Ask HN: Why do managers tend to make more money than engineers? - shawnps
======
dpritchett
Don't get too caught up on which job role has more risk, responsibility, or
communication skills.

Salaries are apportioned based on how close a job role is to the company's
revenue stream. Executives come out on top because they control the money and
payscales. Sales is often second because they can very easily point to new
revenues and say "I brought that in". Profit center staff (most Valley
engineers) would be somewhere up there because they are at least creating the
actual product that the business sells. Support staff - cleaning, office
managers, accounting - bring up the rear because they have the hardest time
claiming responsibility for a share of the pie.

Within each of those groups you'll see normal salary dynamics based on wider
market forces and hierarchy. Engineering manager's gonna make more than most
of the line engineers. Comptroller will probably make more than a line
engineer too even if she's considered a cost center because she's in a
position of relative authority and individual responsibility.

Study questions:

\- How close are you to the money?

\- How legible are your contributions to the bottom line?

\- Could you get significantly more elsewhere for the same role?

\- Is management incentivized to retain top-shelf people for your job role?

~~~
RodericDay
I'm so glad this post is at the top vs. the other "it seems fair to me"
replies.

I also find it illuminating to compare to three other careers that I consider
intellectually similar to engineering in that they are not "management", and
yet they capture way more of their value in their corporate zenith (or did at
some point in time when their reputations as careers were made).

\- Lawyers: Lawyers aim to make partner. They become owners. None of this
"engineers are afraid of risk" stuff.

\- Doctors: Doctors control supply. I have met many socially odd doctors,
without "negotiation skills" or "business acumen", but they don't worry about
their salary precisely because this "union-like" aspect to their profession.

\- Finance people: a.k.a "bankers". Most people have no better proxy for their
"value" than what they agree on a job interview ("the value of your work is
what people are willing to pay for it"). But "bankers" do know what their work
is worth, outside of this exchange. And they know how much their peers are
making, and are basically immune to the collective cluelessness that is "I
don't need to know how much my peer and my boss make to be satisfied with my
salary".

Engineers? No union. Meek personality and culture plus cluelessness about
labor economics means they are ecstatic making 200k even if their company is
making 1M+ for their work.

Some scattered thoughts here, but thank you for your post.

------
gopalv
1 manager, 9 engineers (or more).

The ratio of investment per employee might not align up to the investment in
function - the investment might be spread 20%/80% between both functions.

I've worked with (uh, "under" feels insulting) really good managers who truly
earn their pay & it has given me a different perspective of what they do to
make "things happen".

I've cut that down into literally four levels of management - delegation,
negotiation, inspiration & vision. Those who merely delegate are hard to work
with, those who negotiate for you are good, those who inspire you to pick up
risks are great and those who can see ahead six months to realign/nudge a team
to build new skills is just awesome.

On another note though, I'd rather have no management than bad management -
there are those who do none of those things, while fulfilling Peter Principle.

~~~
pestaa
Great insight with the four levels!

Was there any book or resource that helped you shape that view?

~~~
gopalv
> Was there any book or resource that helped you shape that view?

Haven't read that anywhere, but is just a precis of something from one of my
drafts.

That said, the idea was to express that as clips from "Better Off Ted" :)

------
BadApple1981
Having been in the industry for 15 years, and having been both a hard
developer and an engineering manager, my two cents: 1- managing a team of
engineers WELL is really hard, and requires a broad range of skills. Granted,
there are a lot of bad managers out there, particularly in engineering. 2-
managers aren't getting paid for their productivity, or even their time. They
are getting paid for judgment and accountability. They are accountable for the
output of a whole team, and they can only indirectly influence productivity of
each engineer. 3- I can say this because I'm an engineer- lots of engineers
(in fact, many of the best ones) are immature and stubborn. That hurts teams,
hurts feelings, and inhibits productivity. Don't underestimate the difficulty
in keeping things running smoothly on interpersonal issues.

To the above points, I was a manager for 4 years. My team members said I did a
good job. Yet, after sweating in that position for that amount of time, I
gladly took a 30% pay cut to be an individual contributor again.

