- A culture of burnout (really, really bad death marches, mostly because upper management had fucked up by dithering about what products to make)
- A lack of respect for engineering quality (when the build for your project is broken for weeks at a time, you'd expect management to get a clue -- I mean, what are managers for? -- rather than ask about how things are going with the schedule)
- A lack of respect for your time, realized as a reluctance to buy equipment (I got my build times down to two hours, from four hours, by buying my own computers. Yup, I probably spent $5K on computers while I was at MS because my managers didn't see the benefit in buying faster hardware), and by scheduling tons of nonsense meetings.
- Politics (oh God, the politics). MS needs to fire about half of its "partner" rank people. There are good eggs there, really smart people, but then there are the ones who . . . aren't. (When they do get around to axing half of the partners, I'm betting it'll be the wrong half).
A year and a bit later, I'm at a place where they realize that the most valuable thing is your time, and equipment is Not A Problem. It's a great thing when you're the bottleneck.
Let's say that a "good" desktop computer is $10,000. Just load the thing with enterprise scale SSDs, fast spinning disks, CPUs, RAM and so forth. I think you'll be hard pressed to spend that much on something that you'd want near a desk. (I'm assuming that you've already bought the developer the two or three large displays and a decent graphics card).
Let's say this gets builds down from 4 hours to 1 hour, and a developer has to do a build like this on average once a day. At $80/hour, this takes 42 hours, or maybe two months (spread out) to breakeven.
By NOT buying your developers great machines, you are costing your company money.
"But that comes out of a different budget!"
Who cares? The shareholders (who the management chain proxies) should be delighted that developers have faster machines.
Of course, multi-hour builds are nonsense, too. MS has a whole cloud infrastructure that they should be leveraging the crap out of, to make sure that developers are the bottleneck again. I'll bet they could get Windows to build inside ten minutes, if they put the right people on it.
Were you there when Ballmer promised every employee would get a new windows 8 machine? I am still shocked at how they could mismanage that so badly - almost everyone I know was angrier about their equipment after that effort than before.
On the other hand, if you're an employee and not getting paid what you think you're worth, don't jump to the conclusion that you're being exploited or disrespected, and don't jump to the conclusion that you have to leave in order to get market rate. If you're happy with the team and with the work, consider just asking for what you want. Founders are crazy busy and, believe it or not, sometimes lose sight of "little" things like comp. Talking to them may be all it takes.
At my last startup, I was given the opportunity to begin as a junior and work my way up. I gave them a year of very hard work to the point that I feel I was proficient enough that I could talk development with people 3-4 years my senior and stay on level. I asked for a raise (as prior to that I was making an obscenely small amount, especially for San Francisco).
The CTO, who was a generally amiable guy, said "No, no, I get it, America is a capitalist country, you guys don't value loyalty" (he was from another country). I have never been so thoroughly insulted by what was probably meant as an innocuous statement. He told me he had to talk to the CEO about it. They stalled and stalled and the HR guy told me I should 'worry about learning more, don't worry about your salary'. Finally I confronted the CEO about the delay. He told me he needed to run it past the board, and that I would need to go through a two month 'trial' period before they'd authorize it. Little did I know he was himself half the board.
This entire time there were posters up in our kitchen offering $40k to people who could refer 4 developers. But my piddling little raise to market was being stonewalled because they felt they could get away with it.
I am still angry with them because they essentially forced me to go looking for another job, despite my absolute devotion to the team. I almost instantly got an offer almost double.
Disrespect and exploitation are absolutely prevalent. You can ask for a raise, but you'll never have leverage until you have an outside offer.
> The CTO, who was a generally amiable guy, said "No, no, I get it, America is a capitalist country, you guys don't value loyalty" (he was from another country). I have never been so thoroughly insulted by what was probably meant as an innocuous statement.
Um, no, it was not innocuous--that was your misread. Invoking your loyalty in any context other than purely positive is an "out the door" flag no matter the culture.
Yeah. Loyalty goes both ways. A company has no right to expect more loyalty than they're giving their employees. And a loyal company should give you that raise even before you ask.
That said, while I've worked for some really cool companies, with excellent contact with management, usually the way to get a raise was to get another job. (And usually I was ready for a change anyway; I shouldn't stay too long at the same place, no matter how much I like the people and the company.)
I had something similar to me happen. I came in at a very low salary (which I would have rejected had I not been desperate at the time) - I already knew almost everything I'd be doing in that job, but they weren't sure about verifiable experience. I worked hard and tried to take on additional responsibilities and skills, but they didn't want me to (always a huge red flag in hindsight), my scheduled pay rise was repeatedly delayed for several months, then around annual review time, nobody got any raise at all. That was the point I had enough and quit - I'd already witnessed several of the best people there quit for better paying jobs prior to that.
I still consider that company a nice place to work for, with nice people, but the work itself was unfulfilling and the pay very poor.
...And when you have the outside offer and talk about it, you shatter any remaining trust your bosses have in you, so you'd better take the offer.
I'm sorry for your story. I feel the same about the industry. When you're young, job hopping is pretty much the only way to get your value, and it will let you see many different places.
Your anecdote does not equate to "disrespect an exploitation are absolutely prevalent." You didn't actually build an argument for that statement, you provided one personal example. It sucks you had that experience, but just because you had it once doesn't mean it's a bad idea to ask. Bosses are people, and people come in all kinds - some honest and respectful, some not. Asking has the small potential downside of being a short-term time-waste, and the large potential upside of letting you continue to work at a job you're familiar with, with the people you like, at a more satisfying salary. Seems like it's worth simply inquiring about your options.
I generally disagree. I always feel that it sets a bad precedent by relieving those in charge of having to take the initiative to recognize and reward the efforts of their employees.
If they are too busy to make sure I'm not having to question my value, I would rather find another employer that may not have this issue.
Having said that, money is one of the last things that cause me to leave a job. If I enjoy what I'm doing and the people I work with, it usually doesn't matter (as much) what raises I receive.
I also recognize everyone is different. This is just my preference and what works for me.
> "Having said that, money is one of the last things that cause me to leave a job. If I enjoy what I'm doing and the people I work with, it usually doesn't matter (as much) what raises I receive."
I had a conversation with a friend very recently about how our company handles counter offers.
"They don't believe in counter offers."
"Don't... don't believe in them? What's there to believe in?"
"That's what they say."
"That's the dumbest thing I've ever heard!"
"I dunno, it kinda makes sense to me."
"What?!"
"Well, the reasoning is if you're only there for the money, then why would they want you?"
"It's a JOB! Of course I'm there for the money. Otherwise I'd be doing it for fucking free! What if the money is the only thing keeping me from fucking leaving?!"
"Hm... yeah, that's a good point."
I don't know when or how one's passion became some sort of counterpoint to their compensation. Just because I love what I do doesn't mean I don't deserve more money. It means I'm lucky enough to be driven far beyond most, and endowed with a greater amount of ability, and thus a rare and valuable member of the team.
The best part is the CEO, the executive teams right down even to the middle management won't move a match stick unless there is some bonus, stock incentive or a pay component attached to it.
Yet they expect nearly every one else shouldn't have any financial expectations at all.
They only do that because some people are destructively naïve and buy it hook, line and sinker. No one actually believes those things. It's just a clever strategy which is more palatable than "no" if you don't read between the lines.
To me, money was always the least consideration. The content of the work, how much I'd learn, the atmosphere and co-workers, open source or not, that was generally what made me pick one job over another. Often when I had several offers, I ended up picking the lowest.
And yet, when I've worked there for two years and learned a lot and did some good things there, and I still haven't gotten a raise, I don't feel appreciated. And when I don't feel appreciated, I look for something else.
In my experience, I've found that the times I want more money falls into a few categories:
1) Cost of Living
- This can change bc of higher rent, getting married, having a kid or a million other things
2) I'm unhappy about something else
- When I have another issue with my work, it often leads to what many people have said in other comments..."I'm not paid enough for this" which can take many different forms. Addressing this is much more important than whatever financial increase you do or do not get in asking for it.
3) Envy
- If you find out all your peers at similar stage companies are paid more than you, or that your coworkers are, you'll probably want a raise.
In my experience, #2 is actually the most common that leads you leave and even if you get the raise, a manager needs to make sure they treat the condition (whatever is bothering you) not just the symptom (I want more compensation for my work).
Huh. It's easier to go find an entirely new job than to just knock on your employer's office door and ask to have a quick chat about your compensation?
If that kind of interaction makes you uncomfortable, I guess you probably should go find another job since you might not have a great relationship with your company.
I think this is somewhat related to the concept of 'managing upwards'. While it might not be hard to tell people "I should be making more money", it should also not be difficult for a good manager to recognize "hey, this guy should be making more money". For me, there would not be a scenario where I'm asking my manager for more money but I'm also satisfied with the relationship with my company, because part of my job satisfaction in relation to my company is recognition of my efforts in the form of salary compensation.
I (personally) feel that there's an implicit understanding with my employer, wherein my above and beyond efforts will result in increased compensation. If I feel like I've been clearly outperforming my compensation level and that's not recognized, I'm more likely to search for a new job than to ask for a raise, because my current employer has already failed to meet their end of the bargain.
This exactly. It IS easier because when it comes to a new company, you've only got one problem - the salary. When it comes to your existing company there are two problems. The money, but also the fact that you're having to ask for it. The more you deserve it the more awkward the conversation becomes since the ask itself is evidence of a management failure. In extreme cases, making the request can be as uncomfortable as having to reapply for a job you've already got.
In a well-run shop, managers have a very good idea as to who is worth what, and how much the company stands to lose if they lose good people. Staying one step ahead of this curve is a fundamental part of their jobs as a managers.
Obviously, the rules are a bit different in an early-stage start-up where the founders are doing everything at once and hoping something connects. But once an operation has hit cruising altitude, you really shouldn't have to ask for a raise if you're actually worth what your asking.
"I (personally) feel that there's an implicit understanding with my employer, wherein my above and beyond efforts will result in increased compensation."
Your expectations around compensation should be based on explicit not implicit understandings. Making assumptions about how your emploeyer is going to make decisions about your compensation is not only likely to lead to disappointment, it's a poor way to maximize your salary if that's what you're interested in.
Most startups will hire (or push for hiring) a "senior person" at the "maximum rate allowed by the board". This includes a mix of stock/yearly comp.
Depending on hiring circumstances you can potentially push this. If there is a need, the will find a way to make things work out.
Once hired, from the employees perspective, it becomes a game of maintaining expectations. Unfortunately for the employee, in the case of startups (especially early), the expectations are quite high and any extra effort is tied in to the initial offer/hiring agreement.
Early stage startups are a gamble. There are often unexpected twists and turns. If you agree to X and Y at time T, three months down the line, the expectations at time U may be much greater.
As a non founding employee, your initial contract starts when you join with the expectations around the company when you joined. Carrying those same expectations along the way if the company is not growing in the same manner as you expected is a detriment to yourself.
When you realize this, it is time to re-evaluate and decide what is right for your current situation.
Does if fit your initial agreement? Then maybe you continue. If it doesn't, you need to consider renegotiating or looking elsewhere...
Companies aren't interested in negotiating promotions or pay increases anymore. I went from making $30k/year 4 years ago to $200k/year now, and not one time in that course was it from a raise.
And people say jumping from job to job looks bad. If it does, I sure as shit haven't seen that side of it.
Some companies are willing to keep up, because they don't want to replace employees, but for most, it's cheaper to hire someone underpaid for a year or so until they jump ship, then repeat.
In my experience, the issue that I see is that after asking for a raise or more compensation the response is that "they will look into it". Weeks later, no one gets back to you. At which point its time to move on.
A ll too common as a way of ripping people off, unfortunately.
Sometimes they are actually trying, if the problem is internal politics preventing paying staff properly, but more often they're hoping you'll either forget about it or leave instead.
Both are good reasons to leave. It doesn't matter if your direct superiors disrespect you, or disrespect is more institutionalized higher up the chain.
I have a great relationship with my company - I enjoy my job, I get on with my colleagues and my boss - but it's still incredibly socially awkward to ask someone for money. (Whereas interviewing elsewhere means they've offered money first)
It's not that it's easier, it's that most likely the raise will be 20% minimum, and you're probably looking because of other reasons in addition to the money ("I'm getting paid chump change to deal with this? I'm done"). If you're really good, all it takes is a few phone calls to a recruiter you already know, an interview that week, and your notice on Friday.
