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Ask HN: Is your company considering inflation in this year's comp review cycle?
209 points by jurassic on March 11, 2022 | hide | past | favorite | 277 comments
My current company (not FAANG but a household name) just handed me a sub-inflation raise (5.5%) in spite of my "exceeds expectations" performance rating. New hires are getting 50% more equity than the total value of my unvested equity. The official line is that inflation is not a factor in assessing annual comp adjustments.

Does this match up to your experience elsewhere? I'm certain I could make more by switching jobs, but I wonder if I'm being screwed by more than the usual amount by staying.

I'm really effective in my current role. Past a certain level of seniority it's a big ordeal to change jobs, rebuild your network within a new company, rebuild reputation and social capital, etc. These network effects are a big part of your effectiveness as a staff+ engineer. I'd rather not move, but it seems I have to given the hundreds of thousands being left on the table.

I'm a new manager, having been an SWE IC for 15 yrs. I just did comp planning for the first time. I was given such a small budget for my team, it's not even funny! The system is designed so that most of the staffing budget goes to new hires, not to reward existing employees. Even promotions are fairly small, compared to what you could get by leaving. It's a game of chicken between you and your company: how long are you willing to tolerate small annual raises while more money goes to new hires before you decide to become a new hire at a new company, yourself?

Now that I see it from the manager perspective, I pledge to stay sharp and become a job hopper ... as soon as I find the time to start interviewing. :^)

> The system is designed so that most of the staffing budget goes to new hires, not to reward existing employees.

Organizations undervalue their employees, encouraging brain drain, and then wonder why retention is such a hard problem. It's almost comical.

It also doesn't help that salary sharing is still so taboo (in the US/Canada at least). Stinginess is hard to do when people know what they're worth and know what you're paying everyone else.

> Now that I see it from the manager perspective, I pledge to stay sharp and become a job hopper ... as soon as I find the time to start interviewing. :^)

It's true that interviewing takes up a lot of time, but you can accomplish a lot just by doing low-stakes networking. Connecting with someone new over coffee at a cafe (and/or virtually) is a 15-30 minutes, every once-and-a-while kind of thing. Even better if you interact with them before/after on social media.

Fascinating! How do you plan to stay sharp if I may ask?

I personally just constantly interview. I find the time for that by no longer seriously reviewing any code.

Code review is mostly to think long term about code (as tests catch the immediate stuff). I have no long term future at the company, so oh well.

Guess it's time to start giving strong no hires to job hoppers then /s

Its not that simple. If somenone wanted you wouldn't even know that. Besides - IMO for the hopper it is also not easy - changing colleagues, earning respect again etc. OTOH, whatever one says - the goal of the job is to get paid and support your familly. That gets especially important when you have kids.

We do background checks, so hopefully we're not actually hiring people who tell big lies on their resumes.

> IMO for the hopper it is also not easy I agree. I'm changing jobs soon and have some apprehension for the reasons you mention, plus don't forget the fear of underperforming and being deported for losing my job :/

> the goal of the job is to get paid and support your family Parents and people who pass the vibe check get strong yeses from me so no issue there /s

But in all seriousness I do feel really bad when interviewing parents or anyone with other obligations that stop them from grinding practice questions if I have to fail them because they can't solve some BS leetcode question. Unfortunately my intuition if someone is a good engineer or not doesn't matter much if they can't crank out some leetcodes in 35 minutes :/

The signal for who is a good developer is so unbelievably low for a leetcode interview. I do feel like some codebases have been made unmaintainable because of the "fail fast, break often" mentality that I feel like is taking over things. In the interviews I give I touch on many other aspects of code design, testing, and review especially for senior candidates.

Obviously its not bad enough yet to warrant changing the process though at top companies, so maybe I'm the one who is interviewing in the wrong ways.

What I’m seeing is that some big tech companies these days (including my own) have standardized rubrics [1] for leetcode-style questions that focus on a few areas (like DS&A, communication and coding style) so I can’t really give any marks for these other positive behaviours.

There’s some benefits to rubrics (reduces differences between interviewers and is more fair to minority candidates from what I’ve seen) but I’m it definitely impacts or senior hiring.

Unfortunately there are also so many experienced developers in the hiring pipeline who actually can’t code, so doing at least one coding interview seems inevitable. I’d give less “tricky” questions but, like rubrics, the questions are standardized too :/

[1] https://blog.tryexponent.com/google-coding-interview-rubric/...

I do give coding exercises in my interviews, but they’re usually more open ended and don’t require understanding tricks. If there’s a DS&A portion it’s usually something I’d expect to be used on the job (e.g. a map or array list, not a BST). I also touch on things like SQL and API design. These things feel like they’re hardly hit on in most tech interviews.

The problem is this is great news to other competitors and its not possible to bring everyone on board. Its probably not even legal.

It's ok if my employer's competitors are advantaged because I'm switching jobs soon to get that sweet sweet pay bump anyways :)

Not to be dismissive, but why would a company specifically care about some arbitrary number called "inflation" vs overall pressure from the labor market, which presumably must have some encoding of that, considering they seem to clearly paying a person enough not to justify leaving?

P.S. It is especially amusing considering lots of "only if I were to leetcode I could increase by X" coexist with many posts that diss on leetcode and whine that it filtered them out and it is not "relevant to the work they are doing". Perhaps the system is working then?

> Not to be dismissive, but why would a company specifically care about some arbitrary number called "inflation" vs overall pressure from the labor market, which presumably must have some encoding of that, considering they seem to clearly paying a person enough not to justify leaving?

You hit the nail on the head.

Everything related to compensation becomes much less confusing once you accept that hiring is a market. Like any market, supply and demand drives the prices. Nothing else matters much.

Big companies have entire teams dedicated to compensation which are separate from HR and hiring managers. They carefully track these details and will fine tune their rates up and down depending on how often their offers are accepted or rejected. If every candidate is accepting the offers, they're probably too high and can be adjusted downward. If the company can't close any good candidates because they're going to other companies, it's time to raise the rates.

Of course, not every company plays this game correctly or intelligently. If the OP's company has guessed wrong and gave too low of a raise, they risk losing too many people. On the other hand, if most of the employees shrug it off then maybe they made the right call for the business.

Do markets and inflation not go hand-in-hand, although sometimes slightly out of step, like I thought they did?

Your compensation isn't driven by the things it can buy. It is driven by the balance of supply and demand in the labor pool, which is mostly insensitive to inflation in the short term.

In the long term, sometimes inflation is caused by employers being able to charge more for their products. If they can raise prices faster than their costs, then they'll be able to afford more folks to work, increasing demand in the labor pool, hence increasing labor prices (i.e. compensation).

Still, it can take several quarters for information about pricing to flow through the supply chain and impact wages.

In the short term companies make incredible profits. Compensation is down but most price contracts are adjusted up for inflation. Most b2b contracts have an annual inflation clause for example

There's also the fact that the "inflation rate" is a pretty imprecise number. There's no real inflation rate, it's more of an average of the price increases of various sectors of the economy. But even drilling down into the sectors you have to account for things like geography. So the inflation rate is useful as a gauge for where the economy at the macro level is heading, but for making individual salary decisions at a single company it's not very helpful.

it's really not. in fact there are specific terms to differentiate them

cost of living is your total live cost including inflation. cost of labor is cost to hire replacement in the overall labor market.

most companies pay in each market based on cost of labor

Depends on the demand for your skills, not generic inflation.

So we should all be constantly interviewing and rejecting offers to drive up the price?

It's not the rejections, but the lack of hiring.

If you artificially pump up the number of fake interviews, but the company is still receiving the same number of accepts from their offers, they will have no need to raise their salary offer.

> It's not the rejections, but the lack of hiring.

True, but note that there is a cost for interviewing as well. Ad absurdum, if you interview 100 candidates and get rejected by the first 99, your hiring cost could be much higher than simply offering x% more to the first candidate.

>> Everything related to compensation becomes much less confusing once you accept that hiring is a market. Like any market, supply and demand drives the prices. Nothing else matters much.

This is not about new hires but existing employees. There is not market or rather a less flexible one. People are reluctant to leave for a number of reasons.

>> On the other hand, if most of the employees shrug it off then maybe they made the right call for the business.

But not because of market reasons.

The larger problem is that giving everyone inflation-linked raises causes inflation in the first place; that's called a wage-price spiral. That's one reason raising interest rates stops the inflation, it gets enough people laid off that the rest of the raises are absorbed. Unfortunate really.