~~~
matwood
Good points. Anytime I hear a bunch of engineers talking about not needing a
manager (not you, but in this thread) I cringe, and I'm an engineer. Managing
personalities and getting people on the same page is hard. I liken it to a
bunch of NBA players saying they don't need a coach. Phil Jackson made a
career of taking the best players with the biggest egos and getting them to
play together.

------
agotterer
I'm surprised at how passive aggressive some of these answers sound. I imagine
many of you have worked some poor managers who weren't very good at their job.
That will make you question why they deserve to get paid so much. For the
record, as a manager I've had staff members make as much as I have.

I believe a (good) manager gets paid a lot because they make their team more
productive, focused, and happy. a good manager will... Increase the
productivity and output from the team. She makes sure that each person has the
tools and resources to do their job effectively. She ensures that roadblocks
are moved out of the way and not a distraction. She mentors the team and helps
identify projects that help improve their skills and peaks their interests.
She sets a vision the team can rally behind and adjusts that plan and pitch as
needed. Shes brings experience and prospective that no one else on the team
has had. She hired an all-star team and fires the deadwood. She's the shit
umbrella who protects the team from the rest of the company.

Hiring a good manager is hard work. It's even harder to promote within without
the right training structure. One of the problems with management is many of
us are self taught. Bad managers can often breed more bad managers. But a
great manager can be worth every penny.

~~~
UK-AL
I find managers who see themselves as visionary hero's, who mentors
subordinates often forget engineers are capable people with their own ideas,
self motivated with skills they probably don't have themselves.

They dont need to be lead, but helped to self organise and to stop external
interference.

~~~
zo1
" _They dont need to be lead, but helped to self organise and to stop external
interference._ "

That's quite a whole lot more difficult to be done, than said. I've been
learning that first-hand for the past year, especially when it comes to
subordinates that are not too keen on being dealt with in a "conventional"
manner.

~~~
UK-AL
Conventional management is not really meant for knowledge workers.

------
yummyfajitas
One hypothesis, admittedly based on a premise I don't believe.

We've been told by a lot of sources that 10x engineers don't exist, and only
the team matters [1]. Suppose this is true, or at least suppose the company
decision makers believe this. In that case, there is no point paying any
engineer more than 2-3X what another one makes - why pay more for the same
productivity?

In contrast, management matters a lot. All your engineers might be more or
less interchangeable cogs, but the manager is a force multiplier. A good
manager might increase the productivity of 20-40 engineers by 25% each - as
such, he's as valuable as 5-10 engineers.

(Having worked with engineers both 1/10 and 10x as good as me, I personally do
believe that 100x engineers exist. But assuming you don't believe such things
are possible, then engineers being wildly underpaid relative to managers is
simply people being paid for their marginal productivity.)

[1] e.g.
[http://www.hanselman.com/blog/TheMythOfTheRockstarProgrammer...](http://www.hanselman.com/blog/TheMythOfTheRockstarProgrammer.aspx)
[https://modelviewculture.com/pieces/hacker-mythologies-
and-m...](https://modelviewculture.com/pieces/hacker-mythologies-and-
mismanagement) [http://leftoblique.net/wp/2014/12/27/on-the-myth-of-
the-10x-...](http://leftoblique.net/wp/2014/12/27/on-the-myth-of-
the-10x-engineer/)

~~~
hawkice
I think you're right about the mental modelling that leads to these market
outcomes.

I am perplexed by the weak arguments from sources -- comparing dev work to 9
mothers trying to have a baby in one month? What point are they trying to even
make there? My crystal ball is cloudy but I think they mean delivery time is
immutable? The other, saying productivity differences encourage lack of
communication? That's not even relevant to the exploration of the fact of how
much productivity difference there is!

The whole question is somewhat beside the point: I don't understand the
benefit of homogeneity. I don't have amazing productive work every minute of
the day, heck, I don't have good productive work every week of the year.
Making a system that homogenizes output would limit _all_ employees, because
we all have times we are 100x better than us at our worst.