Depends. My best job came from a recruiter. In a larger company, the people who you'll be working with and the people managing the hiring process aren't the same. I'd imagine that transistion takes place the second there is someone to handle HR things. Afterall, the team that's hiring probably wouldn't be hiring if they had time to deal with it.
"If they are too busy to make sure I'm not having to question my value, I would rather find another employer that may not have this issue."
Honest question: have you quantified your value to your current employer in dollar terms?
A lot of people I know say they're worth $x because that's what another company might pay them, but I can count on one hand the number of these people who actually did the math on how much revenue/profit their employer derived from their work.
At a previous employer, I did some work, over a three year period. (Custom reporting system, nationwide, 10,000 people fortune 500. The system was used by hundreds of managers and above, and professional workers (think 7 years of college or more). Shortly before we were laid off (the IT dept was outsourced to Cognizant), there was a bid for re-writing the system. Cognizant came back with a quote for $20,000,000. Yes, that's 20 million dollars. That was in late 2008. As of last year, a director there told me they are still using my system, 4 years after I left, and zero maintenance had been required.
I made 65,000 per year for four years. What do you think I should have made, money-wise?
At my current gig, same thing. Billions of dollars at stake, and I single-handedly design, build, deploy (one-click -- the power of scripting) and maintain systems used by over 1000 people, from executives to line workers. What is my true worth to the org? Do you think they would pay be $900,000 a year? Even at that rate, they would still make money off my work.
I can't tell you what you should have made but unlike a lot of the people who are constantly whining about how they are underpaid because they have a friend at Google making $150,000/year, you actually did the math and can argue for your value. :-)
You need to save up enough money that you can live for a year without an income, quit your job and start consulting. At least if money is important to you.
I see where you're coming from. In a way, you have a point, and in another, you don't :) You've provided massive value to the business, but on the other hand, other people made your job possible probably by working pretty damn hard.
Start your own business and keep all the profits you earn.
You're right: other people made my work possible. They put computers on my desk, paid for (nice) offices, paid the power, air conditioning, water bills, stocked the coffee room, emptied the trash, etc. They also insured the software was licensed, the laser printers were fast, stocked, and maintained. They paid the networking bills, etc. All these things I would have to do myself if I ran my own business, and I could not possibly do them as well and as cost-effectively as people who specialize in that work.
This leads to why small businesses are hard: the owner has to do everything themselves, and at many things, they are bad.
At my current company, I give the car to the free valet in the garage, grab a cup of tea, walk to my desk and sit down and work, without worrying about all the infrastructure stuff.
> They put computers on my desk, paid for (nice) offices, paid the power, air conditioning
True, but more importantly, before all of that, they made something people want to pay for and acquired enough customers to pay for that shit, and for lots of salaries too.
That's a good accomplishment, unless they're part of some government-supported cartel etc. There are plenty of those too.
Most employees don't directly contribute to revenue and are largely replaceable. Assuming their position cannot be eliminated, that is, the decision to have that position in the first place is reasonable, they are worth approximately what their replacements would cost in salary and training. Thinking of your worth as being largely determined by what another company might pay for you (or a similar employee) is generally reasonable, unless you're directly responsible for some portion of the revenue in ways that are not replaceable, which is true of very few people.
If you're trying to estimate your worth to your current employer, you may be better off estimating how much they would pay for a replacement (and how urgent the search would be) if you were to leave.
The value to another company, whilst interesting to see if you're at the right place, doesn't necessarily help figure out your negotiation position if you'd prefer not to move.
I notify my employers every time a recruiter pings me. I often sell consulting services for my company to the companies recruiters put me into touch with.
As I mentioned below, it is a mixed bag. But if you are feeling that your current situation is not amenable to what you can actually make, if it makes sense (culture is open to it, people have been busy, environment has changed) -- talk with your manager and above (founders) (depending on your position) first.
The minute you enter the realm of "counter offers" you have more than just business interests at play.
It is a pretty well known fact that in many cases the only way to move up or get paid more is to move to a different department, team, or company. Hell, there are so many cases where people leave the company because they weren't getting paid well only to be replaced by people who cost the company more than what the person wanted in the first place.
It's a silly thing, but sometimes you have to leave to get what you want, even if you shoudln't have to.
I don't think so. If founders don't care about their employee in the beginning they wont care about you later either.
Your job security = value to you add to the company - what you are paid.
Make sure it is 0 at all times. Or have some written assurance from the employer (such as stock options) that the meager pay now will be compensated for later.
I have a question about your job-security formula and your requirement that it balance out to "0 at all times." If you add value X to a company, and if (as you seem to require) the company must then pay you X in return, what profit does the company make from your employment? And, if a company cannot profit from hiring employees, why would any employees be hired?
I'd agree with the GP. Heck, target a negative value to the company.
Realistically, you're going to end up with some small ROI. Let's suppose you end up with a 1.05 ROI for the company. For every dollar the company spends on you -- not just your salary and benefits, but also the cost of a desk for your butt and a manager for your ass and an HR department to cover their behinds when you start thinking too much about your coworkers' -- then they make a $1.05 back. If your company's owner has a hundred employees, he'll make five times as much as you, for doing nothing but owning it. If they employee ten thousand people, he takes home 500x your pay.
Why do you think your employer deserves more? Why should he get a 2x or 10x ROI on your labor?
For any positive value of Z, there will always be another employer willing to hire me where Job Security = Z1. Z1<Z. Thus in a good market the value will tend to zero.
You are mistaken to think that Company's profits is a the sum of value added by each of the employees. I would say company's real profit should be the additional value generated because of synergy between the teams. For example few ordinary individuals can deliver extra ordinary results as a team.
No employee is paid what they're worth at a capitalist company for very long. What is the point of employing someone if all the benefit they bring is being cancelled out by their salary?
Nice idea, but I think on a macro level bankers have proven the opposite of economic value to society, and they get compensated outrageously for it.
I am sure there are some people (I can think of a few people I know personally) who turn up, take the paycheck, and do as little as possible the rest of the time.
In order for your statement to be true you would pretty much have to buy into a Marxist value theory that virtually no economists today agree with, and which is highly implausible under scrutiny.
Because they have to employ somebody at your position and it might as well be you. That they are indifferent between you and a market-rate replacement does not mean they don't benefit from having you in your position.
Say I'm in the market for a babysitter. If the market rate is, say, $18/hour, and I hire someone for $18/hour, I'm not abnormally benefiting from a low salary, yet I'm perfectly okay with that because I need a babysitter. The rate at which I no longer want to have a babysitter because the benefit they bring is cancelled out by their salary may be much higher than the market rate, because the market rate takes into account other potential babysitters.
In short, market rate is not the rate at which employers can no longer profitably hire, but simply an equilibrium price point that balances supply and demand. Assuming a reasonably well-run company, the price point at which they are better off not having you or anyone else in your position is much higher than your market price or worth.
You're confusing market rate with employee value. If an employee produces $100 worth of goods per hour (after non-labour expenses), that employee is worth $100 an hour. It doesn't matter if the market rate for that job is only $12 an hour.
The worth people are talking about here is, for the most part, the market rate. If you don't own the business, your labor is fungible and the revenue you bring is not separable from the rest of the company, your worth based on revenue criteria like the one you mention is irrelevant and impossible to calculate, because part of the input is the system you're placed into and its cost is the profit deliverable to the owners. In general, the market does a better job of attributing how much of the profit is due to the capital, the system, the management, etc and how much is your contribution than any sort of ad-hoc, I produced X type of analysis.
If that's not the case and your production is separable from the rest of the system, that does set a floor for your market rate because you can just do that on your own and keep the money instead.
I find it very hard for founders (who approve the salary of every hire) to not know what their people are worth. Maybe they can't afford to pay it, but that's not a knowledge issue.
An experienced engineer might be worth $x to one company, but $x*2 to another. A lot of companies that are used as a reference for market rates (Google, Facebook, etc.) have incredible leverage in the sense that their per-employee revenue and/or profit is very high. This isn't just a result of the talent of their people. It's a result of their business models, competitive moats, infrastructure and tooling, etc.
In SF/SV it is entirely possible for an employee to state "I'm not being paid what I'm worth" when, to their current employer, they are actually being paid more than what they're worth. The fact that their value varies from employer to employer is something that I think a lot of employees miss.
Employees who want the biggest bucks should go out and get them, but the idea that companies are undervaluing/underpaying their employees just because they're not paying what Company X, Y and Z pay is one of the worst delusions in SF/SV right now.
If a company is losing money from employing an engineer at a below-market rate, that means the company likely has a bad business model, not that the engineer is paid more than they're worth. One's worth, at least in this context, is determined by the market, not a a particular company's inability to make use of a valuable resource.
And I'm not sure what this has to do with anything - within reason and all else equal, employees should go work in environments that maximize their value.
"If a company is losing money from employing an engineer at a below-market rate, that means the company likely has a bad business model, not that the engineer is paid more than they're worth."
I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business. It's okay if your business model isn't as profitable as Google's. Heck, a lot of the companies that are paying market salaries have no meaningful revenue o even a business model. They're investor-subsidized.
"employees should go work in environments that maximize their value."
A lot of people work in "environments that maximize their value" and they're miserable. I have friends who make half of what they could make in SF/SV. You would say that their current employers aren't maximizing their value, but most of them own their own homes, live very comfortably and are home by 5-5:30. I don't know many $120,000/year+ engineers in SF/SV who can say that.
A lot of the high-paying jobs in SF/SV that are compensating employees at their highest theoretical value aren't as glamorous as the people who have caught the grass-is-greener-bug would like to believe they are. A lot of the people in these jobs trade whining about salary to whining about the hours, the lack of interesting work, their crazy/incompetent boss, the fear of funding running out, etc. etc. etc. Pick your poison wisely.
"I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business."
Uhm, by definition, no. If your business model requires a resource for which the market rate is higher than what your business will sustain, you do not have a profitable business. I could have a very profitable gold selling business if only I could buy gold at 50$ per ounce. Which I can't, hence it's not a profitable business.
I run a dev shop in San Jose. I hear all the time that the "market rate" is a good 40-50% higher than what I pay my engineers but I have all the engineers I need. Are they the best engineers in the world? If we're talking about pure talent no, but we're not doing anything exotic. We build modestly complex web applications for enterprise clients.
Have I lost engineers? Yes. In the past 3 years I lost 2 of my favorite employees. I was disappointed but it wasn't a surprise and I supported their decisions. They were superb engineers and I knew that they would one day go on to do great things. It wasn't just an issue of not being able to match the salary of a publicly traded tech company. These engineers were destined to work on the type of things we just don't do here. So why would I want to hold them back?
On the flip side I have one engineer right now who I know is looking to leave. He told one of our other employees that he's unhappy with the pay and thinks he can get a better job at a big tech company. Guess what? I heard about this 8 months ago and he's still here. I know he has interviewed elsewhere but you see, for every engineer who can get a $$$$ job at a tech giant or rocketship startup there are 50 engineers who THINK they can. And then they find out they can't.
There is no shortage of engineers. The big names often get 100s of applicants for every open position. But you need to be really, really good, not just at your job, but at the interview process. The interview process at some of these companies is so difficult that a lot of very good people get filtered out.
So I have no problem finding engineers at "below market" and still manage to deliver good work product to our customers at good margin. Apparently I'm doing the impossible!
I see your point. I've had to deal with this a lot. "Hedge fund X is paying someone 2x what I'm getting today for a technology job."
ok... You may be worth more to them. You may also be working 50% more hours, and you may also be getting paid daily, and not getting benefits, social security contributions, and the like.
IT's very frustrating. Ultimately I try to screen for "Money is the most important thing in my life" during interviews, and then if I have folks like this working for me, I encourage them to chase the better dollar.
You can't stay in business chasing the best offer away for each and every employee.
Your last sentence is the best advice to give to any company in this market. My dev shop is doing just fine and I'm not paying anywhere near what I'm constantly told the "market" is. I wish I could but then I wouldn't have a business.
When my best engineers want to move on to bigger and better things I support them. It would be nice to keep them of course but I'm honest enough with myself to know that I don't need the type of engineers that can get a job at Google.
