Developer won’t get hit by a bus, they’ll get hired by Netflix | Hacker News Reader

Developer won’t get hit by a bus, they’ll get hired by Netflix

neomindlabs.com

272 pointsdeltamidway431 comments

I agree with the author's point about using popular tech stacks to alleviate the ramp-up time for new hire productivity, but that is not the optimal solution. The optimal solution is for management to not let high-productivity talent from leaving - increase their comp to whatever offers they might get in the open market. That's how labor economic works - it's a market.

Investment bank and management consulting figured this out a long time ago. Example - when you new grad starts in i-banking, they're in training for 4-6 weeks. Not doing anything productive, just training to do the job. Not the case in engineering, you are assigned user stories day one and your training is doing the work. So new i-banks are highly paid (so they don't leave because talent is perceived to be scarce and valuable) and they're companies invest in them (through training early on).

Right now, corporate managers are vomiting in their mouth when the have to look at how much they need to pay to keep their engineers from leaving. It's because of the perception of engineers - they're seen as semi-skilled labor (cost center, not strategic to the business) and are easily replaceable (no, they're not). Culturally, they have been conditioned to think this way, so no wonder turn over is so high every where.

Only failing companies in 2020 view their engineers as easily replaceable.

That said, there are a lot of failing companies these days thanks to cheap and readily available debt.

> Only failing companies in 2020 view their engineers as easily replaceable.

Indeed.

You should engineer your systems as if everyone is replaceable (including yourself) but treat your employees as if they aren't (even though they are, just not _easily_).

That's simply not true. There are lots of companies in highly regulated industries that remain profitable and have low regard for engineers.

The tech companies do invest a certain amount into new-grads. If you are a new grad in Microsoft working on most products you will get a weeklong training on how to build apps on azure (equivilant to azure level 1 certificate). You will also get invited to these pretty cool speaking events where they bring in people who have had TED-talks to discuss your transition.

> If you are a new grad in Microsoft working on most products you will get a weeklong training on how to build apps on azure (equivilant to azure level 1 certificate)

Do you actually get a certificate? That would be equivalent(and would actually be a good idea).

I think it shows up internally I completed the training. They say at the end of the course, that you should be ready to take the official test. I think you get a discount on the test, but you do have to pay for it.

That's good to hear and MS is doing the right thing, but this is not the case at many other companies.

They could probably do more to make it an integrated experience (manager had no idea these things were happening). But I think Microsoft is trying to make people feel like they belong. If these events weren’t going on only CS graduates from top 20 CS schools would feel like they deserve to be there.

"The optimal solution is for management to not let high-productivity talent from leaving - increase their comp to whatever offers they might get in the open market."

That might result in the engineer being paid more than the value of their contribution at their current employer.

Many things could cause this, e.g.

- the new employer is much more productive, can make better use of the engineer, and so can afford to pay more and still make money

- the new employer over-estimates engineer's skill level and likely contribution

While this is possible, it's relatively unlikely. Top performers can generate enormous amounts of value for a company. As a hiring manager, I absolutely believe in the existence of 10x engineers. The reason the term has been so mired in controversy is because folks think the 10x part refers to raw coding ability, but it doesn't. It refers to soft skills, communication, leadership, domain knowledge, business acumen, customer relationships if relevant, and dedication -- overall impact on the company. It's actually quite easy for one developer to have 10x as much positive impact on a small company compared to another.

As a hiring manager, though, I'm stuck in the middle between developers and executive leadership. Executives tend to form a notion of what different roles should be paid, and they just won't bend, even if it means losing talent and spending $1 million+ replacing them over time. The problem is that replacement cost is abstract and easy to ignore, whereas paying a single developer $500k/year to retain them feels very real. Never mind the fact that losing them means multiple projects will be derailed, you'll spend a year looking for a replacement to hire at twice their salary, that replacement will take 3 additional years to reach the same level of domain expertise, it turns out that replacement never takes on the same degree of leadership or earns the same level of trust from colleagues, and in the midst of all of this the absence of your top performer causes two other talented engineers to leave in the following year.

$500k starts to look reasonable in retrospect, but you'll never be able to sell it, so you'll do the above dance instead and spend more money in the end.

The issue is we're not able to quantify the costs of technical debt and lack of domain knowledge.

We rewrote something in React and adding a feature to it took 2-3 hours but doing the same to the legacy Java code took 3 weeks. This cost was easy to quantify and strengthened proposals to remove the legacy Java code.

I was literally asked "Do you think you are worth $x?" in an exit interview. Obviously I do, since that was the offer. What a strange question.

> Do you think you are worth $x?

Yes, actually $x * 20%.

Right? How much am I worth? How much do you have?

Investment Banks are a terrible example of low attrition workplaces, as attrition is quite high. It used to be the case (not sure if it still is) that expected attrition was ~100% after the first 2 years as an analyst as you were expected to go to B-school, the buyside or somewhere else.

Less of comparison of attrition, more of a comparison of:

* competing for talent by paying very well and wiling to do so

* investment in training early on

Two things that tech workers do not benefit from as much.

The whole discussion is anchored on retention. If you're not talking about that what is the point of your example?

>> The optimal solution is for management to not let high-productivity talent from leaving - increase their comp to whatever offers they might get in the open market.

>> Investment bank and management consulting figured this out a long time ago.

That only works if your business makes piles of money, like investment banks. Or FAANG.

The rest of us have a % of money to spend on talent.

The rest of you waste more money hiring 5-10x more mediocre engineers to try to mitigate the bus factor or whatever. And it's still not as good a product as it will be built by a handful of good, over paid and over worked engineers who really know what they're doing.

Most "over paid" engineers are smart enough not to get in a position where they can become over worked :)

That is a hypothesis that may be true in some cases. In other cases it may be better to have two redundant engineers at 150K than one at 500k.

The idea that there is a single solution is absurd.

> The rest of us have a % of money to spend on talent.

If the % of money allocated to talent is so low that the business cannot survive, then the business has no intrinsic right to survive. One possible exception to this would be a mission-driven non-profit, but that's not what we're talking about here.

If the business can't turn a profit and pay engineers at the same time, of course they shouldn't survive, but I don't think that is what they were saying.

There are plenty of viable business solutions that don't require paying every engineer 500k+.

Not all companies need $500k engineers or can afford them. An optimization at Netflix that improves performance by 1% may save them millions of dollars. The same optimization at a medium-size company may only save them a few thousand.

Also, it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. The latter two are directly making money for the firm.

> Also, it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants. The latter two are directly making money for the firm.

Yes, it is difficult, but possible.

Here's quick and dirty analysis - consider Sears, Walmart, and Amazon:

- Amazon pays its engineers near top of market - $1.5T market cap.

- Walmart has a pretty good engineering culture. They acquired a tech company to start Walmart Labs for data science stuff and they even have popular open source software (Hapi.js) - they're the largest company by revenue and $370B market cap.

- Ever been to Sears.com? Me neither - largest retailer in 1980 to bankrupt in 2018, stock price at $0.23 and $94M market cap.

I deduce that investment in software engineers == higher stock price.

I deduce that investment in software engineers == higher stock price.

Easy to do when you cherry-pick three companies.

Run your analysis on 10,000 companies large and small and you might have something.

I wonder if we looked at stock price / developers.

Would it prove or disprove this statemenet?

> Easy to do when you cherry-pick three companies.

* Netflix vs Blockbuster

* Uber / Lyft vs taxi cabs

* Airbnb vs hotels

* Blogs vs print media

* Youtube /Instagram vs TV

* porn tube sites vs porn studios

I could keep going.

I've also tried the corollary - companies that are successful while cutting cost in tech, but I can't think of any successful companies that are cutting investment in tech.

I meant quantifying an individual's impact. For i-banking that's easy. The more money an i-banker the raise, the better they are. There isn't a simple metric you can use for software engineering. Some terrible developers write a lot of code. Some amazing developers barely write any code.

Of course there is still meaningful signal you can use to differentiate developers, but it's going to be fuzzy. I-banking and consulting increase wages for their employees by firing everyone who doesn't meet a certain bar. In addition to creating a toxic work environment, this practice isn't possible with only fuzzy signals.

I mean, "treating your employees better" doesn't necessarily always mean "paying them more". For one, giving good employees more autonomy and decision power, treating people like adults, focusing on their career development, etc., goes a long way too.

> it's much more difficult to quantify the impact of a software engineer compared to investment bankers and consultants.

This depends to an incredible degree on what kind of "consultant" you're talking about. For the traditional "strategic consulting" type consultants it seems basically as impossible to quantify as for software developers, or rely most other people working in large companies.

I think as an employer you need to know when you have such an engineer, though, or be prepared to lose them.

I’d personally disagree with the cost effectiveness argument though. Unless your engineering work really cannot benefit from more skill (and as often as I’ve heard management think their work is relatively simple, in practice I’ve rarely seen it) then you’d have to replace a highly skilled engineer with a small team that would likely cost more than $500k. Packing your engineering firepower into as few bodies as possible is a highly cost efficient strategy, as most of the successful techs know.

On the other hand, a small team is less vulnerable to getting hit by a bus or hired out.

Even if you have the best compensation in the market, sometimes people leave just because they want something different. I agree with your general point that we should be willing to pony up to keep people, but ensuring your system is straightforward for other people to pick up and maintain is also a good practice.

You're asking that businesses think about long-term goals, efficiency, and what is best for the business. After having worked at over a couple dozen companies, I've never seen such an attitude from any business. Industry and size are irrelevant. Occasionally things line up by accident and the business does well, but every single business I've ever worked at or seen has a culture of shooting itself in the foot:

* No training (Not just for engineers but for anyone, including for specialty positions that simply don't exist outside the business)

* No focus on employee retention

* No significant raises / bonuses (Lucky to get a cost of living raise these days)

* No consideration for employees' goals

* Stressing employees unnecessarily with shit vacation benefits and no sick time

* Stressing employees with shit equipment

* Stressing employees with shit hours

* Stressing employees with shit office conditions

* Reducing benefits to slightly cut costs

The list goes on and on. Businesses succeed despite their own best attempts at hurting themselves, not because of it. Owners, executives, and other stakeholders are deluding themselves into thinking this isn't the case and often driving the business into actual bankruptcy or just below mediocre performance.

It's no wonder most employees are disengaged from their work. When you treat employees like shit, they will treat your business like shit to the greatest extent possible. They will do the minimum and it's extremely hard to change that course once it's been set. Employees are humans. Most businesses treat them like slaves, or machines at best.

There does seem to be a slight difference between stock-owned and founder/family-owned business, in my experience.

Not in my experience.

Somewhat related to this point: A large conglomerate I worked for managed to kill one of their major products by making the mistake of assuming that programmers are easy to replace with any other skilled programmer. So they moved a product team to a new office, knowing that the highest-paid people on the team would not choose to relocate, and assuming it would be easy to backfill them with inexpensive new hires at the new location.

Except, in this case, the programmers in question had decades' worth of hard-won domain expertise that was absolutely critical to their job function. And, this product targeting a niche industry, it was relatively uncommon domain expertise. So much so that the only people on the job market who had it were these folks whom they were ousting. All of whom had found positions at competitors within a day or two.

So then the company lost their ability to maintain the product in any meaningful way, and, within a year or two, customers started moving on as well.

Sounds similar to what happened to my team. In our case, it was "only" two years of hard-won domain expertise, but we were also "trained" by the original founders (who had left at some point after the acquisition). The new team had zero domain knowledge and while we tried to hand everything over as well as we could, it seemed like a lost cause to me. A couple of months later, we found out our old company ended up buying the competition.

>So much so that the only people on the job market who had it were these folks whom they were ousting. All of whom had found positions at competitors within a day or two.

If they were the only people anywhere who had the critical domain expertise, then how could there be any competitors to snap them up?

This story doesn't sound internally consistent to me.

Not the only people anywhere. The only people on the job market.

So the skills in question, while niche, still enjoyed a supply/demand ratio that ensured that the structural unemployment rate for people who had them was 0%. And most companies know to get who you can and then make sure they stay happy.

Unfortunately, large conglomerates tend to be very credientialist. So leadership positions tend to be filled with people who have diplomas from schools with a lot of name recognition, rather than people who have enough of their own domain expertise to understand the product's business environment.

>on the job market.

That's a very nebulous term, as this whole thread bears out. I feel sometimes like my comments are abducted by aliens.

Perhaps we understand the word differently.

To me, it isn't particularly nebulous, it just means, "People who are currently looking for a new job." Which would roughly be composed of people who are currently unemployed, and people who have jobs but are looking for a new one. I suppose the developers in the story I relate would actually be sort of the latter group looking to avoid becoming the former group, but that's perhaps diving a little bit too deeply into the semantics for a conversation that doesn't involve someone playing bongos or a djembe.

I suppose you could expand that to include, "People who are happy with their job, but could be lured away if you offer them enough money." But it's pretty obvious that that's not a useful subcategory of people for the purposes of the company in the story I'm relating.

The optimal solution is for management to not let high-productivity talent from leaving - increase their comp to whatever offers they might get in the open market. That's how labor economic works - it's a market.

Life is not that simple, and cannot be boiled down into "it's a market."

People are messy. They leave companies for all kinds of reasons. They just broke up with someone and want to start a new life. They don't like the weather. The have to take care of an ailing relative. They've picked up a hobby (surfing, hiking, skiing) that is inconvenient where you are, or more important to them than money. Very often they just want a change.

It's common for HN-types to try to reduce everything to a numbers game, but people aren't numbers. They're not strings of attributes that can be quantified by an AI. They're human beings, and human beings will always be unpredictable.

While this is all true, comparing the turnover in the tech industry with other sectors - even high-paying sectors - our industry does seem a bit crazy, so it's worth figuring out why this is happening and what we could do to fix it.

Very few reasons for leaving aren't connected to an implicit "and I'm making more money." Very few people take significant pay cuts for reasons that don't boil down to "obscenely toxic workplace."

Money and Management are the real reasons people move, everything else is an outlier.

The "hit by a bus" thing is used for the most dramatic effect: there's nothing you can do, there's no grace period where a "poached" developer can give some wisdom to his/her successor etc.

Managers know that it's not the most likely case, but it's still possible.

Yeah I think "hit by a bus" generally means there is 0 chance of knowledge transfer and is more a disaster recovery term than a talent retention term.

Unless you really burn a bridge with your workers they should have at least a week or 2 to transfer knowledge!