And yet, in order to get predictability, we strive to build systems where
engineers are cogs, because if things are predictable, targets are met, and
managers get their bonuses. But it ultimately doesn't serve the best interests
of the business.

~~~
yummyfajitas
Homogeneity in developers is useful in the same way that homogeneity in
servers is; it reduces the dimensionality of the problem. Instead of having 1
unit of 20 different resources to allocate, you have 20 units of 1 resource.

That said, sometimes (read: 10-100x developers) you sometimes have only 1 unit
of 1 resource. And if you don't pay for it, you wind up with 0 units.

------
truebosko
In most companies, business knowledge is key. The more knowledge you have
about how the business operates the stronger you are. Beautifully
architectured applications are great, but you need to be able to make the
right choices for the business, rather than simply complete task from start to
finish.

On top of that, managers generally got into that position because they are
solid communicators, work well in teams, and have organization skills.

In our company, all managers were engineers.

~~~
bigiain
" … because they are solid communicators, work well in teams, and have
organization skills."

And, in my experience, because those communication skills result in them
asking for more money more often - and having good explanations ready about
why it'd be a good outcome for both the manager and the company. Engineers
are, to a first approximation, all woefully bad at asking for more money.

~~~
uptownJimmy
I hate to say it, but the engineers are often really bad at everything but the
software engineering and the discussions about comic book characters.

~~~
fsloth
May I suggest you have a specific stereotype of an engineer and that this
causes you to have an observational bias which self-fortifies this notion?

------
Dwolb
The answer is pretty simple and has broader implications than an immediate
discussion about managers. The answer is people make more money because they
have more leverage.

Managers make more because they're seen as having human leverage. Start-ups
can make more because they have technology leverage (think about this has
changed with the advent of cloud computing) Banks can make more because they
have financial leverage. Etc.

------
UK-AL
Managers are promoted to managers because the higher ups like them, and want
to include them in their circle. They have the right face, fit in, agree on
similar things etc.

They earn more money for the same reason.

If your are not the sort person, who can surpress your own values to fit in
with the right crowd. Its best to just regularly reneogiate your salary.

Humans are humans after all. We run on emotions/friendships/tribes and not
pure rationality.(although people like to pretend they do)

Regneogating your salary, is using the market to correct these irrationalities
and bad perceptions about where the value is coming from.

Business knowledge comes after being given position where its possible to
learn it, not before. If someone wants you as a manager because they like you,
they'll find a way to train you.

Also engineering managers are often stuck between a rock and a hard place.
Given imposible tasks and deadlines from people above them who don't have a
grip on reality, and engineers from below who are saying it just can't be
done. Often it is just impossible situations. Its there job to neogiate the
team out of these situations.

Its very nice to be a manager when everything's going well. Absolute hell when
it isn't.

~~~
jazzyk
It is very nice to be a developer when everything's going well. Absolute hell
when it isn't.

------
Sukotto
Possibly because many (most?, nearly all?) engineers are extremely poor at
contract negotiation and believe whatever lies HR tells them about how much
money is available and how valuable their contribution is.

------
tptacek
A possible reason: management career tracks in larger companies are among
other things a mechanism for retaining senior engineers; in that sense, the
"management" role is overloaded (most companies also need managers
intrinsically, to do the management job), and the manager-managers benefit
from the premium the company pays the (for lack of better term) vanity-
managers.

------
analog31
Granted, I haven't worked for a lot of different companies, and haven't
experienced a silicon valley style labor economy. What I've seen leads me to
suspect that nobody would want to be a manager, if managers weren't offered
more money and social status.

Every case that I've seen where someone got bumped up to management, was right
after the birth of a child. Suddenly, their CAD screen doesn't look so green
any more. One engineer was lamenting to me his lack of advancement, and I told
him that he should become a project manager. His response: "Why should I work
that hard? I want my evenings and weekends." I made the jump when my first kid
was born.

Management seems easier and more social, but I think it's because the ease and
social perks (private offices) are part of the package of incentives to make
people want to do it. I was a manager for a few years. It was stressful for me
because it was way more political. As an engineer, I could solve problems by
innovating. As a manager, I had to solve problems by moving resources from one
pot to another, or watching people negotiate over endless minutiae. If a
company has a budget, then management is a zero-sum game. That's why it's
stressful. Everybody is your competitor.

And the boredom was crushing.

------
kasey_junk
It sort of depends on what you mean by this. If you are asking why someone who
manages engineers is making more money than the engineers they manage a couple
of things come into play:

\- Frequently engineering management plays a double role, both senior
engineering roles (guidance, architecture, big design, project/product
management etc) and "people" management (hiring, salary negotiations,
compliance, etc). It is relatively easy to argue (though not necessarily
correct) that someone with more things to be responsible for, "deserve" more
compensation.

\- Frequently engineering managers are elevated to that role because they
either have aptitude, interest, or experience translating engineering feats
into business relevance (ie revenue generation or cost reduction). It is
relatively easy to argue (though not necessarily correct) that someone who
captures more money for the business "deserve" more compensation.

\- Compensation is also largely a market transaction. Managers tend to have
more accurate information about both market rates and what the business can
bear. This serves them in the form of more optimal negotiations, both in
relation to the engineers that work for them and with their own compensation
negotiations with other management.

------
a-guest
The top voted answer on this old programmer's stackexhange question gives some
insight:

[http://programmers.stackexchange.com/questions/45776/why-
do-...](http://programmers.stackexchange.com/questions/45776/why-do-business-
analysts-and-project-managers-get-higher-salaries-than-programme)

------
yuvadam
Kind of like asking why those engineers still make +100x more than the workers
at the factory in China that manufactures their computers and smartphones.

It's called capitalism and it thrives on inequality. Whoever can be exploited
- will be.

