Well with all this talk of hyperinflation, and anecdotally seeing some of the salaries my friends are getting recruited at, I'm starting to think I'm getting a bad deal. Does your company have any kind of policy to deal with inflationary periods?
In some countries it's common practice to get a 2-5% auto raise per year to cover inflation.
When you stay longer in a company people getting in almost virtually always get a better pay. Salaries in tech aren't really following any logical trend, but internal raises in most companies do. A junior might have started at 45k four years ago and 65k today, most people don't get a 20k raise over the same period.
That being said you'll always find a friend doing the same job and getting more money, unless you're grossly underpaid I wouldn't overthink it. What matters is to be happy with what you have, if you're not move on, if you are it doesn't matter that your best friend gets 20% more. I personally enjoy having a relaxed work environment with few but serious people, 0 bullshit and no internal political games and I sure get paid less than I could if I was working for #bigtech or some random startup working on yet another bs product. I have friends paid almost twice as much as me but listening to their weekly horror stories doesn't make me feel like I'm missing out, set your own goals
I think at some point though the cradle is going to break. 20k difference isn't much, but when you start talking about an extra 50k or more, it can make your current job feel pretty lousy.
20k would be an enormous amount to me. This is sort of frustrating to read in a similar way that it is frustrating when some "satisfaction expert" tries to tell me money won't consistently motivate me or make me feel appreciated, when I know for a fact that it does.
Yeah that's unfortunate. I think that this is amount is obviously relative to a lot of factors, like where you live. Not just because of the cost of living, but also if you live in a progressive tax country, and you're making enough, that 20k is effectively cut in half.
It's one of those things that works to a certain point. Should you hit that point, the prospect of getting what used to be an enormous amount of money won't hold much appeal to you.
You'll know if you're there. You'll ask yourself how an extra $20k a year would change your life. You'll find yourself realizing that it wouldn't, except possibly slightly fancier groceries. This is the point the satisfaction experts are talking about.
Maybe they are talking about that point, but then why would they make this case to me? There is not a person in the company that I work for (except for the suits I guess) that this would not be an absolutely transformative amount of money for.
Inflation is an increase in the cost of goods and services. Employers generally mitigate it with regular small bumps in salary, often called “cost of living” increases.
What you’re seeing with salaries right now is not inflation, or at least mostly not inflation. It is supply (lower than usual) and demand (higher than usual) of certain skills. In other words it is a real market movement in the value of certain kinds of labor.
Employers can mitigate this as well, either by proactively raising salaries to match (sometimes called “market adjustments”), and or by waiting to hear an employee is leaving and then trying to match their offer to keep them.
Candidly, sometimes employers don’t actually want to mitigate these forces, but instead see it as an opportunity to trade longer-tenured employees who are entitled or jaded for newer employees who are more enthusiastic (and maybe more naive).
In any case, the only sure way to test your market value is to apply for new jobs.
Never directly that I've seen. However indirectly I've seen across the board 10% raises for everyone when the company realized that people were leaving for better paying jobs, and those who were left just hadn't found the right opportunity yet (probably because they were lazy about sending out resume's but that is not something a company should count on)
I've personally left a position I liked mostly because my raises were not keeping up with inflation. I understand that at my age I'm at about the peak of what I'll earn in my lifetime: I'm not expecting a raise to earn more money anymore, but inflation still applies and so 0% raise is a pay cut against inflation. Turned out I liked the new position, but I wouldn't have risked that if my wages had kept up to what I thought I was inflation.
An explanation I saw lately about misalign between salaries of newly hired people and existing employees is due to budgeting.
The budget for new hires comes from one budget line, and budget for increases comes from another.
A manager has $N to distribute among fixed number of existing employees (typically a few % of existing salary mass). They can't 2x everyone's salary. And the budget for this is approved long in advance.
OTOH they have some a budget of $X to hire M new people. They might not be able to hire M people if market is hot, so they hire fewer people at elevated salaries and still stay within the overall budget $X.
This may be how it works at large companies or places with more complicated accounting practices, but my department simply has a payroll budget and when we want to make a hire we argue for it and the budget is increased. Raises and bonuses are distributed out of the yearly budget increase.
I expect a yearly raise that at the very minimum match the inflation, such a raise I interpret at "my salary has stayed the same as previous years" while no raise means "I'm getting paid less". I'd probably quit if the company started paying me less (by not matching inflation) unless they had a very convincing excuse.
Note that because you only get this raise once a year you are actually making less than you expect during the year, getting further from matching inflation towards the end of the year. So you are actually getting paid less, though it makes you think your salary is staying the same.
Employees negotiate salaries. In theory this means they should take possible future scenarios, like inflation, into account when coming up with the salary that they'll accept. You can always ask to re-negotiate, or look for another job in this hot market.
Money isn't everything, peace of mind is worth lots of money. If you need more money, then consider jumping to another job for a substantial raise or asking your supervisor for one after citing why you deserve it.
Money isn't everything? So you're okay with working for less year over year? Before you know it, you'll be earning less than usual and due to inflation your salary won't cover it.
I dislike loyalty to any company because even if you're a permanent employee, the company won't hesitate to fire you or replace you if it comes to it.
At the end of the day, time is the most valuable resource people have, and if you're okay with working for the rest of your life for someone else without enjoying your life, then fine, otherwise, you really should re-consider your position.
Unless you are Mother Theresa everyone works for money and extra money in terms of wage increases to keep up with inflation is welcome. I have seen this come out of mouths of MBAs who are tasked with quelling the wage rebellion "money isnt everything, work for the greater good, save the walrus who can't get his sea weed and lives 3000 miles away" come on :)
I agree that money is a factor, but not the only factor, in deciding whether a job is right. I currently have only mortgage debt and I am making substantially more money than I really need to pay bills. I thought making a lot of money would be the solution to all my problems but now my problem is that I feel unfulfilled because I'm not using the technologies I want to use in my role and no amount of money will solve that problem. Another issue is coworkers; you cannot pay me enough to work with some people. And lastly, time is priceless so I always take any flexibility time-wise into consideration.
When you stay longer in a company people getting in almost virtually always get a better pay. Salaries in tech aren't really following any logical trend, but internal raises in most companies do. A junior might have started at 45k four years ago and 65k today, most people don't get a 20k raise over the same period.
That being said you'll always find a friend doing the same job and getting more money, unless you're grossly underpaid I wouldn't overthink it. What matters is to be happy with what you have, if you're not move on, if you are it doesn't matter that your best friend gets 20% more. I personally enjoy having a relaxed work environment with few but serious people, 0 bullshit and no internal political games and I sure get paid less than I could if I was working for #bigtech or some random startup working on yet another bs product. I have friends paid almost twice as much as me but listening to their weekly horror stories doesn't make me feel like I'm missing out, set your own goals