I'm picking up from a senior colleague who wasn't hit by a bus, but did die suddenly out of the blue, with absolutely zero warning. Reconstructing everything that he was doing, and why things are the way they are, has been an interesting challenge to say the least.

Opposite opinion. You should never need more then a day to knowledge transfer. If that.

I always try and cross train people enough that I can quit at any point and it’s not an issue.

All processes are kept automatic where no one is crucial to keep it running.

Mostly it’s useful for vacations. In the past I went on a cruise. And I wasn’t sure the company will be online without me to baby them through.

After that I got extremely serious about investing in the team and tools to never let that happen again.

I agree with making things automatic. But sometimes you have to let team members specialize. It's less efficient for everyone to know everything. But, it is good if everything is known, at least in part, by at least two people.

When I was managing the goal for the team was to have at least two people know each thing, but avoid too much overlap between any two people. This is like some form of erasure encoding :)

A Company got down from 20 to 3 people. Completely different tech stack each. Many warnings that company was in major trouble if any of left. Other 2 had no way to support.

Oh It was so painful when it happened.

Then you've mitigated the bus factor, this thread is about that being uncommon or not fully supported in other places.

Part of the mitigation discussion here is a tech stack that is transferable.

In practice, "knowledge transfer" is pretty much a joke anyway. Unless they have been documenting important things to know along the way it's usually at best an ad-hoc, partial data dump of the most recent thing they were working on.

Even that goes a long way. I've seen in-progress work just dropped on the floor, then they launch, and the team scrambling like their hair is on fire when just looking at the dev's assigned tickets would have shown in-progress work to fix all the hair-on-fire issues before launch.

There should be knowledge transfer as part of work review..

yah, terminated with no possibility of knowledge transfer.

Keep in mind that an organization that doesn't appreciate their top performs (hence them leaving) is also more likely to not take advantage of their limited time left when they give notice.

And a grace period that isn't taken advantage of is functionally equivalent to your employee being hit by a bus.

There's several reasons a bus is seen as worse than them being poached:

* Early startup employees have golden handcuffs regarding switching jobs. Sure, Facebook is offering them $500k but they'd be on the hook for $200k in taxes if they exercise their options and they leave a bunch more un-vested options on the table.

* You can mitigate them leaving by having a better work environment, equity and so on. Not much you can do about a bus.

* You can pay them to stay on for another month or to consult after the fact. No amount of money get's you an hour long phone call to the afterlife.

edit: Also, the article underestimates the effort needed to get a FAANG job. They don't just call you up and offer you a job. They offer you the chance to take a grueling set of white board interviews that require months of studying to pass.

As a counter point: the golden handcuffs for startups/companies aren't guaranteed to pay off, so the employee may decide that the options are still worth $0 and not bother with incurring taxes by exercising.

I'm probably okay with losing out on a sale event with a startup I've left, especially if my stake is <1%, if the big tech company pays as well as it's reported. YMMV.

Options for most startups are mostly way overrated. The opportunity cost to hang around for 5-10 years to maybe get to a liquidation event is very high.

Seems like a thing where if a FAANG wanted the early startup employee enough, they would gladly compensate for the one-time cost with a signing bonus.

I think an important part of the "golden handcuffs" is the employee's sense of deep expertise and importance at their current company, especially if they were a very early hire. Coupled with a bit of impostor syndrome, this can create a huge gravitational well where the employee sticks around even in a bad situation. They are afraid that by switching they will take a huge "demotion" in terms of their overall importance and the weight of their decisions in a new team/company.

FAANG companies can certainly offer more money, but there are lots of things other companies can offer too (besides Ruby on Rails apparently).

- ownership of the product and process

- less red tape and politics

- good work life balance

- location other than Silicon Valley

- boss who pays attention to engineer needs and wants

Money is a huge factor but it isn't the only one!

I feel like people try to tell themselves this, but money is BY FAR the most important factor. And FAANGs pay a ton.

Maybe this can be true if you're going from like $250k to $270k from FAANG to FAANG.

But most of the time we're talking about something like $180k to $250k when getting poached to a FAANG. It would take a huge amount of perks or otherwise to make that gap worth it.

(Of course this isn't true for everyone. But it's true for most)

I know a guy who passed on Apple because they weren't offering anywhere near that. Are a lot of people really seeing this kind of money?

Yes: https://www.levels.fyi/

See, I always have trouble with 'stock'. I need more details. Is it a stock grant, or an option grant? Because with a publicly traded company, they'll let anyone buy options. The difference is that I don't have to wait 2 years, but I also don't get to wait three years if things aren't great at 2.

It’s a grant. You’re given $x value of stock (say $100k). It vests, meaning you can do with what you want, usually at 25% per year, often with a cliff at 1 year and then quarterly/monthly after that.

You may have restrictions on when you can sell depending on your position in the company and other rules.

But that mostly sums it up at a high level.

AFAIK it’s a stock grant with a vesting (going to assume 3 year, 1 year cliff) period. So after 4 years at BigCo I own $200k in BigCo stock.

I agree, options would worthless. They only seem valuable for startups where you’re paying pennies against the potential of a $10/share IPO.

It's always stock grants. Only crappy companies give their employees option grants these days. FAANG doesn't do it, as well as the second tier of tech companies (Oracle, Adobe, etc.).

And they will make you rich. Someone who works for these companies at a non-junior level for more than 5-10 years and is reasonable about expenses can quite easily become a millionaire if they work in their offices in developed countries. 5 years for senior positions, 10 years for regular positions.

Total compensation, yes (i.e. base salaries are usually much lower)

I've generally seen high 100s low 200s for L3, mid to high 200s for L4, 300s for L5.

This is total comp. I don't know Apple specifically but I'm basing this off of a few of the FAANGs that I have experience with.

>But most of the time we're talking about something like $180k to $250k when getting poached to a FAANG

In the last couple years we're talking 2-3x from our BigCo's $150-250K. Getting such an increase people do feel like being hit by a bus - at least my friend looked that way for a few days after getting such 3x offer couple years ago from a FAANG style company :) Our managers don't even try to match - during the 2019 not FAANGs gave 2x, 2x and 1.5x (that one still got lucky as his RSUs value almost doubled because of acquisition right before his first year cliff) to the other 3 acquaintances, and beginning of this year a teammate got 2x from Apple after concurrents with another FAANG and couple non-FAANGs.

Wait, are you saying 150-250k is standard and you can get more at FAANG?

Most senior devs I know aren't breaking $130 in a flyover. To be clear, a lot aren't breaking $100,000.

It _was_ standard few years back and is still for anybody who hasn't changed job in the last 2-3 years. In our BigCo we're loosing people fast (only lazy sediment like me - Google gave me only 1x - is still there), and the new people, not much of them around though, are getting $300K+ .

I am lost between not believing you and questioning what I am doing with my life.

It's about 180k for beginner level, 260k for the level above that, and 370k for seniors at G/FB [0]. And if you consider Chicago flyover, then you can get close to those numbers even in flyover as I'm in Chicago and pulling about 5% less than those numbers. Although it definitely is easier to find those jobs in NYC/Seattle/Bay area.

[0]: https://www.levels.fyi/company/Facebook/salaries/Software-En...

You're saying that senior devs in Chicago are $350k? Because that doesn't jive with literally any piece of data I've seen. Even on the high side I can see somewhat reputable sources saying seniors are in the $180-200k range.

Can get close to those numbers

Senior devs don't get those numbers on average in the bay either. Facebook/Google are the top (NFLX too but they only hire senior engineers) and few other companies close behind like amazon, apple and some fintech. I'm saying you can get those numbers because I myself am making 5% below those numbers (245k for mid level) in Chicago for what levels.fyi is showing what FB is paying for their engineers.

Every time compensation comes up on HN, people come out of the woodwork quoting some super high outlier salary that someone they know makes, and then they extrapolate that to "all FAANG software engineers must make $500K". Sometimes they quote that "anecdote aggregation" website whose name I won't even mention as evidence that these super high outlier salaries are the norm.

As far as I am aware, the data powering these sites (and HN's comments) are voluntary and self-reported, and there is no correction for this self-selection bias. Few people making average or below average compensation really want to admit it or post about it in public, so you're only going to see evidence of above-average salaries, biasing the resulting average figures.

Outside of finance, right?

Take a look at levels.fyi (not affiliated).

The base at senior typically varies between 160k to 220k where the majority of compensation comes from stock. Seniors at FB tend to make between $300k to $450k. This also includes generous perks like 401ks, health insurance, etc.

At Netflix it can even be astronomically higher.

Levels is a cool site, had no idea how high some salaries can be. Kinda motivates me to get on the leetcode grind.

One promotion from junior at a FAANG can get you to mid 200s.

This is the reason I have a really hard time with the "cost of living" arguments people make when talking about living in the bay area. $2.5k/mon rent is 30k. Even if I'm getting free housing elsewhere, it's generally not worth it.

Not sure if MN is a "flyover" state.

I lucked into a great job with a good, generous boss that values technical expertise and domain knowledge who also built a growing, successful business with high margin, recurring revenue.

I'm getting close to $250k as the lead dev/CTO. I wouldn't take a FAANG job for $350k. Maybe 2x/$500k.

Though I'd be afraid I wasn't cut out for it, and frankly, I'm not going to put in the work to get an interview and 2x offer from a FAANG so it's a moot point.

I expect if I ever have to change jobs I'll be taking a pay cut.

Our mid-level devs are getting $120-150k. We'll hire a junior - as in their first dev job - at like $70k but they'll be hitting $100k in 2 years. Raises slow down some after that but 10%/year is common. No grind culture, flex schedule & location (we have some people who live out of state).

> I feel like people try to tell themselves this, but money is BY FAR the most important factor

I can only offer the anecdote of myself, but I've floated the idea several times of taking a pay _cut_ to obtain more autonomy. No manager has ever taken me up on it.

I've floated around skipping a promotion cycle to work 4 days/week for same pay. No manager has ever taken me up on it either.

I feel like people tell themselves the opposite so they can justify continuing to run the SV rat race.

Sure you might be able to sock away an extra $10k/yr but the valley is gonna eat most of your raise and leave you miserable if you don't drink the kool-aid.

Is it? Or is it because you can sock away way more than $10K/year extra and have a very enjoyable life both at and outside of work?

You paint a false dichotomy here. These compensation numbers are just as likely in NYC. Work life balance at many of the FAANG companies tends to be better than other companies (especially startups), and I've had plenty of bosses that pay a great deal of attention to my needs.

I upvoted both your comment and parent.

9 years at a FAANG and I'd willingly trade plenty of my money and golden handcuffs for a workplace that was more productive, creative, with better communication, and so on.

But when I look I just find shops with distorted work life balance, pointless whiteboard coding interviews, egotistical pseudo-feudal lord bosses with an illusion of hierarchical dominance, and a bunch of 25 year olds insisting on the merits of the latest JS framework flavor of the month.

Want experienced engineering talent (well, maybe they don't)? Money is not the only factor. Smaller companies are shorter on cash, but there are plenty of other things at work that smaller companies can control for...

"when I look I just find shops with [...], egotistical pseudo-feudal lord bosses with an illusion of hierarchical dominance, [...]"

The rest of the traits you list I can usually figure out, but how can you get at that one from just a couple interviews at a company?

A combination of cynicism and reports from employees who already work there or worked there :-)

Also describes almost every job I had before coming to Google.

Anecdotal, but when I hear of people working impossible hours and with a clueless boss it's almost always a startup or some small shop.

It's also a good signal that there's something wrong with the management at the startup and/or the startup is not doing well enough to hire the resources they need.

ive worked for 2 fortune 50s and in both cases i had lots of autonomy and ownership of the product and process.. however other teams in the same org were clearly being burned out and worked to the bone by their bosses. its a management thing. smaller companies have fewer managers so your odds of working under a bad one go up.

> - location other than Silicon Valley

FAANGs have been embracing permanent work from home/anywhere over the past 5 months.

Do they pay as much for an Alaska-based dev as for a SV-based dev though? I'd be surprised if that was standing policy outside of a few smaller companies (Basecamp is fairly famous for paying SV salaries to all remote employees)

> - ownership of the product and process

I work at FAMANG, and I feel ownership over my product and process. I set priorities for it, I set how work will get done on it, my team collectively determines what kind of processes we follow, and my manager just sanity checks that things are on-track.

> - less red tape and politics

Red tape, sure, politics, there's no guarantee of less politics in a smaller company. If anything, when politics happens, you don't even have the chance to keep your head down and avoid it.

> - good work life balance

There are hundreds of thousands of FAMANG engineers who have good work-life balance. There are many who don't, but there's an pretty big upside to working at a firm/on a project, where you aren't just an expensive cost center (non-eng-firms who generally don't give two damns about their engineers), and where you firm/project isn't default-dead (startup).

> location other than Silicon Valley

Large branch offices exist. Not in the mid-west, but the software jobs in the mid-west tend to be of the 'expensive cost center' variety.

> boss who pays attention to engineer needs and wants

Why would you think you can't find this at FAMANG?

I don't mean to generalize that Big Tech has awful work life balance or other problems (I am sure it is mostly the opposite!), but rather there are lot of things smaller companies can and should offer to be more appealing.

Yes. If your company is actually very good on those things, it can be a good selling point, especially to someone who has been burnt in the past.

The problem is that when I'm applying for a job, I have no idea if the hiring manager is being honest with me, or if they are just telling me what I want to hear. Any claims of 'no politics' and 'you own the process' should be taken with a lot of salt.

Ha yes it is hard to believe it when people say it, almost like when someone has to tell everyone they are smart it often means they aren't that smart...

The few places I've seen that try to push the benefits/perks angle vastly overestimate their superiority and value of those things. 10-20k a year for 5 years buys a lot of food, gym memberships, tickets, drinks, swag, etc.

The grass is always greener on the other side of the fence. Rightly or wrongly, people who have the things you mention start to value them less, and when a FAANG waves a huge stack of green at them it can look very tempting.

The three biggest ones are people, scope of work, and future career potential.

The author makes it sound like Rails is the recommended way to build software that is maintained by a revolving door of junior developers whom you don't have to motivate or compensate, because you can just hire another cog-in-the-machine when the old ones inevitably wise up to your game.

Not sure if that was the intended message.

yeah, kind of read it that way, or as an ad for their rails churn 'shop'. More than anything seems like an ad for rails developers, nothing else.

as a fullstack guy who's worked w/ rails, laravel, etc... and who's done my share of frontend stuff, I'd say focusing on the frontend might be a bigger sell, cause that shit is VERY opinionated lately.