~~~
zo1
Because those engineers produce more value for their employers than the
factory workers.

It's not "inequality", it's just a cold, hard, fact no matter how much it
makes us feel uneasy. I've seen this opinion a lot with individuals who don't
understand that "creation" need not be linked to a physical product, or with
manual labor.

Now, if you'd get back to comparing apples to apples, we'd compare those same
"engineers" with "engineers" in third-world countries. And then you have to go
back and ask yourself _WHY_ companies aren't just moving their operations to
those countries so as to make a bigger "cut" from that cheap labor.

Multitude of reasons can be chalked-off to for that. But one of them is
government-enforced restrictions on immigration, free-trade and licensing.
Both for skills, and of education.

And when you get to that point, you realize that this "exploitation" you speak
of would actually _benefit_ those third-world engineers. And the entity
preventing said "exploitation" from occurring is the "noble" government. The
thing that everyone loves to never blame for problems, but always worships
when it comes to solutions, even if the problems those solutions are for are
caused by them in the first place.

~~~
SamReidHughes
> Because those engineers produce more value for their employers than the
> factory workers.

It's also a question of negotiating power.

~~~
zo1
That's definitely a component of it, yes. But why do they have more
negotiating power? For the sake of argument, let's leave out the trail
regarding levels of education/intelligence.

------
sergiotapia
Because when a milestone is missed or the product sucks it's the managers ass
not the individual engineers.

It's all about responsibility

~~~
jchendy
I don't know how common this usage is, but where I work, we'd say that the
engineer is "responsible" and the manager is "accountable."

[http://en.wikipedia.org/wiki/Responsibility_assignment_matri...](http://en.wikipedia.org/wiki/Responsibility_assignment_matrix)

------
james1071
There are obviously different possible reasons.

One is that the marginal product of a manager might be more than that of an
engineer.

Another is that the manager is better at capturing value than are engineers.

These might amount to the same thing if there is a difference between actual
marginal product and what is perceived within the company.

------
gdonelli
It's about power, and money is how you keep the score.

Two scenarios:

1\. People want to be managers to have more power/control/influence... Then
money is needed to keep the score up

2\. They happen to become manager, and in a hierarchical structure (company)
power/money is how you enforce order

------
notacoward
There's no one answer. Instead, it's a combination of factors that others have
touched upon - closeness or influence relative to the decision makers, "force
multiplier" effect, good old supply and demand. Instead of reiterating the
point, I'm just going to get right in the face of the commenters who think
it's unjust that managers tend to make more. I'm just a developer myself, I've
never been a manager, but come on, let's not be total a-holes about this.

(1) It's just wrong to measure managers by the same yardstick one would use
for individual contributors. Of course people who perceive themselves as the
most technically proficient believe that less technically proficient managers
should make less, but there's no rational business case for awarding pay on
that basis. What managers do and understand might not be as technical, but
that doesn't mean it's less important for the bottom line.

(2) You're probably wrong about the technical-profiency thing anyway. Sure,
managers might not understand your favorite two-year-old technology as well as
you do, but it's highly likely that they know some other still-relevant
technologies better than you and have a better "gut feel" for technology
overall.

(3) Business sense and general technical judgement are harder to hire for than
narrow momentarily-relevant skills. Also, what managers do is often a lot less
fun than what developers do. Who wants to spend all day every day in meetings
or dealing with budget/personnel issues or balancing long-term development
with the fire drill of the day? Thus, even if what managers know were less
_intrinsically_ valuable than what developers do, the demand for good managers
would still drive up pay.

To flip this on its head, think for a moment about what the world would have
to be like in order for managers _not_ to make more (in general - I know there
are already plentiful exceptions). Then you _would_ have less technically able
managers, making worse decisions, not resolving interpersonal issues, pushing
more work onto the team or onto HR. Whee. What fun. Instead of grousing about
it, accept it as the way as the world and get on with getting ahead yourself.

------
ryandrake
Not sure that engineering managers even really make that much more than
engineers, at least not at medium or large tech-focused companies. Salary
ranges at this level tend to have a pretty large overlap. I've been places
where the engineer salary range extended past the manager range. On average,
I'd guess managers maybe make 10-20% more. But that's nothing compared to the
10X-100X more that the senior execs and CxOs make. That's where you really
have to ask whether it makes sense.

