll try one last time:
>Your first listing is an apartment. Shouldn't have to explain why that's not a house.
It's not an apartment, it's a condo, which is a form of housing.
>Your second listing has an estimated sale value of nearly $1.7m.
At $1.7m sale price you're still close to the 30% rule and still have more than 5k/mo discretionary spend, which again, is more than most americans make monthly, period, even before paying for a house. The fact that you think this would make you "poor" is absurd and quite frankly, insulting. I'm sure my friend who owns that house in Sunset and has a boat and goes on nice vacations all the time will be bummed to hear that he's apparently "poor". I'll also let my Nob Hill friend know, too. Tell me, do you think commenting on their pic from the St Regis Bora Bora is a good way to break the news to them that they are actually poor?
All of this is also completely ignoring the fact that this is talking about someone making $250k/yr (which is near the beginning of their career for a FAANG engineer) paying for this house by themselves, when in reality the expectation in the entire rest of the world is that you shouldn't be expecting to buy a home like this until your 30s or 40s. There's a reason "starter homes" are a thing, and these listed homes are not that. You have incredibly warped expectations if you think that the target market for these 3br, 3bath homes are 25 year old single people. If you were an engineer in your 30s, you're looking at an income more like 300-400k at a FAANG, and if your spouse also has an income, these houses are trivially affordable.
Again, the median family income in SF is less than $100k, and they seem to be doing fine. For you to sit here and try to argue that "$300k isn't enough" is ludicrous and reeks of ultra privilege. You need a reality check.
> You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with.
> You're not even close to being "poor in the end with it"
> The fact that you think this would make you "poor" is absurd and quite frankly, insulting
"House poor" is a distinct term that describes a home purchase where home expenses (not just mortgage) drain cash flow in a way that prevents hitting other goals - hence this point:
> You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
A very different notion than "poor" alone. Also, you'd have to put at least closer 25-30% down on that home without absolutely perfect credit; jumbo loans have been tightening awhile.
> Again, the median family income in SF is less than $100k, and they seem to be doing fine.
What do you mean by doing fine, exactly? Not to nitpick, but I was under the impression most people buying in SF are not native to the city.
I don't have firsthand experience, but craigslist seems to have what look like normal apartments to me in the bay area for around $2800/month. Something like 600 apartments below that if I filter by off street parking and washer/dryer in the apt, which is my idea of a nice place. Looking for ads that double that brings up furnished apartments and luxury high rises with "24 hour concierges".
My reference point would be, for a young single person in a "normal" area of the country, $55K and $1250/month rent means you have $2K/month left over. A lot of people don't make this much.
To have the same amount left over after taxes and rent of $2800/month, it appears you'd need to make about $78K. So anything above $80K seems on the face of it to be livable at least for one person.
By the way, I noticed that total income taxes seem to actually be lower than in upstate NY.
Depending on the landlord, you wouldn't get the apartment. Some landlords require you to make 40x the monthly rent per year. I don't see many people renting $2800 apartments here at $80k/yr. If people are at 80k/yr, they're almost always renting a room.
Btw, I wouldn't necessarily use the entire bay area as your reference - as we weren't talking about the entire bay area either. Specifically only nicer neighborhoods. The price varies wildly by region. Apartments in south San Jose are much less expensive than in Palo Alto - but both are part of the bay area. There are many places in the bay area where my coworkers wouldn't even want to walk on the street - let alone live there... but there are cheaper housing options there.
You should be using ratios - not absolutes. If someone had $100,000/month rent then by your logic, they'd be just fine if they only had $2,000/month left over. That's very little buffer.
>If someone had $100,000/month rent then by your logic, they'd be just fine if they only had $2,000/month left over. That's very little buffer.
If you scale things up to that extent, then $2K becomes small compared to the possible variance in income or rent. But it's also small compared to the credit you'd have access to.
Without visiting I can't tell for sure, but I can compare apartments to what I'm used to by amenities, square footage, and such. If I had an offer and needed to move there, I'd judge the neighborhood by the housing, not vice versa.
Most Engineers do NOT make $500k total comp per year at FAANG companies, most engineers don't make $300k TC/yr at these companies, and those aren't the engineers I'm talking about anyways. These companies are made up mostly of engineers who make between $100k-$250k.
That's still not a small amount of money; and I never claimed that these people are poor; just that these salaries don't satisfy their needs and desires and these salaries certainly do not feel like you make $100k-$250k. Part of that is anchoring our expectations to what those amounts of money mean to when we first really began to understand the concept of money which is usually in our tween-teen stage of life, but it's also that these are in incredibly high COL areas.
I don't live in SV. Looking at Mountain View, there are quite a few nice 2000 sq ft houses to rent for about $6500/month.
When I compare that to what I'm paying in a cheaper COL area, I can assure you that the difference in pay between me and typical Google compensation, after taxes, more than compensates for this increase in rent.
I won't say it's "luxury", but it's still better than most people get around the country.
I pay $2200/month mortgage to live in the burbs of a major southeastern city. - 5 bedroom, 3-1/2 bath, 3100 square feet. It was a brand new build in 2016.
I just went to https://paycheckcity.com and did a gross up calculator. At first I thought you were underestimating how much more I would have to make to make the move worthwhile - with downsizing.
But if we were willing to downsize, I would need to make about $70K - $80K more than the average senior software engineer makes in my area.
I was off. $220K - $240K is about the average range for engineer with 3-5 years of experience in $BigTech so $6500/month is not unreasonable.