Vue vs React vs Vanilla vs Alpinejs. Do you use bootstrap or tailwinds? Backend code is rudimentary but nailing the ui stuff and also cross platform if needing mobile or w/e is much harder personally.

Also, it might not even work!

What happens when one of your fungible junior engineers happens to be smart enough to do some tricky things even with Rails?

And then she gets hired by Netflix to do something more career-enhancing than copy-pasting Ruby code from StackOverflow.

Now you're stuck with your revolving door of undercompensated junior developers and a complicated Rails application. Uh-oh!

Thanks for this perspective. I believe it takes developers at all levels to maintain a piece of software. A developer of 10 years experience may not get professional fulfillment out of form validation changes, but a bootcamp grad shouldn't run the SOC2 audit.

I'm pretty sure that's the intended message and the thread is simply hijacking the thesis to talk about developer compensation as usual.

Instead of "hit by a bus," I prefer the term "win the lotto."

Any member of your team could win a life-changing amount of money in the lottery, inherit it, win a gambling bet, etc. Frame it as a good thing rather than a death or a change of hire - somebody might just flat out retire because they don't financially need your employment anymore.

I'm a fan of "hit by the lottery bus" myself.

That poor person would then need rocket surgery.

Sure, but even someone retiring after winning the lottery might deign to write a few things down for you. The point of the bus scenario is that there is not even the possibility to ask them a question you might get an answer to.

I don't really see why framing it as a positive thing or negative thing matters, no one is actually getting hit by a bus, it's just a hypothetical scenario.

> Sure, but even someone retiring after winning the lottery might deign to write a few things down for you.

Might, or they might not. Just as if someone were hit by a bus, they might be able to communicate from their hospital bed...or they might not. Hope is not a strategy.

> Hope is not a strategy.

Well yeah, that's why the whole scenario in the first place is that they're hit by a bus and instantly killed.

Maybe it should be rephrased as "blown to a million pieces" then there's no question you're discussing a situation in when there's an immediate and irreversible loss of knowledge.

I see this one as a different problem.

If your team members who won the lotto would just give their two weeks and quit, then your company/team has a substantial morale/motivation problem.

Such a company is not creating an environment where people enjoy being a part of it.

Yea sorry that's bullshit. I certainly don't need the stress of a job in my life if I have other options. I don't care how much I like my job, it's still a job and the only reason I'm doing it is to make money. Otherwise I'd be spending time with my family and doing hobbies, of which one would likely still be writing software.

And I wouldn't expect anyone in that position to give me two weeks. Two weeks is about not burning bridges. If I never need to cross that bridge again, what do I care if it burns?

>And I wouldn't expect anyone in that position to give me two weeks... If I never need to cross that bridge again, what do I care if it burns?

IMO that makes them an asshole.

But, to your point, sure. If I have FU money then depending on a lot of things including what arrangements I could make with an employer, I might well choose not to work for someone else.

Agreed. A rich, independently-wealthy asshole. But there's also a difference between my moral judgements and my preparations. I can hope someone won't be an asshole, but I will prepare for it.

Sure. And again this comes back to the bus factor. If someone disappears off the face of the earth for whatever reason that will hopefully not precipitate a major crisis at any company with more than a handful of people.

I never said anything otherwise? I'm unsure what you're trying to get at. Are we just agreeing with different words?

Yeah, we're agreeing. Hope for the best, expect the worst.

People work jobs to get paid money. Not because it's the most fun thing they can imagine in the whole wide world.

What would you expect someone who just won the lottery to do? Continue working and not enjoy a vacation, etc? Keeping contact with friends made in the workplace is completely orthogonal to giving notice after winning the lottery, and taking a long vacation.

If I win the lotto, I'll give 4 weeks notice. If I get hit by a bus, not so much...

I love this, thank you

I always call it the "lottery problem" instead of the "bus problem" because it's more positive. Also for some people, getting hired at a FAANG is like winning the lottery so it jives with OP's article.

The problem with either of those is that the chances of either of those things happening are incredibly low, so the urgency to act on it isn't there. If someone would tell you that you have to prepare to the one in a few million chance of winning in the lottery, you would likely also ignore it.

An employee getting hired by another company (doesn't need to be FAANG) is on the contrary a rather common occurrence, and a lot of people understand the importance of preparing for that.

I love this, thank you

> you want more than one person in your business to have domain knowledge

> Everything gets a lot easier if you select the right software and framework

Huh? Domain knowledge doesn't refer to your tech stack or coding practices. It refers to why you've built things the way you've built them -- customer requirements, business requirements, technical requirements.

Ruby on Rails may improve onboarding time, but it has zero to do with domain knowledge.

This is such a low-effort blog post:

1. It's click-baity. From the headline you'd think it would be a discussion about why engineers hop jobs so frequently, why in particular FAANGs seem to be so attractive, and what we could do to increase retention. Instead, the post just quickly summarises what we've known for ages (turnover is a big problem), very briefly goes off on a completely irrelevant tangent (that it's more likely for an engineer to change the company than to be hit by a bus, which is true, but pointless) and then tops it off by the insane suggestion that "just use Rails" is the answer to all of your turnover woes (more on that below).

2. There is an interesting discussion here to be had: why exactly do companies suck so badly at retaining talent? My take on it is that we all (companies, developers, etc.) routinely emphasise the wrong things (office perks, showing off tech skills, etc., instead of a good understanding of the product) and burn people out, but as said: this is a much larger discussion. More importantly though I disagree with the received wisdom that "developers are developers" and domain knowledge is worth nothing. Of course, you always should be prepared for the worst (i.e. the proverbial bus), but it should still be the companies' priority to retain good people as long as possible because once somebody leaves, so much knowledge just goes to waste and has to be reacquired. At my last company, my whole team was fired because they thought that some other team would be just as good for the product, ignoring the fact that we'd built up the product ourselves and all the knowledge for two years. But to the higher-ups, the view was that developers are exchangeable.

3. The author just really comes across as immature and uniformed with their unilateral praise of Rails. I've worked on Rails apps so messy that they were almost impossible to understand. And, by now, Rails is by far not the only framework with strong conventions and a lot of out-of-the-box support for many common things - Spring Boot for example (whatever its faults) arguably supports even many more requirements. But more importantly, for any kind of non-trivial app, the complexity is not just in the technology: it's in the (often contradictory) requirements, the different architectural tradeoffs, the little gotchas, the personalities in the team, etc. etc.

> Everything gets a lot easier if you select the right software and framework, primarily if you use Ruby on Rails. Rails itself is a full-stack framework that has a best practice for every piece of a web application. If you are committed to doing things “the Rails way,” you cut the total cost of ownership by A LOT.

Rails has an incredibly large community but I think this statement would be equally true for any tool you're well versed in

Having worked w/ rails/laravel, I'd say you could say the same thing and it may even be 'more' true about laravel (see: built in queues, authentication, etc), with rails you need devise, and 3rd party packages for a lot of the normal boilerplate.

However, lately I'm thinking more about performance so would love to work more with rust or golang, though I find rust harder to grok mentally. Golang is nice though, and easy to follow most code samples.

I've been meaning to checkout rust/golang for some time now - might pick up a book on it. I've worked primarily with rails the past few years and at times it feels like some of our biggest maintainability issues are the direct result of certain third party packages we reached for to solve boilerplate.

Not to knock on using libraries or anything like that, but we've definitely felt the pain of putting tools / convenience ahead of architecture.

Being on the receiving end of poaching is simply a failure to compete in arenas beyond compensation.

Not only must you compensate your talent at the top of the market and then some (including generous equity), but you must give your employees an amazing work environment with excellent work/life balance, while providing something for them to work on that motivates them on an ideological level.

When any part of this aegis cracks, poaching has the potential to ravage your ranks.

I would say that in the case of especially valuable or world-class talent, it's the founder's responsibility to know as much as they can about that person, and to truly pitch them on a level that fully aligns across all dimensions of that person's life. Give them not only excellent comp, but fulfillment and purpose that is congruent or even symbiotic with their personal lives and overall ambitions.

Deep down, most people aren't pawns that you can simply acquire with a number and expect the highest quality work from.

> Deep down, most people aren't pawns that you can simply acquire with a number and expect the highest quality work from.

In practice, it is extremely rare to find managers who effectively practice this. When you do, it's pretty amazing to watch in action.

I've only seen one such manager out of hundreds I've encountered consulting. That manager's team members won't leave the team for even 2X pay increases, because they figure the additional anticipated stress and job insecurity is not worth it. The amount of trust between that manager and the individual team members is higher than I've ever seen elsewhere, and that manager redefined for me what was possible with people skills superpowers. RDF doesn't even begin to describe it, and this field was accomplished without Jobs' infamous tantrums.

Thanks for that, it's encouraging to hear.

While I've no experience in the corporate world proper, as a solo founder 7 years into the same project I've a similar game plan with respect to talent, and just hope one day to have the privilege of giving it a go. Further (albeit slightly outdated) context in the link below.[0]

My scenario is more to do with how to put together a dream team, and convince people to join that team. With world-class talent, you have to consider that some of the people you want to hire are already quite wealthy and/or famous. Therefore, if you want any hope of landing let alone retaining them, you have to dig deep and discover what motivates them, and understand what aligns with their existing pursuits and goals.

If I ever do get the chance to hire any of these people, I'm not that worried about the sell. I've probably had countless imaginary conversations with each of them over the past few years. To even have the opportunity to talk to any of these people would be an honor, so the notion of somehow mistreating them, or failing to both compensate and appreciate them to the maximum extent possible just doesn't compute. That extends to the non-wealthy, non-legendary hires as well; if anything it's a healthy model to approach how you treat all people in your employ.

As an aside, one of the biggest problem I face with respect to hiring (minus funding and, you know, actually getting off the ground) is: who to approach first? Dream team assembly dynamics are very delicate from a game theoretical point of view, and I've begun to think this is perhaps the wrong way to approach thinking about the problem. Elizabeth Holmes infamously used the "If I get person X, then getting person Y will be easier." strategy to great effect, but she was a complete fraud.

There's a few ideas I have here that aren't fully elucidated, but probably could be thought of as consensus-based offers. Pitch people individually and in a personalized fashion, but with no expectation they accept the offer unless certain conditions are met, such as others on the prospective dream team agreeing to the same understanding, or even making it contingent on funding itself.

Assembling a ~50 person team pre-funding certainly is putting the cart before the horse in so many ways, but I think it can be done. The look on the VC's faces would something. "Here is the vision, here is the prototype, here's a team of 50 exceptional people—some of whom are legends—that have agreed to build this thing together, contingent on funding. Just need the money."

[0] https://news.ycombinator.com/item?id=22429827

>Not only must you compensate your talent at the top of the market and then some (including generous equity)

How is that actionable advice for companies competing with the richest companies in tech? You can indeed (hopefully) do the other things you say but you may simply not be able to afford to compensate them at top of market if that market includes Google or Netflix.

That's where equity comes in. However, equity is only worth something in any practical sense if it's fair and the employee truly believes in what they're doing.

Most startups offer joke equity that's subject to dilution games with salaries below market, while claiming they hire only the best.

Post dot-com though, options (now mostly RSUs) are hardly funny money any longer. So bets that my company will go up a whole lot more than Google to the degree that it covers $100K/year comp difference are still bets.

It's fairly clear to me (who doesn't (and haven't applied to) work at a West Coast tech giant) that if you can get a job at such, you will make more money. That's just the way things are. Of course, there are reasons to work elsewhere, but making the most money is probably not one of them.

Yeah, I completely agree equity is no replacement for proper salary.

Just saying it's a really effective tool when combined with ideological motivation to fend off the unlimited pockets of FAANG-scale companies.

Realistically speaking, isn't getting hired by Netflix et. al. a practical impossibility for 99+ % of software developers?

Yes, it is. And the high salaries at netflix are for top performers, not someone who did a full stack, once.

Like you said, 99% of software developers are NOT the top 1%. ;-)

EDIT: I removed some snark after reading Zenbit_UX's reply.

In response to your assertion that 99% of devs think they are in the top 1%, I'm not sure if that's true...

Here's my case:

Devs who work in a team with others are constantly exposed to the skills, cleverness and ingenuity of their colleagues. Most interns and juniors look at sys architects and senior devs with awe, not down on them.

Obviously we're all exposed to incompetent dev's at similar rates, but I feel like when you become the best dev in a company most realize they're unlikely to learn much more and should consider moving on, if not out of à desired to learn more, than likely out of frustration.

The wildcards are the "1 man shows", a dev in a department of 1. These people are often either incredibly brilliant and don't need any help or so stunted in their development and inflated I'm ego that they genuinely do believe they're the 1%.

As a 1 man show dev myself, I often have to remind myself I have no baseline reference for how good I am - despite my talents being sufficient for my employer to not need to hire others. To combat this, I just have to read HN and get a frame of reference for what others in the industry are accomplishing. It's quite humbling.

Good point, I edited my post. Thanks.

So 1% chance of it happening. Far more than being hit by a bus.

Back-of-the-envelope.

In 2014, Google had around 28,500 software developers. [1]

In 2016, it was estimated that the US had around 3.87 million professional software developers. [2]

So around that time, about 0.75% of all software developers in the US worked for Google alone. If your organization employs a few dozen skilled developers, there is a very strong chance that some of them could find a placement within FAANG. It's likely that these are the engineers that you rely on the most.

[1] https://www.quora.com/How-many-software-engineers-does-Googl...

[2] https://en.wikipedia.org/wiki/Software_engineering_demograph...

Only some of those employees were in the US, though. So probably the chance was 0.5% or lower.

It is, but replace "Netflix" with "a competitor" and the point still stands.

A good idiom doesn't need over-explanation, and I think the "bus factor" is a good idiom; no Rails or Netflix commentary required.

I think "poach factor" is a more important idiom/risk, naming particular boogeymen isn't all that relevant. It's far more common, and far costlier. As someone who has literally experienced the bus (well car) factor, after the blow of the initial loss, there is some sense of we have to find a way to manage that takes over.

I don't care how you put it, but the fact is that people leave. I led an engineering team I was quite proud of, and days came that I had to let top engineers go. Everyone has growth arcs, and they had opportunities to seize their dream jobs working on things they'd never get to otherwise. I was proud to have felt like a stepping stone on the way to their dreams, even though it screwed the business temporarily. I learned a lot of what this article is trying to say. Calling it a bus sounds like a one in a million disaster to prepare for. Getting hired by Netflix is far more likely but just as impactful.

