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Comment by Areading314 | Hacker News Reader

A huge problem with this industry is the inflexibility to pay current engineers LARGELY increasing comp each year. The thought is that there is a market rate for an engineer and that pay can increase with the market rate, but this is a fallacy. An engineer that has been at a largish company for 1 year is worth 20-30% more than the year they were hired because they have specific knowledge of the tech stack. Yet that engineer will likely be offered a 3-5% raise. An engineer with 3+ years might be worth 50%+ because they have developed the specific skills relevant to the job AND know the idiosyncacies about org politics and the nitty gritty parts of the codebase. Yet they will still only get a 10-15% raise. So that engineer moves on and accepts a 40% raise elsewhere. And thus we see the constant churn of highly talented engineers which is a huge drain on productivity for all involved.

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> An engineer that has been at a largish company for 1 year is worth 20-30% more than the year they were hired because they have specific knowledge of the tech stack. Yet that engineer will likely be offered a 3-5% raise.

Although I agree with your overall point, I disagree with this line of reasoning. I think the pay offered to an engineer already takes into account that they will understand the tech stack after six months to a year. The situation is essentially the reverse of what you said: they're being overpaid initially compared to their productivity (but, quite rightly, that's the company's problem). Then their productivity catches up with their salary.

But I agree with your point in the years after that.

I agree with the both of you, so here is my simple version:

Companies rely on the fact that you stay a couple of years at least. So if you want to make good deal, you need to switch jobs more often.

A year to learn, a year to earn, a year to yearn.

*A year to learn, a yearn to earn, next year churn.

I remember reading somewhere (but I can't remember where): "My job is not my job, my job is to find a better job"

I've come across "My job is to eliminate my job."

Impossible in reality for the most part, but a lofty goal to aim for.

I don’t think this line of thinking will bring out your best work.

That sounds about right to me. The company also has risks in that its interviewing process indeed just found a good match and you will be as good in real as in paper(your resume), I think the salary part covers the first year, no raise for first year makes perfect sense unless you're absolutely undervalued when you're hired.

The other side is that, if you're not as good as you're supposed to be, normally you won't get fired just in one year, you are actually overpaid. From the corporate side, the better engineers are covering the loss(those are overvalued but still too early to be laid-off).

So the best and most capable ones will switch jobs after 3 years, not totally because the company is too greedy. Unless there is a way and culture to make your salary can go up and down each year based on your performance, there is no good solution(because pay-cut is not common no matter what). In the end those who are overpaid will more likely to stay, those who are undervalued will likely jump board.

One way is to keep salary less important, like an average value that is reasonable for both sides, then the company can use monthly/quarterly/yearly bonus to reward the top employees, but who could like it when he has a 30-year fixed-rate mortgage that needs a sense of secure/stable income.

Overall I'd say the whole point of the interview process at senior level and beyond is to make as sure as possible that you are productive immediately. They give you tasks you can do without thorough knowledge of their process. And these days, lots of one-to-one meetings to hold your hand some and keep your productive.

If you don't get a raise in the first year, it's often more about pedantry regarding the HR rules, which tend to be "optimized" by penny-pinching adjustments over the years to take advantage of employees every way they can (this is their job, squeezing money out of people any way they can). E.g. you weren't there for the last round of evaluations so you don't get a raise. Possibly no bonus too. You need to discuss all this stuff when negotiating, they'll be trying to help you work the system at that point, rather than using it against you.

As long as you are classified as an at will employee you should give your employer at will loyalty. They don't owe you anything and you don't owe them anything either beyond the responsibilities of your job in exchange for whatever they're paying you.

It's up to them to make sticking around your best option. But when I'm on interview panels and someone brings up that the person in question is a job hopper, rather than see that as a negative, I see it as a challenge to find a way to get that person to stick around. And the only thing that offends me when someone quits is if the offer to do so isn't better than sticking around.

I am not popular with my fellow managers with this attitude and I expect downvotes for this. Bring 'em. It really doesn't matter to me anymore, the remainder of my career will be spent on making hard things easier rather than making easy things harder.

No reason to downvote you.

However, if someone has generally changed jobs every year or two and I wouldn't hire someone who I knew with certainty would only stay that long, I might think I'm special enough that I can keep them around. But I'd probably be wrong.