> some arbitrary number called "inflation" vs overall pressure from the labor market

They should in the end only care about market pressure, but there is connection between the two. The way I see it, if you are a new hire, companies pay you more to get you, so they stay ahead of the inflation and keep up with market rates.

If you want to stay, a company's reluctance to keep up with inflation (and the market) will make it a very hard decision, even if you like the job, the people and the company.

Why do you think inflation is an “arbitrary number?” I can’t imagine what gave you that idea.

It's arbitrary to a company when it comes to wages. What matters is "can we hire/retain the people we want at compensation $X".

If $X needs to increase because they can hire/retain the people they want, then $X needs to increase.

The government publishing a single inflation numbers is kind of irrelevant to the equation. If they can keep hiring/retaining the people they want, in spite of inflation going up, then nothing has to change.

Inflation is a really flawed concept that is very hard to quantify in any non-subjective way. There is a real effect of prices going up but any measurement of it is subject to biases, because of the choice of which prices you look at.

> I can’t imagine what gave you that idea.

I can't imagine it being that hard to imagine :) considering this is the second paragraph of wikipedia[1]:

Prices will not all increase at the same rates. Attaching a representative value to a set of prices is an instance of the index number problem. The consumer price index is often used for this purpose; the employment cost index is used for wages in the United States. Differential movement between consumer prices and wages constitutes a change in the standard of living.

[1]: https://en.wikipedia.org/wiki/Inflation

Any given measure of inflation is arbitrary, that doesn't mean the phenomenon itself is. Compare a concept like obesity and a common measure like BMI.

The claim that the OP made was that inflation is an arbitrary number. The underlying phenomenon is not a number, more accurately it would be a vector containing all price deltas and any particular inflation measure is an arbitrary choice of how to project that vector onto a number. There is some validity to the claim. BMI is an interesting choice of comparison as many of the flaws in the measure are related to the arbitrary way that different body types produce different ranges.

So…not an arbitrary number.

Precisely as arbitrary as how you choose to measure it, or more.

Considering that, say, 100% of tech employees are consumers and CPI measures cost increases for consumers, it may be “arbitrary” but still highly relevant.

For instance, if my employees are earning 500k+ and driving Teslas, I don't think the price of oil, lettuce and tomato, and even general rental market would be materially impactful like, say, the increase in Los Altos home prices.

What really makes a difference is how much a competitor is willing to pay, their scale, their work environment, and how well they sell themselves.

Inflation is also psychosocial. If people think inflation is happening they will want to be paid more. That’s what can cause a wage-price spiral, partially.

Wages are prices. A wage is the price of labor. When wages increase, inflation is happening, by definition.

The price of labor can increase faster than the price of goods increases. This is usually what people refer to when they talk about the development of a country's economy, or a country getting "richer".

Inflation is not arbitrary. To some extent this should be like the minimum a company should offer. If not, it means the money you bring home might not be able to cover all your expense + saving.

Let's say you earn 500k and your cost of living is 200k leaving you with 300k additional disposable income. Assuming a 7% increase in your cost of living, you still have $300-$200*.07 additional disposable income. The question now is, why should the company be the one absorbing this loss and not the employee selling the labor, to put it bluntly, let alone adding an extra 7 percent to your extra $300k? Even if they are able to pull a price increase, they will be under pressure by shareholders to keep the profits to preserve the share price to offset the collapsing multiples. Surely at the borderline compensation levels or below, cost of living increases can make a material difference to the employee's ability of providing their services in the first place, out of their control (analogous to a negative gross margin for a vendor), and force them into pursuing an alternative solution (reducing expenses, moving to a different location, moving to a different industry).

However, if the employees are significantly above that limit, the primary reason the employee is able to justify their additional earnings must be competition in the labor market, so that should be the driving factor here as well.

The company doesn’t have to… unless the employee decides to leave for that reason. Now adding an extra 7% is not about inflation but about retaining (good) employees.

I imagine that for bad or not good enough employees, the decision is rather easy for companies: let them go.

> Now adding an extra 7% is not about inflation but about retaining (good) employees.

Sure, and that distinction is the entire point, i.e. retention for [Silicon Valley and similar] tech employee is likely not dominated by the value of 7% but what the labor market dictates in terms of compensation, benefits, and company culture; could be a lot higher but by-and-large not directly driven by consumer price increases.

It depends. The number attached to (and reported about) inflation is dependent on the index, the products that are used to calculate the price delta. As well as the estimated share the specific products have in this virtual shopping cart.

This shopping cart doesn't necessarily represent your or mine reality.

If I compare myself now with my pre-corona self I massively reduced the need for gasoline. I work from home and don't commute > 300 kilometers per week anymore. I fill my gas tank about once every two months compared to twice per month.

So the impact of rising gasoline prices to me is way less now. While the consumer index in Germany stayed the same.

So my individually felt inflation differs massively from the average inflation that is based on a politically decided upon virtual shopping cart.

It could have something to do with my reality. Or it could not. In that regard it is an arbitrary number.

It could be higher or lower. And from experience - but that is anecdata - the more one earns the less inflation is subjectively relevant.

For sure it isn't. Let's imagine there is a imaginary currency λ which isn't affected by inflation. That way USD will have x% inflation when compared with λ and EUR will have y%. Those x% and y% will reflect all price changes in their respective economies.

If banks wouldn't give up to gold standard we would probably see almost no inflation since gold is a finite resource while fiat money are not.

We can even judge inflation by rising gold prices.

I somewhat agree. Tech comp seems to be up a lot more than inflation and I’m sure it’s going to lead to a lot of churn.

They wouldn't but they should be aware that inflation will put pressure on the labor market. People will leave if they are underpaid.

Really dissatisfied with pay increase this year in February. CEO talked up how everyone was going to be really happy with big bumps to make us more competitive (they have been struggling with high turnover after a couple of acquisitions). I get "exceeds expectations" multiple years in a row and did everything my manager suggested last year to try to get a bigger bump this year. I got 2% base salary increase and 5% bonus target increase. Chances of seeing the full bonus targets this year? Not high.

I'll be looking for a new job this year for sure.

I have to wonder why anyone bothers to ever exceed expectations except for intrinsic reasons.

I assume from the day I start that I will be gone in less than 18 months.

This this this. "Exceeds expectations" gets you the B+ treatment, at best. Meanwhile, slacking off and doing the bare minimum gets you a C rating. Every year that I bust my ass with proven results, there's always some excuse in store for me and "well maybe things will be better next year," and the same customary 2-5% raise as last year.

Eventually I got bored, stopped trying, and still walked out of reviews with average or above-average marks and same pay bump. This is after getting talks from my manager about upping my game and narrowly avoiding a PIP.

If an employer wants me to bust my ass for them they need to make it worthwhile. If my work unlocks significant value (verifiable 6 or more figures) for the company then I expect more than a token amount of that to be sent my way.

SWE pay may be high but they use that as a cudgel to keep you from claiming value proportional to your contributions, and don't even get me started on the trap that is equity compensation

This career really feels like interviewing skills are the real skill and everything else is just a mandatory socially enforced cooldown period.

As an industry we have favored marketing of software over the quality of software. Promotion has been tied directly to that choice (expressed as "productivity" and "delivery") and then the people promoted by that system make hiring choice. It would be unexpected if the emergent outcome was not as you have described it.

Not as an industry, as a society! In "free market" liberalism, selfishness manifests as self-promotion, because money and success is tied to others perceiving how good job we are doing. In other words, the (supposedly objective) free market metric of selling service to others becomes a target and is being manipulated.

It helps to perform well enough to get influence as to what you get to work on, as that ends up on your resume.


Last year (or financial year ends in summer) there were basically four numbers.

The minimum amount a promotion was worth. The impact on the base salary (and the slight impact on the bonus) if you were considered important talent.

The impact on the bonus (and only slight impact on the base salary) if you had outstanding contributions last year.

The overall base increase for everybody based on seniority (higher for more junior positions).

The latter more or less covered inflation. The others improved on that (sometimes by quite a margin).

I can see why outstanding contributions won't make a big dent in salary, but they absolutely have to make a huge difference in bonus. If I have an outstanding year my bonus should be at least an integer multiple of a more normal year.

SWE work can be super impactful depending on what you're working on (especially in startups), why can't we share in more of the glory? In some companies, if you run the numbers and divide that result by the total number of hands that have touched the project you can STILL come up with net revenue or even profit that is 100x+ what you're being paid. And not seeing more than a token piece of that is just wrong.

If I knew that performance could net me 2x or more of my salary, you can bet I'd be a lot more motivated to work hard.