My retention rate with my "adequate" engineers is very high. Most of the ones that I know have complained about money find out that it's one thing to see jobs that pay $$$$ and another thing to actually get those jobs.
Sometimes there is not a lot of money, the project is on a bad phase and the little you're being paid is somehow a good pay because you know for a fact things are getting better and everything else feels fine, as you say "happy with the team and with the work".
Other times it's not as easy. Even if the low pay is because of a lack of money, if management keeps hiring cheap, and then you're surrounded by undergrads that have no sense of responsability, then the ship is clearly sinking, there will be no money in the future and your coworkers make your work less by not caring and leaving things half done. In that case, run away as fast as possible. Maybe you're not being intentionally disrespected, but any sense of respect for you, your talent and your work has faded away.
What if he says no, and I don't have another job lined up? That's the advantage of looking elsewhere - if I'm rejected, i haven't screwed up my current position.
> Founders are crazy busy and, believe it or not, sometimes lose sight of "little" things like comp.
It's actually one of the red flags of a poorly run company. Product might be great, team might be great, but a company is run poorly at that point.
Compensation analysis and adjustment should be a clearly defined process, posted somewhere on internal wiki, not a one-off thing that gets initiated by an employee out of the blue.
Agree that you should ASK...and many people overlook this simple step, but a founder that "loses sight" of something as critical as the comp of his so called critical employees is not someone I want to work for.
It's never as simple as just ASK. There are lot of concerns and things you need to think through you need to go over before you can just diplomatically raise the issue.
Regarding founders being busy, I think this is exactly why counteroffers work in many cases. Founders and managers that use a mea culpa defense along with the presentation of a counter are probably going to do better than those that just offer more money without explanation.
counter offers may work in the short term, but not in the long term, there's a level of trust that's lost as a result of going out to get another offer. this trust is really never replaced. the employee maybe happy initially with a counter offer and stay, but long term it's never the same as it used to be.
Most people who accept a counteroffer leave within 6-12 months. It's generally accepted at least within sysadmins (maybe not so much progammers or engineers) that a counteroffer makes a 'train your replacement' work situation.
I don't know if there is reliable data to make a statement on the long-term effectiveness of counters due to the subject matter (best for both parties to keep silent).
Totally disagree. If the managers and leaders aren't taking care of their employees pro-actively by effective 1-1's and compensation wise, there are plenty of companies who do in this market.
I agree that there are plenty of places that will pay you market when you are hired. I've (almost) never worked at one that was proactive one you were hired.
Only once in my career was I called in to my managers office and told I was getting a raise - and that was around 1991.
Manager: "We're adjusting your salary."
Me: "Um, up or down?"
Manager: "Up."
I can think of several things (mostly trying to create a sustainable business and adding value, without which employees won't have salaries for long), but I agree it should be close to the top.
I have to disagree if your not paying market, it should be on your priority list to keep the stars happy. And honestly if youre "too busy" and forget, that kind of is disrespect, and neglect.
Also, comp isn't a "little thing" to your employee no matter how much they make - it defines your role both inside the company and outside, measuring a developers skill and throughput is an extremely hard thing to do, comp is often the only thing you can really use to define your worth.
Correct me if im mistaken but that was sort of the intent of the post, to put at least as much effort into retaining staff as you do recruiting. Or did I misunderstand it?
I see my self as pretty average but probably ahead of most the pack developer yet I still get a constant stream of recruiters "touching base". If I feel stagnant or neglected eventually one will say the right thing to get me out the door or at least start looking around for somewhere new to learn.
> Pay market, or above, as soon as you can. It’s a sign of respect.
This is the best advice I can give any software engineering firm. I've left companies large and small chiefly because they waited until I gave notice to bring my salary in line with my performance. If you have a top engineer and haven't given them a raise in 9 months, they are seriously considering their options.
A lot of people act like compensation shouldn't matter. All the senior people in your company care VERY MUCH about their compensation. If you become good friends with them you will see this very clearly.
Assuming you've done well for your company you might say
"That's very disappointing to hear that we're struggling so much as a company. I was (hoping|expecting) for X.
<pause>
Is there any advice or direction you could provide to me where I might help ensure we do better as a company going forward? I'd like to set up a plan of what I can to help and revisit compensation in the next 1-3 months."
And at the same time, start polishing your resume and interview skills.
I would think of this approach as a probation period for any company that I work for. If an employee isn't doing well, they're put on probation. Why not do the same for any company that is vying for our technical abilities?
You politely thank them for their time and immediately start looking for a new job. You have no reason to put up with that sort of a response in this job market.
If you think they have a future, ask for stock – they're asking you to accept low pay to help their business, so it's only reasonable to expect part of that return in exchange. The usual cautions about option games apply but again, if you're expecting to get screwed cut to:
If they're doomed and / or you don't trust them (i.e. does it seem like the managers also subject to low pay?), start looking.
You evaluate whether they're telling the truth. Some companies genuinely cannot afford to pay you market rate. That's why OP said "as soon as you can." In those cases, you say, "I understand. Please consider it again when the timing is better. Thanks."
But if you feel like the company can afford it and they're just shutting you down, the proper response is, "Seeya."
I've seen this claim over and over, but never any sort of citation or numbers. Lots of people get competitive offers, get a counteroffer, and then stay for years. I know a number of them personally.
The reason it seems like they never stay is that they don't talk about the offer they didn't accept. The negotiation happens over the course of a few days, and they don't mention it to the other employees. So there's a big bias in how frequently you hear about the negotiation. Whereas if they leave for another company, of course everyone knows about it.
Honestly, as an employee, if you are looking around and get a good offer, accepting a counter offer from your present company is rarely a good thing. Management clearly didn't plan for raises/growth, expected you to maintain course and be happy. At the point you have already gotten an offer, most management at your present company is not going to look kindly on one's activities...
Despite the advice above.
There are many factors to "an offer", for some money is important, for others support for built up work habits (odd hours) may be another. That said, I think the initial advice of the article is spot on -- stay engaged with your employees.
The last three times I've left a company, it was either a surprise or a shock. Twice bonuses promised were over due, the third, slave pits that founders refused to see (previously commented on).
I agree, and I also agree with the OP on this issue. Typically, at the point of a counter offer, a line has already been crossed. We've all seen exceptions, but by the time that meeting takes place, the employee has usually left already in their minds and counter offers are typically too little, too late.
If, as in your three cases, the employer has clearly failed, then the employee is in a position of strength. They probably don't even want a counter offer, as they are already resolved to leave. If the employer is surprised, it simply further illustrates the problem and validates the decision to leave.
From the employer's perspective, if the employee is just trying to leverage better comp opportunistically instead of through merit, it's also unwise to match or beat the offer. In my experience, this only tends to happen with younger, inexperienced people who don't have a long view of their career.
Either way, my policy is that when a person leaves, that meeting marks the end of their tenure at the company. Pay them for the two weeks notice they are always willing to give, just as if they were still working, and make all honorable accommodations. But once someone has resolved to leave, it's just better for everyone if they weren't around for an extended farewell tour.
This is often very difficult policy for managers, because they fear that a person is indispensable and will require the full notice period to train up replacements. They worry about the disruption to the business that it would cause. But if that's the case, it simply highlights another management failure. I'd rather take the business disruption, which gives my team an opportunity to shine, instead of the cultural disruption of having someone there-but-not-there, anxious to move on.
At the time of a counteroffer, it's reasonable to plan around the possibility that accepting it means being fired shortly after, and maybe followed with a compromised recommendation on back channels. You've made yourself an irritant.
It's common for employers in this industry to feel so entitled to your labor that they feel betrayed and hustled, categorize you as an uppity liability, and have to re-establish face with aggressive moves.
If asking for a raise isn't enough to get it and you can't offer a specific marginal-value carrot in return, the only leverage you can develop is another offer. But it's too big a stick - you probably aren't just going to get another raise without causing hard feelings and inviting retaliation. You wouldn't try get improvements out of an abusive relationship by letting your SO know you had options.
The only way you can build a mutually better deal, including a better salary, is if there is justifiable trust. Employers can earn that trust by fair dealing - like paying fairly well before we both have to deal with nags, demands, and sales pitches.
Employers who can't earn their employees' trust have shown failures of leadership and deserve to be walked out on.
I've been a hiring manager for the better part of the last decade. I cannot imagine any situation where I'd counter an employee's offer while simultaneously plotting to get rid of them down the road.
In most cases, I don't even try to counter, as it's usually pointless, but in those cases where I do make a counter-offer, I'm doing it intending to keep them in the fold "permanently" (3+ years, ideally longer).
Depends on the individual (and the tendency varies with the industry).
Anyone who responds on HN claims to behave in an ideal way, but if you took this for an indicator of the industry you'd be surprised almost immediately - whether because these claims are often untrue or simply because the people making them are so unrepresentative.
Other than pathological or sociopathic management tendencies, I can't see any common scenario when it would make sense to counter while planning to fire.
Suppose Abel is working for Manny; Abel gets a better offer and tells Manny. Manny decides to counter.
In order for it to make sense for Manny to counter and plan-to-fire Abel, he has to be planning to hire Baker to do Abel's job, but wants to keep Abel around a while for stability and to on-board Baker.
That's enormously expensive and risky compared to just paying Abel more in the first place or to just counter-and-keep Abel. If the job is that critical, pay Abel. If it's not that critical, just let the job stay open until you hire Baker.
Taking on the severance costs to fire Abel later (and pay higher UE insurance) just to "get back at him" is self-defeating more than it could possibly hurt an employee who has just today proven he could get a higher-paying job. So, where's the "win" for any rational Manny?
There was a pretty well-respected guy (we'll call him Sam) known to almost everyone of note in town here, who had built a great team for a company with a fairly boring and unsexy (though profitable) product, who wanted to leave to be part of the founding team of another company. They made a counter, he accepted, and then they secretly began a search for his replacement, eventually axing him some months later.
The epilogue to his story is that most of the team he built worked for Sam, not the company. Within six months the team had disintegrated, with almost all of the senior staff having moved on after seeing the way Sam was treated. Frankly, any management worth their salt would have seen that one coming way before cutting Sam loose.
The lesson here is that even though its against their own self-interests, the counter-and-fire thing happens, and probably more frequently than not (though a single vague anecdote does not evidence make, I admit.) I think any engineer who thinks they ought to be making more should ask for it. But they should also be prepared to move on if they don't get what they want, unless they really trust their managers.
I'm fairly certain I know which company you're talking about (check the profile -- we have a friend in common who worked there), and I get the feeling that, given their notoriety, they are the exception rather than the rule. If they were typical, after all, they wouldn't be note-worthy.
> Other than pathological or sociopathic management tendencies, I can't see any common scenario when it would make sense to counter while planning to fire.
Deadlines.
Having you walk out this month may be a big deal while next quarter, not so much. Or I may have found your replacement by then.
It's not about "getting back at" someone. It's about minimizing my risk as a manager. I would rather have 80% the performance with an 80% chance someone will be around in a year rather than 100% the performance and a 50% chance someone will be around in a year.
Thanks! You and bsder gave labels to a vague feeling that Manny and I might both have. I admit that I wouldn't have the same level of trust initially (and I've been on both sides of that in the past).
That would manifest itself as me being more aware of the risk, but I'm also rational enough to know that unless I find a way to rebuild that trust, I might as well have not made the initial counter-offer. (I'm also writing from a pretty big [by typical HN standards] company perspective. On a sub-10 person technical team, the equation is a lot different.)
There is a lack of reliable data on counteroffers and their effectiveness due to the secrecy - companies don't have to report to some agency when they counter an employee. Another part of the problem is that recruiters are trained to scare candidates away from accepting counteroffers (I'm a recruiter), and you'll see all kinds of articles from recruiters claiming statistics about what percentage of people who accept counteroffers are gone within a certain amount of time. I've heard 80% within a year, 90% within 6 months - depends on which recruiter you ask, but the numbers seem inflated and are just used as a tool to scare someone from accepting.
I distinctly remember being trained on how to handle counteroffers when I was first getting into the business. I don't use any of those tactics these days, but I am certain lots of recruiters do. The amount of publicity that recruiters give to these numbers (which usually lack a source) adds to the misconceptions.
That seems reasonable. There is a lack of reliable data.