And that's the thing, it's okay with me if I'm wrong. Or as I responded to a doctor who asked a similar question: "Do all your patients live?" It's not a question of being special to me, it's a challenge to figure out what will make them stick around and make the company money and it's usually strongly correlated in my experience.

I can only speak for myself but so much of my job hopping is geared towards both getting more money but just as importantly trying to find an environment I really like. I want to find work that is fulfilling and that does not make me dread Mondays. I have reached a level financially where while I can always use more I make more than I ever reasonably expected to make and I am making far far less than many on here. My years are precious I want to spend them somewhere that I like both the people I work with and the work I do.

Yes you have figured out the secret (tm) in my opinion. Sturgeon's law applies to tech which is to say 90% of it is crap. Don't waste your time with that 90% and if you find yourself in one of those positions feel no guilt whatsoever running away as fast as you can.

Please read this to avoid bias: https://www.linkedin.com/posts/lizryan_the-dumbest-part-of-e...

But the grandparent comment assumes that you can keep a certain percentage of engineers you want to by making them an offer that gets them to stick around.

Is "at will" the right term here? What's the alternative, granting you tenure at their little company or something? If you are an at-will employee who is kept around, then might that demonstrate actual loyalty (and probably higher pay) versus being at a place that is prohibited by law from laying you off without good cause?

Perhaps you mean if they treat employees like a commodity. They can do that withoug laying people off; universities tend to treat their tenured faculty this way also. Optimizing for getting the most work out of the witth the lowest cost. If so, then yes employees should, in turn, act like the job is a commodity and try to optimize income-minus-costs on their end too.

If I have to sign an agreement that gives my employer permission to terminate me at any time for any reason with or without cause, they should not be surprised that it also grants me the right to quit at any time for any reason with or without cause.

And yet, all that fuss about these job hoppers. How about creating an environment and culture where sticking around beats job hopping instead?

As for the alternative? Check out the severance packages that executives and TLAs get. Try scaling that down to the employee level. Not going to happen.

Well in the past employees got ISO's. Now employees are getting RSU's.

And in our lawsuit-happy culture (with a perverse incentive for companies to always settle lawsuits even when they can win), even the most employee-friendly place probably needs such an agreement for CYA reasons.

I do agree ecompanies can do a much better job of treating employees like partners instead of "resources" to optimize. Even on HN, we have fellow engineers talking of the importance of (soul-crushing) processes that ensure no one is essential. As if it's undesirable to let anyone be special or important...

RSUs happened IMO because Warren Buffett didn't understand tech. But they're fine, really, the same competitive pressures that led to compelling ISOs now lead to compelling RSUs. Not sure what problem that solved though but give me a couple beers and I'll probably come up with one.

https://www.nytimes.com/2002/03/11/business/stock-options-ar...

I'm saying it's a step in the right direction. No more starting at zero or even being "under water" like with ISO's. With RSU's they just grant you the stock like they used to only do for execs (with nonqualified options or whatever). As long as the company doesn't get delisted or something you're a stakeholder.

Employment contracts are a double-edged sword that would warrant their own discussion.

Also you’re not really signing an agreement that they can fire you, you’re signing an acknowledgement of the at-will employment status so you can’t claim any illusions that you had an employment contract, but that status is typically derived from state law and advertised on the job posting you applied for. That paper you’re signing is about the same as an acknowledgement of the warning that you shouldn’t eat tide pods. It’s there because stupid people have necessitated it.

Speaking as a long time employee and now as an owner/employer, I’ve always thought people who bristle at at-will employment don’t really get it — it’s a two-way street, as an employee you can leave anytime, being considerate of professional courtesy for notice, etc.

I was always highly confident in my value and skills, so the idea of an employer randomly laying me off was never an issue - their loss more than mine. Your life will be far less stressful if you can develop that mental confidence and self-actualization, and if there is something preventing it, work on that. Specifically, if you feel lucky to have been employed in your field, and are barely hanging on to your job, maybe you should find a better field?

At-will employment should not even remotely be a big concern in life. Talent is hard to find - there’s more money than talent out there.

I once had to sign a non-compete that came with paying me my full salary during the noncompete period to do anything but what I was doing. I was great with that. And when I left, they chose not to enforce it anyway, but I felt like that was a fair deal.

Paying your full salary is not at all common - though I agree that is sufficient to make a non-compete fair and wish it would become normalised.