> I assume from the day I start that I will be gone in less than 18 months.

This is my mindset now, but man, I would like to be able to actually stay at a place for 5+ years.

My father worked at an engineering firm for over 15 years. Although this had its own cons like everything, I'm jealous of the camaraderie that my father had with his coworkers. I suspect I'll hit local maximum for pay/career at some point in my future and try to find a job where I can stay long and cultivate meaningful connections.

It kinda sucks that effective teams that takes decades to build aren't valued higher in the corporate world.

Networking. If I'd have been a better performer in the past, I'd have probably followed some of my high performing coworkers to their jobs and gave better overall job satisfaction. Being in teams that value good code and perform with good work life balance makes work enjoyable.

This is true. I’m currently working 3 remote jobs (just gathering as much cash as possible) and one is a good one with a tech firm and the other two are at technologically incapable places.

The two tech incapable ones are pretty annoying, or at least would be if I gave a damn about my performance there.

Also never met such mean people. Tech is so nice in comparison.

> Also never met such mean people.

You think this has anything to do with putting in the bare minimum?

You work for three places in the same 8 hours?

I probably should have followed this route. I've been at my job for over a decade and all my big promotions and large pay raises happened in the first half of that. Been single digit raises since then and I don't think there's any more room to move up unless I want to try management, which I really don't.

How long can you keep hoping jobs like that in the long run though?

I see resumes like that a lot. In generally move past them. The cost of churn is high and people who constantly job hop aren't worth the effort or the potential impact to team morale. I say this as an engineering hiring manager. I've job hopped too but I always shoot for at least for years. I don't always make it but I plan for it.

Normally people don't like to job hop. It is unnecessary stress. However, people have responsibilities to their families. If you are concerned of job hoppers then why don't you help them to alleviate their burden. If not, and if other companies are paying higher somewhere else, why would that person stay? That would be doing a disservice to him/her and his/her family.

son: "dad, why can't we go to vacation this year?"

dad: "sorry son, don't have enough money. still got bills to pay and dad's company don't give enough raise."

son: "why can't you just find another job?"

dad: "that's treason son, we don't do that here. think of the team morale son."

son: "okay dad. i love you."

wife: "Look(showing Instagram) Your CEO bought new Tesla Model S Plaid"

If someone job hops I don't recommend them for further interview rounds. Even in an agency setting were turn over is high. I don't want people like that on my team.

I have one 7 months stint in my resume and that is framed by 5.5 on one side and now more than 7 years in my current job.

My pay increased by >90 percent in my current job. The people I work with are really great and I couldn't in good conscience recommend someone for that team that goes out of their way to support each other that is only in it for themselves. I personally don't want hedonistic people on the team I am playing on.

And a word about crafting BS emotional stories around how a family suffers because someone doesn't job hop. WTF.

If one can't go on vacation because they did not receive a raise they are not acting financially responsible. Especially when having a family.

Vacation imho always should come out of a play money budget. Put aside some amount of money every month for play and/or vacation. Next to money you put to the side for emergencies. Then pay the bills and still have money to spend. This is financially sound planning.

If either one of these is missing people are not planning their financials good enough. At least imho.

If anyone ever tells their kid that they are incapable of going on vacation because of a raise too low their kid should answer that they are sad their parents are lying to them about their financial incompetence.

Repeat after me:

The majority of people do not like interviewing.

The majority of people do not like investing their own time to change jobs.

The majority of people do not want the mental and emotional burden of changing jobs and feeling guilty over it.

The majority of people do not get amazing job offers frequently and will have to manually filter to find better opportunities.

The majority of people do not like taking a risk which may not pan out. Especially while having little savings.

Job-hopping being so prevalent is a result of the market. Despite the increasing number of barriers. If you do things differently from the market that prevent those incentives, I assure you, the majority will stop job-hopping.

Thanks for the long reply. It seems our way of seeing things are just different, irreconciliably different. Like, fire and water different. Like, extra terrestial beings different.

That being said, skipping on job hopper’s resume actually brings positive on both sides. We avoid wasting each others’ time. You are doing the right thing.

Actually, real life is way way more cruel than the 5 line dialogue that I described above. You don't know what people struggle in their life.

Maybe, hmmm, just maybe, they are supporting a few older generation women in their family that are all divorced and no longer can work? Just maybe, hmm...

Maybe, just maybe, that person has an aspiration of doing better for the world instead of chasing compensation, but limited by his/her circumstances, so he/she has to do leetcode + jumping ships all the time, just maybe.

Reality is brutal, cruel. Some people have so much, yet some people have so little.

I value other personality traits and people scoring differently on the big five. Especially agreeableness. I experienced them providing a better and more long term productive team setup.

So I pass on candidates that (on average and I might miss out on great people once in a while) tend to value short term personal gains.

In the end it is a question of how (better in which direction) one tries to influence the environment one is in.

And I decided to take an approach geared towards longevity and sustainability of the team environment.

> My pay increased by >90 percent in my current job.

I've increased my comp by 250% over 8 years vs your ~90% in 7 years. That's what you're missing out on.

I see I wasn't able to make my point.

I don't just do things purely for monetary reasons. I am glad my parents instilled quite different values in me.

And you can't see my point, which is that increasing your income by 250% enables you to do other things you otherwise wouldn't be able to do. I work to live as much as anyone, but I expect to be paid market rate to do it.

I just realized we are comparing apples to oranges here.

I am paid above market median already in my current job. I could probably reasonably add 15 - 25 percent if I jumped once, maybe 60 percent if I jumped 3 times over 3 - 5 years.

I would have to change my role though and switch from an expert role into leadership/management with responsibility for people (wouldn't be a problem) and way less time to do the stuff I like about my job.

Btw. looking back over a somewhat longer time frame my current compensation is higher by a factor of 4.5 then around 11 or 12 years ago.

It isn't as if I would not look out for myself. Or would want to be compensated significantly below market rates. Just that for myself and the team I am part of I try to optimize for agreeableness and long-term thinking.

Well, I got over 200% in the last 5 years. And my current employer will give a raise of 20% after one year with them. This was negotiated before.

In short: if you are unhappy with your payment, you have to realize owe more to yourself and your family than to some random company. Find another job, negotiate as much as you can and move on.

So basically you are in for the money only? There are no other factors?

>If someone job hops I don't recommend them for further interview rounds. Even in an agency setting were turn over is high. I don't want people like that on my team.

You can get assured, people don't want someone like you near them, too. You are doing them a favor. :)

I don’t like to job hop. I hate change. I hate having to learn new people.

I’m the kind of person who has eaten the same breakfast since I was 13. I have 5 of the same shoe as I don’t want to have to find another new kind of pair. I like rules and consistency and knowing a system well.

But if I don’t, I will end my career millions of dollars poorer.

Essentially as soon as I am comfortable in an org, I have to leave unless I want to forsake a big chunk of money.

It's such a seemingly self-contradictory view and I love that you're sharing it because it makes complete sense in the world of ill-logic in which we find ourselves.

Loyalty means nothing as an employee now (and for a while) in the same way that existing customers don't get the perks that new sign-ups get. Employees are being viewed more and more the same way as customers; is this an extension of "if all you have is a hammer, then every problem looks like a nail"? It worked for customers, which are people, why can't it work for employees since they're also people and therefore afflicted with the same psychological pressure points.

It's all a calculation of the individual status: Is their leaving going to cost them more than staying for a lower-than-CPI "raise"?

The "churn" cost to the company doesn't seem to be a KPI in most places. "Seat-filled = seat-filled" may be the equation, with no preceding multiplier as to the knowledge or expertise held in each seat.

I wonder when loyalty to a company meant anything? I mean, I'm sure there are, and were companies where it did. But was it ever a norm?

Good point, it's probably always been just a story and after a certain amount of bitter experience we eventually realise it is not true.

A persistent, rolling wave on the sea of fiction that eventually breaks on the shores of the gritty-sanded beach of experience behind the dunes of which is built the school of hard knocks.

I think it meant something in the West long time ago. And it still means something in Japan. But to have employees giving you loyalty, you have to give them something else in return.

Okay. You might end up millions poorer. But at what cost?

I once had an offer that was 20 percent higher than the current salary I received at that time. I passed on it. I valued working with my coworkers more.

I have a standard of living that is fine by me. I do not complain. My SO was able to go back to university and we still have our house, are able to pay the mortgage, put aside play and emergency money.

Sure. I could already make more money. But to what end? What should I do with it? I would probably increase the amount of money I donate as I did with every raise. I would put more into my retirement fund. Other than that? I would probably buy more crap.

