
Ask HN: Does higher pay offer on exiting a job reveal employee's real value? - valand
A scenario: an employee, Orion, is announcing to exit a job in a company, RapidData, due to monetary reason.<p>On announcing the exit, Orion is being offered 180% of current pay if he decides to stay in RapidData. Orion&#x27;s responsibility will not change because of the raise.<p>Does this indicate that:<p>1.) Orion&#x27;s value has been 180% of current pay the whole time<p>OR<p>2.) Orion&#x27;s value rose because of scarcity based on supply-demand law?
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davismwfl
To answer your question, no it doesn't.

Generally it is never that simple and there are a variety of factors that go
into this.

Let's assume the company gives Orion that offer, it could be that Orion's true
market rate is 200% (or more) or it could be that Orion's market rate is
really 160% but they value the employee and can't afford to lose them so they
are trying to make it attractive.

Almost always Orion's accepting of the counter offer from the existing
employer is a mistake. Many employers that make the counter offer will be less
trusting of the employee in the long term and will be looking for a way to
reduce the employee's value. There are exceptions on both sides of course, but
rarely is accepting a counter offer from an existing employer a good idea. I
had an employer offer me 1.5x one time to stay, I left for a job paying me
only 1.3x. More money doesn't change the situation generally why you are
leaving, and if an employer lets you get that far behind market they aren't
valuing you properly and are just waiting for you to call them out.

What I usually suggest to people is they need to negotiate every year for more
money as a matter of process. This reduces the need to get a competing offer
to just get a raise. Then the only reason you leave generally is because you
find at the first year the company is cheap or over time you just don't want
to work there anymore because of whatever other issues. Employers see this
method much differently than an employee that job shops and tries to bend them
over a barrel with an ultimatum.

~~~
sethammons
As you said, there are exceptions. I accepted my current employer's counter
offer which was less than the new job. I'm still here over three years later
and have been promoted and am dramatically over what the original offer from
the other employer was. It worked out doubly well for me as the other employer
later folded and my equity at my current employer has been life changing.

You have to evaluate the reasons for why you would leave or stay beyond just a
paycheck.

------
mcv
It primarily reflects how hard it is and how much time it costs to replace the
employee. The employer needs the employee to stay on until they've hired a
replacement, and can afford to pay extra for a limited time.

If you accept this offer, prepare to get fired as soon as they've found your
replacement. If you think this might be your actual value to the company, ask
them to make that raise retroactive from a year ago.

~~~
valand
This is if Orion's position is replacable. Holding a project "hostage" because
the project has only enough manpower.

What if the company intends to keep Orion because the company knows that
Orion, even though not holding any "hostage" situation, is accelerating the
growth of the company?

~~~
mcv
Then they would have given that raise earlier and wouldn't have waited until
Orion was already ready to leave. The company is also not going to rely long
term on someone who already has expressed a desire to leave. They will still
look for a replacement.

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bjourne
Marxists make a distinction between "value" and "worth." The words are
synonymous in English but etymologically different. Value is of French (or
Latin) origin and is related to valew and valour. Worth comes from the
Germanic words wert and werd. You can hear when you pronounce "value" and
"worth" how different they sound.

To Marxists, "value" is extrinsic and subjective. "Worth" is intrinsic and
objective.

Did Orion's worth increase by the threat of quitting? Clearly not. He or she
didn't suddenly become a better developer, thus his or her work output didn't
suddenly become worth much more. Did Orion's value increase by the threat of
quitting? Clearly so. The valuation of his or her work output suddenly
increased by 80%!

Marxists then make the point that our society focus way to much on the "value"
of things, which often is nonsensical, when we instead should focus on what
things are "worth."

~~~
valand
> The words are synonymous in English but etymologically different. Value is
> of French (or Latin) origin and is related to valew and valour. Worth comes
> from the Germanic words wert and werd. You can hear when you pronounce
> "value" and "worth" how different they sound.

I learned a new thing today :D

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muzani
It's really hard to gauge value in the software industry. A company may make
$0 on some code today, $5000 on the same code next year, and $50 mil 10 years
after that. Assuming Orion is writing this code, is he worth $0, $2500/year,
or $5 mil/year?

It's part of a team effort - testers, marketing, management, investors, HR,
finance, even the janitor who keeps Orion from taking a day off to vacuum the
office and clean the toilets.

I think freelancing comes as close to true value as possible. You abstract out
a portion of work to someone, who handles it for a certain value. That someone
also mops their own floors, does their own taxes, registers a company, deals
with regulations, deals with their own insurance, manages their own
motivation, and so on. They often outsource this too - maids, co-working
spaces, plumbers, personal health insurance, etc.

Freelancers request about 1-10 times the average rate. This varies by
location, e.g. companies with good public healthcare and lower taxes might
have a lower multiplier.

But if you live in a location where full time freelancers normally request 4x
wages, it's likely Orions max value is closer to 4x his total compensation.

~~~
valand
> It's part of a team effort - testers, marketing, management, investors, HR,
> finance, even the janitor who keeps Orion from taking a day off to vacuum
> the office and clean the toilets.

Doesn't it portray more of the company's value rather than Orion's value?

~~~
muzani
Yes, but Orion's present value is no higher than the company, or specifically
his team. If the company makes $5000/year and has no hope of making more than
$5000/year, then Orion's value is no higher than $5000/year. If a recession
hits, and Orion makes do as a waiter, Orion's value drops even with the same
skills.

A nail costs a few cents but the value is dependent on the product it is used
in. If the price of a nail goes up to $10, it's likely people will stop using
it for decorations, and only for expensive furniture and buildings. The value
of the nail is still higher than $10 as long as it is used that way.

But the nail keeps to a low price because it can be used in so many low value
things. Most nails are worth only a few cents. And most programmers are only
worth maybe $10k a year or so.

------
lunias
Value is decided by the market. If Orion is leaving due to monetary reasons
then it would seem that Orion has already been made aware of an opportunity
which places a higher value on their work.

In this example, there are two markets to consider; RapidData and everyone
else.

We know that Orion is worth more to everyone else, but that's no guarantee
that they're worth 180% of their current pay. RapidData may be willing to pay
out more in the short-term because of the opportunity cost associated with
replacing Orion and keeping the business running in the interim.

So, I'd say it's mostly #2.

In practice though, if you wanted to leave before the raise; then you'll
probably still want to leave after. The only difference being, that now your
company is actively making sure they're not caught in this situation again.
You will be judged more harshly and in the event that 180% does exceed your
"everyone else" market value, you will eventually be let go or made to quit.

------
codingslave
There are many possible reasons:

1.) Orions value rose because he is about to walk out the door with all sorts
of important information in his head. Often times, a counter offer is made to
lessen the risk of information loss, with longer term plans to move Orion out
of the company, or lessen his impact.

2.) His boss looks really bad if he quits, especially if he is a high
performing employee. So the boss has every incentive to keep him on.

3.) Short term high profile project has a huge business cost if not completed,
Orion is not worth that much, except for in the next few months