This is written to business leaders, but I feel like if phrased differently would sound familiar and accepted by HN. Namely, don't adopt esoteric technologies no one else knows. Document production process. Never let mission critical operations exist solely in your lead engineer's head.

The fact is that it's never a good time for your best people to leave, but that's inevitable on a long enough timeline. It's the duty of business leaders to be prepared for that so they don't have to resort to dirty tactics to convince them to stay.

Thank you, this is great feedback.

I've felt companies would want what the post lays out:

- A safe software stack

- Make code understandable (industry best practices)

- Focus on employee ramp up time

I was confused when some companies stressed different things, and I didn't quite realize until reading this post that it might be coming from a place of fear of losing engineers.

What I've seen:

1) Committees for coding standards

2) Teamwork over code ownership

3) Peer code reviews to enforce quality

Sounds like these things would help increase code quality and reduce the bus factor. But I think there are some dangers.

1) Committees can mean that no individual is responsible for bad decisions

2,3) Teamwork is great if people have separate roles. Too many cooks can become a real problem otherwise.

I suspect people afraid of responsibility are more likely to embrace committees and teamwork. Dickheads incapable of working with others are more likely to take ownership (or else they'd be completely unemployable).

I also suspect many startups cargo cult practices that work well for giants, but are net negatives that encourage your employees to leave if you're small. Lacking ownership but getting paid super well is a better tradeoff than lacking ownership AND lacking amazing pay.

I guess I'll be the one to say it. No, I am much more likely to be hit by a bus than hired by any high-caliber tech company. I'd say stroke or heart attack top the list for me - probably will happen before 40 too.

And here I am, can't even get a recruiter from Netflix to reply, after submitting my resume on a job that I was match for 10/10 requirements on the description AND got someone to refer me.

Don't put yourself down, hiring is broken. Very few recruiters actually understand the requirements that are in demand for a given position, and many will discard you for irrelevant reasons: e.g. they dislike your CV formatting, or you have extra unrelated experience in the CV (thus you're not specialized).

It's mostly a numbers game, so keep putting in the time - but not mindlessly: keep optimizing your CV/presentation/skills and it will eventually happen.

When was this? Companies now are slowing hiring down a whole bunch

Pretty much last 5 years of my career

> “Staying on the Rails” makes any new developer productive almost immediately ... Sticking to the standards evangelized by the community and adding proper documentation ... makes onboarding a breeze, which creates more productive developers, which makes hiring more accessible, which reduces your “bus factor.”

You could make the reverse argument. Using "industry standard" tools makes your top performers much more likely to get poached. Using unusual (but enjoyable) technologies might increase employee loyalty.

I use the phrase "win the lottery" rather than "hit by a bus". Has the same impact but it's less negative (though probably less likely :-))

Sometimes it does happen. I once interviewed with a company that was hiring because one of their engineers had died in a motorcycle accident.

Personally, I think trying to reframe it as happy and positive and coming with a grace period is a little frivolous. Your team should be prepared to transition someone's responsibilities in the context of a sudden, wrenching, and traumatic change.

When working on a project, I would title my documentation something like "Bus Document," aiming for a soup-to-nuts file describing how the project came to be all the way out with appendices describing each file format, etc. I spent a lot of time talking about the Bus Factor, to little avail. A pity.

Nitpicking, but FWIW that's not the definition of a bus factor I've learned. It's a number of people to be hit by a bus for the project to die. Bus factor of one is a SPOF, so you need to increase your factor, not decrease it.

That might be an unusual situation but actually happened to me. I used to be in a team of two, going to work after one weekend - he's dead.

This reads basically as an ad for "use rails its better than the rest, cause it's what we use, and you need us! So hire us!"

Are $500k+ yearly salaries in SV really that usual?

If you factor in stock grants and the crazy run-up in their valuations over the last decade(s), yes. This may or may not continue.

For senior engineers, yes. I've found that https://www.levels.fyi/ is pretty accurate.

Levels.fyi seems to indicate senior total comp as more like 300k in Bay Area for FAANG.

Google is ~$350K, Facebook is ~$375K, Amazon is ~$315K (and not known to pay well outside of equity appreciation), Apple is ~$320K for ICT4 which doesn't map well to Senior at the others, probably a bit low. Netflix is severely north of $300K but hard to say because there's just one title -- average at $450K.

Right: the grandparent was about north of $500k though which apparently seniors don't make, only higher levels. I'm surprised I was downvoted there?

I guess "senior engineers" can be up to interpretation. Colloquially, I take it as someone with mid-career experience. For most of the FAANGs, "senior" can be reached in as little as 3 years out of college, with a median somewhere around 4-5. For a 30+ year career, one can safely assume your compensation will continue going up from your "senior" title 5 years in.

To summarize: yeah, I suppose $500K 4-5 years out of school isn't achievable, but within 10 it is.

That would be a staff level position, possible but not common. https://levels.fyi has details, but in the 200s for experienced, 300s for senior.

> Are $500k+ yearly salaries in SV really that usual?

Salaries? Not at all. Total compensation? Well, it depends.

Software engineers with < 10yrs of experience routinely make this much at FAANG. The total compensation number usually includes the following:

* Salary

* Bonus (anywhere between 15-25% of salary)

* Initial grant that vests over 3-4yrs

* Stock "refreshers" that you get annually

* General equity appreciation due to a bull market

For senior engineers, the equity portion of their compensation far outweighs their salary.

I wouldn't count the equity appreciation as compensation. you already own the capital, its your own capital gain, not income from employer at that point.

I'd argue that if we're talking about unvested equity, counting appreciation as a comp increase rather than capital gain is reasonable.

It’s basically guaranteed at this point. And you don’t own the capital, you don’t start getting the massively appreciated grants until you are a few years in

Yes and no. When your RSUs are granted at 100k and then vest a few years later at 300k, from yours and the IRS' perspective you made whatever + 300k.

Yes, but you should value them at 100k, because it is the functional equivalent of getting a 100k cash bonus, that you (instead of diversifying) foolishly spent on buying a single company's stock.

You don't actually need to work at Facebook to sink 100k into buying Facebook stock (That you then forbid yourself from selling for 4 years).

> that you (instead of diversifying) foolishly spent on buying a single company's stock

So, it is actually a bit more complicated, and better than that, and long term stock grants act as a psuedo stock hedge.

This is a simplification, but imagine that there is stock worth X, that hs a 50% chance of the stock doubling in value, and a 50% chance of it crashing to 0$. You might think that this would be equivalent in expected value to X, but that is not true.

It is not true, because if the stock goes way down, you don't have to "accept" those losses. Instead, you can jump to another company, mid way through, and get back your previously high salary.

In that way you can capture the upside potential, while also being protected against the downside losses, in that if the stock goes down, you just jump ship, and get a high salary somewhere else.

hedging is not arbitrage. There is no free lunch.

In this case it is free arbitrage.

This is because if the stock goes way down, and you are 1 year into your 4 year vest, then you can leave the company, and get a high compensation package somewhere else.

Do you understand how this makes it so you have free downside protection, from those other 3 years, because you can leave and get the high salary somewhere else, if the stock crashes?

Since RSUs vest over time, the penny-for-penny equivalent financial transaction for receiving $100K worth of RSUs over 4 years, would be for me to receive $100K of cash compensation over 4 years, and using it to buy stock (That I can't sell for X months).

There's no advantage to RSUs. Cash is better in every way, because, at worst, you can invest it in the exact same allocation that your RSUs are invested in. Any gain from them rising in price could have been realized by investing cash. Any loss from them falling in price is a real, not a paper loss. [1]

I'll take $100 of cash over $100 of RSUs any day. I probably wouldn't take $80 of cash over $100 of RSUs, though.

[1] Unless for some weird reason, you are accounting your personal finances, where a 4-year stock grant is realized in year 1. If you are doing this, you should stop, because it is not an accurate way to do accounting.

The advantage if you are definitely going to invest the cash in the same company is you get to invest pretax with rsu’s probably.

No, I don't, I pay income tax on my RSUs when they vest. And then I pay cap gains taxes I sell.

you are right. Even ISO options are subject to AMT in exercise year: https://carta.com/blog/stock-options-tax/

> the penny-for-penny equivalent financial transaction for receiving $100K worth of RSUs over 4 years, would be for me to receive $100K of cash

You still dont understand. Let me work this out for you, year by year.

Lets say that the stock grant is 25k a year, over 4 years. But there is a 50% chance, after year 1, of the stock doubling and staying there, and a 50% chance of it going to 0. IE, it will be worth 50k or 0$, which is an expected value of 25k.

So you have 100k of stock, and 25k vests on year 1.

Situation 1: you win the coin flip, and the stock doubles. Your 25k that you received, is now worth 50k. BUT, you now have an ADDITIONAL 150k that is unvested. The unvested stock has increased in value! If you stay for 3 more years, you get 200k in total.

Total value: 200k, over 4 years.

Now, lets look at situation 2.

In situation 2, the stock crashes to 0, after 1 year. Your 25k vest, is now worth 0$. As is, the next 3 year vest is also worth 0.

But here is the trick. What you do now, is that you quit your job. You do not stay at the company for 3 more years, to get the 0$ of stock. Instead, you get different job with stock that vests at 25k a year.

Total value: 0$ for the first year, + 25k/year at job 2. Which equals 75k.

Do you see how this is different?

You absolutely could NOT get the same value as this, if you were paid in cash. Because if you were paid in cash, then you would realize the full losses of situation 2.

> Any gain from them rising in price could have been realized by investing cash

No, actually. In situation 1, I receive 200k, and in situation 2 I receive 75k, because I am protected by the downside risk, by the fact that if the stock crashes to 0, I can leave the company and get my salary higher again.

This is not possible by investing 100k from the beginning.

Yes, you're right, RSUs are better as a signing bonus, in a bull market. (In a bear market, plus a harder job market, you would have been better off locking cash in for your comp - if switching jobs after a year would not get you an equivalent RSU/cash grant)

Once the four year vesting cliff is done, though, the annual top-ups aren't much different from cash (Because if the stock inflates fantastically, you will get fewer RSUs next year).

Agree. It comes down to if you think equity is underpriced. If you think its underpriced, take the equity. If it later becomes worthless, you jump ship, unless they offer more cash to compensate. So, yes you have some extra value tied up in your option to just leave before vesting. If its overpriced from the beginning, ask for cash in the beginning.

High package elsewhere is not free money... Also leaving the company isn’t free (you lose unvested shares, atleast). this isn’t arbitrage. even arbitrage usually has some carrying risk in between the two transactions.

Never mind, see sibling threads.

You actually do not own the capital until it vests, and the amount that vests (which could have greatly appreciated) is all taxed as income.

That's just accounting treatment. Doesn't change the financial fact that it can be replicated with a cash bonus the same size as the original grant.

No, it can't because you lose unvested shares if you leave before they vest. Have you ever been granted RSUs?

>* General equity appreciation due to a bull market

This one can theoretically cut both directions

Theoretically. In practice, for the past century, there has been only one direction, provided you are patient.

I guess that when the market will finally correct because of all the mess that we are having in 2020 their salary may get quite a downturn if they are including the increasing values of the stock market as part of their compensation..

Yes as long as you're talking about total compensation; I've 7 years of experience in software engineering and my offers are in the 500-600k range of total compensation. Note this is equity value at grant; there is no appreciation (or depreciation) yet.

I recently took one of those offers from a FAANG, swapping a bunch of illiquid startup RSUs for liquid equity compensation.

Pretty sure the author will also get "poached" if a FAANG offers them 200k more than what they currently make.

is this a RoR ad? It doesn't really provide any new insights. If your devs are hired by nflx or hit by a bus the outcome is the same. It's just a saying

I also thought that. Great title, and then a lacking blog post.

Yeah, it was kind of jarring to go from "your developers might get hit by a bus" to "Ruby on Rails solves all your problems!"

Yes it is. From the homepage [0]: "Dedicated to the stewardship of Ruby on Rails applications."

I guarantee no one needed the author to explain that "hit by a bus" applies to more than tragic accidents.

[0] https://www.neomindlabs.com/

I wouldn't hire them cause their ui/ux sucks. I'm fullstack, and not a design expert but I can do better than that easy. The dropdowns at the bottom of the page are the worst.

"Hit by a bus" means hired away. That's the meaning of the phrase.

In Soviet Russia, if developer go to Netflix, developer get hit with bus.

> never underestimate the amount of money the FAANGs have to poach your talent.

I really wish we'd stop using the word "poach". It's a loaded word with negative connotations, but what it really means here is "offer someone a better situation than you offered them". Employees have agency, they aren't wild elephants who need your "protection" from "predators" who just want to pay them more.

Another way of saying it:

> Never underestimate how much better a person's life can be by working for a FAANG instead of working for you

Edit: For those who are downvoting, I'm simply saying this is what's implied by the quote. I'm not making a statement about FAANGs.

I don't think that is actually implied. A better life is very subjective.

Employees are absolutely allowed to define for themselves what 'makes a better life' for them, and their choice to move would almost assuredly be an indication of that, hence the implication by moving there.

Edit: I should add, it's probably mostly about the money. I mean, nice office, all the perks, all enabled by money. And for most people a very material raise in pay makes a difference

> Never underestimate how much better a person's life can be by working for an AANG instead of working for you

FTFY.

I happily don't work at a FAANG.

The original quote was about their ability to poach employees.

What does it mean to poach an employee? It means to convince the employee to make the major life decision to work for them instead.

Why do people choose to make such a major life decision? Usually it's because they think it will make their life better.

Why do they think it will make their life better? Because the FAANG offers >= 70,000usd to switch jobs, pays for them to relocate and sell their existing home, offers fully paid health insurance for their entire family, offers hundreds of thousands in stock options, and an unbeatable salary.

This is how they convince engineers to work on the world's most effective attention machines. By making their life better in all these ways and more.

If you fail to understand that, if you fail to engage in any kind deep or abstract thought that isn't summarized by a four letter meme, then you're doing exactly what this article warns you not to do - you're underestimating FAANGs.

As you pointed out there are imbalanced ways of phrasing things and societal taboos that all lead to the imbalance of power where employers try to keep as much control as possible.