Why should I care about theoretically making millions more (or hundreds of thousands in Germany to be more realistic). I enjoy the fact that I can trust in my colleagues offering help and trusting my knowledge and my opinion. We know each other well enough to trust each other and have a good relationship. We can be vulnerable with each other.

Something I did not have before.

Why would I throw this away just because I theoretically could make a few bucks more?

Wow. I just realized why I value my team/environment so much (and believe me, there are a ton of things I am unnerved about at my current job regarding processes from the parent company).

A heart attack in the US can cost over $1 million to survive. Hope this put things in into perspective.

Yes it does. But how to people manage that don't make these IT job salaries? How do "regular" Americans survive such an event?

Bankruptcy, or they die from not being able to afford care beyond the stabilization emergency rooms are obligated to give (and bill extremely high for) even without insurance or ability to pay. Plenty of people can't afford chemo, for example, and just die.

Think you already know the answer to this… :-)

They don't, or they go bankrupt.

> Okay. You might end up millions poorer. But at what cost?

Not to be snarky but... "millions"? the answer is right there in your question. You are making it seem like getting that extra money is going to cost OP their health or family, when in reality, the higher paying job will likely have better WLB and more interesting technology.

> Not to be snarky but

Yeah. Exactly.

Why should I want to earn millions while doing something I despise. As if money was worth living against my values. Not everybody buys into this ideology.

I actually don't do things purely for monetary reasons. Gladly my parents instilled some better values in me.

To be clear - I definitely have no problem with earning money. I absolutely like to make money if it coincides with my values. But only then.

You don't have to do anything you despise. I love what I do and the impact that it has on society, in my area of work there are companies that pay worse (and have worse wlb btw) than the one I'm currently at. I worked at some of those, and as soon as I was able to, I left, and I don't regret it a bit.

Same here. And there are companies I could probably at least get 50 to 80 percent more. With less secure job, with more cut throat management, with toxic culture and the need to work for clients in military or clients like Nestlé and the likes.

So there goes some of the the reasons I am not working there.

You move past them but there are another ten hiring managers who wouldn't, so it wouldn't make an impact on the guy sending the resume.

People job hop either because the payment is not enough, either the work environment is bad. As a hiring manager, if you want to have stable teams on the long run, you just have to make them happy. Push for decent salary raises and provide them a nice environment.

> generally move past them

> I've job hopped too

Nice double standard, lucky that your current employer didn’t apply your heuristics to you, so you could close the door behind you.

Changing jobs is such a hassle, I suspect most people wouldn’t do it as often if companies were nice places to work with raises to match the market. But that’s harder to do than blame candidates and only hire those that appear to settle for less.

I'm twenty five years in and have about 15 companies now. I finish projects and move on to a new one typically at a new company. Only a couple times were leaving part way through something. Would I be seen as a job hopper?

Are you contract? Then maybe not, if it was "contract ended, moved on". If FTE, yes, very much so. I usually don't care if someone job hops, but that's at best 7 years you haven't stayed at a place for more than 6 months...unless you have unicorn skills that I needed for 6 months I'd not take a chance on you.

I agree. Seeing this resume I wouldn't even ask HR to schedule an interview.

Actually I wouldn't schedule an interview if I needed the skills for six months. I would rather hire a freelance person because that would give me more control and flexibility. Even with the ability to let someone go within 2 weeks in the first 6 month of an employment in Germany.

Yeah, did a five year stint at a company before going contract.


I think the equity/stock performance in the current tech markets is a bigger problem than inflation. Many who received stock grants in the last couple years have had their value cut in half (with some exceptions like GOOG).

Companies were giving equity grants based on inflated, sloshy market values. Why stay at a company where your $1MM (hypothetical) stock grant is now worth $400k when you can go to a new company and get a new $1MM grant at the current cheap market value?

I’ve been thinking the exact same. Changing companies is effectively “buying the dip” because equity grants are always normalized in dollar quanta terms. I’m wondering if the market has bottomed out or not since that’s the best time to switch companies.

> Changing companies is effectively “buying the dip”

well put.

I accepted an offer at a high-growth, public tech company in January. I talked with my hiring manager after the stock got hammered and we agreed to push my start date to April to take advantage.

Can you say a little more about this? You signed an offer letter in Jan and then you were able to get additional equity? How did moving the start date factor in?

An offer typically involves a dollar amount of equity. Not a fixed number of shares / options.

In January, I negotiated an equity grant at a fixed value (hypothetically, $1 million, vested over 4 years). That $1 million value doesn’t change, it’s what my offer agrees to.

The strike price (value per share) is based on the average stock price N days before my starting day. If I started Feb 1st, the strike price would be based on the N days before Feb 1. If I push my start date to April 1st, it would be based on avg stock price N days before April 1st.

I would rather get $1mm worth of stock at $60/share than $1mm at $110/share, for example.

This is a huge part of the dilemma for me. My equity has, on average, traded sideways. Equivalent offers or even worse offers from companies with better stock performance could end up being worth materially more.

> or even worse offers from companies with better stock performance

not as relevant IMO. Overcorrections might be better than current performance. Example, now is the best time to join Robinhood, get an $800k stock grant at $12/share. If it goes back up to $50/share like is was last year then that $800k would be worth $3.3 million.

If you can predict individual stock prices with such accuracy, you’re wasting your time doing anything else.

Staff level. Got 3.8%. Seriously considering leaving. There has been super high turnover of other senior leaders and friends.

Could literally double my total comp if I spent some time doing leetcode. Probably 20% raise without leetcode.

Have some silver (bronze?) handcuffs or would probably be gone already.

> leetcode

Please just don't. You're better than that. Here's a list of companies who don't participate in this bullshit: https://github.com/poteto/hiring-without-whiteboards

At my current gig I was hired at staff level in Nov. 190k (please, let's normalize sharing salaries) . I could do better, but I am passionate about my job for the first time in 10 years. How much do you value happiness?

You're not an imposter. Especially as an HN reader (you're actually interested in your job).

The leetcode companies will pay $500K+ easy for a staff level engineer. A Senior engineer will easily pull $400K.

That’s over a 100% increase from your current rate.

I’d personally recommend practicing leet code, if that’s the thing holding you back… maybe 1 problem a day. By the time you actually decide to change companies, you wont be interview prepping just before an interview.

> 500k+

Oh yes, I know, and I am envious. My soul and mental health is worth more. Solving problems makes me feel alive. Parroting answers does not.

I was somewhat headhunted by UiPath. Huge money. Crazy salary. First round I had whiteboard problems with the most awesome engineer that there is. Absolutely aced that, the engineer missed a meeting over shooting shit about algorithms. Second and third leetcodes were engineers that were clearly running off known solutions, and couldn't rapport over best or alternative solutions. I absolutely made a fool of myself, and I'm really good at that stuff.

Leetcode encourages parrots, and I need to believe that I'm better than that. Arriving at the thesis of a doctorate of a tenured scholar in the heat of a 1.5hr interview is hardly a representation of how valuable an engineer is.

I am so glad I failed. I was kicking myself at the time for tolerating the bullshit (I had a gun/green card issues at my back), I knew that I should have walked away.

Or you can just suck it up for a bit and make hundreds of thousands of dollars. You have to give up a few months studying, not your soul.

Interviews tend to reflect culture: If your interviews are based on leetcode, then on at least some level you're being trained to associate "good at leetcode" with "good at this job."

I generally expect a leetcode interview to lead to either an environment where there's a lot of fires and putting out fires is the only high status thing (at which point maintenance and fundamentals get ignored - no one notices the service that didn't catch fire); or else you get a very snobbish environment where you're expected to memorize answers (at the expense of saying "I don't know" and spending a couple hours doing research)

(Some people are fine with this, of course, but I personally find it exhausting)

> Interviews tend to reflect culture: If your interviews are based on leetcode, then on at least some level you're being trained to associate

Yeah this isn’t true at all. Much of the leetcode paradigm exists because companies want to hire top tier talent, and they want to fill head count at significant scale to quickly ramp up new teams or entire organizations. There might be a better style, but this style has worked well enough for these companies to establish $1 trillion+ market caps, regardless of how you feel about it. And no one wants to risk moving off this because of how expensive it is to hire and fire.

Nope not true at all.

I've worked for some phenomenal companies that treat employees incredibly well and compensate them top of the market. They required some leetcode to get in but other than that, the culture was fantastic and the quality of my peers was/is top notch.

To me it seems like you just don't want to spend a few weeks prepping and you're coming up with reasons to justify it.