Not true. The amazon sde2 external hire offer I saw given to people with >=1 year of experience is around 250K in Seattle and higher in California. Amazon is known as one of the lower paying FAANG companies.
The average SDE 2 total compensation is around $215k according to levels.fyi which I have found to fairly accurate. I'm not saying you didn't see that offer, just that it isn't normal.
$215K in Seattle is still quite high. External hire gets a lot more than internal promo and that site lags behind the current offer compensation which is some part of the diff.
Management and upper management is not friendly, it is cut throat.
The skill people who go up the ladder have mastered, though, is to be deceitful and to maintain appearances, you might call that being professional at all times (at least to know when to be and when it is OK to be more natural).
There are many companies in our industry that disprove this. Culture can be toxic/abusive despite well paid employees. Culture certainly flows down, but it's the execs/managers who create it, not the compensation. See Tesla, Uber, Yelp, and most major video game studios.
> You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
i assume this is some sort of very subtle reductio ad absurdum?
> When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.
i was working at a place where the salaries were flat across the board, and set at a perfectly reasonable level, and it still didn't eliminate concern for appearances and bickering.
Definitely agree with the latter part here about execs, but I feel like anxiety around compensation doesn't tie back to material needs as much as to the extent to which people measure their self-worth by compensation.
Years ago, these studies were going around saying that people are happier when they make more money up to about $70k, at which point more money doesn't make you happier anymore. I'm sure that has to be adjusted for inflation etc by now, but very few devs make less money than they need to live comfortably by most people's standards.
It was conducted in 2010, so I wonder if anything would change if it was conducted again today. The current tech industry was in its infancy 10 years ago, and a lot of high paying jobs have been created since.
I wish I could find back the article that I read, years ago, that demolished the $75k claim of that paper, simply by having a different look at the same numbers.
Of course, but what about Austin or Denver? The tech industry has brought high paying jobs to a lot of smaller cities that weren't accustomed to such high salaries.
It definitely starts there, it misses on a key aspect: 70k for how long and how assuredly? Usually once you start making that, your next goal would be
- To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.
- Then you want to account for inflation. (Add a buffer to the above)
- Then you want to ensure this is on top of your car, house, child costs. (Depending on where you like to live and your car choice, add anywhere between 200k -> 2MM)
- Then you realize this car/ house kinda bumps into the 70k limit - especially if you went for a giant house because reasons.
And so on. So yes, folks can definitely start to feel 'safe' at 70k, but that's nowhere close to the checkout point. Once you figure out a target number based on above, you will realize you need to make so much more than 70k to get to that comfort state.
> To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.
> Then you want to account for inflation. (Add a buffer to the above)
A buffer?? Assuming 2% inflation, the "buffer" you're adding is just over 100% of the original amount.
It is worth noting that "happiness" is distinct from "life satisfaction" in these studies. The latter does scale with income up to very high levels. Just being happy on a day to day basis is a low standard, many people aspire to more in life somewhat independent of happiness.
I left a job which paid in the 95+ percentile of my area for one that paid right about the median wage (maybe a little less). My reason: I like to own the software I write. We had an influx of people on our team who began to rewrite sections of stuff I wrote a long time ago for no real reason. Basically, some of them didn't like promise chains and decided to rewrite every one they encountered. Things finally bubbled over when I ended up in merge hell where I'd have the codebase drastically change while I was on my branch and I'd be reimplimenting the same feature every time I tried to submit a merge request, but all of these changes amounted to largely meaningless "refactoring."
It's kind of petty on my part, but I'm not the type that wins arguments. So I decided, despite loving the people I worked with, that I was not in the right job. Now I design and develop software mostly individually and I'm infinitely happier. Someone who is competitive and enjoys confrontation would thrive in that role though.
Point is, people have lots of different reasons for changing jobs. And something that makes one group happy may make another miserable. I also hate traveling to conferences, but that's the nature of the job sometimes.
I mainly write embedded software rather than web stuff. I will say that the hardest to read and maintain embedded code I've ever had to work with was structured to use asynchronous chains of callback functions. It can get bad enough that you just can't fix a bug without dousing it with gasoline and lighting it up. Not to say that such patterns can't be used effectively, but maybe your former co-workers had some previous emotional trauma!
Promise chains are usually totally fine and readable, it's when callbacks are passed around without promises or bad abstractions occur that async code is problematic.
More often than not I would not touch code written with promises because it doesn't matter anyways since code using it can still use async/await + sometimes it makes some patterns easier to deal with (f.e. using a dependency written with callbacks and calling resolve from within the callback function)
I would've changed your code from promise chains to await statements (after warning you, of course) because they just look awful. And I would then have expected you to buy me a beer for getting rid of all that ugly code.
So you would've spent company time rewriting working code to match your personal aesthetics?
Sounds like parent didn't have a reasonable structure in place to generate consensus amongst the org about stylistic preferences vs tech debt, and where developer priorities should lie.
There's some ego in both of your comments as well. Async is nicer looking that promise chains, but there risk in changing working code, no? Growing with an org means letting go of your old code but joining an org requires empathy and understanding for the old timers and their code babies as well!
I assume you are looking at things for a living. And from your corporate tone, so are your coworkers.
We all want to look at good things. Promise chains were bad things. When I see bad things, I am willing to make the change. So should you. And we should ask before we change. GP was caught off-guard. That is not what we want.