Not discussing salaries is the exact same thing - the employer doesn't want everyone to know how much their peers are making, lest it result in higher overall salaries. I always think of offering candy to a kid but saying "Don't tell anyone I gave you this". It's pretty clear someone is trying to be manipulative if they don't want anyone else to know the details of the deal.

https://www.merriam-webster.com/dictionary/poach

a: to take (game or fish) by illegal methods

b: to appropriate (something) as one's own

>>> c: to attract (someone, such as an employee or customer) away from a competitor <<<

Webster’s dictionary describes language as it is used, it doesn’t prescribe definitions. Citing a dictionary means nothing in a debate of whether we ought to use a word in a certain context.

How do you feel about poached eggs?

> Webster’s dictionary describes language as it is used, it doesn’t prescribe definitions

American English is a high context language. The GP was illustrating the current parlance, which Webster is lacking.

I thought the US was considered to be a prime example of a low context culture.

E.g. https://www.unitedlanguagegroup.com/blog/communicating-high-...

Poaching has always had a certain connotation that you snatched/stole/etc. someone from another employer. Of course, we use "steal" in other contexts where it's perfectly legal/by the rules: steal second base, this thing I bought was a steal, etc. So there's a long history of using this language in English for things that aren't actually illegal or underhanded.

That said, I understand why people object to it and it may be one of those terms it's better to avoid even if it's used playfully.

If everyone strictly used words based on what is “correct” English, the language would never evolve and we’d still be speaking Chaucer’s English.

True, but being intentional about the connotations of your language is still important.

It means something when somebody does not know the way the language is used.

Every person in this discussion understands how language is used in this context. The discussion is on the merits of whether we ought to use a word in a specific context. Appeals to authority like saying “but everybody uses that word” are completely beside the point.

You’re in 100% agreement with myself and GP if you say that “poaching” is commonly used to mean trying to hire someone from another company. But that has nothing to do with what GP is talking about. They are saying they really wish people wouldn’t use that term, despite it being commonly used.

Understood?

Or maybe you already knew that but really like putting people down on the internet.

>Every person in this discussion understands how language is used in this context.

I am not sure, hence my reference to the dictionary. In my opinion the whole discussion is because people only know one usage and think the other one is a hyperbole. Otherwise you'd been actually arguing about the meanings of words with the dictionary, which looks rather stupid.

Your position seems to be that it’s invalid to even talk about whether a word should be used in a context, if the dictionary says it should. This prevents any discourse around whether we should evolve the language, because an appeal to authority like citing the dictionary would just shut down the debate.

To use an offensive example: This dictionary has a 4th definition for the word “Jew” meaning “to bargain sharply with”: https://www.dictionary.com/browse/jew

If somebody said “Maybe we shouldn’t use “Jew” as a verb to mean this, since it has negative connotations”, would you also cite this dictionary link to say that it’s perfectly fine? (I would charitably assume no.)

The discussion is, to me, very clear. We all know that “Poach” can mean hiring someone from a competitor. But some of us feel that using it in that regard creates the wrong connotation, and although it’s commonly used, and even in the dictionary, maybe we ought to not use it that way.

Do you see why citing the dictionary is counterproductive here?

I am sure you are trolling now. You pick an example from some unknown dictionary, explicitly marked as offensive right there and pretend there is an argument if it's offensive or not. Is not this exactly what you had been accusing me of doing? Anyways, my position is pretty clear - if you disagree and want your own language, I am fine with it, have a day.

A word's denotative meaning has little relevance if the connotative meaning is something else. "Literally" is probably the best example of this.

The grandparent was complaining about the word's connotations, explicitly in fact. They weren't saying its denotations were incorrect here.

The use of the word 'poach' by employers comes from a mentality where they are the lords, the employees are deer on their land, and other companies are peasants trying to get some food, which the lord believes to be his exclusive right.

It dehumanizes the employee by comparing them to an owned animal.

> but what it really means here is "offer someone a better situation than you offered them".

Some people would similarly have a problem with claiming a higher salary equals a 'better situation'

Again; missing the point. It's up to employee, who is generally speaking a fully formed human being with the capability to know what matters to them and make decisions on that basis.

A higher salary is an indicator of a better situation, it isn’t the situation itself.

It just happens to also be one of the easiest indicators to sell to a prospective employee. A great company culture is also a “better situation” but it’s a lot less tangible from the outside.

That's one of the reasons I work where I do. My coworkers are fantastic and I don't get up in the morning hating the fact I have to go to work. Sure I could make more in the Bay (but really not all that much more), but it's hard to beat living walking distance from the office and actually enjoying your place of work.

(Satellite office of a bay area company)

That's fine - it doesn't matter what is right for 'some people'. It just matters if it's a better situation for the person accepting a new job - whether money is part of their viewpoint or not.

But again, it's not up to anyone besides the developer accepting the offer to judge what a better situation is. It's implied it's a better situation for them because they are intelligent independent human beings with their own values, and they accepted the offer. If it wasn't a better situation for them they wouldn't accept it.

Who?

> Employees have agency, they aren't wild elephants who need your "protection" from "predators" who just want to pay them more.

Not from the employer's perspective.

Yep, we're captive elephants and employers don't want to give up our ivory.

I think it’s poaching from the perspective of the employer not the employee. The employer wants to keep its prized employees from getting poached by other ruthless employers.

This is purely their fault for being uncompetitive in the wages and benefits offered to their employees. Of course they try to spin it negatively with loaded language.

The best way to protect your prized employees is to treat them so well they'd be crazy to look elsewhere. If you, the business owner, can't afford that then you just aren't as competitive or successful as you think you are.

Or.. free markets for the capital holders, patronage for the workers.

I don't mean to be malicious or anti-capitalist, but this seems like another example where companies want free markets when it involves taxes or costly regulation. But they oppose free markets when it causes labor costs to go up or reduces barriers to entry. It's a logical position for a corporation to hold but there is no ideological justification.

Hypocrisy? In my corporate America??

It's all platitudes of free market competition and meritocracy until the going gets tough and the competition (be it other businesses or labor) gets ahead of you. Then it's sob stories for bailouts, anti-competitive practices, and "but we're like a family here" drivel.

Then pay them more and give them a better situation. So many employers don't give existing employees the right pay increases to keep them from making more by jumping to another company. That's on the employer

Approximately 10 years ago, I was really unhappy with my work situation and was checking job postings. I found one that sounded right up my alley and I reached out to the agency that posted it. They told me that because I was working for another one of their clients, they wouldn't submit me for the job because they felt it was unethical.

I responded that I wasn't owned by my employer and just as they were free to let me go, I was free to leave on my own. The real reason was that since employers pay them and talent does not, they don't want to risk their income stream. Since that day, when this agency emails me to ask if I'm looking for new opportunities. I remind them of that incident and request that they don't contact me again.

It took about 8 years to finally sink in that I would NEVER have any dealings with them and they eventually stopped emailing me.

Frankly their actions don’t seem particularly unreasonable to me.

Agreed. Like it sucks, but I can't fault any of the actors in this story. They are all just looking out for themselves.

I understand why they did it.

My decision to make them persona non grata was about not rewarding them for behavior that negatively impacted me.

It seems like a prudent business decision on the agency's part, to be honest, rather than some kind of underhanded anti-employee move.

Until he applies directly and cuts out the agency if that's possible.

LordKano's reaction doesn't seem unreasonable to me, either.

To be denied a career opportunity just because the gatekeeper is biased is unreasonable if you ask me.

That's why I strongly prefer reaching out to companies without any middlemen. The more people are involved, the worse for me.

FWIW, that is not how all agencies operate, unless they are under a contractual obligation.

For example, some agencies only limit themselves to not representing a previously placed candidate if they are still the role where they were placed by the agency. Outside of that, if a candidate wants to move from one client company to another, the agency may even act as a catalyst, especially if the candidate would be a great fit for the new role.

I wonder if they disclose such policies to companies they represent.

"We will do everything in our power to find you the employees you need, unless it might make one of our other clients unhappy."

This would be a disqualifying conflict of interest for a law firm.

Sometimes the B2B contracts restrict the organizations from hiring each other's employees. This is pretty common. My company has at least two partnerships where these types of conditions are present.

> Sometimes the B2B contracts restrict the organizations from hiring each other's employees.

https://www.cnet.com/news/apple-google-offer-415-million-to-...

That is because they are competitors, so this becomes an anti-trust case.

The scenario I'm talking about when you bring in a company as a partner. For example, we work with TCS and the contract states that we can't hire their employees and that TCS can't hire our employees, at least not to work within the partnership. We partnered with another company and as part of that contract we are transferring people them with the promise that we will not hire them back for a year or two depending on their position.

It's reasonable for them to want to avoid conflicts of interest. They act as an agent of the employers and don't want to get into scenarios where they can't do a proper job of representing their client's interests.

It's seems counterproductive to blacklist them for behaving ethically just because it worked against you in one scenario. No recruiting agency is ever going to act in your best interests because you aren't the one paying them. One that behaves ethically is about the best you can ever hope for.

There are so many recruitment agencies in this town that I am not disadvantaged by not working with them.

Their behavior wasn't ethical. They didn't approach me. I found their job posting and approached them.

In the instance that LordKano reached out to them, they were acting as an agent of the company he was applying to, not the company he currently worked for (even if they had an ongoing relationship with that company). By discarding a qualified applicant, they unethically prioritized their relationship with another client over the company they were supposed to be acting as an agent of in that instance.

Unless you have special knowledge of the contracts signed, you really can't say that. It's likely the second company was well aware of the restriction. And it seems like the OP felt he was wronged more than the second party.

If the companies had a contractual agreement that their recruiting agency would block each other's employees from applying, that sounds like a non-poaching agreement of the sort that Apple and Google were fined hundreds of millions for.

I'm pretty sure they weren't fined. I believe they were sued and settled with no admission of wrongdoing.

Ah, you're right, I was mixing up the DOJ action (not involving a fine) circa 2010 with a later civil suit [1]. In any case, it cost them hundreds of millions.

1. https://venturebeat.com/2014/05/23/4-tech-companies-are-payi... (adding to the confusion, Venture Beat incorrectly calls it a fine)

Look Moses, the promised Hill we can die on, as foretold!

I have an even worse expirience.

I was a SWE for a large corp for a while, and after that transitioned to a role of manager.

As I was very eager to build a good team, and the company HR looked slow and unefficient I tried doing recruting myself, at least the part of meeting people and talking them into come to work for us.

What I could decide (up to a point) the salary and benefits but people had to go thru testing with the people from HR (IQ tests, personality tests etc)

Anyway I was pretty successful in finding experienced engineers but the thing fell apart when it came to HR testing. "He/She is not a good fit for the company" they would told me.

This was going on for months. I did more than 300 interviews in my free time in maybe 5 months and only about 5 people where "ok".

At some point a guy from HR told me: 'you must stop sending employees from companies X,Y,Z to testing, we have a deal with them that we don't take each other's people' 0.o

The deal was not only no to stop "poaching" but when someone form those companies applied to a job posting they would call up the other companies HR and told them about it.

And there was more than 10 of companies they told me about that where forbidden.

Imagine all the people that applied for job at some company not knowing that their boss, the HR etc. would know about it.

That actually crosses the line from “unethical” into “unlawful collusion”. If you’re talking about a Valley company, they all got hit for this some time ago: https://www.google.com/amp/s/www.nytimes.com/2014/03/01/tech... And if it’s not a Valley company, well, there’s likely a similar lawsuit to be had. Sorry to hear about your experience.

Please name the corp and list of 10 if possible-

If these are US company on US territory naked no-poach agreements in place, they are black letter law flatly illegal [1]. "No-poach agreements are naked if they are not reasonably necessary to any separate, legitimate business collaboration between the employers."

I would be extremely surprised if these are wet-ink-signed naked no-poach agreements.

[1] https://www.justice.gov/atr/division-operations/division-upd...

Reason #239 to avoid recruiting agencies.

You can usually search a important blurb from the job posting combined with the geographic info to find the posting or something very close to it.

> I really wish we'd stop using the word "poach".

It's intentional language used by employers because it has preconceived notions and they succinctly communicate a story that benefits the employer.

When you hear poached, you think illegal and victims. It makes you think that the employer has been wronged in some way and that the employee was both participatory in something illegal or at least underhanded and at the same time being taking advantage of.

The reality is that the employee was being taken advantage of by the employer and received an offer more closely aligned with their actual value.

But that's the nature of the employer/employee relationship, it's never truly balanced and one party is always benefiting more than the other.

> The reality is that the employee was being taken advantage of by the employer and received an offer more closely aligned with their actual value.

In the vast majority of cases, I agree. If someone is working at CompuTech for $100K per year, and gets an offer from TechuComp for $110K per year, that's market forces working in favor of the developer. This is a good thing.

But there is the possibility for entities the size of Google to ignore market forces entirely in order to better position themselves. For example, a guy working on self-driving cars might command a salary of $400K in most cases, but Google or Tesla or someone might offer them $600K just to prevent competitors from having access to them.

Most companies couldn't afford to do that, but FAANG are so vastly wealthy that they can hire entire engineering teams as a loss leader.

This is still good for the developers involved, at least in the short term, but it isn't so great for the market, or society, overall.

Isn't this still exactly market forces, though? In your example, Google is just driving up the market price for somebody who works on self-driving cars. In what way is it a deviation from market principles?

In the same way as offering products below costs would be to drive out competition and become a monopolist.

I'm not sure I think this is bad but I believe this is the argument.

Equating the two creates a perception that employees shouldn't be paid as much as they're worth. An employee being paid $500k/year is probably producing even more value to their employer than that, and if anything, the goal should be to close the gap between value and compensation, not widen it.

I think the point is that very wealthy companies can temporarily pay employees more than the value they provide, and willingly eat that cost until the competition has been stifled, at which point they can lower compensation again.

On the other hand, offering extremely high salaries makes a lot of people consider becoming programmers who wouldn't otherwise think of it. You can't buy your way out of having your competitors having access to skilled labor, outside of perhaps the very short-term.

Yeah, this is the housing problem all over again. If the price to buy (well, rent) an engineer is too high, build more engineers.

>is probably producing even more value to their employer than that

That's the crux of the argument, though. Google can afford to take a loss on the employee's salary for years, just to keep them from a competitor. We're not talking about Google arbitrarily paying a developer more than their competitors, we're talking about Google diverting funds from other business units to cover costs.

In the same way, isn't that just the way markets work?