> To me it seems like you just don't want to spend a few weeks prepping and you're coming up with reasons to justify it.

I've obviously spent weeks prepping and passed leetcode interviews: otherwise I couldn't comment on the drawbacks I've seen working for such companies.

They really don’t. Interviews are just interviews. They don’t reflect culture even in the slightest. Almost all the companies I’ve worked at had leetcode interviews - and they all had different cultures.

In my current role I had to do an algorithm question. It would be an easier medium on leetcode. I wouldn’t describe the environment the way you have at all.

Ahh, we might be talking past each other: I wouldn't call a single medium-easy leetcode question a "leetcode interview" - I meant companies where that's the primary/only focus, not one part of a robust evaluation.

This feels really confused. You know the leetcode answers are just during the interview, right? Once you get the job, it's a job that involves solving real problems.

So you're telling me that an interview process that filters for rote knowledge yields candidates who who are, in general, not representative of that process?

I've always thought of work as a game. How do I uncover the rules to maximise earnings within boundaries that provide suitable enjoyment and acceptable levels of stress.

Spending a few months doing some leetcode revision to pass some interviews that could personally yields me hundreds of thousands, potentially millions, of dollars, is a very acceptable trade-off. Many people accept that because the risk/effort/reward ratio is very worthwhile.

I've worked in two FAANG companies and the level of talent and skills is phenomenal, an order of magnitude over anywhere else I've ever worked. They all played the game, and continue to play the game, and receive the rewards for doing so.

Choosing not to participate because you dislike the process isn't going to change the hiring process.

What's the point of interviewing someone if it has nothing to do with the job they're actually about to be hired for? That feels really confused to me.

It's a proxy for IQ + willingness to grind to learn a new skill, and those two attributes are highly cross-functional in an environment where job requirements frequently change.

> What's the point of interviewing someone if it has nothing to do with the job

Sounds like there are about 2-300,000 points …

You're literally asking this person to forgo potentially an extra quarter million dollars a year to avoid a couple dozen hours of study.

I tend to agree leetcode is not always reflecting fundamental skills. Some people just freeze even if they are good software engineers. I'm wondering how to assess the ability to write some code and decent problem-solving? What is your approach?

No reason you can’t trade up silver handcuffs to platinum handcuffs :)

Which negotiation tactics did you try?

I'm not sure negotiation is the problem. My company has not been making competitive counters to anybody I know who has left for two years. I feel like a lot of the senior employees are S tier, FAANG caliber, great developers but the company doesn't want to pay for that level of talent in the current market. I also think leadership is completely out of touch with the hiring market.

For example, I know somebody who was told to come with an offer if they wanted a raise. They came to their first line with an offer for 20% more plus more equity. The first line said they would match the salary, but ultimately some exec thought it was too much and only offered a 10% raise. The person left.

I’ll chime in as a business owner. We peg our raises to the SSA cost of living adjustments. This means our bump for employees at the end of 2021 was just under 6%. If current trends continue, likely a similar number at the end of this year.

There are a few reasons I encourage other employers to peg annual raises to the same number:

- It’s usually a very fair number; never egregious for increasing costs. - Someone else gets to do the math, and you have a very easy number to tell prospects in interviews for what to expect. - It helps keep social security solvent.

We also use this number as a guideline for increasing our billable rate during contract negotiations. It has most of the same benefits.

Forgive me if I'm misunderstanding, but doesn't this mean that you don't give your employees any raise in terms of real dollars?

Even in the same role YoY, don't they become more knowledgable, experienced, capable? Take on new responsibilities? Don't they deserve to share in that added value to the company?

Yes. But I (and most of the people who work here) tend to agree: the capital concept of infinite growth is fundamentally broken. We're a small company, we have a flat salary policy (everyone, including the owners, earns the same wage). The salary is enough; it's market competitive without going overboard. We have a profit share so when the team does well, we all do well. We aim to raise our billable rates and our salaries in line with inflation.

It's a simple, sustainable model. We don't grow, but we don't shrink. We exist. That's enough.

I'm sure this 6% raise is just the baseline for everyone. If you are promoted or stand out amongst your peers, then a larger raise is in store for you.

Perhaps knowledgeable, experienced, capable - but not necessarily more valuable.

The value is very much based on what a person does, where they do it, who they do it for, and when they do it.

All those other factors will usually outweigh modest personal growth.

Lame example: being a better typewriter repair person today, working in a barbershop. No matter how well that person does their job, they may not add more value this year than last.

"Pegged" does not mean "Equal To"

> New hires are getting 50% more equity than the total value of my unvested equity. The official line is that inflation is not a factor in assessing annual comp adjustments.

Leave. They either only want you at a discount or you will get a counter offer to consider.

Yes. I (director) normally get (total salary * 3%) to hand out for annual cost of living adjustments, this year it is (total salary * 7%). This is at a ~2000 person US software company you've probably never heard of with so-so pay.

Throwaway for obvious reasons.

And I'll add a thought in response to OP: if you're going to quit because of money, you should be doing it because your salary is too low, not because your raise was too small. Some of the places handing out big raises this year stiffed people last year, and vice-versa.

I agree with that. Thanks for the perspective.

Exceeded - 0.0%


I knew that going in. I helped to secure 10 million in business in 2021. They disbanded our team. To “grow” it. I applied for the “new” role.

They offered less and said it would include 2022 annual raise.

Told by my managers manager they would make me right at the end of 2022 through a bonus. Asked for it in writing, never heard back.

This decrease in total comp plus inflation has seen my real world earned drop by 20% for 2022.

> in writing

Good shit. Make that threat real ASAP.

Circa 2015, Micron have a cost of living adjustment separate from merit increases. That always struck me as a very honest way of handling things. I'm assuming they have continued the practice, which would have been helpful considering how rapidly the real estate market shot up since then.

Last year got raise 3%, this year just got raise 5%, but my TC currently ($190k base + $30k bonus) is still lower than people I know. 2 years ago when I joined, my peers got $250k base already and I was getting $180k base.

Exceeded expectations on both 2 years.

Raise for inflation doesn't even take into adjustments knowledge and experience gained.

Looking at TeamBlind astronomical TCs, I feel I'm not valued enough. Especially not when my peers are making $70k more than me.

The company: we sell terminal.

I am interviewing hard these days. Leetcoding again. It sucks to interview again, because I like my teammates, my manager. And instead of working with my best effort for my employer, now I have to juggle interviews and Leetcode/system design/behavioral preparation.

And I will not stop interviewing until I get a better job, even if it takes me 365 days or more.

Why is it so important though to earn as much as or more money than your peers?

For me it's always been about a sense of fairness, not the nominal amount.

People don't like to willingly leave significant amount of money on the table.

In the end, one of the main reason why we work is for money.

It is not about that, but it is about knowing my value. Am I wrong?

I don't even need to earn $250k like them. If they were giving me $240k I would've been okay. But $180k, come on...

I have family to feed. I am an immigrant with no help from parents. I gotta do what I gotta do.

Knowing your value is actually being the stupidest person in the room. If you are at the top then it is logically impossible to guage your worth.

If you are earning 180k vs. 250k earners who you have nothing to learn from, move on, even if you move to another 180k but with smarter folks.

That's what I'm experiencing now. I have nothing to learn from the $250k earners.

My best advice (in the short term) is to contribute to a huge open source project. At the depths of my boredom I contributed to dotnet, who better to learn from than the people who make your tools? Amazingly bright minds to learn from.

Contribute to React. Contribute to Boost. Contribute to Scala. What are you using, or what do you wish you could to use? Contribute to that.

And how do I get more money? Working for free?

Let me tell you a secret. A friend of mine is the no. 1 maintainer of a very popular OSS. 60k stars. He got paid way way way lesser than me.

I think you've answered your own question: your discomfort in moving jobs is not worth to you the bump in salary you'd get.

It's already been well established by many even in non inflationary times that dev salary is maximized by switching job every 2-5 years or so, subspecialty dependent.

> The official line is that inflation is not a factor in assessing annual comp adjustments.

Then what is?

Engineer comp has exploded the last few years, well past inflation. So if they're not matching inflation, and they're not matching the market (which would be even higher) then it sounds like they just pay you whatever they feel like and hope you stick around.

In Norway we have employers' organisations[0] and unions[1] that takes care of the overall wage adjustment negotiations, and it usually ends up higher or equal to inflation.

Personally, I'm running a tiny IT-consultant company together with six close friends. Because the market is so volatile for us, everyone is paid based on the company's result, with a definite minimum of $120,000/year (2021. This is then adjusted for inflation every year. Everything else is bonus, except a lot goes into running expenses (of course) and a "war chest" for worse times.