I don't look at things for a living, I trade time for money with the expectation that my time has a multiplier on revenue, profit, and team health/productivity. I guess I've seen enough legacy code at this point that I don't have any desire to change it just because there's something better, changing stuff that works has to be a reasonable balance between tech debt/maintenance/quality of life things, vs features/uptime/performance. Of all those things, features make the most money right? So why would I want to spend time refactoring things when I could make measurable, incremental improvements somewhere else? Spend all day in the same system? Sure. Drive by refactorings? Absolutely not.
Refactoring a large JS codebase is like painting the proverbial Forth Bridge. By the time you've finished, fashions have changed and it's time to rewrite it all again.
It is exactly what I did with bluebird before async was even part of the language back in 2013, and when async finally arrived all we did was a simple regex replace. So yeah, I am pretty consistent at what I do and everyone who disagrees is just cringe.
Async/await isn't exactly a fad that is going away anytime soon. If refusing to refactor outdated pieces of code is your idea of "fun" then I feel sorry for your coworkers.
What does 'outdated' actually mean here? It's a sign of lazy or fashion-driven thinking. If there's a good reason for refactoring a pice of code, it should be possible to articulate that reason without reference to the date it was written.
I mean, fair enough, everyone has their personal opinions on style. But these battles can end up with the losing side leaving the company. This was a net loss on both sides: I lost income & a job I otherwise enjoyed while the team lost the key AWS expert that took months to originally fill.
Ironically, a team is probably more likely to lose competent people in such a scenario because they are the ones with many opportunities. A former manager of mine was more than happy to fast track my hiring to my current role.
I had some time to think about this comment, and I really like it. It demonstrates the issue underlying issue I was getting at with my original comment, but didn't express because it would not have come across as believable. I've encountered a lot in my career and has been the impetus for my last three job changes.
Hearing this tells me three things: you don't respect my work, you're publicly demonstrating that you're better than me, and that you're entitled to something from me for putting me in my place. Microaggressions like these are difficult to work with, no matter how much you're paid.
I'm sure you're a great developer, you've probably been promoted a lot, lead a big team and are generally well liked (at least on the surface). However, there are lots of developers and engineers that have been put down their entire lives and never really developed the social skills to stand up for themselves. Somehow, even over the internet, people like you can hone in on this and leverage it.
Our setup was you needed one person to approve a merge request. These guys were buddies and would fast-track approvals. Also at that point, there were ~10 contributors to the code base, so things moved quickly.
Other product within the company had a more formal code ownership structure, but this project was only two years old. So there were no owners, other than for infrastructure.
No tech-debt JIRA ticket - no big refacroring. JIRA tickets gets assigned during planning and are usually talked through in the team and agree upon. Problem solved.
I worked at Netflix for several years, where they actively practice paying ‘top of market.’
This is an oft misunderstood tactic, but in action means:
1) Yearly, employees are asked to seek evidence for their top of market compensation.
2) employees do two things as a follow up - They either interview elsewhere to get competing offers to establish ‘top of market,’ or they feel fairly paid and do nothing.
Having worked at a few large tech companies that practice the typical equity grant and vesting structure designed to maximize retention, Ive never seen a more effective tactic to completely remove the concern of ‘am I paid enough’ from the employee. As a result:
1) The really high impact people are paid extremely well, as Netflix always overbids.
2) The average performers either go elsewhere or retain without jockeying for greater comp and ownership.
The proactive seeking top of market is a good feedback loop to pay for/reward impact and to build trust with your team, and is something I still practice with my teams outside of Netflix.
This was back in 2015, so some things may have changed. Regardless, the net to the business has compounding returns. At an average company:
1) Most employees do not pay for their salary in business impact.
2) Top performers drive outsized impact relative to their compensation.
If you find a way to mitigate 1), you can pass the savings into 2), protecting and retaining your highest value employees.
While other factors do obviously matter, and comp isn’t everything - removing comp from the hierarchy of needs entirely dramatically changes the mindset towards ownership of work and outcome.
I'm probably taking the wrong lesson away here, because from an outside perspective the message seems to be "don't waste time interviewing someone who currently works for Netflix".
You'll either waste your time, or get buyer's remorse. Very little upside.
I've had this same practice with a team of two that has moved with me to different orgs over time. Had no idea it's a norm and followed by big companies.
My motive was exactly this. If you remove the "am i paid enough" concern, it allows talented engineers to focus at the job at hand and deliver really impactful outcomes
It's only about 50% about pay for STEM fields. They have to be engaged, feel like they have a voice or influence in the culture/business decisions, have great equipment to use, and flexible time off.
Yep. I'm a MechE and my pay is decent (not amazing) for the area but I was fine with it due to a lot of other factors.
In the last year or so, my company has had a culture shift leading to down-to-the minute micromanagement and I've lost all autonomy - every decision requires approval of multiple managers. There's no realistic engineering salary they could pay me to continue putting up with this and I can't get out quick enough. Covid has made that a bit tough though.
Less autonomy also means less responsibility which affects growth in a bad way, but there is a small bright side to this, it reduces the cognitive workload and one can have leftover energy for side projects and hobbies. For the ones who have absolutely no taste to bureaucracy/red tape/stupid hierarchies of command, this could be soul sucking though
It doesn’t reduce cognitive workload for high performers.
With my previous boss, I spent 90% of my intellectual effort managing up. Despite his best efforts, the project was delivered above spec and on time (saving his ass), but I burnt so many political bridges making it happen that I ended up moving teams.
My point was exactly to take your high performance outside the organization you’re working for if they don’t offer the conditions necessary such as some autonomy and agency. It’s not worth proving anything, too few people would notice of care
Indeed, pay me $1m a day and I'll stare at a wall for you.