IANAL but I believe lowering prices to kill competition is illegal in the western world and in the US in particular.

Googled: https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

It’s called predatory pricing in that case and legality is unclear. It seems you probably get away with it in the US.

It's the "invisible hand of the market" vs. the "invisible hand of rich monopolists". I think one is (conceptually) good, while the other is (provably) bad.

It really depends on the perspective. If we're considering this a zero-sum situation, we have to conclude that your situation is good for developers in general because it will cause all developer/engineer salaries to rise to meet the (possibly inflated) salaries that the market has deemed required to recruit talent.

On the other hand, does it mean that some employers won't have money to hire talent? And will that result in some businesses failing? And is that ultimately bad for developers? I don't know, but it feels like it's such a big system that it will balance itself if that is the case.

Short term, yes. Having a company with deep pockets driving up salaries is great for the people working for those salaries. I've definitely benefited from having a bunch of tech companies a short walk down the road.

Long term, however, there's a risk of a monopoly forming, which isn't good for developers or society. FAANG are willing to pay big salaries because they are competing. If they use their power to destroy the competition, that market force goes away.

> Long term, however, there's a risk of a monopoly forming, which isn't good for developers or society. FAANG are willing to pay big salaries because they are competing. If they use their power to destroy the competition, that market force goes away.

Big companies have been overpaying developers for almost a decade now. It is not going away. It is not some short term thing. Instead, that is what these elite tech companies pay.

It is not some singular company, that is buying up all of the tech talent. Instead, it is a whole bunch of elite tech companies, paying lots of developers lots of money.

The idea that there is one singular company, that is a monopoly on developer talent, that is false, given that there are a whole bunch of them doing it.

Yes. To oversimplify the model, there are n<10(?) companies that have first dibs on developers who can pass their interview process and want the best comp (and/or want to work at one of those companies for other reasons).

But there is competition among those companies even if "everyone" else pretty much doesn't even try to compete with them based on comp. (Which makes talking market price a bit odd in this case. I imagine an economist has some term for it. I guess there's a market price for developers who can get a FAANG offer and then there's a market price for everyone else.)

It may not be bad for developers, but it would be bad for customers of the companies in the long run. The companies will need to raise prices to cover the increasing costs of their developers.

If the companies sell ads, ads get more expensive. Then the items those ads promote get more expensive, working its way down to the rest of the population again.

Those developers will also see the increasing prices, but the extra cash will hopefully keep them happy for a while.

Some employers/enterpreneurs going bankrupt is the definition of capitalism. If that wasn't the case, it wouldn't work for the betterment of everyone (as people wouldn't strive to create healthy businesses). This is increasingly becoming skewed though (with government subsidies).

On the other hand, capitalism has this great thing where going bust is not the end of the world (or life), compared to previous eons.

A system which allows (and encourages) failing is great.

I really fail to see the distinction. If someone is willing to pay 600k for something, then the value of that thing on the market is 600k. That is what a market is.

If Google is willing to pay 200k above market rate to hire an employee from a competitor, chances are part of the "value" of that employee is that they will no longer be working for someone else.

Yes, literally speaking, it's "worth it" to Google, or they wouldn't do it. Being so large, Google can throw advertising money on their self-driving car division, no problem. They can take a loss for 5-10 years, no problem. However, it's extremely anti-competitive, which is the problem others are pointing out here.

> If Google is willing to pay 200k above market rate

This is not possible according to the usual definition of "market rate".

If Google is willing to pay X, that is the market rate.

I disagree with your definition of "market rate", but let's suppose you're right: Do you not see it as a problem that Google alone decides the cost of entry to an entire market?

Why do you think that Google alone can afford to hire software engineers?

edit - I see how my post was misleading. I should have said X is a "lower bound" for the market rate.

Do you mean upper bound?

Google isn't the only well-paying software company. If they were, they wouldn't throw money away by paying so much in the absence of competition. Furthermore, there's nothing stopping you from paying $100,000/hour and beating Google if you wanted to. If your business can't make good enough use of programmers to justify paying more than Google, then maybe their talents would be best allocated where they would be most valuable.

> Do you not see it as a problem that Google alone decides the cost of entry to an entire market?

This puts Google in the position of being a monopsony for the labor of programmers; that is, they're the only or primary buyer of that commodity. Part of antitrust laws is preventing that, so, yes, there is a problem if a monopsony arises, but Google isn't in that position anyway because jobs aren't completely interchangeable the same way programmers aren't completely interchangeable. For example, companies can compete on the basis of not being Google, which attracts some people. Companies can compete on the basis of being based in some other geographic location, or having other things to work on, or having a different mix of salary and benefits.

Google offering the highest salary doesn't mean they automatically get everyone. It means they get people who want the highest salary to do what Google's interested in as opposed to wanting to work on some kinds of technology Google isn't pursuing.

That's assuming that the thing Google is buying is a commodity, and its value is the same to all parties.

The law defines practices that, while they happen in a marketplace, are anti-competitive and thus problematic. It is not anti-competitive to own the gas station next to the airport and charge a premium for gas. It is anti-competitive to buy out surrounding gas stations and close them to extract higher prices, or to conspire with competing stations to coordinate pricing.

Single-firm anticompetitive behavior, as defined by FTC: (https://www.ftc.gov/enforcement/anticompetitive-practices)

Single Firm Conduct:

"It is unlawful for a company to monopolize or attempt to monopolize trade, meaning a firm with market power cannot act to maintain or acquire a dominant position by excluding competitors or preventing new entry. It is important to note that it is not illegal for a company to have a monopoly, to charge “high prices,” or to try to achieve a monopoly position by aggressive methods. A company violates the law only if it tries to maintain or acquire a monopoly through unreasonable methods."

Horizontal Conduct:

"It is illegal for businesses to act together in ways that can limit competition, lead to higher prices, or hinder other businesses from entering the market. The FTC challenges unreasonable horizontal restraints of trade. Such agreements may be considered unreasonable when competitors interact to such a degree that they are no longer acting independently, or when collaborating gives competitors the ability to wield market power together. Certain acts are considered so harmful to competition that they are almost always illegal. These include arrangements to fix prices, divide markets, or rig bids."

That's in relation to creating artificial scarcity of a product or controlling supply.

Staff aren't a product or commodity.

Labor certainly is a commodity.

I have a relative who bought a very nice beach house from his legal fees suing a hospital network for doing something similar.

If Google is willing to pay $200k over your current employer for you, your employer is paying you $200k under your market rate.

You can view this issue from another standpoint.

Imagine some market where 10 companies sell bread and it costs $5. And lets assume that the costs are $4 and $1 is profit.

Then comes a company that makes its money on selling water and it is doing very well. It comes to a bread market and starts selling bread for $3.

The competition is quickly destroyed and the bread prices rise.

Edit: as a sibling comment mentioned: https://en.wikipedia.org/wiki/Predatory_pricing

Google buys labor using the proceeds from the stuff they assign the labor to do. Their money does not come from a second market unrelated to programmers. Even if you flipped buyers and sellers your analogy would be inapplicable.

> Their money does not come from a second market unrelated to [those] programmers.

Yes it does: Google makes money from advertising, not from self-driving cars.

Are you sure that there's the direct analogy between pricing and salary models like that?

I believe a better analogy would be that the 11th company comes and is willing to pay higher costs while still selling at the same price. That company gets the best ingredients at that cost, the suppliers prefer to sell to that company, and denies it to the first 10 companies. The 11th company might even raise prices since their product is better. I don't think predatory pricing would apply in this situation.

Sorry, but that's not what's being described here. If you want it to be about your bread market, then the water guy is hiring your best baker because bread is worth $10 when combined with water, but only if it's particularly good bread.

Maybe 50 of the other 99 bakers at the 10 bread-selling companies are also capable of making good bread and will feel bad, maybe the company that lost the baker will feel bad, maybe that company will even fail because it turns out that really was their best baker... but in that case, it just proves that the water company was paying the market price for that baker. Which they were.

Spending more on talent is not predatory pricing.

Let's say your value to most employers is $100k---this is the amount of money you make for them balanced against the amount you want in order to work for them.

Then the Goog enters the picture and is willing to add another $200k premium to that, in order to prevent you from working for that employer. This isn't sustainable; you're still you and your direct value to Goog is only $100k. The additional amount represents how much damaging a competitor is worth to Goog. As soon as the competitor goes out of business or Goog stops having piles of cash laying around to fight with other companies, that additional value evaporates.

If you decide to leave Goog, you should probably not expect to get $300k or more. In fact you may get less than $100k, if Goog has eliminated the competitors to whom you are valuable.

"Market rate" is extremely unstable.

Of course it's probably also possible for it to be that you're uniquely valuable to Google in the context of their other people, infrastructure, and strategy. Especially as people acquire specialized skills and experience, they can be worth a lot more to some companies than others.

This is true of everyone of course. Even a more or less commodity junior Javascript developer isn't worth much more than their generalized ability to do random tasks to a company that doesn't do any software development.

But some people have a skillset and track record that is very valuable to some companies but that would make it hard to be hired at most.

This economic theory depends on the idea that Google is the only well-capitalized software company... In reality there are several.

Market rates being unstable don't make them stop being market rates.

This. You can't define a market rate as being lower then a bunch of other employers are willing to pay. Your market rate is what people will pay you. I see this all the time with saying FANG pays above market rate. Now if we're saying "average" market rate, sure there is an average market rate for a larger group of developers that they pay above, but then you need to do a good job of talking about what other companies are paying relative to average or median, not just say one is above market rate because it is above what many smaller companies will pay

If Google is stopping forward progress to entrench their moat, they need to be broken up by the DOJ.

There's plenty of antitrust fodder already with their stranglehold over the web and the behavior they've taken to protect their search/ad business. But if they're hiring people away in cutting edge areas of research simply to destroy startups, that's abhorrent. That means they're pouring their obscene wealth from advertising into unrelated fields in order to dominate them.

Monopoly.

This is true but long term Google can not sustain that. MS did the same in the 90s. Google is failing to execute on many 'big ideas'. Not because of a shortage of talent. But because of a shortage of follow through and nothing moves the needle anymore. That means any new product that has a shot of being interesting (say 1%) has to produce 1.6 billion pretty quickly. There are very few new businesses that start at that position. MS should have owned the cell market. Not for a lack of trying or talent. But they kept changing positions and tech stacks every few months. They lacked the will to do it. Google is in a similar position now with most of its projects outside of its 'core' ideas. What happens, fairly quickly, is the talent figures out that the company does not really value their ideas. They move out of the company and do something else.

If I hire Brad Pitt to be in my (post-pandemic) summer blockbuster film, part of the value he adds is that he is not simultaneously in your summer blockbuster film, and so people who really want to watch Brad Pitt will choose my film over yours.

I don't think what you're describing is anti-competitive behavior, rather it's omni-competitive. Pretty much all the money Google throws at anything is "advertising money" but if they are really trying to make self-driving cars, what's wrong with that?

Should my Brad Pitt Summer Blockbuster profits not be able to bankroll my Teletubbies Christmas Special?

As legality and morality are two different things, so too are market forces and monopolistic behaviour.

I agree in this case. Though there’s probably a good economics lesson to be learned here about how to instrument what’s a market move to a new price level and what’s above or below that. Without getting into it-when the employers typically have much much more power than their employees at a broad level (even legalistic levels) then I’m inclined to conclude the worker was being undervalued as opposed to inappropriately hoarded by a competitor.

> If someone is willing to pay 600k for something, then the value of that thing on the market is 600k. That is what a market is.

Arguably. But, if 10 average people are worth $200k and one exemplary person is worth $500k... and the company pays the 10 average people $100k instead, then the company can hire two exemplary people where it only needed one.

Scale it down to minimum wage and you end up with people who are worth way more than they're paid -- you literally don't have a business without their work -- who are held under by telling and treating them like they're worthless.

That's what predatory behavior disguised as a market looks like.

Monopolies are a part of a market too but that doesn't mean it's a good thing. Identifying anti-competitive tactics practices is a good thing.

The correlary is that McDonalds could offer free burgers for a year, they have enough money to handle the cost. They could do it just so that other business cant stay affloat.

This doesn't mean that the market price of a McDonalds burger is $0

It does if McDonalds decides that it wishes to dump burgers. The ask price would fall to $0.

The market will correct very quickly, as competitors will immediately head over to McDonalds to purchase $\infty$ burgers at $0, killing MCD dead in seconds.

The moment McDonalds applies a purchase limit (Free burgers! Limit 5 per customer), the burgers have non-zero cost, as they require a person's time in order to purchase.

If McDonalds does have enough capital to buy long-term customers and kill off competition with free burgers, perhaps they should consider it. I assume that they've considered such a strategy on occasion and concluded that it isn't worth it. Burgers are probably worth more than $0 to McDonalds, too.

> If McDonalds does have enough capital to buy long-term customers and kill off competition with free burgers, perhaps they should consider it.

I'm pretty sure they should not consider it, because it is generally illegal.

https://en.wikipedia.org/wiki/Predatory_pricing

> I'm pretty sure they should not consider it, because it is generally illegal.

It is really not. At least in America. In America, where laws are based on consumer benefit, it is extremely difficult to prosecute companies for having too awesome of a service, that they give away for too good of a price, in a way that helps consumers too much.

It really just isn't something that gets prosecuted, except in absolutely exceptional circumstances.

Leaving aside any skirting of regulations also involved, is the government going to prosecute Uber or Lyft because they're losing boatloads of money and therefore obviously priced too low?

This is a great example, actually. Because Uber is no stranger to being prosecuted by the government. That happened a bunch of times, when they were operating as a taxi company, without following taxi laws (before they got those laws changed, of course, lol).

But of all the things that Uber has gotten in trouble with, do you know what they have not been prosecuted for? They have not been prosecuted for selling taxi services for too low of a price to consumers.

Breaking taxi laws = yep prosecuted

But price dumping = nope, not in trouble for that.

Keeping in mind where this thread started... I'm not aware of a similar law that prohibits employers from overpaying their employees, though.

McDonald's (among many other places--especially those with many lower income customers) certainly do have loss leaders. I don't eat at McDonald's but I assume something like the $1 $2 $3 menu functions as something to get people in the door after which they or their friends may buy high-priced/margin items as well.

I don't think Google is operating at a total loss when they pay a developers these salaries? Software is making Google (and many other tech companies) hundreds of billions per year in profit and people are complaining about a 6 figure salary being too high.