But citing the ulterior motives of recruiters doesn't establish that it's safe to take counteroffers. There's no reason it can't be both at the same time: recruiters do have ulterior motives, AND it is dangerous to accept a counteroffer. Waving at the badness of recruiters doesn't dismiss the issue.
The risk of taking counteroffers isn't unconditional, it depends on the employer. The person evaluating a counteroffer has to consider the trustworthiness of the employer. In the best case, that still includes offering a lower-than-market wage (or how did you easily get a better offer?)
While it's true that recruiters' interests often aren't well aligned to the candidate's interests, employers' interests often aren't well aligned to employees' interests either. BUT... in these cases where someone is already desperate enough to be hustling for other offers to push their employer's hand, it's already a lot more likely that the employer's interest is less aligned with the employee than the recruiter's is.
Raises come out of profits and many people do take it personally and can't be professional and more importantly, decent about it.
If you are facing a counteroffer, you are the person best positioned to evaluate whether your employer is trustworthy - not HN commenters, not a recruiter and certainly not your employer.
I can see how people who hire on HN are scared of recruiter memes about counteroffers. A lot of us want to get rich and want shortcuts. Unfortunately, those recruiter memes align with certain realities. There is no shortcut, you (generalized you, not fecak) have to earn the respect of employees as a fair dealer if you want any rational person to want to stay or even consider your counteroffers. If you don't earn that respect, you have no right to complain: you deserve to lose the employees because you yourself adopted a strategy which puts a little cash in your hand in exchange for this very problem.
I agree entirely. One of the more interesting challenges of my job is discussing the potential dangers of counteroffer acceptance without sounding like the conversation is self-serving. I very rarely discuss counteroffer now primarily as a matter of integrity, but several years ago I discussed it with every candidate, and often in the first conversation ("have you ever accepted a counter, how do you feel about counters, etc")
I do believe that people who accept counters are taking some sort of calculated risk, and it does depend on the company and management. When you've been consulting to a job seeker for some time, get him/her an acceptable offer, and then find out about a counter, it's difficult to remain a credible source. I've recommended to candidates to accept a counter on at least a couple occasions, and I once accepted a counter (and stayed 5 years).
I suspect that those (% gone with a year) numbers vary drastically by industry, and may be 80-90% or whatever in some lines of work, but are likely much lower for developers.
Over my 15+ years in recruiting developers I'd say a fairly high number of people stayed much longer after accepting a counter than the most quoted 'stats' would have led me to believe. My only numbers are candidates I lost to counter or admitted accepting a counter in the past, so this isn't a huge sample.
The secrecy of counteroffer benefits the company, as if it becomes known that a counter is your quickest means to a raise you can be sure others will follow suit. But that secrecy also has some benefit to the person who accepted a counter, as any potential questions about your loyalty or (in some situations) your perceived willingness to abandon the team during a crunch time won't be exposed and the accepter can continue business as usual to a degree.
Maybe a lot of people know that moving job comes with a 10-20% raise, so they take the counter offer while planning to move on in 6 months or so, meaning that they get a double raise...
They might also feel they will be taken as a more skilled candidate if they can quote a high current salary, enabling them to score a better role at a better next employer. That might seem counter-intuitive, but if you know you are under market, people selecting employees for quality over price will wonder why.
Definitely plausible. A higher 'most recent salary' means more money in the new job.
A counteroffer doesn't change whatever conditions about a job made you leave, be it unfulfilling work, coworkers, a bad environment, long commute, etc. - unless your only concern about the job was being underpaid, which is likely far rarer.
In the instance of a counteroffer, the recruiter is financially motivated for the person to accept the new job (and decline the counter), regardless of whether or not accepting the counter is a better move for the person. That is one of the most obvious flaws in the way the recruiting business operates, in that there are instances where the job seeker's interests may not align with the recruiter.
A couple years ago I posted an article here about an agent system where job seekers were the recruiter's real client (and footing the bills), which would resolve this particular instance of misaligned incentives.
My learning as a Fortune 500 VP and a 2x start-up CEO is this: you can do the CounterOffer thing once. Once. Then you are tagged as "loose" and somewhat unreliable. You'll get the $$$. But the next promotion may be impacted. In any event, you can't do it twice. The second time, they let you go.
It's not that there aren't female ninjas and female rockstars. It's that appealing to the ninja and rockstar image is a particularly male thing to do.
Being "into" rockstars or ninjas is largely a boy thing, and (like upper body strength) has absolutely nothing to do with software development other than the fact it's a largely male dominated industry.
In any other profession they'd generally be called "master" whatevers. The problem with software dev. is that it's enormously difficult to judge skill level, and impossible to do so objectively.
Couldn't agree more. Unless we code at day and fill Arenas at night with our rock and roll band, we are not rock stars. And unless we spend out nights running around rooftops assassinating and shurikening our way around, we're not ninjas. Always bugged me that terminology...
Probably not though I find that word a bit easier on the ear than rockstar/ninja. Maybe because in the UK its quite common to say to someone that he's a star when they are extra helpful or kind.
Agree, only exception being if the employer is going to pay a rock star salary -- millions of dollars and a contract that make sure you receive those in either case.
> Pay market, or above, as soon as you can. It’s a sign of respect.
And just as importantly, the lack of a decent compensation/raise is a sign of disrespect. I also factor here places that expect their developers (especially young ones who advance exponentially at the beginning) to either stay at the same pay grade for years or suck it up with a 5% raise.
I agree, I'd also add that when you let the juniors sit at the same pay for longer than a year and a half they'll start to build a bit of resentment (even if they don't change jobs as they probably should). Even a pay rise at that point might not help because they can think the next one is going to be just as far off and if they feel they deserved it at an annual review a few months ago they might think of it as lost money.
At least that was my experience. Of course being younger and less mercenary I hung around longer than I should and jumped, just after a pay-rise, to a similar position similar pay job. I couldn't hang around knowing my heart wouldn't be in working there.
> By The Time You Give Them a Raise, It’s Too Late.
I have seen this happen often. If you get a higher offer from a second company, you will think that the first employer paid you below par, which leads to a feeling of being taken advantage of. At that point, it doesn't really help if the offer is countered, the feeling of being exploited has already taken root.
Unfortunately, most managers just don't get this, or they somehow believe that they can counter offer. Maybe that works in sales/marketing, who knows, but I think it's different in dev.
If you are dissatisfied with your compensation, speak up before you go looking elsewhere. If you say you're leaving, do it.
Accepting a counter-offer is almost always a bad idea; no matter how much money is on the table. After accepting a counter-offer you are bought and paid-for, you decided to stay for the cash and, unfortunately, your loyalty to the company will be questioned forever after.
If loyalty means "you can fuck me over and I'll stick around," it's a vice, not a virtue.
Loyalty keeps sweatshops fully staffed while keeping good businesses from replacing anyone who is a bad fit.
In fact, why would any business want a "loyal" employee, someone incapable of recognizing or acting in situations that have grown lopsided? If someone struggles with strategic decisionmaking in their own life, why trust them to aggressively act in the best interests of the business?
Feudalism is long dead. The occasional job change shouldn't merit a scarlet letter.
In my mind, a loyal employee is one who will ride out the ups and downs in a relationship, and put in the effort necessary to make things work. The same is true for a loyal employer.
To that end, I think a loyal employee should speak up when they think they deserve more money, because it is in everybody's best interests that they be fairly paid. And I think a loyal boss should a) do their best to make sure that employees are already fairly paid, and b) when they slip, to be grateful that an employee has taken the risk of talking about something that can be difficult.
I get what you're saying, but I don't feel like calling his model "too simple" is fair when yours is predicated on loyal employers. They exist, but I think I'd be hard-pressed to rely on their beneficence.
I don't think any healthy relationship involves relying on beneficence. Loyalty for me at work is more about recognizing and acting for long-term benefit, not short-term gain. I think loyalty, along with trust, gets built over time, and it's something both parties have to work toward.
By "too simple", I meant that his model of the world was too black and white. Trust isn't a binary condition. It's a continuum. A collaboration.
I can't really estimate that, but I've seen it happen a fair bit. And I've benefited from it as well. But then, I'm choosy about where I spend my time.
It's primarily around future raises - once you accept a counteroffer, your future raises won't be as good (if they happen) as "What if he leaves right after?" is always on their minds.
The counterpoint is you've ID'd yourself as someone who cares about their comp and is aware of their value on the market.
Those signals are positively correlated with future raises. (I agree that getting an off-cycle counter will have some negative correlation to your future raises, mostly because "you already got some of it" will be on the mind.)
That is the standard advice and I have agreed with it for a long time.
However, that highly depends on the company, especially large one. There is very often a disconnect between line management, HR, and all the parallel hierarchies that make up the company - meaning there is no direct relationship between people caring about your loyalty and people that have the means to do anything about it.
Personally, nowadays I'm almost convinced there is no drawback. I have seen just too many people offered a red carpet for years after such threats.
You don't get what you're worth, you get what you negotiate.
If an employee feels taken advantage of, then I'm afraid they're going to go through life with a victim mentality, and probably aren't a rockstar to begin with.
Fine, but if I find somewhere willing to treat me like a respectable human involved in building their business and not just a cost centre to be minimised...
Take the following scenario (forgive me for using $--your word choice leads me to believe you may not be in the US)
Say I have $10 to pay you.
I ask you what you'd like.
You say $7.
I offer you $7.
You agree.
Where is the disrespect?
If I wanted to buy some good will, I could offer you $8, and you'd be happy because I paid you more than you asked.
In this scenario, I gave you the upper hand by allowing you to tell me what you'd like.
I could have "anchored" the discussion by making an offer, or telling you the salary range for the position.
Now you would feel disrespected if you found out that I actually could have paid you $10, but instead only offered $7 or $8. However you got what you wanted, so being upset is irrational.
In all likelihood, you were upset because you would rather be given the $10, instead of having to negotiate.
People get upset because they feel uncomfortable about negotiating, and mix emotions and feelings when doing so. It's not an emotional affair. Negotiation is about leverage, and with some practice, you can get good at it.
For negotiating salary, you should do one of two things:
1. Figure out exactly what you want to be happy. Ignoring if you're asking for too little. Ask for that figure. It helps if you can justify the reasoning.
or
2. Figure out what you are worth, and ask for that. Again, it helps if you can justify this with facts.
If the company does not make you an offer that matches, and instead counter offers, then you should weigh their reasoning or just politely tell them no, and find someone else that will.
You slightly miss my position; but people are emotional. Do you really want unhappy employees for the benefit of saving $1?
Say I have $10 to pay you. I ask you what you'd like. You say $7. I offer you $7. You agree. Where is the disrespect? [..] Now you would feel disrespected if you found out that I actually could have paid you $10, but instead only offered $7 or $8*
At this point, there is no disrespect, That's good. And I wouldn't feel disrespected if I found out your budget could have been higher.
However, if I asked for $5 and you paid me $5 and I was happy, and the person next to me in the same role asked for $7 and you paid it, then they asked for a pay rise to $8 and you paid it ... and then I found out, I would start feeling annoyed.
You suggest "figuring out exactly what you want to be happy" - what if that is not a number of dollars, but a sense that everything is fair and considerate throughout the company?
I work for you, fighting problems on your behalf, for your profit. I want to do that with my employer and coworkers solidly supporting me, not having my employer provide the bare minimum of support unless pushed.
Would you want an employee that was doing the bare minimum, literally only doing what you ask and nothing more, replying "sorry, can't help, not in the contract" to every customer request no matter how easy or how happy it would make them?
Why would you want to be an employer doing effectively that to your employees? Why think all you need to do is point out that it's fair because they're rubbish at negotiating, and then expect them to be happy with that?
> People get upset because they feel uncomfortable about negotiating
Some of that discomfort is justified, as negotiation and other methods of hidden pricing can lock in discrimination.
Ian Ayers found this effect when examining negotiations leading to car sales, leading to widespread racial and gender discrimination. Negotiation discrepancies were found to account for 10-15% of a gendered salary gap observed in Portugal by Card, Cardoso, and Kline. A survey of the lit on gender discrimination in employment is provided in Linda Babcock's "Women Don't Ask." (I feel like I've seen HUD research on negotiation effects for housing, but can't track it down.)
Not saying it's not a skill people should learn to deal with the realities out there, but it can be a pretty insidious activity too, even when none of the participants think they're doing anything wrong.