So there are a number of people on this site who are not at that level and they get resentful that someone might get a deal like that rather than try to find a path to getting a deal like that for themselves. That's crab mentality and it helps no one.

The way to get there is to refuse to sign non-compete agreements unless they come with an equivalent clause to what I got. When you sell yourself short, you sell everyone else along with you.

Eh, Hoppers I don't worry about. Jumpers, OTOH, Are a negative.

The difference (at least to me) is time. Hoppers are people who typically change jobs every 1.5-3 years.

Jumpers, will have a long history of 6 month stints, very few if any gigs longer than a year. At most places I've worked, depending on the quality of on-boarding it took most engineers 1-3 months to be productive, and 3-12 months to understand the system well enough to make impactful changes to the ecosystem safely.

There's a trade off between exploration and exploitation. And sometimes, because they put on their best face to recruit you, you can't figure out that a seemingly promising idea is actually nonsense and it will never work without joining the effort for at least a month or two to go far enough down the rabbit hole until you realize it's full of manure.

I've lasted anywhere from 30 days to over a decade depending on the gig. And every one of those moves was the right choice. I prefer to rely on my own research of the person's career track and the number of people they can summon as references to say nice things about them. Tech culture brings out survival traits and I'm not going to hold anything against people who act in their own best interest.

They don't pay upfront. That's not how management thinks. Until attrition is below 50% hiring new people with a good hike is profitable than paying to people who don't leave.

I was able to negotiate a 45k pay raise at my current company.

After clearly proving my value for about 2 years. I made it obvious that I would accept a role at my friends company if they couldn’t come up. I explained to them nicely that I would rather stay, but I can’t without a large raise.

It can be done, but it would have never happened without me pushing them. No company is going to willingly throw out raises this large to people without reason.

I agree with your point fully, it’s just unfortunate it doesn’t happen.

In effect, you threatened them into giving you a raise. And I'll say congrats on getting it, but are you at all concerned about your ongoing relationship with management? Do they think "he's good for a few years at least now" in terms of comp adjustment, and/or do you expect a raise again next year?

At my company, I understand (but have not seen first hand) that anyone who tries this (either comes to the table with a competing job offer in hand or threatens to leave in specific terms) is told "we thank you for your time here, best of luck"... Because it is assumed they are not dedicated to the company and so investing further in them is not wise. This is old-school thinking in my opinion, but it's probably still how a lot of places think.

Unless you are _critical_ to a project or team, it's a risky play.

Generally speaking it's a dilemma for sure, and I'm not picking a side here, but I have to imagine there is a lot of tension these days in companies due to these kinds of pressures.

Again, good for you for negotiating a better comp for yourself though!

This is not at all a risky play, because GP was willing to walk.

It’s a true negotiation only if you’re willing to walk out. So to negotiate, realistically assess the availability of other options, and whether you’d accept them.

If you’re not willing to walk, it’s just a game of chicken. That can indeed be risky, as then you might lose what you have with no fallback and no alternative.

I do agree that it is negotiation, but it IS a risky play. While you are negotiating, you have leverage. But it is time dependent leverage. If you stay, you lose, not all, but a large part of that leverage. If you do stay AND they decide that you are a risk for THEM, they may make moves to make them less dependent on you and at some point may RIF you or move you out in some other way and at that point you may not have a fallback option. While it is true that you are a great employee and someone will scoop you up eventually, when you are looking for a job and are currently not working, you LOSE leverage with your new potential employer. It is human psychology that you appear more attractive to an employer when you currently have a job than if you don’t. This puts you at a disadvantage going forward.

I am not saying don’t negotiate with your current employer for a pay raise, but leveraging another job offer does come with some risks you should be aware of. Some employers can see it as “burning a bridge” (I don’t agree with them, but it happens).

Personally what I do is try to negotiate without a job offer in hand (never threaten to quit) and if they don’t give you a good-faith pay raise then start looking for a new job then. It can take a year or more to find a good job you want. Then quit. They have already shown you that they don’t value you enough to pay you more. Paying you more under duress often does not end well.

> what I do is try to negotiate without a job offer in hand

You can have an offer in hand and just not talk about it. Without an offer, it can also be harder to come up with numbers. What if you ask for X at your current job, get it, but then get an offer for X+D from another company one month after?

Some posts read like they threatened their employers, but the politically correct way to negotiate is something like: "I think my market value, based on comparisons with friends with similar experience, is +x% of what I'm getting currently. I'd like to fix this so I stay here longer-term, because I like my current job thanks to y and z. Can we fix this?".