If all I can afford to pay a developer is minimum wage, is he or she now obligated to work for me at my "market rate?" At what point does it go from not having enough money to afford a highly qualified developer to becoming "poaching?"

ed: Toned it down a little. I think tech is making an absurd amount of money and it's exasperating to see people complain about paying their workers too much.

Alphabet’s revenue isn’t even multiple hundreds of billions (it was $161 billion last year). Their profit is “only” in the tens of billions range.

I don't think people are complaining workers are paid too much, but that some markets are distorted by external forces.

Let's say you're a company in a field, competing against other companies in that same field. Everyone is basing wages on how much money they expect to make and so on. Not everyone has the same estimations, but in the end they're all grounded in that market.

Now comes a company with virtually limitless from some other market, who doesn't care about making money but about achieving dominance. All of the sudden, they're throwing wages around you can't compete with because they're not trying to be profitable.

Google is not operating at a loss, however. They are not paying people exorbitant salaries to keep them from working at smaller companies. They are paying them six figure salaries and making _billions_ doing it. Google seems to very much care about making money. Six figures seems small to me, if anything.

Did I miss something?

There's no need to contort an analogy. It's just like as if McDonalds pays more for the best employees, such as real estate analysts, beef sourcing agents, taste scientists. Other burger joints are then denied the talent. Nobody would complain that McDonalds are poaching real estate analysts from Burger King.

I would argue that FAANGs have the ability to overpay in many cases and still acquire talent which skews market wages. A FAANG can possibly pay 200K to an average developer who would otherwise may be make 120K in a regular company. So now the developer thinks they are worth 200K everywhere.

That is how a market works.

I think the S&P is overvalued today. The market thinks otherwise. No matter how much I would like to purchase reasonable stocks at P/Es of 15, by and large, I can't. If someone else wants to buy them at P/Es of 21, they are going to attract every single seller.

What makes you think they are overpaying? If they offered less the employee would go to a competitor, and the company gets more value from the employee than they do from $200K/y.

True that Google itself sees value in paying 200K and they need to do that to attract the best talent compared to their competitors. But google has so much money that it almost makes it difficult for the little guys who could pay a good salary but not the inflated ones like google. I am not convinced that suddenly "market rate" is decided by FAANgs. No FAANG existed before 2004 (some did but weren't as powerful back then) and there were plenty of good developers/programmers even then.

I think it's a combination of:

a) These companies are much bigger than they were, which increases the impact a programmer can have. This means the amount of money a programmer can bring in for one of these companies is much higher than previously, and so they're willing to pay more.

b) Previously, programmers were capturing a much smaller share of the value they were creating for their employers. Either through explicit collusion to keep employee salaries down (https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...) or because the threat of startup founding (which is both easier and more normal relative to 10y ago) has pushed salaries up.

And they conspired to keep wages down because... the market?

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

And then the developer switches jobs 1-3 years later to another FAANG or somewhere that pays in the FAANG range for $260-300k... seems like market rate to me

In this case, it's a market distortion, and is arguably an example of anticompetitive behavior.

Im not sure thats a useful model -- google would be in this case bringing in money from one market (eg ad revenue) to overprice in another market (self driving r&d)

If walmart takes its surplus capital and decides to sell toilet paper at a loss, to run everyone else out of business (till they're the last man standing), I'm not sure its correct to say that the market value of TP has reduced during that time period. Walmart has undercut the market value (the point where buyer and sellers generally meet) -- it hasn't actually changed the market value, except temporarily, in whats effectively a hack. The permanent shift in this case would occur when the dust has settled, and all competition has been eliminated

> it hasn't actually changed the market value, except temporarily, in whats effectively a hack

All market values are temporary. Walmart absolutely has changed the market value in this scenario. It might be anticompetitive in the Walmart example, but in the case of one company paying their staff better than another I don't think the company paying less and complaining about it is going to get much sympathy :)

> If someone is willing to pay 600k for something, then the value of that thing on the market is 600k. That is what a market is.

And if a bunch of homeowners are willing to drive up housing costs and prevent building out an adequate supply of housing in an area, that's just the market.

I don't have a horse in either race, but I think there is an appreciable difference between paying a premium for a resource that you use, vs paying a premium solely to prevent someone else from having access to it.

I'd agree.

but as a contrapoint; in capitalism there's a trend of selling a product or service substantially below market rate as a way of gaining significant adoption, once you have significant adoption- you raise the price as best you can.

This is called: undercut, corner and squeeze.

Often this results in monopoly positions or at least significant leads which are hard to overcome. (Uber, is a famous example).

Obviously this is only possible with significant financial capital, which google have.

I can see how the undercutting analogy has synergies with overpaying for talent. It's worth making a loss on hiring me if it means that someone else doesn't get the (lesser) value of me.

Correct, if I place a market order for 100 shares I expect to pay a premium for current national best bid price. Same thing here - it's the price you pay for taking liquidity from an illiquid market (the labor market)

>someone might offer them $600K just to prevent competitors from having access to them.

Those are still market forces. They aren't paying the worker value, but the damage they will cause to competitors. Welcome to capitalism.

Facebook's stock price will keep going up (hopefully, for people holding them), but they're never going to appreciate in value in the same way an early state startup is going to. 100x returns between strike and exercise price exist. CompuTech can give the programmer more options to make up the difference, and while there's advice to value those options at $0, that's harder for an engineer to ignore once a salary threshold is met.

After the first $100k or so in salary - enough for living expenses, soft things like culture fit, are able to become more important to employees, and by offering services like on-site massages directly, employers are able to offer more value than employees could capture themselves. (On-site massages are also used to keep employees on campus longer, but once you start getting "free" massages, they're hard to give up!)

> to ignore market forces entirely in order to better position themselves

> just to prevent competitors from having access to them

They don't ignore the market, they use their resources earned from participating in that market to keep and/or improve their current market positioning. Which is exactly what their shareholders want, and is fair game until treated as a monopolist.

People want to work on their interests more than take more money after a certain amount is met. The real power of someone like Google isn’t just paying more money, it’s the variety of projects under its umbrella. They can entice curious cats better.

> but Google or Tesla or someone might offer them $600K just to prevent competitors from having access to them

This arguments fails on so many dimensions that it must just be a meme. I’ll use Google as the example. For it to work Google has to be able to monopolise the buying of talent.

Most damning, the premise itself is self defeating. Somehow Google is picking the most talented people (delivering far in excess of say $1M marginal returns), yet somehow it is paying well below that to steal that talent and furthermore Google is then wasting that talent (employee delivering value below their pay+overhead). To assume Google chooses to waste talent merely to achieve some low value outcome (damaging a competitor by $1 doesn’t magically enhance Google’s returns by $1 so the factors are way out here) seems to assume the Google is somehow acting against their best financial interests. I don’t think Google is as poorly run as that.

Also:

1. Occam’s razor: Could it be that a Google is actually getting good value by paying very high salaries?

Yes. The average revenue per person for Google is about 160G$ / 115kiloemployees = 1M4 per employee. I do note that using an average is silly because the value distribution is not flat, but neither is the employee salary distribution flat. But the figure is so large, average does say something useful for back-of-envelope calcs.

2. Can Google monopolise by buying power alone?

No. Other companies have similarly high returns per employee (Apple is 260G$/160kiloemployees, Netflix is 20G$/20kiloemployees) so for Google to outbid them, it needs to outbid above the marginal revenue per employee, which clearly is well above a 600k$ salary.

3. Can Google corner the market for talent by restricting supply?

No. We know that there are plenty of talented developers because Google isn’t the only company making over $1M revenue per employee. Google employs about 115000 people. Let’s say 50000 of those were “overpaid“ to remove them from the competitors. If the total pool of equivalent talent were as small as 250000, then Google couldn’t monopolise talent. Yet other companies with high revenues per employee have a sum total of employees higher than 250000. Furthermore Google’s returns per effective employee become ~$2.8M/employee, so Google can obviously afford to pay $1M for talent it really wants!

By the same argument, Computech's sky-high $100K salaries deny k12 access to good stem teachers whose districts can only afford $40K/yr...

You learn a lot about people (managers, founders, etc.) by how they handle their employees leaving the company. Looking over my career up to this point, the conversations I've had when leaving a company are ones that I still remember vividly, whereas I've forgotten a lot of other details about these places I worked for years.

I think back fondly about the managers that genuinely wished me well at those exciting but scary junctions, even if I had my frustrations with them while I worked there. And if I'm being honest I still hold grudges against the ones that tried to make me feel bad and acted like I was betraying them for taking another job that I felt was the right decision for me at the time.

Even from a purely self-interest perspective, it seems to me that it's in every manager's interest not to try to guilt employees that are leaving or talk negatively about them. It's the last chance you have to leave a good impression, it costs you nothing at that point, and you never know when you may cross paths again, or the employee that left may be friends with someone you want to hire in the future and warn them not to join you, etc.

Oh come on. It's just succinct and communicates what's happening effectively. There's no grand conspiracy to create some underhanded psychological shift in the workforce at large... God, it's so ridiculous. Business slang like this comes from managers bored out of their minds trying to be concise and make corporate interaction marginally interesting.

What other word would you recommend? Lured? Hired? They're not as precise.

They should call it something neutral like "BigCorp unilaterally downsized my team for me".

The only sense in which 'hired' is less precise is that it doesn't communicate that the former employer is bitter about the situation.

Otherwise "they hired people who worked for me" and "they poached my employees" describe the same thing. If the bitter attitude is important to express, then it could be phrased as: "They hired people who worked for me and I have a stick up my ass about it."

"Hired" does not communicate that the other employer was the instigator.

"Did the employee reach out, or was he poached?"

I just do not think it's worth getting anal about the terminology. Who gives a shit if your old employer says "poached" when you just got a $50k pay rise?

"taken advantage of" Uh, no. There's no such thing as perfect information in the marketplace. And besides, money is only one vector for a job. There's many other factors that go into deciding who to work for and where to work. Work-life balance, perks, location, team or mission, family responsibilities, etc. You actually can have win-win relationships. They exist.

> There's no such thing as perfect information in the marketplace

And why not? Are you saying that a market of free and voluntary exchange where every part has access to equal information cannot exist?

An exchange where a part is better informed than the other and thus gains profit, is the exact definition of "taking advantage". Wait, isn't that how all exchanges work in the capitalist's workplace?

> And why not? Are you saying that a market of free and voluntary exchange where every part has access to equal information cannot exist?

Outside of very limited circumstances, how could it? Only for the simplest of products can you really grok them as well as the people making them.

But the information is available in that case. Independent experts and other customers can (and do) review products. For the workplace there has been some failed attempt like Glassdoor but you generally don't have access to that information while being hired.

> The reality is that the employee was being taken advantage of by the employer and received an offer more closely aligned with their actual value.

It is also possible that the "poacher" has such a ridiculous amount of money at their disposal that they're able to suck a talent pool dry with "so-much-money-you-can't-refuse" offers. I think, however, that enough employees are getting wise to the fact that a FAANG offer isn't an automatic "yes".

People do turn down offers even if the money is crazy high, especially older folks who have gained some control over their career path, have job-satisfaction, and don't want to stage-dive into a competitive hellscape of Type-A 20-somethings.

For what it's worth, I've been at a FAANG since 2012, and "competitive hellscape of Type-A 20-somethings" sounds completely alien to me. My coworkers and I generally work about 40 hours a week, and don't feel like we are in competition with each other.

>The reality is that the employee was being taken advantage of by the employer and received an offer more closely aligned with their actual value.

Employee value generation isn't fixed. It is entirely possible that the employee can generate more value in the same role at a different company. For example, if the product is more valuable, so is the work.

I've ben poached, in the past. It was nice. It simply suggests the employee is a scarce, valuable resource, actively sought out.

On the same note, what is the difference between a company being acquired by Netflix vs the employee being poached by Netflix. Why is the first one a positive and the second one a negative.

Perspective.

The employer sees employees as resources. Property. Property doesn't have agency. Someone else is taking the employer's property, but the employer isn't being compensated for the loss of their property.

But buying a whole company? That's paying the shareholders for their property. Therefore that's good.

The leap from resources to property is a slippery slope. Also, why should shareholders expect compensation for an employee who leaves as long as the he or she was doing whatever his or her function was till their employment ended.

It’s the same as when during elections a state is called “up for grabs”. Things are phrased in a way that parties/companies are the main actors and voters/employees are just fodder for them. Not a good attitude in a democracy.

The thing that hits me is the "$500k+/year in the valley".

Is this really a thing? Am I a giant dumbass for staying in Colorado? Even factoring in my stock grants, I'm nowhere close to that number.

I keep telling myself one day I'll try to make it, but by the time I feel comfortable with those interviews I'll probably be too old for FAANG lol.

If I may offer advice: Never tell yourself no. Go give it a shot, even if you don't prepare at all. You lose nothing.

Well... your current employer might let you go or freeze your upward mobility if they find out you are looking at other jobs.

I've even seen this internally. If I want to go to another team, why would my manager use their budget or political influence to promote me when they can use it on someone who is staying on their team.

This is why you do not tell your manager until it's decided, or it's so far along that they're needed as a reference.

In a perfect world, your manager should not care and your company should not treat you any differently for looking, but this is rarely the case.

Externally, I agree. On a side note, my company will not provide references when you leave and forbids managers from providing any references.

At my company, internal postings notify your manager when you apply, so there's no avoiding it. It's generally better to talk to them first so they aren't blindsided by the posting. Otherwise, if you don't get the new position that could create some friction with the existing one. My company can also trap you in your current position if they designate you as a "key resource".

You'll never pass if you dont prepare, this is bad advice

If you spend so much time preparing that you never interview, you'll never pass either.

You only make it by taking the uncomfortable shots. I also never felt comfortable with the interviews. Worst that happens, you get feedback on things you can work on.

Depends on your experience. If you're at a senior level, you can potentially get that from Google, Apple, or Netflix. You'll spend a lot more of it on housing, but you'll still come out ahead, by a lot.

Netflix is, iirc, quite an outlier in terms of salary versus other types of comp. They are also not bashful of letting people go that don't meet their expectations.

> Is this really a thing?

There's outrageous equity offered by like 5 companies. Everybody else is getting stock option grants worth 5-10% of what Facebook, Amazon, Apple, Google, and Microsoft are offering (the situation is a little different for Netflix).

> Am I a giant dumbass for staying in Colorado?

Probably not, Colorado is great.