~~~
codeonfire
Where I worked salaries were the same, but everyone above line manager
generally got a 100% bonus. So while engineers might get $25k in stock, a line
manager would get $150k, director $300k, and VP could get over a million for
successful projects, CX0's 5-10 million. This makes perfect sense when you
consider that management is setting salaries and bonuses. Of course no one out
of the loop knew it. Engineers generally got disappeared when the project was
over.

------
falcolas
People skills.

A good manager is able to negotiate much more comfortably than your average
engineer, and they are able to apply this to their salary negotiations as
easily as they can to a feature list.

Another contributing factor is that the upper management is also well versed
with people skills, and so they are more likely to get along with, and are
more willing to compensate people they get along with better.

The really good ones also act as productivity multipliers for those who they
manage, giving them leverage and visibility.

------
BWStearns
I've had one really fantastic engineering manager (miraculously my first
solely programming role, wish I was still there), and I have yet to have
another good engineering manager. The degree to which time was spent improving
the product under the good manager was phenomenally higher under the good
manager than the others. Granted this seems to be rare but a good tech manager
can deliver crazy outsized returns on the line developers and also make their
days easier.

------
hawkice
It turns out we can get numbers for how valuable managers are, and indeed, it
is more value than the lower level employees, by a factor of about 1.75. In
turns out that the difference in increased productivity is roughly in line
with the difference in pay.

[http://faculty-
gsb.stanford.edu/lazear/personal/PDFs/Bosses....](http://faculty-
gsb.stanford.edu/lazear/personal/PDFs/Bosses.pdf)

------
vayarajesh
It makes sense if a manager is managing a big team of for e.g. 10 engineer and
a product. But in a startup environment where there are only few engineers and
mostly they are capable of self managing.

However in a startup I think there is lot more work apart from the engineering
of the product but not all startups' manager makes more money than the
engineer.

May be manager make more money, but the placement security preference would be
more for an engineer (i guess)

------
brg
In my experience in major tech companies, at the same levels of experience
there is very little disparity between management and engineering salary.

This leads me to believe that this perception is the result of management
being more tenured than the population of engineers. This same reason middle
aged people make more than those out of school, and that the vast majority of
wealth is held by seniors.

------
yesimahuman
Simply because the boss of the manager trusts that one person with
implementing their vision and strategy. Yes, you can have individual
contributors underneath that are technically providing more value to the
company, but they aren't responsible for the success of the team in the way a
manager is. Frankly, that is just worth more to bosses and helps them sleep
better at night.

------
Kenji
Who is more useful, the guy who is capable of doing stuff, or the guy who is
capable of talking other guys into doing stuff? Let's face it: Social
engineering may not be particularly visionary and idealistic, but making other
people do what you want is all you really need to get things done.

------
trias
pay is aligned to hierarchy in the first approximation. people have a hard
time accepting that they are overseeing someone who has a higher pay and the
other way around.