[0] https://en.wikipedia.org/wiki/Category:Employers%27_organisa...

[1] https://en.wikipedia.org/wiki/Category:Norwegian_Confederati...

Don't count on it. First of all, "exceeds expectations" really means "meets expectations". It's pass/fail, and you passed. Programmers are interchangeable cogs, if you stand out it doesn't matter because your excess potential will go to waste. In fact, it can be red flag to management because you're trying too hard, you could start feeling too important or better than the rest of your team, and could leave as a result. (That said, many of us can't help but stand out). Secondly, I think it's well-established that developers will leave after 1.5 years or whatever the average is, and to keep someone you really need to throw a lot of money at them. Smart companies (like MANGA) structure their entire culture and process around this. The best people will move on after a few years. The truly great will get pulled aside and get extra sweeteners added. But that's like 1%.

Elite private high school in SFBay (not tech, but all of our families are tech/VC). Everyone is getting raises of max(8%, $6700), working out to an average per-employee raise of 8.6%. Inflation is the main stated reason.

(FWIW this means that my salary, teaching undergrad-level math classes to high schoolers, is going from $74K to $81K.)

Hijacking this with a related question: I’m an independent contractor, and have not yet renegotiated my prices. I just hate those kinds of conversations, but at some point, it is irresponsible to procrastinate. I’d be interested in hearing from other contractors: how have you approached this?

Law firms and accounting firms solved this long ago, they all send out new rate cards effective January 1, [YEAR] during Q4 every year. I would not be ashamed to do the same.

Like this.

The reason (relating to my other comment) can literally be ‘it is 2022 and these are the new rates.’

Often that’s enough reason.

My subcontractor did just that. Handed me a notice matter-of-factly mentioning inflation. I am going to do the same to my client when renewal time comes.

what's the state of agencies these days? back in the day they charged 100% overhead and paid by w-2.

is there a more lightweight model where for say 10-20% they'll handle searching, billing, rate negotiations, late payments and disputes?

i'm not sure if i'd go into contracting again without something like that. it takes far too much energy to be the asshole that is necessary to not get screwed in business (for yourself) and it detracts from the actual work and life satisfaction in general.

As dispassionately as possible.

Be matter of fact about new prices, and try to explain as little as possible.

(But always give some reason. Any reason beats no reason, but a simple even vague reason beats too many reasons.)

This is what people don’t understand about the psychology of persuasion. Especially tech workers. You can validate the following from your own experience. In a decision made by a team where two options are presented, the person who states a simple justification for their proposal (especially if it plays into existing assumptions or just laziness) will more often “win” the decision than someone offering many better reasons for an alternative.

Baffled me for years until I started to understand that I needed only to offer fewer and simpler reasons to get my ideas implemented.

I was also thinking about the same. I work in Germany, non FAANG, so the salaries are lower. I started one year ago.

With the very high inflation numbers, I can't stop thinking that I learned a lot of things, I'm more effective, yet, I get paid less and less. Due to churn and team growth, I also count as one of the people who have been here "long enough" to have context of different things.

My salary today, adjusted for inflation, is significantly lower than when I started.

The company is okay, I work from home most of the time, I go to the office maybe one a month? The main reason I plan to stay until the end of the year is that I got a 50 day holiday (that I'm not sure I could get anywhere else, most places in Germany offer in the range of 25-30). We also have a 10% time for self improvement (learn anything you want).

Lots of people ask about inflation and salary, and they want a raise. The company is delaying discussions about compensations, but I assume we won't get even inflation rate increase.

This forces me to re-evaluate whether I can afford to stay any longer, as other companies offer a better salary.

My current plan is to use some part of the holidays, and the company's self improvement time this year to upskill and leave at the end of the year if I can't get my salary back to market rate.

Not sure if it helps, but here are my stats as a FAANG senior IC. I received an "exceeds" perf rating, a 6% salary increase and one salary worth of RSUs (vests over 4 years). Others I've asked got a 3% raise (with a worse rating).

An entire year’s salary in RSUs? Is this common or a reaction to the times.

I’m not the GP but those numbers are very common for refreshers at FAANG, assuming that it vests over 4 years.

If it vests over 4 years it's not even that much. I recently got 3 times my annual salary in RSUs. Not sure how common it is.

3x salary is very nice. Congrats! Outside of a promotion or discretionary awards / retention award, I don't know of anyone who had so many RSUs awarded at a FAANG. Are you an IC? Would you be willing to share your level?

I believe it's common. I got a similar number of RSUs last year.

What time horizon on the RSUs?

They vest over 4 years

My C-Suite (SMB) thinks they’re the smartest guys in the room. They’re giving us 3% and telling us “it’s a bad idea to peg to inflation because we just had a long stretch of low inflation and we wouldn’t have been able to give you a raise.” I’m gonna go on cruise control for a few months and take as much advantage of PTO as I can then GTFO.

Yep always funny when they try to tell you why the sky isn't blue. Sad part is it works on most people.

> Past a certain level of seniority it's a big ordeal to change jobs, rebuild your network within a new company, rebuild reputation and social capital, etc.

Doubt this is relevant, seems like a red herring. What do you want? Just get paid more and call it a day, right? What level of collaboration do you really want? Just join another company, and if there are leadership expectations that cannot be met, then just get the normal level of performance review so that when you do become effective you can get the higher evaluation later, compared only to your moderate performance earlier. No need to overachieve.

> "inflation is not a factor in assessing annual comp adjustments"

Jesus, that's a tone-deaf official line. Are they also not updating their prices? What are company's annual statements and financial figures looking like?

> New hires are getting 50% more equity than the total value of my unvested equity

Request an increase in equity to the equivalent that a new hire is getting by default. If not, you may have to decrease your rate of productivity (or working hours) in line with the difference between the raise percentage and the inflation percentage.

Yes, our company considered inflation every year (not just the years where the media talked about it). Ultimately, it was the role of those accountable for the budget to make the claim. It all started with the budget cycle and budget increases in a division would be scrutinized. Actual or projected inflation, along with actual or projected growth and other things could all be argued and as budget rolled up to the executive committees, we would generate consensus bands for what the next year looked like. The budget cycle preceded the merit increase cycle by a full quarter, but the budget cycle is what generated the guidance we needed.

The money to pay employee comes from budgets not from comp review. If your company isn't considering inflation they either don't have a proper budget process to gather the info or the accountable individual isn't doing their job to consider it.

It is also possible your division was not given the money to give raises or your director blew the money on growing the team wide in head count rather than tall with raises. At the level the budgets are made, they dont care if your division has 10 well paid people or 100 poorly paid people - your division is given $X to complete Y work packages, the executives don't give a shit how the director achieves it as long as it gets done.

I’m only 7 years into my career and I’m technical roles but not a dev. I’ve never received a raise without a title bump. Are yearly or same-role raises common in general?

I believe this thread is mostly referring to CoL increases, which are commonly determined annually yes. Usually the minimum is tied to ~inflation. If you did well during your last review cycle it'll be a few percent more on top of that.

I'd say yes, I've had one at every company I've worked at for > 1 year, however they're much smaller than moving companies. I once had a 20% raise to get up to market value but < 10% for the rest of mine.

Yes, they are. Typically raises are annual and increase pay by 2-5%

Borderline of being a staff-level machine learning engineer at a large technology company, and despite getting an exceptional review (and completing a major product delivery), I will also be getting a sub-inflation comp adjustment.

Already started interviewing, early indications and offers suggest a 40-60% pay jump is within reach, possibly more with equity. I just don't understand why companies do this to themselves.

Not this year. Expectations were inflation was transitory. You don't budget your wage increases (which would've happened in Q4 last year) based on transitory economic conditions.

This round I expect the usual 3% base plus a small discretionary bonus pool and have been setting that expectation with my staff accordingly. Depending on how this year pans out I expect the 2023 raise pool will factor in persistent inflation.

> You don't budget your wage increases (which would've happened in Q4 last year) based on transitory economic conditions.

Wage increases are as transitory as inflation numbers. If the inflation per year is 3% then 7% then 3%, you don't skip the 7% just because it was an outlier.

Only an uncritical look at the situation would one think that the inflation was transitory.

Tell that to central bankers last year.

You might not personally agree with it but that was the prevailing wisdom amongst economists until fairly recently. The US Fed in particular didn't start discussing rate increases until early this year, well after FY 2021 was over and 2022 budgets were set.