There is a clear display on lack of honesty here. And such people don't deserve any loyalty at all. If a company can't be honest with its own people they will definitely cheat their customers.
>>so being upset is irrational.
Right, if some doesn't know they are being cheated. Cheating is now perfectly justified. In fact if they discover later what happened its wrong on their part to be refuse to be cheated further.
>> There is a clear display on lack of honesty here. And such people don't deserve any loyalty at all. If a company can't be honest with its own people they will definitely cheat their customers.
In the hypothetical scenario I outlined, was there a lack of honesty?
There is an imbalance of information, certainly, but I don't think that information should be disclosed.
>>> Right, if some doesn't know they are being cheated. Cheating is now perfectly justified. In fact if they discover later what happened its wrong on their part to be refuse to be cheated further.
Along the same lines, where is the cheating occurring?
I am surprised you don't see the lack of honesty. A person/system knows what the fair measure of pay is towards labor of an individual. Instead of paying that they turn this into a negotiation game, and hope they can squeeze as much out based on how ignorant a person is.
Please note this negotiation attitude is unacceptable on job. They demand a more human requirement, called 'loyalty'.
I agree with what you're saying. I (assuming I am the system) should not take advantage of people, and use negotiating tactics to get them to work for less pay than they deserve.
However, "market rate" isn't just a flat value you get when punching in a formula, and is subjective.
Also, I think you've read more into what I wrote.
I didn't mention what was fair pay. I just said I had $10 to pay someone, and asked what they wanted, and offered them just that.
Why did you assume that $7 was not market?
Why did you assume that the individual was ignorant when asking for $7?
Why did you assume the individual was entitled to the full $10, perhaps they performed only okay during the interview, but showed signs of promise?
The point I'd like to illustrate is that if you're paid an amount that makes you happy, or that you are okay with because you had some control over it (i.e. negotiating), it seems childish to accuse the system of cheating, or being unfair if you later find out there was money "left on the table."
In life, no one is going to watch out for your best interests. I don't believe in screwing people over, "cheating" them if you will, but I also don't believe in overpaying either.
At some point, for most individuals, the utility value of additional money diminishes.
Hopefully you will get to a point where making an extra $10k in salary isn't the deciding factor in joining a company.
In the same way, if an employee, say, does not "fully disclose" that they are leaving town in a month while applying to a full time job, that is also perfectly OK, right? Not dishonest at all? The distinction between a lie and not telling the full truth is a trivial detail.
> The disrespect comes in not figuring out what's fair.
This is besides the point of what I outlined. "Fair" is not a concept that applies to the real world. Nothing is "fair." Instead, and what I think you're saying is that you want people to act in good faith--this I agree with.
If someone doesn't know their own value, I shouldn't take advantage of them.
You've assumed that was the case in my scenario--note that I never mentioned market rate.
I also shouldn't use information imbalance, or other forms of negotiating tactics to unfairly gain an advantage on someone.
All this, I agree with. However, if I ask you "what is your salary requirements" and you make a reasonable request, and I meet that, I don't see how you can feel cheated if you could have got more money.
If you ask people what they want and pay it to them, you will overpay some and underpay others. If you truly believe in paying people what they are worth, you have to go further.
You might end up working with a bunch of self-described 'rockstars', 'ninjas' and 'gurus', who I should imagine would be unbearable to spend time around.
I wouldn't want to work with people who self describe as top performers, unless that classification is also given by their peers, performance reviews, and accomplishments.
I don't know if it is the writing style or something else, but this comes across to me as being written by someone who has difficulty empathizing with their employees.
After all, the opposite of the advice presented would be to ignore the ambitions of your most important employees, underpay them, and never speak to them.
The fact that not doing the foregoing is seen as a novel insight is not encouraging.
Sadly this kind of "don't be an asshole" common sense is insanely rare in management.
I would love to work for the author. I've worked in so many places where the management vibe was "how can we squeeze more blood out of the talent" and not "how can we support the talent to make awesome things."
I read management-oriented things from time to time to get an idea of the mentality, and it's very, very split between the two kinds of 'advice': common sense, and exploitation.
No one thinks that these are bad things to do, but it's easy to forget to do them in the midst of all the other responsibilities of running a company. I think the article's insight is that the things it talks about are really important and you need to find time for them.
You may be right, after all, the author is describing some ways to avoid alienating one's employees.
Nevertheless, I have always been somewhat confused by the distinction many people (and with no particular reference to the author of the article) make between the ethics that one expects between individuals in everyday life and in the workplace.
Though not the focus of the article, I have a huge problem with the idea that leaders should pick out their best employees and reward them, while leaving the others treading water on their own.
I am in the middle of watching a team constantly churn, unable to retain many talented developers, specifically because the managers are only rewarding those they think are the best engineers, but are actually rewarding very mediocre employees they trust. My advice to everyone, especially managers, is do not try to pick out your "best" employees and reward them exclusively!
My team has hired 6 engineers over the last 2 years; the distribution has been pretty even: 2 really great engineers, 2 decent ones, and 2 sub-par ones. Going in to the 2 years, the team had 5 engineers 1 really great, and the rest swimming between mediocre and great. The two managers try to follow the advice in the article, and it has been disastrous. Of those 6 engineers they hired, the two really great ones were out the door in 8 months and 1 year respectively, and just last week the 1 great engineer already on the team announced he was leaving. The problem feels like failure to launch. These talented people come in, are doing good work, and then feel there's no room to grow. The source is obvious, the managers have picked out 2 of the mediocre engineers who they feel are their "best", the "talent" doing the most work and attracting other great "talent". The "talent" is rewarded with the big projects, which in turn makes management think they're working harder, while the other engineers are left with the scraps. The result is simple -- genuinely great engineers take a few steps in the door, quickly realize the problem, and turn around to get out the door as fast as they can. It's really sad.
The advice of the article is good for the most part, just really be incredibly careful about choosing your "best" as a manager. It's far better to make sure you're fostering your whole team.
Sadly, of the many things. The best way to grow in any company(Start up, large, mid scale) is to become your manager's pet. Go to lunch with them, play badminton with them on Sunday's, Help them buy groceries or whatever. The point is you need to become your manager's best man.
Unfortunately companies want innovation, rock stars, stellar growth and all that. But rarely have their growth/rewards/compensation system aligned with those goals.
I've seen CEO's and execs crib and whine endless for months and years about how difficult it is to hire and sustain good talent. How greedy good people are. For heaven's sake its not other people's job to sacrifice their lives to help you clear your BMW's car loan quickly.
A sad truth. From my experience, a lot of it comes down to "who looks like they're working more?" The sub-par engineers, god bless 'em, are just clearly going nowhere. The great engineers go home at 4 or 5, knowing they've written some great code and removed a lot of bad code. So who's left working at 7 or 8? The mediocre guys who have to put in more hours to get the same results.
So yeah, eventually the great engineers get tired of playing code janitor and bail.
Now if I understand correctly, the bigger question is: why are there two managers managing 6 engineers? If a manager only "manages" 3 engineers and still doesn't know who does what then what are they doing all days?
They do, I'm not sure how effective it is. They've been tweaking it a lot, which is a good thing. Ultimately though, management is the biggest influence by far on retention and team development.
This thread is both illuminating and depressing for me. I hire engineers at an academic medical center who work on really tough biomedical problems. Let's just say that I would have to move heaven and earth to get annual percentage raise amounts that are being thrown around here. I wonder how industries like healthcare can hope to have the best people with this job market. At some point, even if you are doing work that really matters in a big way, you can't be stupid about your career and leave money on the table. I wonder if this further drives non-IT focused organizations to SaaS offerings since they can't get talent to do things in house?
> I wonder how industries like healthcare can hope to have the best people with this job market.
It's like saying "I wonder how I can hope to have steak dinners with Safeway charging such high prices for steaks."
That's what they cost. If you can afford it, pay it. If you can't, don't have steak dinners. This is the market. It's not a special problem for you that requires an intervention.
You aren't entitled to anyone's labor at any specific price.
If your business cannot be sustained unless certain people are coerced into working a lower price, your business is not sustainable!
Anyway, in reality, the US healthcare industry has a massive and powerful lobby, so it can exert a lot of control over markets through its purchased representatives. For example, everyone in the country has to throw business their way (for good or ill).
The healthcare industry isn't about to go belly up because engineers aren't cheap enough. Maybe your job is hard because you have a small budget. So sorry, but don't blame the candidates.
> At some point, even if you are doing work that really matters in a big way, you can't be stupid about your career and leave money on the table
You make an offer and because it's dodgy or not good enough, you have to belittle people and call them stupid in the hopes that they will be insecure and weak-willed enough to believe you and back down.
I guess this is one solution to the exorbitant expense of keeping people happy: "Don't be stupid, baby. You can't live without me. You're nothing without me."
Your tone is incredibly rude and uncalled for. Where in my post did I ask anyone to intervene? You are imputing motives that I did not state. Furthermore you are interpreting my last comment in a way that I did not mean. I meant that there are limits to people's altruism. At some point, no matter how personally meaningful the job is, a sane rational person can't afford to limit themselves when they can do better elsewhere. I don't get to set the rates I pay software developers. I have no say in that at all beyond a very narrow band dictated to me. Nowhere did I state that I expect people to work for below market wages. I do not expect this and I do not begrudge anyone for making such decisions. It sucks for me when recruiting, but that is my problem.
My larger point is that there are finite numbers of employable people who write software and that it appears to me that it is becoming more and more professionally rewarding for those individuals to concentrate themselves in dedicated software companies. As this happens, it becomes harder and harder for non-software companies to employ such people.
You didn't understand what the GP said. He was clearly saying that people would be stupid if they would come work for what he can offer them. May I suggest working on your reading comprehension before you go off on people.
I took an engineering job in an academic lab. I traded salary for the opportunity to work on an interesting problem with interesting people. I expect to move on once I've achieved what I want to with my current project.
The problem is not the money per se, but the same problem I see in working for any non-engineering company. There is simply no career path available when your role is perceived as being outside the core mission of the organisation. To progress in academia one must write papers, not software.
The NIH has begun recognise the need for funding software and databases, but there seems little prospect of university career structures adapting any time soon. As far as they're concerned we're only the staff.
Would you care to share more about that academic lab job that you took?
I'm currently interviewing at a few of those types of places that does research. My main role there would be to develop applications that will help them gather data for their research.
Did you have any other bad experiences or lessons that you think a developer should know about before working at a place like that?
I'd previously done freelance consulting with university administrative IT departments. They tend to be service based rather than project based so have a different focus. Though research projects run for several years, culturally it has been most similar to work I've done with a consulting firm. My colleagues work hard, care about the work they do, but also about each other.
What I miss most from working in an engineering company is the technical feedback I received from my colleagues. Now, they're experts in a different area. In that respect it's not that different to working in any other non-tech company. You'll probably spend a significant chunk of time introducing good development practices (testing, etc.) But expect to be asked to justify them too. This can be great, but hard work without the common experience to fall back on.
Like any organisation there is huge variability between teams and projects. I'm not sure I'd read too much into my comments. An anecdote is just that.
You will likely get a lot of freedom to develop using the language of your choice, but thee is unlikely to be any formal process (no one will encourage you to do unit tests, comment your code, or even bother about it as long as it "works").
If you can't compete with salary, compete on something else. The most effective way for you to compete for talent could be offering remote work. People are generally quite willing in my experience to leave money on the table for this particular perk. Giving developers interesting problems to solve (that happen to also make positive impact on the world) from the comfort of their homes will have appeal.
DevOps/Lead Engineer here making well over $100K/year. I'd take at least a $20K/year paycut to work remotely. My current employer doesn't permit it though, since it doesn't "mesh" with the culture.
If you're in a US timezone, Stripe is looking for experienced devops candidates. Most employees are in the SF office, but we have a sizable minority of remote employees.
Send me an email, I'd love to chat: jorge@stripe.com
That's a very good point. A lot of the places paying "rockstar" salaries are reluctant to allow remote working, so being willing to offer it to high performance candidates would be a way to attract them.
I think insisting on on-site work is mostly fear driven. The founders don't know how to work with peers effectively, and slip into manager/employee mode, and since they have no management experience, fear sets in and they need "as much" control as they can get over those employees. Hence, they need to be on-site.