There are a few other companies that consistently give offers with TC approaching $500k to senior engineers, where the non-salary portion of the comp consists of RSUs that are immediately sellable upon vesting (like FAANG), as opposed to stock options. I'm sure I'm missing some, but these are the ones that I could think of off the top of my head (verified with levels.fyi):

- Snap

- Pinterest

- Lyft (though their stock is hurting right now, they still have top-band comp)

And then there's HFT, where $500k is probably considered average, but I guess that may as well be a completely different industry.

If we want to drop down to approaching $400k, you can add:

- Dropbox

- Square

Also I don't think Microsoft should be on your list unless you're specifically referring to LinkedIn's SF and Sunnyvale offices.

Note that getting $500k+ TC offers as a senior is still exceptional even in the Bay Area (look at levels.fyi). Netflix is supposed to be the most consistent when it comes to giving offers in that range (and all-cash too). Whereas if four senior engineers got four offers each from other companies on the list, they would likely range between $300k and $500k before negotiation.

I appreciate the fixes to what I said. I mistakenly thought Microsoft offered a more generous RSU package.

What I wanted to emphasize, mostly, was that there exists a tier of companies that offer stratospheric compensation primarily through equity, but there are many more people working at other publicly-traded companies that offer RSUs that are worth closer to what you might consider to be a yearly bonus.

Yes.

It definitely happens but it is salary + RSU generally.

If you measure "dumbass" purely by income, probably yes. There's a lot to dislike about the valley though, so choose wisely.

For the top of the top who can play offers from multiple FAANGs against each other, ya it's possible. For the normal to above average devs is where the cost of living vs high income dilemma becomes interesting.

An interesting analogy is how many people uprooted and moved to LA in time's past to become movie stars, and how many succeeded.

Times are changing though and you can now apply to some major tech companies remotely, more will follow as Cali is now the hardest hit state and the desire to move their cools off.

I feel the same way about being a dumbass for staying in los angeles lol. Here I am getting low 100k and some linkedin recruiter tells me about a 400k job. Wait WHAT?!

Man I'd happily take up one of those Google jobs, but being an embedded software guy, I'm not even sure what they'd want me for. It seems like a lot of silicon valley companies are a great place if you're a web dev, or use C#/Java all the time.

Server optimization is huge business at Google and anywhere that burns an expensive amount of power. It can be incredibly lucrative, I'd look into it.

I have both interviewed and coached embedded software devs into positions at <FAANG company>.

You probably won't end up doing embedded work though, just as a point of warning. I mean you might, but probably not. As sibling poster alluded to, there are some jobs closer to that area, but more likely than not you'll end up on some other team doing something completely unrelated to embedded.

It doesn't have to be a permanent thing though -

It does not take too many years of $300-$400k compensation to make your future much more free to pursue what you want. If you do FAANG for 5-10 years while saving aggressively and can't take any more of it, then you can go back to working on embedded software for a third of the pay and have a huge buffer for retirement.

Or C++, which can be a great skill for an embedded dev to pivot into other fields, since almost all embedded devs work with C on a daily basis.

It's really a thing, and it isn't just in the valley. You can find salaries like that in Silicon Forest, too. More than half of it will be stock and bonuses.

You're in a lower cost-of-living location, and one where there's less competition; employers don't pay as much there because they don't have to. That said, if you like where you are, you might start by looking for remote work that pays better (from companies that don't say "we can pay you half as much because you're not in California").

Also, look for employers that have a robust technical job ladder for advancement; that's part of how you get a salary like that, and even higher. (I know software architects making 7-figure salaries.)

Are there companies paying like this around Portland? Obviously there are in Seattle. I'm in Portland and working remotely, but it would be nice to have more options. I have a friend who was talking to Puppet, and it sounded like their salaries were pretty low (by these standards.)

Some, yes. (Leaving aside that Google has an office, there are other companies paying that as well, just as there are in Seattle.)

Keep in mind that the cost of living in silicon valley is drastically higher than Colorado. You can use something like https://www.nerdwallet.com/cost-of-living-calculator/compare... to estimate the difference and it's pretty staggering. You'd probably have to at least double your salary to consider moving.

That calculator (and this argument in general) assumes you are sinking 100% of your income into dead costs, saving nothing and building up no equity. Avoid blowing that monopoly money on cocaine and hookers & you can work for five years and buy half of Ohio.

I went through the same thing for years. If I were young (early 20s?) and single, I'd probably consider it. But keep in mind that's the high end. Most people in the valley also don't come close to that number, so it's a gamble without an offer in hand.

I'm in my 30's now, with a family. There is no reasonable amount of money that could convince me to uproot and go to the valley. Sure I could come out ahead financially, but at what costs? Commuting for hours each day, working long hours, living in a smallish house with no yard, high crime, high pollution, etc. Those are just some negatives, but there are of course some positives too. For me, my time with family is my most valuable asset, and I don't think I'd sell it for $500k.

Sure you could go there and make a lot of money and basically retire in 10 years, but I'd rather have those 10 years back in time at the end I'm sure.

This is called "rationalization", and to be honest, it looks worse than you may realize.

Please elaborate.

You're making a lot of assumptions that are not necessarily true. You'll never know if you don't look.

* Commute/housing: you can afford a lot of house in a good location on $500k (or even 250-300k which might be more attainable).

* Long hours: varies a lot from team to team, and company to company. From my own experience, there's not a lot of correlation between long hours and salary, and a lot of people who work long hours do it because they want to.

* Crime: crime in the US is at historic lows, not sure what you're worried about here.

Yeah, I realized after I reread it some of those negatives are contrary to one another. eg insanely expensive housing vs commute time and whatnot.

I include commute time into long hours. Many people I knew there, admittedly NOT at FAANG, would spend an hour or more each way on a bus or train, plus 8 or more hours working, that's a huge chunk of the day. I'm remote, if that helps give a frame of reference.

As for crime, I guess it's just culture shock. I've had people tell me not to drive, and if you do drive and park, to leave your doors unlocked and empty your car, or else someone will break the windows and take things. And I've seen the broken windows. That, along with being harassed by mentally ill folks, was just a big turn off to me. Though, this may just be more of a SF thing specifically.

Ha, tell me about it, I just got from a remote company an offer of 2.2k eur/month as a PHP developer. The drawbacks of being a PHP guy I guess.

I was making ~$200k as a PHP developer, not sure what this has to do with it.

PHP developers always have had lower salaries, you can't argue with that.

Like in retail, it depends on location, location, location; a regular developer will never make that much in Europe - remote (for a EU company) or not.

Yeah, that's top end of software engineer comp for E5/L5 at Facebook/Google, and middle of the road for levels E6/L6. For reference, E5/L5 is achievable with 5 - 10 years of experience, though without a specialization you'll most likely get $400k instead.

Netflix median engineer pay is around $400 - 500k, because they only really hire engineers who would be E5/L5 or above. Apple and Amazon also pay this at the titles which map to E5/L5, as does Microsoft, Uber, Square, Snap, Pinterest, etc.

This does not include stock appreciation, but stock appreciation certainly helps inflate the comp even further.

Going further out from FAANG: if you include non-liquid compensation, many pre-IPO companies pay comparably (or better, with the tradeoff of uncertainty); including Airbnb, Stripe, and Snowflake.

Source: I earn about that myself, I have friends at almost all of these companies, and I have worked at or received offers from some. Also, see levels.fyi.

I can't tell you what you should do, but from a cost of living perspective: people who make at least $300k in SFBA or NYC will very often come out ahead compared to making maybe half that in a significantly cheaper area, despite the higher cost of living.

Yes. Also true in NYC if you don't want to come to SV.

IMO the move is to find a remote-friendly company that will pay you $200-400k, and stay in Colorado, unless you're already making that and happy where you are of course. Stripe and Github are two companies that are known for paying in the higher range and that hire remotely.

It’s like going to hollywood hoping to be an actor.

It makes sense to pay a few that much so that you can have riches of people to choose from (and exploit?)

I know top tier dual masters grads who have received close to this right out of college.

Offering a better than average package to attract talent is just a HR strategy, I agree.

Poaching, on the other hand, usually does not mean that. It means targeting key people at competitors and specifically courting them to make them switch. Hence the analogy with hunting on someone else's land. I would also agree that the term tends to be overused.

Thanks for making me feel like slightly less of an insensitive clod for my choice of words.

That's gonna be a "no" from me dawg

Headhunters, poaching, they are clearly idioms because we don't live in the safari or a conflict zone with hostile tribes (because we won.)

Pull request rejected and closed.

What are your thoughts on the language to use when a nation-state backed ‘company’ hires away a critical mass of people at many multiples of the market rate as a means to gain market dominance.

(e.g. China recently hired away a few thousand engineers from TSMC this way)

That's fine on the surface.. Would you go work for such a state? I value my time and freedom more. If things go wrong I won't get paid, passport may be taken, perhaps jailed.

But the FAANGs have a huge unfair advantage over startups - their size gives them monopoly power that disadvantages small companies.

That's a failure of American governance. Economists used to all know that markets needed to be regulated to make competition fair --- and efficient. But the American right has pushed for 50 years to deregulate everything, and the FAANGs have benefited from this rollback of anti-trust.

I'm not sure 'poaching' is the right word, but what the FAANGs are doing is unfair. And it's unfair because they benefit from deregulation and monopoly power that hurts anyone at a small business.

Let's go back to the Soviet style communism where a highly skilled engineer and a simple factory worker make the same money. That'll be the triumph for the society and the economics. Except that it wasn't. Know the history lesson.

Either you think America used to have Soviet style communism, or you have serious reading comprehension problems, or you're a parodist.

Is ad hominem allowed here on HN?

Startups do have advantages: they can give early employees a bigger piece of the equity pie than FAANG ever could, and provide a gamble on becoming much wealthier than employees could become working at FAANG. They can also give employees more overall product impact, more autonomy, and better growth opportunities.

If you, as a founder, don’t want to give up equity, who’s fault is that? You’re expecting employees to work for a pittance of what they can make elsewhere and take on the risk without upside.

If employees are look at your business and decide the probability of their equity being worth anything is too low, who’s fault is that? You’re trying to dupe them into taking a bad deal, or failing to communicate the opportunity.

If your company cannot scale to provide market-rate salaries, whose fault is that? You’re expecting your employees to give up their salaries and their financial security to subsidize a non-competitive lifestyle business that suits you, not them. You’d better figure out some incentive where that equation makes sense.

Please explain how it is unfair to startups when the vast majority of technical staff at startups have a practical zero chance of hitting the lottery odds of making good on their startup options to compensate for the lower cash compensation, lesser benefits and additional risk over taking a FAANG or even F500 position. Startups that complain like this generally want FAANG technical talent without even the realistic promise of above-FAANG payoffs in case the venture hits it big.

There isn't an infinite maw for staffing at FAANGs, they aren't going to suck out all the air for all the technical talent in the room. Just the air for other members of FAANG and maybe the second-tier competitors. Startups that want to pay less than F500 compensation packages for greater job insecurity only think they're in the anoxic depths of available technical talent. They're really swimming in a talent-rich pool, they just want a McLaren for a Toyota price.

You can get a helluva lot done with a well-managed fleet of Toyotas, and done right, you'll get to the point where you will afford that McLaren cash-over-the-barrel should you really have your heart set on such managing such talent. Not every problem in the world requires world-class problem solvers, and in fact, most problems are solved every day by everyday people with sufficient time and determination. It just doesn't make for good copy for VC's to read about in the pitch deck.

In any case, rare is the startup I've seen that can even supply the right infrastructure to leverage FAANG talent. Their benefits aren't delivered de novo like Athena leaping from Zeus' head. For example, if you have a Free Electron personally grinding out non-core code and manning your most senior-level support desk fielding rando calls, instead of teaching more junior engineers and wading in only for the most difficult project-endangering parts, you're wasting your and their time, whether you're a startup or a FAANG.

Complaining about not being able to hire FAANG talent with sub-FAANG compensation packages without any discussion of the infrastructure is cargo-culting the effects of FAANG talent.

If you're a startup that must have FAANG-grade talent in specific positions, then pay the market price for that talent. Otherwise, you'll accommodate for lower-skilled staff like nearly any other manager in the world does, and adjust accordingly. The market has evolved so FAANG talent obtains competent legal and financial advice now, so promises without founder-level or even VC-level protections against dilution and other valuation clawback mechanisms are more correctly priced towards the market-priced zero.

People use the word poach because it supposedly makes 'non-poaching' agreements sound like something positive.

> Employees have agency, they aren't wild elephants who need your "protection" from "predators" who just want to pay them more.

I think your analogy is only slightly apt. I rather see the company being raided for talent as the prey. The employee as its ivory.

First, elephants are usually not being protected from predators, but rather from hunters (illegal ones). I know it might sound like a nitpick because the two words can be synonymous, but since this is about terminology, I think it's appropriate. At the time you lose an employee due to "poaching", they're often not unhappy with the conditions you've given them and are not actively looking for another position. But they have been spotted by a "head hunter" hired to find talent for a specific role in a different company.

Second, employees might not belong to a company, but some companies spend a lot of time nurturing their talent through various programs (knowledge transfer, mentoring, experimental projects, personal time), because they hope it will benefit them in the future. Time is not free, it's even dearer than money, but it's the currency we all have the same amount of. If we don't consider another company just swooping in at the 11th hour to simply reap what should've been your benefit as a form of legal "theft", then what should we consider it?

Maybe the solution for companies would be to put some of their employees under contract, like in sports. They'd pay substantially more for those services, but a clause would include them if another company was interested to acquire their talent. That or maybe some insurance companies may start offering some compensation against poaching.

In fact, the poached animal usually dies.

Given that these folks are instead going to become apologists for obvious abuses of power in the name of "making a difference in the world", perhaps radicalized would be a better word choice :-)

And frogs don't really sit in boiling water.

These are called figures of speech for a reason, being literal about them is not admirable nor worthwhile.

I still see it as an important distinction simply because developers also have an interest in not getting hit by a bus.

But they are quite happy to leave for Netflix and given turnover rates in tech, are almost guaranteed to leave in a few years.

It would be an important distinction, except that "hit by a bus" always primarily meant being hired away. (For me "always" means "since the mid 1990s".)

Fair, but an organization should still be able to survive a literal bus hit too.

Why is Netflix seen as such a tech giant? They serve videos. CBS, HBO, Vimeo, Youtube, Amazon do it too. Nothing special.

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