Your post is based on a belief the central bankers are some all knowing, objectively factual, 100% competent organization.

The transitory inflation parade was so ridiculous that it turned into an internet meme. It’s just like the Fed was saying inflation was 2% when housing was skyrocketing across the country. They’ve literally redefined their measures to the point that their measures have become useless and a meme.

They're very trustworthy and have society's best interests at heart (they actually think they do, with this being a prime example because not saying that inflation is transitory could have provoked some kind of panicked reactions that could have caused more fundamental problems for society).

The, admittedly few, sources of economic information I regularly seek out were saying that "transitory" was a joke from the first time it was mentioned. The combination of money printing, pandemic cheques, national debt, 0% interest rates, low-to-zero percentage bond markets (and probably numerous other things I can't remember right now) meant that raising interest rates could cause more harm than good (although it's inevitable sooner rather than later), and the same goes for slowing down the money printer.

Using the word "transitory" was a one-use-only lie acting as a pressure relief valve, and it was at least semi-obvious to those paying attention.

Regardless, it is probably moot now. The impact of oil and embargo will have wide-ranging inflationary effects.

Inflation is just one factor in your comp, and not the most meaningful. Some companies are thinking about inflation for employee compensation and some aren’t, their revenues are also affected different ways, but this is not really your concern. The main question for you is whether you are underpaid overall and could get more elsewhere in absolute terms. If so then you have leverage, if not you can still bluff but it’s a dangerous game that depends primarily on management’s perception of your value (so don’t overindex on your internal monologue).

The other piece is equity, and the detail you’ve given here is insufficient. Total new hire grants are irrelevant, the question is how much are you vesting annually and where is the stock trending compared to other companies you could work for.

Of course there are other factors like how you much you enjoy the environment and work, but the important thing is to consider the holistic situation and not get hung up on a narrative about inflation which is at best an excuse papering over broader feelings you are experiencing.

Remember. American companies chose this path of violence and turned all their employees into mercenaries. It is your duty to jump ship.

Definitely, salary compression issues cause big problems and the worst part is that they cause the worst retention issues with the most tenured, most valuable employees who have knowledge of your company or codebase that can’t be replaced. Making sure that they’re not taken advantage of is what encourages a lot of people to job hop. That’s worse for employers, but it’s also arguably worse for employees who actually like their jobs, when compared to a situation where their compensation would keep up with the market. If you like your job, switching companies every 1-2 years to keep up with market introduces risk and many people would be happier if their comp just remained competitive. (Shameless plug I work at a company that has a product for creating compensation bands which is a good buffer to salary compression. link if this would be helpful: https://www.aeqium.com/)

Last year's was delayed by half the year, and was 3%. This year is 3%.It is becoming harder and harder to justify staying.

They obviously don’t care if you stay, everyone knows what the market is like right now

At the very least, you should interview to get a BATNA in hand with which you can try to negotiate a more significant raise.

"If you can't walk away from the terms of a negotiation, then you aren't negotiating. You're just working out the terms of your slavery" [0]

[0] https://www.youtube.com/watch?v=ADobcQEhrzQ

My company did a 5% across the board raise late last year to make-up for inflation, since before then raises were ~2%, roughly keeping up with inflation from previous years(in Canada). This raise was on-top of the additional raise we will be getting this year in March, so it does seem like my company currently cares about ensuring we at least keep up with inflation. The expectation from talking with some coworkers is that they will continue this trend and at least give us a raise that's keeping up with inflation, although I have no proof of this. I do think you're getting screwed over here, getting a sub-inflation raise when you're exceeding expectations sounds awful. Maybe compensation works differently when you're higher up (maybe because you have far more equity/bonuses), but it couldn't hurt entertaining other offers to see what's out there.

This is a slightly controversial opinion, but I'm opposed to company wide percentage increases. 5% for someone on 100k is 5k. For someone on 500k it's 25k. So there's an unintended consequence of increasing pay inequality between the lowest and highest paid staff, increasing any gender equality, etc.

If the intention of an flat company-wide increase is fairness it should be a fixed dollar amount that's the same for everyone. I've never seen a company do that though.

They're not aiming to be fair. They're aiming to reduce turnover. If they gave a flat amount to each person that would matter more to the lowest paid. They would in effect be penalising the higher earners. That's not "fair" either.

I don't really agree. There's no good reason why "5% for everyone" should be considered fair while "$15k for everyone" isn't. They're both justifiably and rationally fair. The only difference is that one is calculated based on existing inequality, and furthers that inequality, while the other doesn't. People who benefit from that inequality like to argue that its fairer, but that doesn't make it true.

I'm sure that any company that implemented a policy like that would lose some senior staff (maybe not such a loss if they're people who think perpetuating inequality is good), but the junior staff would be much more likely to stay. If the point is staff retention, then you have to consider which staff you want to keep.

Yes, there are multiple possible bases for judging fairness.

You want to keep the higher paid staff more than the lower paid staff. That’s why you pay them more.

You want to keep the higher paid staff more than the lower paid staff. That’s why you pay them more.

Which staff you want to retain depends on a lot of things other than seniority and pay, but that's not the point. More senior staff are already being paid more.

Let's reframe this problem slightly. Imagine you have two people, one on 100k and the other on 500k. The difference in 'value' is measured as 400k. If you give both of them 5% raises, so one is 105k and the other is on 525k, the difference in value is now 420k. Why has the pay differential between junior and senior staff increased by 20k now? If you don't fix it, over a couple of decades you're going to be paying your junior staff an order of magnitude less than the seniors. How do you justify that?

Here's another example. Imagine there's a company where seniors are paid slightly different amounts despite doing the same work. One is on 200k and another is on 180k. If you give both of them 5% that's really giving the higher paid one 1k more (10k vs 9k). You can't claim that it's fair to give someone a bigger pay rise on the basis that they already earn more. That makes no sense.

Blanket percentage-based pay rises don't work. Companies should be more intelligent and work out more nuanced solutions.

> You can't claim that it's fair to give someone a bigger pay rise on the basis that they already earn more. That makes no sense.

That it does not accord with your intuitive sense of fairness is not an argument that other people have to bow to. Treating everyone the same according to a blanket rule, uniformly applied, is absolutely a kind of fairness.

Fairness is a subjective judgment, not a property of the universe. Which criteria to be used in making decisions is a choice, not something immediately obvious.

Interesting perspective, haven't thought about it like that. I think this % increase across the board was just so everyone is still making the same amount relative to the price index, so might not be applicable here for that specific increase. However, I believe my company still does approximately the same raise % for everyone in a particular org/department every year, which has the troubles that you mentioned.

interview elsewhere and offer your employer the opportunity to match.

if you have to rebuild your network to be effective at a new firm, anyone they bring in (at a higher rate) will have to do the same

What company are you at?

Amazon is increasing pay for many technical jobs, although specifics haven’t been communicated. They’re selling it as a large bump for everyone, although I already understand it’s mainly to retain talent or at least match inflation. We’ve underpaid our talent in the past compared to competitor companies.

Amazon's pay adjustment was long overdue, and not driven by inflation. The base pay has been capped for so long, and the comp model made an assumption (a historically generous one) about stock performance that hasn't held true for quite a while. That together with their vesting schedule, something had to be done, in order to compete for talent.

On top of all that, Amazon's 401k "match" had a FOUR year vesting cliff iirc.

Mine is 3 years. I just edited the offer mentally to say "410k (with mega backdoor!) but no match."

That's horrid.

Got 9% bump in base, and RSU top ups - wasn't expecting any RSU, given our stock performance (yes, even with the market turmoil, it's up a lot since I joined).

Biggest effective raise I have gotten without leaving for another company, and I considered myself obscenely compensated to start with. Pretty content.

Unless you have a key position in a competitive FAANG company, the answer is always the same. If you want a real raise, change jobs. Historically, US companies have set this precedent and it hasn’t changed for anyone but people working in either FAANG or certain fintech or finance companies.

This micro-behavior is what accelerates inflation. Will be interesting what the next few years bring.

On the other hand, I sure won't finance the economy's stability to my detriment.

Can you say more about this? Thanks

I think the easiest way to get an intuitive feel for this is to look at the stories of hyperinflation, because they're always literally exactly the same. The only thing that changes are the catalysts. Zimbabwe [1] being the contemporary example.

The first step is some event triggers a reduction in supplies for some commonly needed good. In Zimbabwe they chose to expel white farmers and replaced them with black farmers, many of whom who had little to no experience in farming. Food production rapidly plummeted and many farms simply ended up being completely abandoned.

