For the first time, The company I work for is not raising salaries this year | Hacker News Reader

For the first time, The company I work for is not raising salaries this year

- Top 100 Company (more than 60k employees) - 9% net profit increase in 2020 compaared to 2019 - One of the best year in a long time

we just received an email from HR that the company will not increase salaries this year due to covid-19 challenges(never happened in my 20 years career in this company). I know this is bullshit because in another news they announced that they are buying back millions of their shares because they think they are not valued enough in the stock market.

Is your company doing the same?

View on HN

Happened in my company in one of the recessions, topped with a few percentages of decreased salary.

What finally broke me and triggered looking for my way out was actually the following year- business were back to normal but in a big company meeting it became clear that only management will get compensated for the lost salary and we have to continue with the lowered one

Hmm, angering employees by giving them a pay cut (not raising salaries is a pay cut any year, but this year's extra inflation makes it moreso)? Seems like a desperation move, trying to survive and maybe recover in a few years.

Edit: I don't know of any other companies doing this, but I expect that many are.

As for stock buybacks, that's basically free money, all companies will do that if they can.

buybacks are not free money, they are taking money from employees to artificially increase the stock price for thei investors and CEOs

How do you take money from employees? Are they owed a yearly salary increase? If your company doesn't give you a yearly raise, find a better job. Also, giving the money used to buy back stocks to employees instead won't help employees if the company goes bankrupt, something stock buybacks may help avoid.

How do stock buybacks help prevent bankruptcy?

Sometimes businesses need to borrow money, a stock buyback signals to banks "we are confident in our future that our stock will be worth more in... the future"

This seems counterintuitive to me, especially when a company is near bankruptcy. Are you saying that a company who is facing insolvency decides that the best thing to do with their cash is to buy shares of their own stock. Future creditors will look at that as a signal that they will be able to make their payments? Wouldn't it be a better show of confidence to fund the projects they are asking creditors to finance themselves?

I'm not disagreeing that stock buybacks are an effective tool and that they can benefit employees. I just don't see how they are helpful for companies facing bankruptcy.

Perhaps worth digging in to understand what the causes of the 9% net profit increase is.

If a decent part of the profit increase is attributable to factors outside of company control that are unlikely to persist then maybe the business will snap back to old performance in 2021+

E.g. government handouts, locked-down customers on a one in 50 year buying spree buying $long-life product & reducing demand for that product in future years.

I agree that share buybacks indicate company has a bit of spare cash, and that it could choose to distribute some of that cash to employees, perhaps as a one off bonus rather than ongoing liability of higher wages.

How are the competitors faring? If competitors also have a freeze on salaries or wage cuts, maybe market rate for salaries has gone down even if your employer faring relatively well this last year.

Nobody else is saying this so I guess I'll be the one: talk to your colleagues, the ones you trust. See if they feel the same way. If they do, ask them to talk to other people. Work together and come up with a strategy to press the issue with management. The company probably isn't going to pay you more out of good will, but they may do it in order to avoid the headache of an agitated workforce.

Other people are telling you to find another job. There's nothing wrong with that advice if it works for you.

Some commenters are saying you should just become a shareholder and capitalize on the profit. That's not a good strategy - unless you're a founded your interest in your own compensation is greater than any stock bump the company might get holding back on your comp.

Where I work last year's salary reviews didn't happen due to the pandemic. I left a previous company because they froze everyone's salaries at a time when I was already severely underpaid. I think it's fairly common.

I'm more impressed that you consistently got raises (or inflation adjustments) for 20 years in a row.

Yeah, I've never had a salary review without asking. They only give me raises for my first job when I was being paid less than a fast food manager, or when I quit. I think it's not that common to regularly give raises and bonuses.

Not directly related to the past year, but I had something similar happen a few years ago.

The company I was working for had a fairly bad year (not "we're gone" but "we only grew 1% vs the usual 15-20%"). An email went out from the CEO advising no salary increases would happen that year.

I was 2 years in and due for a performance review.

In the performance review, I asked for a raise of 7% and highlighted the reasons. My manager countered with "we can't do raises this year". I countered with my performance for the last year and asked if he could review and let me know by the end of the week (the meeting was on a Monday).

He called a meeting with me on the Thursday and gave me the raise. He also asked me to keep it private.

My main lesson was: Don't accept blanket rules. Unless you're in government, you should still ask for the raise.

Companies don't pay employees based on the performance of the company, but on the performance of the overall economy. They probably realised that although have done well in 2020 if wages in the broader economy have otherwise been stagnant and there is a surplus of individuals looking for jobs right now there is no reason to raise salaries.

I guess the question you need to ask is whether you believe your labour to be worth more, if so you could still personally push for a raise or start looking elsewhere. Personally I don't think it's reasonable to expect a company to pay you more than you're worth (especially in a larger company) just because they can. If you want to share in the financial success of a company the best option is to become a shareholder.

I've been at the same company for 6 years and I think the total cumulative raise I've gotten is probably....$5000. The company has done quite well too, even through covid. Huge multinational financial instution, with employees in the tens of thousands.

Also rumor on the grapevine is that the business side (profit center) employees got pretty good bonuses this year, while tech (we are the cost center) got pretty shafted.

I've long worked with the assumption I will never get a significant raise unless I jump ship - and that this is how things always worked, at least outside of SV?

From what I hear/understand, SV style tech companies do give non-trivial raises? Correct me if I'm wrong.

If you are on the tech side and work for a financial institution, you'll always be an afterthought, because the core product is finance, not software. This can only change by joining a company where the core offering is tech.

Yes - 100% true. Hence why I am trying to jump ship.

I have also not received any information about a pay increase, not even adjusting for cost of inflation. I'd suppose that this is one of those times where a job change would be appropriate, right?

As always, make sure your resume is up to date. Maybe shop it a bit to see if you are over or under paid.

Depending on your industry, it might be there are a lot of people in that industry who are out of work. When the IT market is soft, a lot of IT companies go cheap on the raise. Which if you are an accountant in an IT company can kind of suck.

So what industry is the company in? And do you work in the mainline part of the company?

It is very uneven across industries. Gaming (non-gambling) has had a big 2020, and bonuses went out.

I have also seen up to a 20% boost in hourly rates for consultants across the EU.

Time to start leetcode and move to greener pastures

Same here! 0% globally. not even peanuts!

Reply on news.ycombinator.com