Probably wouldn't do it for long, the first day would be amazing - that buys a great house. The rest of the week and I'm set for a very comfortable retirement.
This is part of why stock options are so valuable to organizations as an incentive: the retention power of high pay without the calculus of “do I have enough?” from liquid compensation
Huh? Everyone I've ever known who had significant options knew exactly what they were worth.
I knew someone who changed their bash prompt to (price * unvested count / days left). He said at the time it was the only thing that kept him from quitting or punching his manager.
Long ago companies only bothered issuing options when the stock was illiquid; certainly my startup share options never had a meaningful market value from founding to acquisition.
Publicly-quoted companies issuing options is just a weird form of deferred bonus with a favourable tax treatment.
Well, they also come with the hope that they'll increase in value prior to vesting. But, yes, RSUs in public companies are certainly more like getting bonuses that vest over time than a stock market lottery ticket.
For a few days. My experience is that high pay will A) keep bad people around for much, much longer and B) keep good people around until they get too fed up with the bad people.
I guess that's where high bonus low pay comes into it - if you are a "good person" you get the high bonus so you stay, if you are a "bad person" you don't, so you leave.
The problem then comes down to defining good person vs bad person, which in the real world is very tricky.
It's still a balance between compensation, interesting challenges, and good work environment. You can provide less of one if you provide more of the others, or less of two if you provide much more of the other.
It's probably only "50% about pay" where pay is fairly competitive. For many (of course not all), 25-50% lower comp is going to be a tough sell even if the company is at the top of "great places to work" lists.
The large UK broadcaster I work for is having to make large amounts of savings. They've decided that they don't like paying for slack (for £10 per user per month), and instead are going to force everyone to use MS Teams.
Since 95% of people have been working from home (and no plans for most to go back this year), they won't allow people to take unused monitors back because they might end up lost. These are £80 monitors.
It's these pathetic nickle-and-diming that is far more likely to make me look for another job than not paying a £200 a year pay rise.
Someone sees "£80 times 20,000 staff, that's over £1m, we can't risk that!"
Saving £1.6 million/month isn't nickel-and-diming. That's almost £20 million/annually, which is more than many companies make.
As for the monitors, that may be COVID19 related. If the office is locked up, there are almost always physical/security procedures that must be followed in order to allow non-essential staff into the office...and that doesn't include any cleaning or sanitation that might be required by any COVID19 rules. This means that you need to have someone physically come to the office to open it up. On top of that, you need someone knowledgeable about the hardware (i.e., IT) to come in to make sure any employee taking a monitor home doesn't mess up anyone else's setup.
So you're risking exposing at least two lower-paid employees to COVID19 for the convenience of one higher-paid employee who could just buy his own goddamn monitor for £80 if he cares about the screen real estate that much.
Our offices are still open, just with 10% of the staff in them.
And the "£1.6m a month" view is the problem -- if you are spending £5k a month, or 40p a minute, on the costs of keeping an employee (probably more with the cost of office space), an extra £10 a month is neither here nor there. If it costs just 1 minute extra a day, you're losing.
The 1.6M figure is based on a company with 20,000 employees. How many of them have less than 20M in revenue?
Also, your units are wrong. 1.6M is the total amount being risked. There is no realistic risk of losing that much every month unless you think that every employee is going to lose their monitor every month.
from what I hear of our management Slack's enterprise sales folk are a bit shit w.r.t working out deals and the like. 10 quid per person, for context, is roughly the price of all the MS software stack if you're a decent size.
So for 10-bob you get email, word, excel, teams and exchange/AzureAD -- or a chat app.
So that's the context that they're dealing with; but I fucking hate teams with white hot passion. So I still get annoyed.
And yes, these nickle and dime tactics are rife everywhere, we buy 3k computers for people but our budget for a monitor is 70gbp and it is supposed to last 6 years. :|
Accounting uses excel so everyone who interacts with accounting needs excel.
Then those who interact with accounting (HR, Purchasing) use excel so everyone they come into contact with needs excel.
There's is a metric which is called "Cost per head" used in my company, and it goes like;
1 Person:
* 1 Windows license
* 1 Office license
* 1 Visio license
* 1 Swarm license
* 1 Perforce license
* 1 Jetbrains license (optional)
* 1 Slack license
* 1 jira license
* 1 confluence license
* 1 gitlab license
* 1 Terraform Enterprise license (optional)
* 1 headcount in some HR software
and that's just what I can remember.
Controversial hot-take from one of our IT directors:
<user> Just wondering why can't we just use slack and not use Teams at all :thinking_face: Slack seems so much better.
<itDirector> So, just to put this out there, I started this Slack originally. So it's a topic close to my heart.
<itDirector> But ultimately right now, Teams is eating the fuck out of Slack's lunch.
<itDirector> Teams is included within our M365 license, for all users, at a fraction of the price of Slack.
<itDirector> Likewise, all of the integrations, SSO, features, etc., come bundled in the existing license.
<itDirector> For Slack, they continue to push Enterprise Grid licensing costs of over 300 USD per user per year
<itDirector> Additionally, there are more people now starting to push us to formally drop Slack than Teams. Some studios are mandating the usage of Teams over Slack, as well as some projects.
<itDirector> Personally, I see several features still missing before such a conversation can hold weight. Teams will have private channels added in November, and I'm hoping they address file permissions, non-threaded channel chat and lifting of the 250 user limit in individual chats.
