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Comment by threatripper | Hacker News Reader

If you pay slightly above average and treat your employees well you will get the best talent, they will be motivated and they will stay longer. Caveat is that only a fraction of the companies can run this strategy or the average pay rate will start to rise continuously.

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That’s not a problem as it’s not a zero-sum game. Everyone could get their pay raised at the same time and the overall productivity would go up accordingly, until some point of equilibrium.

If you increase all wages at the same rate then inflation rises (as you don't increase productivity and resource availability accordingly) and you devalue savings. This is not a bad thing overall. It certainly is better than losing a war.

As it rises it starts to pull in talented people from other fields who wouldn't take the job otherwise (coming from everything from finance to biology). There is a lot more supply-side variability than people realise based on salary differences, and money can paper over a lot of work satisfaction issues, at least temporarily.

Maybe also some clients will be happy to pay more, if they notice the quality is better

Short term it steals competitor's employees, which will be biased towards the higher quality individuals (as in, they should be able to pick and choose). Longer term it brings new people into the field, which might depress skill and aptitude levels, since these are people to who this was not their natural calling.

> longer term brings new people into the field

To me, that raises the question of how to find out if someone from another field, will be able to get good at software.

This CEO mentioned they have training programs -- how do they know if someone from, say, biology and with some basic programming skills, is the right person to hire and maybe join a training program

Not disagreeing, but the devil’s advocate: sometimes you don’t want to be keeping the contractors longer, and will use them as fuses to shelter your business when bad times come. This is at least part of the reasoning behind having layers and layers of sub-contracting companies paying their employees low wages.

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