All that guarantees is these founders won't be hiring peers (or better). Better to overcome their fears and let professionals do their jobs, remotely if that's what it takes to get them to work with them to achieve their vision.
> I think insisting on on-site work is mostly fear driven.
Hmm, I disagree, but that's based on my experiences with our attempts to integrate remote workers into a strong team environment (two of our people displaced following an earthquake so we waived our normal dislike of remote working.)
Basically, it doesn't happen. You can't integrate them into a strong team environment.
Now when I say strong, I mean that the team decides how it works, the team decides how much work it can fit in its sprint, and the team decides who it hires. We live or die by our teams, and so we focus on team culture, and team cohesion, and we reap a lot of benefit that falls from regular personal interaction. Strengths complement weaknesses, teams develop cultures that they are proud of and protect, and we deliver quality.
If you're a remote worker in this environment it sucks. You're out of sight, out of mind (despite Skype and Hangouts, if someone has to open an internet application to talk to you, communication becomes that much harder). But more importantly, you're out of the culture, you have no stake in it, and you feel left out.
However - if our environment was one where we worked solo (as opposed to pairing on all production code), and placed far more emphasis on individuals than teams, then remote workers would fit far better.
So yeah. It could be fear, or it could be that people are trying to build a team, and teamwork is vastly easier when you're interacting with others in person.
I wonder how industries like healthcare can hope to have the best people with this job market
I hear the same discussions about teaching high school all the time (e.g. https://news.ycombinator.com/item?id=6969363), and the answer is... they can't, for the most part. Occasionally you'll get heroes who'll do it for less, but mostly things just don't function very well.
They have to take chances on people with less of a long work history. Sometimes they're mediocre or bad, sometimes they're excellent, but the great people in that situation don't stay long as they need to use jobs as stepping stones to work up towards a decent pay level.
Lots of people get paid way more than average software engineers in health care industry, which pays very well in general, so I don't think that's the problem. Your problem may be that you're trying to hire software engineers in support roles in academia, where pay is customarily low due to prestige. But while it's prestigious to be in research but it's not that prestigious to be a software engineer supporting research.
I mean how much does an academic medical center pay their Doctors? At UCLA the head transplant guy makes $2 million or so. Why not pay engineers more? You could probably justify it by taking a product oriented approach, with external sales or patents or whatnot.
Remember though: doctors are the ones who bring the dollars into medical centers. It is very easy to draw a line from an individual "rockstar" surgeon to the revenue they bring in. It is also the core mission of a healthcare organization to treat people, so doctors and nurses are the primary focus. There are enormous opportunities for software to make a difference, but this is hard to quantify except in very extreme circumstances (e.g. identifying systematic billing errors).
Right but you could make software a core focus by selling your product to other medical centers or doctors or whatnot. It would be hard to get it started but it should be possible.
I believe medical doctors are paid much the same as other scientists for research, i.e. the more time they dedicate to research the more money they forego.
This is exactly the formerly revolutionary model of SV 1960s: equity stake for engineers! The East Coast model of private bank investment owning all of a company is over (for 50 years now).
In most organizations, the people at the top intuitively understand that you need to pay management and legal people market rates because that is part of running a successful enterprise. They are less clear about what it is all these "computer people" do. That makes it a hard sell.
Tech lacks the clear professional hierarchy of Medicine or Law which makes it difficult for management to differentiate between roles salary wise. Working for a private university I'm a little better off than I would be working for a state one. It aims to pay median market rates for computer people across all industries. As such the bonuses you'd expect work in tech are excluded from comparison, but you're not going to be on the poverty pay of a postdoc.
> Find a Growth Path for Everyone, Especially the Great Ones.
I've done a few interviews in the last few years, and whenever I ask about career path, they always stumble, even companies with 50+ employees. "We have a flat org chart." I've pretty much decided that it's up to me to advance my career via freelancing, because as an employee you hit a ceiling very fast.
I know from experience this isn't always the case, but of all the kinds of businesses out there, a startup should be able to offer the most in terms of advancement. Pre-growth they need people to step into all kinds of roles and meet opportunities that might be there. And when the growth hits these are the companies where you're going to see head count double or triple in a year, which means advancement tends away from a zero-sum game. This is a big part of why startups are supposed to be great opportunities.
In a big company job, unless they're also on a significant growth trajectory, advancement tends more towards zero sum, and the role-choosing process tends to favor the dazzling outsider with the shiny resume more over the familiar insider whose warts and gifts (and establishment in their current role!) are apparent.
Of course, in practice, startups can work exactly the same way.
One of the bits of advice I'd send myself back through time if I could is to ask for the title I'd want to be holding a year or two down the road if the startup sees success. It guides how everyone thinks about you in day-to-day business, and if they're reluctant to hand it over at the start, they'll probably be reluctant to think of you that way later, even if you grow into someone who is fulfilling the role while they grow into a company that needs it.
I'm not saying I want to go into management. But are there paths to greater responsibility, greater salary, greater leadership? Do you offer technical and non-technical training? If I did want to go into management, can you speak to that progression? Do you have a vision for senior people who want to stay in tech? All the companies I talked with seemed surprised I'd even ask such questions. I'm not saying it's easy, but if you don't have any story here, I'll make my own opportunities working for myself.
I'm not saying it's an invalid question, but it's not one I've ever asked going into a startup. Why? Because the reason I joined a startup is for the direct responsibility to ship code and grow a product from zero to millions of users. To do this I sacrificed joining a hugely successful company with many more resources where I could potentially climb quite quickly and make a huge salary without having to personally make a quantitative difference to the business. Maybe I'm just more of an early-stage guy than you, but I assume that I'll learn and progress my career based on the opportunities that come up. I would be highly skeptical of management laying out a 3 year plan and how my job would evolve since by definition a startup does not know how they will find product-market fit. The questions I would ask of a big company to vet the culture would be moot because I would assume that I will be shaping the culture. If that turned out not to be true then I would be leaving.
The term growth-outside-management is meaningless in almost all companies.
A few companies have it, but those are momentary times until they grow, and once the systems are in place. They will put in a middle management guy have it run. Slowly you will the architects would have been phased out and replaced by managers.
> I've pretty much decided that it's up to me to advance my career via freelancing, because as an employee you hit a ceiling very fast.
Same here. As a freelancer, I control my own career part, decide what I work on, in what direction I develop myself, what projects and responsibilities to take on, and I invest in my own training.
When I was an employee, I always joined a great company that did great things, learned a lot of new stuff, and then hit a ceiling. I learned to move on after about 2 years. Longer than that at one company means stagnation for me.
A point lost in this article is that no one ever leaves just for money. The very fact that you're not paid enough is evidence of a problem in your perceived value. Once you're convinced of that I think for most people your satisfaction and trust that the organization values you erodes. It's not as easy as getting a big counter and thinking everything's peachy, in my experience.
I recently 'fired' my client who paid me under the market rate for a client who pays the market. And I would qualify as a junior, I guess, since it's just 2 years since I started working for living...
I think the problem is that once someone is seriously considering other job, it's very very hard to get them back. They might be physically in your company, but mentally, it won't be the same. Being underpaid just changes the relationship.
In an attempt to add something useful though, why did you terminate your work with your last client? Did you attempt to negotiate a higher rate? Two years is still very junior, and I assume that you worked out your price with them early on. Did you give them a chance to retain you?
>>> ...can't...resist....."grammar".
Oops forgot to wrap it with <sarcasm></sarcasm>
To make my previous comment more accurate, I would add that it's usually not only about the money. Job specifics might change, you might ought grow your job, etc.
Speaking of the client, we both kind of knew that it will happen. I am still doing my degree and, I believe, he expected me to find something else once I graduate. Just it happened before I graduated.
You are right that I worked out my initial price, and the job specifics had changed. I was working on a CRM-like custom solution in the beginning but at the end I spent 80% of my time copy-ing stuff from google docs into html and styling up. I tried to negotiate a higher rate, unsuccessfully, and there were signs that the budget was super tight. Understanding that, I didn't put him in the corner saying 'I need more money!'. Because I know how badly it sucks to be in that position :) so it was quite a mutual understanding.
All in all, it ended on good terms, no bridges were burned.
I think if you come out of a good school with the right degree and jump right into a good company you can expect market-rate pay or better. If you get a CS degree from Stanford and join Google you'll be doing fine.
But maybe you didn't have the money or quite the grades and extracurriculars so you get your degree from San Jose State or City College of San Francisco, you could still be a very good programmer, but you'll have to start by taking lower-paying jobs while you prove it and learn, and at most companies you won't get much of a raise unless you threaten to leave.
A friend of mine ended up a technical lead of about a dozen people. He got there by leaving his company for another company, leaving them to go back to the first company, then leaving them again to go back to the second company as a lead. Each time he got a substantial pay raise. For the four years before he adopted this tactic he was getting the customary 5% or so as a mid-level programmer. In the four years he employed this tactic his salary almost doubled.
> "If you get a CS degree from Stanford and join Google you'll be doing fine."
I disagree. The problem isn't that people are paying below market - Google pays just fine for new grads. You won't find many places paying more than Google does for fresh grads. The problem is that the pay scale for software developers increases rapidly with experience, at a rate no company (Google included) is willing to keep pace with.
A new undergrad may be worth $100K starting. Assuming they're reasonably good performers, in two years he/she will be worth $130K+. I don't know of any company that gives 15% annual raises like clockwork, even to solid performers.
Personally I've doubled my salary in about 5 years in the industry. That works out to 15%, yearly. Is there any company out there that's willing to keep pace? I've been at companies where the typical non-promotion raise is 1-2%, that's laughable in a market where salaries are skyrocketing.
My own anecdotal is from when I started at&t out of college in 2001. The tiny 1 to 3% annual salary raises cannot compare to the quantum-leaps after hopping through 3 start-ups. Also, I never negotiate salary. I just tell them what I was making before and accept whatever offer they give so long as it's higher than my current. When I look at Glassdoor.com, I seem to be doing okay... so no complaints from me. :)
You're probably leaving money on the table, in exchange for avoiding a couple 15-minute exchanges on salary. If you modify your approach to include a request for a small increase or a sign-on bonus after they've made their offer, you will find 1/3-1/2 the time, you'll get it, and when it's in base salary, that will enhance the ratchet effect that you've experienced.
Some places will make their best (or nearly best) offer first. Others will have a broader range and more flexibility for someone they really want on-board. It doesn't cost or take much to ask once at the start, when they're at their most enamored with the endless possibilities you'll enable.
Don't get me wrong; I appreciate the simplicity and ease of your approach. I'm just suggesting your can get more return from very little differential effort.
> My point here is this engineer should not have had a five-figure salary, even if it made sense in historical context (joined as a very junior person, consistent with prior salary). Pay market, or above, as soon as you can. It’s a sign of respect.
My last boss, when I asked for a raise, said "Explain to me why I should give you a raise". I said nevermind, started looking for a new job and left. Shockingly, when I informed them, there was a higher offer waiting. You seriously wonder what goes on in these people's brains.
I don't get it. It seems reasonable to me that you should be able justify getting a raise, even if that justification is "I can get paid more elsewhere but I'd prefer to get paid more here." You make it sound like "explain to me why I should give you a raise" is the same thing is "no."
is that not exactly what he was doing by asking for a raise?
Eg rarely does someone go to their boss with the thinking of "I'm not working any harder, nor am I taking on any additional work, but I'd like a pay rise anyway."
Every time ive asked for a raise its because I thought I deserved more. if you (my employer) disagree then I am happy to hear your thoughts on how I can do better but asking "why" just seems like stalling, as if you wanted me to think you didn't understand the expressed sentiment in asking for a raise.
To be honest this seems like passive aggressive management techniques to me, and I value honest straightforward employers who are proactive about employee happiness.
By the way, "I'm not working any harder, nor am I taking on any additional work, but I'd like a pay rise anyway" is a completely valid argument if you're not being paid the market rate.
Has the market rate risen by 20% while you were here? A 20% raise for the same work is completely reasonable.
Were you being paid below market because at the time the startup was just scraping by and couldn't afford it? When that's over, you'll need pay your people much more for the exact same effort&results.
Although occasionally this may be the case (pay cuts), it seems clear that the employer absorbs the risk of entering into contract with the employee at a certain time, with a certain market price. Interesting that the employee gets to partake in the upside but the employer gets the downside, with the exception of course of the employee getting fired.