<itDirector> But once that happens, it's going to be extremely difficult for Slack to compete.
<itDirector> So, to manage expectations - I would not anticipate a future where Slack is chosen over Teams. It's probably best to start acclimating to that reality now.
By removing slack this adds a ton of work as all the integrations and workflows that have been built into slack over the years need to be rebuilt.
All to save 0.2% of the cost of a person
Now in our specific company the latest hotness only lasts about 2 years, from messanger to lync to skype to zoom to teams. Each is massively disruptive and comes as a major project for a team of project managers.
(They are also trying to downgrade us to office 365, which for our purposes removes archived emails more than 3 years old)
Now for a beancounter it may seem that spending £6k a month on someone, then pissing them off by making a £10 a month saving, it worthwhile. That's because the beancounter doesn't factor in the cost of pissing people off.
100% agree with this article, but would also caution against any kind of generalization. Different people want different things.
For the first ~7-10 years of my career I strongly believed that everything was about salary. I picked jobs solely based on the comp package, and the work I did was motivated by bonuses and promotions. I'm sure that's still the case for a large chunk of engineers, but for me, with more experience under my belt, I now think more and more about stuff like fulfillment, ownership, real world impact of my work etc.
Indeed! "Autonomy, mastery, and purpose" in terms of dev opportunities: mastery is somewhat common, autonomy is rare, and purpose is ultra rare.
I have straight-up told managers that I'd be willing to take a pay cut in exchange for more autonomy. Haven't found a taker yet :)
It is so frustrating to repeatedly demonstrate value, endlessly repeat the story about how "gmail was the result of 20% time", yet be forever told "nah, we just need you to stick to grinding tickets".
I took my first programming job with the intent of staying 3 years and then getting a new job that would pay me what I was worth.
I got very lucky and they kept pace with what I could have gotten elsewhere for about 5 years. At that point, I stopped getting raises and about a year later, switched jobs for that 40% raise.
It's pretty much the norm for IT until you get to your pay level. It's complex, but I think it's mainly that it's hard to justify pay raises beyond what a job is worth and actual promotions are hard to swallow for management, especially if they don't need someone at that level.
When you left each job, they probably filled it with someone making about what you were when you left, but the new job you got was more demanding and better-paying.
I think for the first part of your career, aiming for pay is the right choice. After a while, the pay is fairly settled and you can look for other compensation instead.
Agreed. I think what happens for many of us is that when we're first out of college we just need money more than most other things to get our life in order (ex. buy a house/condo, kickstart retirement savings, a car in some cases, start a family, etc). So, we'll spend a lot of effort increasing our salary as quickly as possible to get to an income where we can afford to buy and sustain those things.
Most "things" are not fulfilling however. So, once our income satisfies all of those wants, then we feel more comfortable. When our income far exceeds our basic needs, we have the luxury to work (or hobby work) for things beyond paying the bills... fulfillment, positive change for self/family/community/world, achieving non-monetary goals, health, etc.
Also, for many people, their salary out of school isn't "enough" for the lifestyle they want to live, they have student loans, need to buy a car, etc. So even relatively modest salary differences can seem like a big deal.
While not true of everyone, people in tech fields tend to have a more comfortable financial cushion as they get older, and at least modest differences in pay don't matter as much as other factors.
I find the reasoning of this article pretty obnoxious to be honest.
They start off with a valid argument, that if you treat engineers better than everyone else it creates resentment in other parts of the company and that makes sense.
If that weren’t enough, all of this “special treatment” towards engineers can create resentment throughout the rest of the company. Such negativity hurts performance and retention in other business units where employees might feel that they’re treated unfairly.
I've actually experienced this myself as the new guy, even within the engineering department. Then 5 paragraphs later this is what they write:
Maybe instead of offering free lunches on Fridays, you can provide funding to attend Apple’s Worldwide Developer Conference (WWDC, once that’s hosted in real life again) or a Coursera subscription. If you’re in the mobile apps space, you might offer to buy the newest iPhone or Android device for your engineers annually on a “yours to keep” basis.
I'm sorry for the negativity, I just don't think I can trust the judgement of the author on this issue after reading that.
Also as a mobile developer, shouldn't you be aiming for your app to perform well on low to midrange devices first, thus targeting the largest ammount of potential users? If you're styling for the iphone x/11 notch you're gonna be doing that in the simulator first regardless.
Pay me enough so I can feed my family and have comfortable shelter.
Don't create a culture where I am a doer but not allowed to be a decider. I will eventually walk away from asymmetric power structures.
If you don't/can't trust me, I probably won't trust you. I prefer relationships of trust.
I want to learn and improve. Use your extra money to do that and act is if it matters to you.
If you must use pay as your sole means of appeasing me, pay me LOTS. So very much that I'm willing to put up with the bureaucratic shitshow that is your company, spending all my drone-ish non-innovative 9 to 5 day thinking about the rush I'm going to experience doing cool things with all of the excess cash you're giving me.
I changed jobs in the past year and only received a slight pay increase. For the first time in my engineering career, I really enjoy my job. There are a lot of factors but the thing that stands out the most is the senior leadership here. They actively seek to engage the entire organization in strategy and planning and are really working towards a more transparent and realistic process of growth and advancement. My experience previous to this had been leadership only paying lip service to these ideas at best. I am not sure what increase in compensation would be required for me to leave and I honestly hope I don't find out.
It probably depends quite a bit on the engineer's life outside of work.