At the end of the hierarchy, skill (& experience/age) counts. Engineering is
one of the best paid "worker profession", i.e. you are not involved in
managing the work of others.

Some jobs can be easily replaced, which usually means they are paid less.

Some jobs require trust by the employer (e.g. manager) and are better paid,
because changing jobs would harm the employer.

Also some industries pay more than others, simply because their industry is
more profitable than others.

------
rjberry
Primarily because the people who decide salaries are themselves managers.

~~~
threeseed
This blank statement is wrong for most companies. The salaries are fixed
within levels that are decided by HR based on the market e.g.

[http://www.robertwalters.com.au/career-advice/salary-
survey....](http://www.robertwalters.com.au/career-advice/salary-survey.html)

------
scottmcdot
Because they have better, refined stakeholder management skills.

------
jacquesm
The simplest answer is probably that there are fewer of them and that they
tend to be higher up in the org chart, so closer to the money.

------
threeseed
Not always true. If you are a decent engineer consulting/contracting in a
field like big data, data warehousing, analytics etc you will make far more
than any manager short of C level.

If you are talking about normal salary jobs then it is simple. Managers take
on risk and responsibilities. Engineers largely don't. If an engineer screws
up the damage is largely minimal. If a manager screws up then serious money
can be lost.

~~~
peteretep

        > If an engineer screws up the damage is largely minimal.
        > If a manager screws up then serious money can be lost.
    

You're being downvoted, which is a shame, because you're absolutely right. You
can screw up much bigger when you can cause 5 engineers to screw up in
addition to pissing their expensive salaries up the wall.

And generally the manager will be held accountable, where the engineers will
not, because they were just following orders.

------
mkagenius
Everything boils down to demand and supply when talking about price:

Its difficult to find a good manager than a good engineer!

------
kazinator
Throughout human history, in all hierarchical work structures, people higher
up been remunerated better.

The main reason it is this way is that the organization grows by adding "leaf
nodes" at the bottom, as cheaply as possible.

For instance, say you have a business in which you're the only employee,
consisting of laying bathroom tiles. You make decent money, but you do this
messy work all day long. You want to work less and make even more money. Hmm,
what to do? Your options:

\- Move to Beverly Hills and be a "tiler to the stars", charging more.

\- Get an assistant to work faster.

Usually, the second approach is selected (with the first possibility being
kept in mind for the future).

The next step is to let the assistant work independently, while you go to a
different site, or work on business activities like advertizing or consulting
with customers.

Then, you get multiple such assistants working on multiple sites. Of course,
these workers are not nearly as well paid as you are when you do the bathroom,
because some of the revenue goes to you (remember your goal: make more money).

The workers are not well paid is justified because all they do is show up to a
designated site, and do the work with materials and tools supplied by the
company. They accept that if they want more money, they have to become
independent, which means doing things like advertizing, consulting with
customers and such. Some of them don't even see themselves making such a move.

Okay, so now you have multiple installations going on in parallel and you're
not laying tiles yourself so much. You go from site to site during the day,
checking on these workers, and from time to time you see they are doing some
things wrong and so you teach them the craft. Everyone treats you with fear
and respect, and so you think, damn, I want even more money!

To make more money, you expand the organization even more: more active sites
at the same time. Now the problem is that there are too many sites. Previously
you could visit each site several times a day to supervise work. Then it was
just once a day, and now there are too many sites; if you visited them all,
then you would spend all day going from site to site.

The solution is to get some middle management: supervisors. Just like you,
they are paid more than the individual installers. If they were paid less, why
would they do that job, instead of just working as installers? They are
experienced installers: they know the craft and can tell if something is not
being done right. Yet, they don't make as much as you do, otherwise what would
be the point of all this expansion?

So the pattern here is that the bottom-of-the-org-chart installers do not make
any more money as the operation expands; in fact they probably make less as
the organization grows bigger, though their employment is more stable. They
have to work to sustain the overhead of all these additional people.

In other words, an operation expands so that there can be higher levels that
make progressively more money.

If you have any salary inversion in the tree, then people will not want to be
at that position in the tree. Supervising people is a headache! Why would
anyone take _less_ money to manage some people, if he or she could obtain an
instant raise just by dropping down one level and joining them?