I wonder - if there were really a way to gauge the current market for X talent (sort of a glassdoor salary index) - could employers purchase "insurance" or hedge their hiring price with "employee securities"?
In an inflationary environment, which is maintained pretty much all the time, it is much, much more common for market rate to raise rather than fall - i.e., frozen wages usually mean a loss for the employee.
That being said - have you seen what happens in shrinking industries? Yes, there have been companies that renegotiate a 20% decrease in wages, and fire/replace those who don't agree; it's exactly symmetrical as growing demand professions where people either get their raises or leave and need to be replaced.
>Every time ive asked for a raise its because I thought I deserved more.
I don't understand why someone asking for a raise wouldn't be prepared to explain why they deserve more. Either reminding one's manager about past successes, or information about current market value, if you think you deserve more, you should be able to articulate why.
> Eg rarely does someone go to their boss with the thinking of "I'm not working any harder, nor am I taking on any additional work, but I'd like a pay rise anyway."
No, I really don't. As I said to another poster, either you guys simply had no time to read a few lines of text or you already had your mind made up before reading them.
I simply think that a manager should be familiar enough with your contributions that they shouldn't need this information. If your boss is this unfamiliar with your contributions its pretty obvious they suck. I also think that a manager making you explain why you deserve a raise is fairly poor form. At this point we were already months past the point where i should have just gotten a raise without a conversation at all. If they had done that up front, I would not have been so quick to leave.
> "You seriously wonder what goes on in these people's brains."
Perhaps it's something like: "I'll need to get approval/budget from higher up and they're going to ask me why. Maybe he can help me by telling why he thinks he should get one."
I respect that your experience may not have been pleasant but it's unfair to paint everyone in that position with the same brush. It would seem odd to me if simply asking for a raise out of the blue results in one.
If the company is in any way a decent place to work, they will have a clue and "So we don't have to spend 2x as much over the next year replacing them, with recruiters' fees, lost productivity, and the fact that someone to do all the work they were doing will demand more money" will work as a reason why.
When someone leaves due to being underpaid, if they are at all good at their job (and especially if they were hired at a low rate and have grown in capability during their time there), their former employer will usually end up spending more than the old employee wanted in the first place with all the inherent costs of hiring a replacement.
OK - there's always a sort of equation related to compensation in developers' minds that should be at the forefront of managers' minds:
happiness(job) = a * job.workEnvironment + b * job.compensation - c * (possibleJob.compensation - job.compensation)
Some developers attach low values to b and c, but part of a manager's job is to maximise the work environment, and minimise the difference between compensation for jobs that the employee is qualified to do elsewhere and employee's current compensation (as long as management wants to retain the employee).
> ... but part of a manager's job is to ... minimise the difference between compensation…"
In principle, I agree but in practice I don't see how this is workable (unless you're trying to retain a star -- as opposed to all employees). It means the direct managers need to know how much the comp is elsewhere at all times. Who has energy to figure that out and meet all the demands of the day-to-day? On top of which, the spread of salaries/benefits might cover a wide range so how do you figure out where you fit (who should you really compare yourself to)? The simplest way is when you hear internally that X has left for company Y and got a pay-bump of Z%. It's the kind of thing people would expect the folks at HR to be looking into, rather than the engineering managers.
I'm not trying to justify the above but it does seem easy to understand why things are this way.
Compensation is not a manager's fulltime responsibility, obviously. But something they should check up on with a annual or bi-annual frequency. There are ample tools (e.g. Glassdoor) that give insight into how competitive a given worker's salary is.
In my view, a reasonable working hypothesis is that compensation and work environment are proportional to one another. My rationale is that they both stem from the same management attitudes and presence or absence of leadership skills required for managers to stick up for their employees.
""I'll need to get approval/budget from higher up and they're going to ask me why."
My boss should be able to answer this, and he shouldn't need to hear it from me. We work together every day. If he needs me to give him a list of reasons why I deserve a raise and doesn't already understand those reasons, he's simply not a good boss. Also, fwiw, this person was the CEO, so they didn't need to get approval.
You were invited to sell yourself, and instead of taking that opportunity, you took your toys and went off somewhere else.
Maybe your boss should have known your market rate, the quality and quantity of your work, how important to the company you were, and that you wanted a raise because you felt you were being undervalued. Maybe he should have known you weren't comfortable being challenged and should have avoided it. But maybe he was giving you the opportunity to inform their opinion further, rather than just to give $default_raise. It seems a perfectly reasonable request to me, providing it was not said in a hostile tone. Whatever, given the situation, going 'nevermind' and leaving, rather than communicating was completely the wrong thing to do.
Sometimes, when you've already raised concerns about being underpaid, when you've given it time, especially if you've kept up with what's going on politically in he company and it seems unlikely to change, you just need to go unless you want the same terrible money for the next 10 years.
Maybe his boss just didnt value him or thought he was over paid as it was? Maybe his boss realized he could finally say goodbye without firing the guy. Maybe this guy just proved he wasn't worth it by his own actions? Maybe his boss and company just weren't very bright.
I don't wonder at all. They're thinking "I can get someone else at this price, and what matters to me is the price"
edit:
Also, many bosses are offended that you would ask for a raise, or have the idea that you need to be dominated or you are no good any more.
Also, it's cheaper to listen to people talk about how good they are, or just look at the number of hours they work, than to try to pay attention and assess for yourself how good they are.
Also, when people promise you the moon they are under pressure to deliver it and can be cut down when they don't get it for you. And if they say they are good, they can be shamed. A scapegoat and yes-man often has more value than someone who is really producing, because of the beholder's value system
What the fuck? I'm genuinely pretty blown away at the lack of reading that went on here.
I never said that I can't think of a reason I deserve a raise, I said that a manager shouldn't need to ask, because they should know, since they are, you know, your manager.
But yeah, I guess grasping at straws to be a snarky dick trumps using any logical thought whatsoever. Thanks for the contribution though?
If and when you are a boss, you'll learn that you will want help justifying these types of requests.
Perhaps your boss just didn't have his eye on the ball and know about all the awesome things you did, or maybe he had a lot of direct reports and can't immediately recall your accomplishments.
Think about it from a different perspective, you joined the company, and I'm going to pay you X, for Y work. If you're still doing Y work, why do you deserve more than X?
If nothing else, it would have been good practice at talking about your achievements.
It's less about the thing that is said ("I need a raise") and more about the thing that is unsaid: "I need more money so if I don't get it here I have to go get another job."
Exactly. Going through this with my employer now. I'm waiting till this coming week to find out what they decide. But if they say no, what they don't know is I have conversations ongoing already that will lead to offers.
If/When I decide to leave there is no counter offer that will get me to stay. For me it's a matter of principle. By the time it gets to the point of counter offers, they've already missed their chance to pay me what I'm worth.
I'm not getting paid as much as I would like. I've brought it up with my manager on multiple occasions. I'm now about 18 months with no raise, and I've been told that this round of performance reviews does not come with a raise either. But I'm constantly reminded of just how valuable I am to the company.
So, I've done what I think anyone else would do and have talked to someone at another company about another position. If I get an offer, I'm likely to take it. I'm highly unlikely at that point to accept a counteroffer.
It feels like I'd maintain a better relationship with my current employer by quitting for a better offer than by seeking and accepting a counteroffer and then leaving later.
Accepting a counteroffer would feel like the company would expect me to "owe" them, and I don't owe anything to any employer.
just out of curiosity, are you shopping around? Don't stop with just one offer—if you're going on the market, really go on the market. You might be surprised how effective that can be in getting what you're worth.
To be blunt, when you are earning less than $100k, when someone else is offering 10-20k more than you are currently making, you are (and probably should) going to take that deal. I've worked at companies with great culture and companies with crappy culture, and the reality for both was the same. When someone else values you higher, you start to feel like you're getting a bad deal and the things that you normally sweep under the rug start to grate on you.
Having a cool culture seems like the hot thing lately, and it can be a great thing, but if you use cool company culture to be cheap on salaries, you are putting money in the wrong place. I think most people at some point would rather work in shabbier offices and get paid more than have some fancy building that only serves to impress outsiders.
When you get over 6 figures, I'm sure it's the same deal, just takes larger numbers to move the needle. In either case, lack of above market compensation is going to cause talent to move if for no other reason than because they are in demand.
First off a link on Quora did not bug me about a login - weird.
Second, all this talk about hiring "rock stars" and retaining them but I heard no one talking about bad hires. Does any one want to share stories about bad hires and why it was a wrong decision? I believe companies put too much emphasis on hiring the correct person. I understand if its the first few employees but after that does it really matter? Unless the person is a real asshole (and he did not care enough to hide it during the interview) does it really matter?
> I believe companies put too much emphasis on hiring the correct person.
You literally can't put too much emphasis on hiring the right person. Not because of you. Firing someone, at least in the U.S., is easy. But you hurt people when you hire the wrong people. You turn their lives upside-down because you made the wrong decision. If you have a shred of a conscience, you'll hire scrupulously because doing otherwise makes you shitty.
"Hire fast, fire fast" is immoral. "Hire slow, fire fast" less so, if you compensate the worker because in almost every case (that is, this isn't true in cases of criminality, harrassment, etc.) it's your mistake, not theirs, and you owe them.
You literally can't put too much emphasis on hiring the right person.
You (almost) can't put too much emphasis on not hiring the wrong person.
Which is not the same.
Suppose your interview process has a 5% false-positive rate. Do you get more incompetents (say, bottom 5%) by looking for people in the top 50% or the top 5%?
This only applies if you actually allow people to assume that "hired" means "staying." If you "hire" people on a tentative basis, and tell them that you're doing so, then this can work. (And you don't tentatively hire people who would have to relocate, etc.)
Why would an employee who is not desperate for a job give up their current job in exchange for a position that's probationary? Setting up a situation where the employer can bail out with no cost to themselves indicates that they have zero commitment to making the relationship work.
How about an employee who is not desperate for a job, but who also currently does not have a job? This would be the situation created by a Basic Income Guarantee.
As per TFA, we're talking abot 0%-unemployment industry here. Such situations happen, but they're the exceptions, not something to base your policy on.
Seriously, even all the quality 2nd year undergrads I see are working already, at least here if you want to hire people who don't have a job then most of them are seriously incompetent people or extremely young.
I guess I'm thinking of a different definition of "unemployed" than you are. Maybe replace your mental definition with "independently wealthy." E.g. "I'm happy just spending all day coding my own projects, but if you give me the right incentives, I'll join your company... tentatively. With the tentativeness going both ways."
You're overselling the basic income. Most software developers have grown used to the lifestyle their income affords and would have to uproot their lives to live on a basic income. The average San Francisco rent would probably eat up all of it.
Sure, if you're looking for a random developer to exploit, and the only requirement is that they can code fizzbuzz, go for desperate. But if you're looking for a highly competent and experienced developer, chances are that they'll already have a pretty good job and you'll need to work very hard to convince them that your job is better.
It depends what sort of life you're turning upside down. For low level jobs I can see hire fast fire fast being a fairly good thing, it lets people have a crack and maybe prove themselves, where they wouldn't be able to pass a more risk averse setup.
Both sides gamble. What's kind's going to depend on what they're putting up.
2) In addition to eropple's point about treatment of the new hire, I think it can be disruptive to the existing team to have a bad hire. For one thing, existing staff always have to spend a least a little time teaching a new hire how things work at the company, and that time is essentially lost if they don't work out. It also frequently means you'll have some mediocre/bad code sitting around when the employee leaves, or in the worst case they could inadvertently cause some major security/stability issues for your product. That can be somewhat mitigated by proper process and permissions, but it's still a risk.
The single worst thing you can do in my experience in a fast growing start-up is make a terrible key hire. I wrote about how making a terrible hire as my first VP Sales almost ruined EchoSign ... The Year of Hell: http://saastr.com/2013/11/06/if-your-vp-sales-isnt-going-to-...
I'd go even further. If you're in the mentality where you're trying to jjjuuust time that minimal raise to prevent desertion, you've already lost in the way the author is pointing at.