For much of my career, I was the only income earner in a family of 6. Making ends meet was sometimes a challenge, which made me very salary-sensitive and averse to the risk of income disruption.
My family finances have somewhat improved in recent years, letting me unclinch a little regarding money. This lets me put more weight on other factors relating to job satisfaction and feeling of purpose.
"Making ends meet was sometimes a challenge, which made me very salary-sensitive and averse to the risk of income disruption."
This. I think a large chunk of society forgets that after you get past 25 and actually have a life and responsibilities, that a meager $100k in a particular region is barely enough to cover base expenses, childcare, car/home loans, etc.
Out of curiosity, how long were you the sole earner before getting to a better state of financial security?
There's a style of management I encounter still that is very unsupportive of it's employees. Untrusting, thinking they're always out to leave just to make more money. It's interesting because the engineers I know tend to be pretty altruistic people and I won't say they don't care about money but it's not their leading factor in employment (I definitely know the other spectrum as well so don't think I'm ignoring that).
I've worked at places specifically didn't want to send employees to conferences because they think everyone uses them as farming tools (whether that's true or not, some engineers just want to go learn and it's pretty upsetting if you have a SME in some subject and don't allow them to attend a con while plenty of other $leaders go).
I've also worked for tech places where a boss would come in and fire you on Monday then call you up and offer you $1k to return on Tuesday, me being about 21 at my first sysadmin job kept me around for that abuse.
It's really, really not a good feeling to feel untrusted or like you're constantly being tested by your employer.
Hah. Seems like this is not as uncommon as I thought. My senior had her convention request denied by company while multiple leadership folk were flown over there. She got pissed and paid for her own access/flight. She clearly met a lot of people there. Maybe that is what management is most scared of. She already almost left once.
It's very common if you're not at some big FAANG or group that is in all the partner groups (CNCF, etc) and pays to get tickets every year.
I do this a lot for a few foss projects I contribute to because even though I'm always hired as the SME for my niche leadership will only give me tickets/flights to conferences if they have extras and none of their drinking buddies want to go. Typically what happens is I'll start at a company, ask about going to $mybigcon when a training budget is brought up, that training budget is always slashed, not real or goes somewhere else then I'll never ask again and I'll find my own way to get tickets (from conf partners, etc).
The funny thing, when I have to do this not only am I really bothered that my company wouldn't spend the $1000 ($200 plane, $800 ticket) but I go out of my way to not focus on ANYTHING that will benefit my company but instead I have a good time and learn things I'm interested in and mingle with every other company/partner I can.
I've actually had companies expect me to get tickets myself from the projects or from gold partners that I know. I don't have that much clout by any means and even asking partners for tickets makes me feel terrible because they're limited too.
Not directly a compensation component but organizations can make sure they have a technical leader supporting software organizations.
Consulting with companies on productivity I can’t express how much devs not feeling like they have representation/a voice at the exec level negates comp effectiveness.
What we're saying is that coders are often willing to pay for "a seat at the table". But maybe management can sell them a placebo.
It's not clear-cut that management ignoring coders will always turn out for the worse, even though management that always ignores coders probably has, historically. Maybe sometimes their voice matters and sometimes not.
It can be faked to the engineers, it can't be faked to reality.
Companies for whom engineering is key need to (at least to some extent) organise themselves around engineering. The strategic decisions need to take into account the needs and capabilities of engineering and engineers. If they don't then they won't be good at it. They'll be staffed with mediocre people who generate mediocre output very slowly.
I don’t now that it’s specifically better to have a CEO that was an engineer. It probably is based on my experience.
What I’m referring to is that period where engineers want to stay vs being heavily comp’d to stay. You can see people throughout this thread saying pay me a large amount and I’ll stare at a wall. If you want engineers not to fully optimize comp (read as $$$$$) against the market they need to feel represented and like they have a say in day to day decisions in the company.
"As an engineer, I experienced firsthand the dual relationship most of us have with the rest of the business. One day you’re a hero for delivering something “magical,” then the next you’re a jerk for not delivering something “so simple” in a short amount of time, or refusing to make certain “easy” changes, even if those requests carry a hidden but critical risk of destabilizing the whole software."
That part of the article really struck a cord with me. From my experience, I think that a big factor in whether engineers start looking for another job is how much the manager acts as a filter for the unrealistic expectations of the rest of the company. Engineers should not be too isolated, after all some interaction is good to get feedback and it feels good to directly see people benefit from your work, but managers have to be able to shield their engineers from the mood swings of the CEO or the pie-in-the-sky promises from marketing. I think this is a big component of a "good working environment" and is often worth more than pay or promotions.
Keep them too stressed out and busy with work that they don't have the time and energy to really look for something new and grind dozens of LeetCode problems to get them through the grueling technical interview gauntlet? Seems to be working with my company to keep me there, at least.
IMO, the only reason above-market pay doesn't raise retention as much as people want is that it's possible to have above-market pay and a job people enjoy doing.
And on the other hand, you can offer enough above-market and people will do any job, as evidenced by the other thread I saw yesterday where people were making crazy salaries to implement unethical, deceptive practices against their users.
I am a big fan of Herzberg's dual factor theory. I find it much more practical and actionable than the ubiqitous Maslow's hierarchy.
In one of my previous jobs, I asked people in my team to make a survey to identify their motivational and hygienic factors. The surprising result for me was how much variation there was among different people. (e. g. for somebody salary was a motivational factor, for anybody hygienic one). Anyway, understanding these factors for individual team members made me much more effective manager.