The second step is rising prices as a result of the first. Wheat isn't inherently worth 5 coppers. It's worth however many coppers people are willing to pay for it. If there's half as much wheat to go around as before, people are going to be willing to pay more to ensure they are the ones who get their wheat.

The third step is an entity, usually a government, trying to solve the problem by attacking the effect rather than the cause. The government of Zimbabwe saw many people were quickly becoming unable to comfortably afford food. And so they responded by giving people more money aiming to bring them closer to their previous buying power.

The fourth step is a new increase in prices. This time the supply of wheat has stayed the same, but people suddenly have more money to bid on it. So again people are willing to pay more to ensure they get their wheat.

The fifth and final step is: goto the third step.


The end result is Zimbabwean's becoming quite capable at big figure math alongside the complete collapse of their economy. For instance we saw the introduction of the world's first $100 trillion bill. In a nutshell, giving people more money to combat inflation is like trying to put out a fire by dousing it with the only liquid you have - gas.

[1] - https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

The other major factor: exporters from foreign countries don't want to exchange real goods with Zimbabwean dollars. However, all countries in the world want to exchange real goods with American dollars or Euros. That's the advantage the EU and the US have. Hence, the US can face less risks with printing money (or adding zeros in electronic account) than, say, a third world country like Zimbabwe, India, Ghana, etc.

Lets call a properly measured inflation I. Let I_z, I_usa be inflation of Zimbabwe and USA respectively. The first derivative of I increases faster in third world countries than in those countries with world reserve currency status: d(I_z)/dt >> d(I_usa)/dt. That's why the US likes to project military power, that's why the super wealthy class in the West support wars to project the power in order to control the first derivative of I.

It's simple. Inflation is driven by increasing the dollar amount for, well, everything. He is correct in saying that this is what drives inflation: If every single thing is worth 20% more, it's really just that the dollar is worth 17% less.

"Inflation" is shorthand for 'price inflation' - every single price and dollar amount goes up, and, when it happens too fast, can tear an economy apart (e.g. 1942 Berliners packing cash into wheelbarrows to go and buy bread).

EDIT: grammar

In very simple terms, if everyone is getting paid more, then all of the stores can price everything higher... and so on. It's a cycle.

It's not that they _can_ price everything higher, they _must_ price everything higher. Everyone getting paid more includes the stockers, managers, bakers, truckers, farmers, everyone involved in getting (eg.) groceries to you.

Inflation is significantly a psychological phenomenon: If people expect inflation, they want more pay, and sellers charge more without getting complaints - they just say the magic word, 'inflation', and people accept it - a psychological phenomenon. I've heard that used to justify 25%, 50% price increases (inflation is ~7% max). :D


Combine that psychological effect with our current post-truth world of disinformation campaigns, and it seems to me that people can create inflation, or create more of it.

Isn't war a psychological phenomenon? After all, some leader or a group of people think about starting a war. And it has effects in the real world. The issue: how backwards one has to go find the primal casual agent?

The pen is mightier than the sword, because the pen can move armies and nations.

If you're happy with your role and your life around it, why not just not care about the money?

What does "total value of my unvested equity" mean? If you are 3 years vested in a 4 year grant, then it sorta makes sense that new employees' 4 year grants would be worth more than 1 year of your grant.

With the 5.5% increase, is your compensation competitive with similar roles at other companies? Are you making enough salary to live a comfortable, satisfying lifestyle? Is the equity you have increasing in value over time better than, say, a mutual fund or ETF? Are you concerned you're not being paid your worth, or are you experiencing FOMO and anxiety because it feels like the economy is failing?

Serious question, how do you deal with FOMO? I’ve been at FAANG for about a year, coming from startups and lower-paying companies before.

Internally it’s nothing but complaints about comp and attrition, but to me it’s the best I’ve ever been paid. My idea was to stay here long term and learn a ton before thinking about leaving, but does anyone do that anymore? Maybe I’m being naive.

You have a good plan.

Complaints on comp and attrition, I've seen literally in every large-ish company I or my friends have worked at. It's a lot of politics.

Since your at a FAANG, learn a lot, build network, and that shiny company name on your resume will help you move later when the time comes.

Thanks for the advice and affirmation. I’ll stick to the plan.

I've had friends at FAANG companies get FOMO and quit, then come back within a year because the grass was browner. They've taken a comp hit in the process, but still made a firehose of money like anyone at a FAANG. People love to complain about relative inequalities without fully appreciating how good of a situation they have within society, so actually trying new jobs once in a while can be healthy and eye opening.

I've been fortunate enough to always leave companies on good terms while generally happy there. I've left for exciting new projects and challenges, rather than for compensation. Part of that is I try to be an agent for change when there's something I am frustrated with. I've also always given several months notice. I also have the mentality of committing to something for at least three years.

I haven't stressed out about compensation. I've always negotiated aggressively before accepting a job offer, and then just not worried about it. I've leaned toward equity over salary, and found that my salary naturally increased over time to stay competitive anyway. I have a reputation for being straight forward, honest and reliable, and that's paid off more than any negotiation or job change. I would have probably been the wealthiest today if I stayed at my first job, making a relatively comically low salary, but I wouldn't be as good of an engineer.

There are always lots of over-entitled loud people at FAANG/friends when it comes to conversations about compensation. At one point, my company was rated as one of the highest paying companies on levels.fyi, and people were still complaining about pay in internal meetings.

I have to agree. In this case it’s more an internal thing: I’m 32 and took a few years off software to pursue other things (where I spent most of my time writing software as fortune would have it), result being a lot of my colleagues are half a decade younger than me having settled into Staff Engineer positions.

I don’t feel that I should be anything higher than L4 but at the same time it’s hard not to feel the FOMO and insecurity that comes with being “behind” in a hot market.

Big companies often ladder refresher grants so you always have a lot of unvested equity just over the horizon.

Yes but those refreshers at best total 70% to at best 80% of what new hires are getting. You’re always going to get stiffed for sticking around longer.

What about bonus? Your manager should be able to get you a bonus aside from a raise. The latters's supposed to be based on market rate, the former is a catch-all which can be performance, inflation, whatever. It'd probably only be another 3-5% though.

There's usually only two choices once you get top seniority in your position: move to a different role with a higher salary cap, or find another employer. Personally, if I was happy in my role, I wouldn't leave just for money. It's hard to find an actually enjoyable place to work. You might be really lucky and just have GIG syndrome.

I was getting constant praise, and was ranked #1 in my group. This of course did not translate to raises, for which I was getting in the low %2 range. Even when business was doing well before the pandemic, raises were meager. Promotions were always "3 years" away. I eventually had to quit and move to another job to get paid market rate. It's strange that companies think that they can pay new-hires market rate and give up on the employees that made their business.

Airbnb, no

Not to single them out or anything. Previous companies have never taken into account inflation for perf review.

The only salary bumps I've gotten that are worth mentioning are from changing companies and negotiating a better offer.

Yes, because inflation.

Similar for me. I also work in a non FAANG but big, well-known company. This year's average salary increase was set to 2.7%, despite having a "record year" and despite last year only getting 1.2% "because of Corona".

I decided to leave and I am already in contact with some headhunters that were already nagging me on Linkedin etc. Good thing it's so easy to find a new job these days. Companies should try harder to hold their trained employees.

In the long run (maybe after my next job) I might turn to freelancing.

If tech employers don’t consider inflation when considering compensation increases, they’re encouraging their employees to start looking elsewhere. Employees will then realize if they’re not being paid market value. Either this is myopic on the part of employers or they want a reduction in staff or churn in staff.

After too many years working in corporate white collar factories, I finally realized how much I was getting screwed. Job hopping worked for me. But the best thing I ever did was to move into the consulting world. Almost doubled my salary!

Are you me? Exactly same.. no, perfectly exact thing (to the same 5.5% and every detail there) happening to me.

As much as I'd like to help people here, having come from a country where for a long-time inflation was so expected that it was baked into everything, I can say, we don't want to assume that much inflation into salary increases. That's a spiral that can quickly go out of control.

I don't think I've ever worked for a company in Germany that had the inflation as a part of any compensation review, actually getting more at all every year was kinda rare. As this is only like 5 companies in 20 years I wouldn't want to claim authority though :P

I live in a country with crónica inflation (argentina) and the fact is the norm is if tour employer doesnt give a raise ay least that cover the inflation the market forces Will intercede and You are going to start interviewing in others companies.

Do you like your job, your boss and your team? That's worth something. Are you still growing in your position? What's the name of that book? "Be So Good They Can't Ignore You."

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