The best companies see high performing employees as systems(1) that receive relatively small amounts of money as input and produce great amounts of value in output. The more money in, the more value out. The question should be how much money they can shovel in the front end before the "unit(1)" burns out. (Active cooling via free food, daycare, and flexible schedules doesn't hurt either)
(1) Yes they see you as a simple value proposition. As an employee, you are accounted for in exactly the same way as the contract for that big Xerox printer out front. That's not necessarily a bad thing. Any company that leans too heavily on that "part of the family" schtick is a place you want to be wary of.
> There are some very tell-tell signs of someone interviewing. Out of the office at weird hours. Talking on their mobile phone on the sidewalk
I've been that employee. As my dad (a farmer) says, "the hired man wants a day off to go look for another job." There are many tell-tale signs that an employee is looking for another job, and the article is absolutely right that—until the they put in their notice—it is rarely too late to change their mind.
The thing is that while I was interviewing, I certainly wasn't telling the boss I was doing that. That's suicide. I certainly have lots of tells (and had lots of "dental work" like the two guys that quit before me). The CEO just didn't have his ear to the ground or talk to the rest of the staff. Especially the office admin: she knows everything.
Very much depends on their reasons for leaving. If it's money, sure, though that ties in to why didn't you respect them enough to pay them market ASAP, if you're able to once you know they're trying to leave.
If it's something other than money, chances are real good you won't be able to keep them.
Small, rapidly growing companies are actually the best places for meaningful career growth, getting a 'organic' experience of growing together with the changing roles.
If in your smaller organization really the best mobility is to jump ship, then you have to factor that already in hiring that you need someone who would like an organization that stays small, and beware of ambitious key people who'll not be good for you. But for startups it shouldn't be so, unless you fail.
It's true. Sometimes, until you get big enough, you can't provide a career path in the short term. But you can at least make someone that is truly great a lead, and let them know as you grow, you want to find a bigger path for them. At least, you can tell them you want to do this. Sometimes, they will need to go to achieve their goals if you don't grow fast enough.
But, if you grow fast enough ... this resolves itself.
I've had coworkers who didn't particularly care about money, and were clearly on their way out. In order to retain them, they were transferred to different teams where the work was more engaging.
When I decided it was time to go, I packed all of my personal things in a box and took them home. Freaked my wife out when she saw the box in my car. "No, dear, I didn't quit. Yet."
This is solid. I constantly remind my co-founder he can walk out and get a $100k+ salary somewhere else (I actually told him to go interview elsewhere - and I would provide a reference - just to prove it). By doing this it opens the discussion for why he wants to stick it out, and I'm quite confident by the aforementioned actions that I know I'm not wasting his time nor is he wasting mine.
A good senior engineer these days costs somewhere around $200k/year (if not more) in a major US tech hub, factoring in overhead costs of salary and benefits. This is something that most seed or series A companies can't really afford.
So my question is, as salaries rise, how will this affect the startup industry? Where $1 million could buy you 8 people for a year before, now it can only buy you 6. This seems to make bootstrapping much more difficult. It also seems like this may end up causing certain startups to be impossible, since they require much more money than they would have normally.
If only there were people who had free access to the labor of a sufficiently capable engineer. Then these people could do things like starting companies or working at an early stage in exchange for major equity, until the business had enough to pay for more people like them. I know it's a radical idea, since these people wouldn't be "ideas guys".
Oh well, no such people seem to exist, too bad for the clearly moribund startup industry.
If the cost of labor is increasing, the amount that funding gets you decreases, as I assume that most of what funding is used for is paying salaries. Equity is also a cost. If before you gave early hires 1% equity, now you have to give them 1.5% equity to make up the same dollar amount - so if you're using equity to offset lack of cash, you end up having to give up more equity.
5 years ago, $500K maybe was enough to launch a serious version 1.0 of a product. Now you might need $800k or $1MM. So what do you do? You either have to give away more equity in early rounds, or in lieu of salaries. If your company is worth $5MM, before where you were giving away 10%, now you're giving away 20%.
Anyway, I'm not saying it's a bad thing - I'm a programmer, I've more than reaped the benefit of this - just that it's worth thinking about.
>5 years ago, $500K maybe was enough to launch a serious version 1.0 of a product. Now you might need $800k or $1MM.
I'm struggling to make sense of this. By "a product", do you mean a piece of software sold for its own sake (as opposed to some other type of product that merely requires that someone in the company write software)? Either way, has the barrier to entry really increased so much in so little time? Why?
This is an interesting thought, but tool improvements are also making programmers more productive. I've seen massive changes from, say, 1994 to 2004 and again from 2004 to 2014. In fact I'd say that programmers have only captured a tiny portion of that productivity increase.
I think it's simple supply and demand. There's been an explosion in the number of tech startups in recent years; now the market is starting to adjust to that, and new norms are forming. On the margin, some startups will become impossible, sure - but they'll be the low end of the market, the kind that no-one would have even considered trying ten years ago.
In general, it's working out for now ... for now ... because the best start-ups are scaling faster than ever. As long as start-ups scale faster, they still get incredible leverage even as fully-burdened costs grow. In SaaS, the best start-ups are getting from $2m to $10m ARR in 1 year now. That was pretty close to impossible 5 years back. The markets are larger. With more customers, you get more revenue. And you can pay more. For now.
I'm presently confused about what to make of my renumeration where I am now...
I was supposed to have my yearly review three months ago, and the owners are out of office or busy so much I can't get a moment of their time.
Last year I got an 8% raise and 8% bonus. This year I got a 2.5% raise and a 10% bonus. I don't know why, and feel communication is unattainable to me now. I've been pondering looking for jobs... I know how hard it is to simply find a skilled and well rounded programmer in Ontario, much less one who can write clean complex systems. I just want to know why that was my deal this year. It doesn't help that I'm paranoid I'm grossly incompetent at what I do, and fearful others think that about me despite the fact I have stronger skills than most programmes I meet in this city.
I look at careers sites more and more as my career-paranoia fluctuates.
I'm posting this as a data point in the model of programmers looking to quit.
From outside the valley bubble, your raises sound fine to me. Tons of people would think it totally crazy to expect sustained 8% raises year after year during recessions.
And you don't cite any other reason you want to quit. I wouldn't over-interpret the numbers. There are so many other reasons you might be paid a smaller raise on a given year, it's no good to overload your interpretation of this. You need, not a justification for giving you a lower raise, but just specific feedback on whether your performance is adequate and what you could improve.
If the money seems fair to you and you are treated reasonably otherwise, it shouldn't matter that much about the number fluctuations, once you have clarified your anxiety about performance.
I don't mean to take away from your main point, but Silicon Valley is not in a recession. The difference in energy between here and the rest of the country over the last 5 years is palpable.
I've jumped to a greener pasture a couple times. I always gave plenty of signals but I never made threats about leaving. He's right, by the time I've made the decision to look elsewhere and found another job, there isn't much that can be done to reverse that course of action.
Also, if you don't pay severance or have me on contract, you aren't likely to get much notice.
When I first started working in the industry nearly 20 years ago, severance and notice were frequently outlined in the contract. Generally it was the 2 weeks that is "professional".
When it is mentioned at all, the only thing I ever see mentioned now is notice. So much for professional.
Agreed. When I left my old job, even a 20% raise would have been significantly smaller than I moved onto. In order to even match it, it would have to have been about double that. As it is, even just a raise won't change things much, as there are almost always other reasons someone wants to leave too - it could be that the work was unfulfilling, there was no room to grow, the company had no direction, management was clueless, the internal politics were toxic, insufficient recognition for work, etc. Those issues don't go away with a raise, that just convinces people to tolerate them for a while longer.
Fine, I'll share my true story of how to negotiate a raise when you are an introvert and without being seen as a job-hopper.
Tell your boss: I'm getting unsollicited offers for 20-30% more than I'm currently making here. Can you fix that?
This has worked successfully to go from low $100K to >$130K.
It works for two reasons
1. It shows you know your market value - this is not a number you are making up
2. You are not being unfaithful to your boss, you didn't go out and sollicit those offers, they just happened
However you have to actually get unsolicited offers for 20-30% more, which is pretty difficult I would imagine.
Sure, I get cold called, and emailed frequently, but never an offer.
I think the interesting follow up to your post would be what you've done specifically during your career which you think resulted in unsolicited offers.
Perhaps I am being too literal but to me "unsolicited offers" is quite clear in that it was an offer of employment.
I wouldn't be as shocked if the OP is a high functioning software professional with an extensive network of peers familiar with her work that do indeed make unsolicited offers. That is the information I am interested in so I can position myself similarly.
If that is not the case I'm surprised anyone is walking into their bosses office asking for a raise because they got an email or cold call from a recruiter.
It's odd how so many software companies claim to be Agile and when it comes to employer/employee relations they toss the Agile Manifesto out the window. Agile is founded on communications and short feedback loops.
Please apply this wisdom in all of your internal business affairs, not just in development activities.
At my previous job, my boss continually told me that I was the most profitable employee and I was obviously one of the most valuable. One year in, I requested a performance review and it kept being delayed. 18 months in, still no formal performance review or raise. So, I started looking for another position and was offered a position with a great team.
I was set to put in my 2-weeks notice, the day after accepting the new position. Already "out the door", just prior to putting in my 2 weeks, I was asked if I was available for a review later that day.
Had my review come anytime between that 12 and 18 month mark, I likely would not have even looked for another position. I'm glad I did though, all things considered.
Great read. Seems to me that the trend of signing people to a specific contract term limit (2 or 3 years @ $X + benes) would solve some of this. When the contract is due for re-negotiating, there's none of this uncertainty over compensation.
Once a week for sure when you small, and with your direct reports. Once you are bigger (say 50-100+ employees) and have more indirect reports -- it's hard to meet with all of them every week in an unscripted fashion, especially when most don't report to you anymore. If you force yourself to do it once a quarter, especially in the functional areas you work less on ... it will make a huge difference.
This goes along with my One Universal Truth: "You get what you pay for."
The only real way to win on price is to find employees who don't know any better, and then, well, you have employees who didn't know any better. Did you really win?
Actually I feel that salaries on glass door are lower than reality. At least that was my impression after getting 6 job offers - all materially higher than glass door median.
I think a harder thing is making the decision to cut someone if they aren't making the cut. A lot of times it's like a bad girlfriend. The thought of being alone is worse than the pain you're going through... Especially if it's early and everyone is drinking from the proverbial fire hose.
I believe a handful of motivated, and skilled engineers is more valuable than a large team. I think it is very wise for employers to spend lots of time finding a few great engineers and motivating/retaining them with high salaries and equity exposure. The advantage of having a smaller yet more talented team also has a wide variety of business-level benefits including better cultural direction, less management overhead, more accountability, etc.
How about this algorithm ?
Whenever someone leaves, present two choices to the team:
1. Divide the salary of the person just left equally among the peers. For example, In the team of 5 developers, Joe was making 100k per year and he left the position. Give $25 raise to each developer in the team.
OR
2. Hire new person.
There should be a self-stabilizing compensation system where employee don't have to leave purely on the issue of low compensation.
Take the 25k bonus, give 10k to the original guy for leaving, and 15k for yourself. The original guy makes 40k for doing nothing and everyone else gets a raise.
Fit. Fit isn't about any one thing: money, manager, work or culture, but any one thing badly out of alignment can destroy fit. Retention means having lines of communication open with important roles and important people (not always the same) and judging the health of the fit.
As the type of employee described here, I think companies would do well paying their employees what they're worth. The only reason I've had to consider switching so far is due to significant pay differences.
- A culture of burnout (really, really bad death marches, mostly because upper management had fucked up by dithering about what products to make)
- A lack of respect for engineering quality (when the build for your project is broken for weeks at a time, you'd expect management to get a clue -- I mean, what are managers for? -- rather than ask about how things are going with the schedule)
- A lack of respect for your time, realized as a reluctance to buy equipment (I got my build times down to two hours, from four hours, by buying my own computers. Yup, I probably spent $5K on computers while I was at MS because my managers didn't see the benefit in buying faster hardware), and by scheduling tons of nonsense meetings.
- Politics (oh God, the politics). MS needs to fire about half of its "partner" rank people. There are good eggs there, really smart people, but then there are the ones who . . . aren't. (When they do get around to axing half of the partners, I'm betting it'll be the wrong half).
A year and a bit later, I'm at a place where they realize that the most valuable thing is your time, and equipment is Not A Problem. It's a great thing when you're the bottleneck.