A nice, laid-back, zero-bs team is all I need. I value that much much higher than money. I have no interest in workplace drama. I've always considered career and competition to be quite pointless: if I had a good idea I'd build the product myself and keep all the margins in my pocket. It's computer stuff afterall.
Often I have no interest in the work itself either, but if the team is good I'm happy. They could make us shovel snow all day, I'd still come to work.
Good article on an important topic. I would like to address what I perceive as assumptions in the perspective. We really need to get away from this idea that salaries are these paternalistic expressions of fairness. We earn money from providing value.
If you want people to stay, your options are to give them money, prestige, or stability.
- Money includes salary, bonus, commissions and contingent comp, stock options and perks and even vacation time.
- Prestige is conferences, publications, exposure to high profile brand clients and stakeholders, airline points hotel and travel rewards, charity sponsorship and matching, committee memberships, media and public facing representation, and leadership options.
- Stability includes things like investing in training, giving them headcount, bringing them into the strategic fold, partnerships, responsibility for key client or stakeholder relationships, etc.
Evaluate your total comp using the triad of Money, Stability, Prestige. Chances are you are weighted toward one, and there is a role out there with a different balance. I think HR salary bands are a wishfull opposite of market rates, and personally I think they're stupid for any company that is still growing and not just optimizing an established long term revenue stream. If you are a bank or institution, sure, but your entire business is an optimization problem not a growth problem. If there is any upside volatility in your revenue and you are making something new that people want, pay for value, because I'd argue you can't afford not to.
I've watched companies lose key engineers that delayed major product releases over a $10-20k salary bump while flying their marginalized director of special projects around in business class, and my conclusion is that compensation is arbitrary and a negotiations power game. Don't spend too much time reasoning about it.
The companies that retain people are the ones who figure out the Stability and Prestige elements of the triad.
Honestly I have given up trying to “keep” engineers because it’s a losing battle. It’s impossible to compete with big tech. From the offers I’ve seen, if FAANG/Big Tech really wants one of your team members, they will get them and there is nothing you can do.
My employees stay because they want to. They enjoy the work, domain, colleagues. The salary is competitive and fair. They can thrive in this environment.
But I am under no illusions about creating some special environment that can prevent them from getting poached. You can throw cash, stocks, options all you want but if Big Tech wants them, they will outbid you.
Just assume that at any moment they can and will get poached and ensure that the business can continue if people leave. Keep the stack simple, stick to standards, minimize NIH etc.
> From the offers I’ve seen, if FAANG/Big Tech really wants one of your team members, they will get them and there is nothing you can do.
True, but your team members aren't getting any offers from FAANG/Big Tech unless the team members put in some effort. At least, they have to do a series of interviews.
FAANG positions are notoriously coveted, at least here on HN, and most people have to work hard, including preparation, to get into them.
So the question comes, what does it take to make your engineers comfortable enough they don't think it's worth going through the process to get those other offers.
I've worked for about 7 different companies over 15 years and at each of those places I've seen a ton of engineers come and go. Most of the time, the reason they leave is one of three things: got fired, got laid off, or was pushed out. So, if you want your engineers to stick around, you gotta find out why so many of them are being laid off or pushed out and prevent that from happening. That's where you'll get the most bang for your buck.
Engineers don't just leave for no reason. They leave because they're either forced out or there's something that really sucks about the company: most of the time it's the work life balance that really sucks.
The trick to retaining engineers, besides paying them fairly, is to hire good managers that understand engineering. A huge component of workplace satisfaction can be traced back to how much an employee likes their boss.
For whatever reason this is making me think about the narrative from a lot of VC’s, Paul Graham, Tyler Cowen, and many more that remote work will commoditize software engineering and destroy wages there.
And articles like this make me think about institutional knowledge and how there are no standards what so ever in software, and so long as new frameworks, languages, and not invented here syndrome persist there will always be a need to keep your engineering staff around.
I need shelter but it only costs so much to full-fill need. Then if I'm get paid sufficient salary to cover all my needs then wants decides the utility of the next marginal dollar. If the value doesn't align with my want then I don't care. As you get older you realize your time is finite and you want to enjoy what you do if you have the opportunity to make such a decision.
So if a job pays 20% more but requires more overtime or more stress then I'll pass.
Pay is not everything. But it also depends on the engineer as well. I've taken pay cuts to work on interesting and engaging work in the past. But then again my lifestyle is pretty simple and minimalistic and for me the trade-off was worth it.
Enough to take the issue of money off the table, given how much life costs wherever they live. And not by applying a "rent index" or "cost of living" factor to whatever people get paid in SF.
My job gives me no bonus or raise after a year and a half, despite obvious vast increases in my responsibilities and the assumption of another engineer who lefts' tasks too.. I just don't know how to approach asking because I hate confrontation and those kinds of situations.
I basically always change jobs because of this reason - I'm just avoiding a conversation I don't want to have and the raise is bigger by quitting haha
If you'd like some unsolicited advice - the job hunt is tricky, because you should be optimizing for the best outcome for yourself. However, if you think of it as materializing your leverage -- just go out and get an offer that is better than what you have. Use that to approach your boss, it won't be a confrontation if you approach it with "I like it here, but it's clear that I'm underpaid. Can you help me find a way where it makes sense for me to stay?"
An interesting question is whether paying enough (imagining an unlimited budget) won't end up selecting for coders who care more about the money than the work.
A further question is whether these coders are actually better for the org -- the Henry Ford efficiency wage-type incentive may keep them at consistent pace and quality, whereas rockstars with physics PhD may have parallel agendas to make the project more fun to work with.
Consistent quality requires accurate measurement. If you can't accurately measure quality and there's only external motivation, you get Goodhart's law.
But Goodhart's law applies to anything that's measured at all (it originates from the world monetary policy), even if it can be measured vey accurately.
OTOH maybe quality exists as a qualitative concept but can't be measured -- then you just do pass/fail (like colleges have dropped letter-grades during the Zoomdemic).
What I'm saying is that "shallower" coders, who are motivated by the extra pay, may be more willing to align their concept of quality with the interests of the organization, while self-motivated coders will have their idiosyncratic or fashionable ideas.
When shopping around for a team to make a web app for my startup -- no technical requirements, we were feeling the market for price first -- we got a $$$ proposal for using PHP and Laravel, and a $ proposal for using AngularJS. I regret that decision; it cost us at least a year of time-to-market.
The original team quit (they worked for a trusted friend of our "business cofounder") because they weren't really experienced in web dev and their opportunity cost was off the roof - they were crack coders that did all kinds of different projects. Then we decided to hire someone (with good references) as a consultant and manage him ourselves. Dude was apparently capable but couldn't be screamed into using off-the-shelf components rather than rewriting and refactoring constantly. He eventually flaked on us, got too many projects and we weren't fun anymore I guess. Finally we found a small company online. By all appearances the new team hates being around computers but can be managed by Trello and feature branches. Web dev is a bore, but it's a living, and not everyone manages to make a living out of their surfing passion.
I hope sooner than later there will be some kind of union of engineers and salaries will be public and standarized (and the median value of the salary for each position will be higher than today, due to the power of collective bargaining). It is shameful that some senior software engineers earn so much less than others, due to out-of-band reasons.
Money alone doesn't keep many problem solvers around.
Problem solving is as important as the compensation.
A great environment to solve problems, and to be able to work with other smart, conscientious people, while pursuing new levels of mastery is a really good sell.
People who are driven solely, or primarily by money can't be paid enough and will on that mindset, tend to move on.
You should pay them market rates to replace them (ie, much higher than you currently are). Yes, you should also foster their need for growth and learning, but that's because it's an investment in their productivity.
Investing in engineer's productivity, and paying them what they're worth, turns out that's all it takes.
This question would be much easier to answer if salary transparency from employers was the norm, or even required.
If every job listing on Indeed had a salary/compensation range, it would be very straightforward to see what the going rate is for that particular skillset, and it would push employers to be competitive on salary.
Ah a management consultant producing arguments for lower pay for Hr/Accounting to justify cost cutting.
I am Shocked Shocked I tell you, can you smell gas :-)
Whilst pay isn't every thing people do tend to lie when asked about what important to them - the same way you slowdown when the time and motion team are monitoring you
My experience is very anecdotal, but there's a point where the pay/stock options are definitely enough to keep people around. I have a few friends in this exact position now, where the golden handcuffs are too sweet for them to walk.
At my company, I think engineers are more concerned with feeling comfortable and having the flexibility to take care of the demands of their lives and families over high pay.
Pay is probably pretty good (especially if current rise materialises) for my level of experience, and I have lots of autonomy in how I do things, as I'm the main technical decision maker on non-frontend tasks.
I'm also doing uni part time, and taking half a day off every week is a tough proposition for employees. Despite the chaos, I do like the work I do, and as it's a Greenfield project, I want to see it reach some level of exposure to core clients before I can consider it a job well done.
I agree... and I don't. I work primarily for money, but not totally.
My job probably doesn't pay me absolutely the maximum that I could make anywhere. If the work environment turns sour, I can hopefully make an approximately lateral move - not significantly more or less money, but a better environment.
I once worked for a medical device manufacturer. We failed an FDA audit. As a result, our procedures became much more stringent, and life turned into a huge amount of paperwork. I couldn't take it. It didn't take a raise to get me out of there.
The problem with a stressful job is that part of that stress invariably become intertwined with the prospect of losing the said job, hence an expected loss of salary. This means that even if you primarily work for money you'd have priced in the positive environment.
Anecdotally, the place where people are uncertain of their future are highly stressful, even when the work is not heavy.
The article does ignore the fact that some engineers are paid below market value, and for that reason, compensation is a higher priority.
You might ask yourself these questions after compensation was not a determining factor:
What if the company I worked for offered a competitive salary that was agreeable for both parties. What other benefits am I looking for outside of monetary compensation?
> When it comes to engineers, the key to employee retention isn't just about pay.
Maybe I’m atypical, but at a certain point all the other factors just don’t cut it. If you’re trying to pay me $400k/yr total comp and I can get $600k/yr elsewhere, the disparities in culture or whatever have to be pretty significant to dominate.
For example, it can mean whether your spouse has the option to stay home to spend more quality time with the children, without having to sacrifice expenses due to income reduction; or it can mean how well (or not) you can take care of aging parents.
Of course. And I don't mean to imply it isn't. $200K is a lot of money to most people and may be enough to make a significant lifestyle choice that wouldn't otherwise be possible.
But in general percentage salary increments affect lifestyle more at the low end than they do at the high end. (And, of course, the absolute differences matter far more at the low end.
Our industry's asinine interview practices keep people from job seeking and getting their fair value. The sooner engineers refuse to give leetcode interviews, the sooner we'll see a natural bump in average engineering salary, and we'll have more power in the job market to demand better working conditions.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsfaq.html