It really depends on the company culture, I've heard places where employees are encouraged to apply elsewhere to know what their market value is (isn't Netflix such an example?), in this case you won't look bad if you do get another offer and bring it up more directly.

Agreed. Also. Make sure you gave six months income easily accessible. Negotiating when living month-to-month is extremely different thing then when you have lots of leeway.

I was talking with a friend of mine a while back. He's getting onto retirement age and I gather he's pretty comfortable financially. And he was telling me, not so much from a direct financial perspective, but how with various organization and team/role changes that had been going on it was just so much less stressful to know that he could just shrug, say "nope, that doesn't work for me," and retire a few years early.

Is "dedicated to the company" mentality still a thing? Let's say the same company buys supplies form supplier X. Then supplier Y shows up with 30% reduced price, same quality. Do you think the company will show "dedication" for the supplier X? Then they should not surprised that engineers are willing to accept a better offer. As for "for now" bit—they should not forget that this is ongoing thing.

Invert that thinking and it means they assume anyone who is loyal to the company can be treated poorly. There is no reason to be loyal to a company you don’t have a stake in, because they cannot be loyal to you. If making payroll next week requires them to fire you, they will.

Do you think your company would have the same reaction if engineers ask for a substantial (5-figures) bump in stock year over year?

Companies will never, ever be loyal to their employees.

Don't fall for that "being loyal to your company" mindset. You won't get rewarded.

I used to work for a Marketing company that was pretty loyal to us workers. It's since been sold, I have no idea how the new owner has been handling things.

Its really no risk at all as they were going to leave for a better offer anyway. the absolute worst case is that management says best of luck and they take a higher paying job. I have gotten a job offer before that included a 15% raise, told my current employer that the new company offered me a 30% raise becuase I really did not want to stay and figured small risk of them offering a match. My current employer unexpectedly matched the made up 30% and I stayed another year. If they did not think I was worth the 30% bump they would not have matched. Then I got an offer for a 55% raise from another company, current employer could not match that one and wished me well. No harm no foul. If the business was doing poorly management would absolutely cut heads, that is the reality of the US based at will employment system. Companies (not managers) have no real loyalty to employees so why have loyalty to them. No need to be aggressive or mean, just taking care of the best interests of one's self and family.

I've seen some friends some do this. The time it took to go through, the size of the raise and the headache involved in convincing everybody (like pulling teeth), still, IME, essentially made it a losing proposition for them compared to just hopping jobs.

Still others have thrown out raises without being pushed but they were critical organizational lynchpins getting 10% raises when the market would bump them 50% minimum. That's even worse.

Fundamentally, I think the surplus value from these tech workers who hate interviewing and get "stuck" with cost of inflation raises are often a lot more profitable than we'd give them credit for, and a lot of companies are happy to risk losing a high performer if it meant keeping 3 profitable grumbling malcontents on lower pay.

essentially made it a losing proposition for them compared to just hopping jobs.

I've done this as well, but I actually liked my current job and wanted to stay. I had a potentially new job lined up which would have paid much better, but it also had many downsides. Primarily a much long commute and a pretty boring industry that didn't interest me. So I was happy to split the difference between my current salary and the new offer and keep doing the job that I liked.

> IME, essentially made it a losing proposition for them compared to just hopping jobs.

I think it's weird how hard it is to convince your colleagues and your management that you're worth 50% more than you were yesterday by continuing to work, yet how easy it is to convince the same people of the same thing by quitting.

I also think most companies realize how disadvantaged they are in salary negotiations in this job market, but it's favored employers for so long that very few of them have any idea what to do about it.

I think it's partly that when you ask for a 50% pay raise a year in theyre probably afraid you may tell all your colleagues who are your friends and who know your productivity and then everybody's asking for a pay raise.

Less risk of that happening if you are a fresh face starting out with 50% more. You probably wont share and plus, who knows what kind of hot shot you are?

Plus, your leverage at the point where you decide to take the job or not is at its highest. They'll infer that walking away is much easier for you than it is when you've spent 2 years somewhere and you're settled.

A friend of mine also at some point disliked his job and convinced everybody to give him better equipment, more responsibility and a significant raise. From what he told it was really justified since they lagged behind tech-wise and then he stayed 1 or 2 years more. But it seemed they've put so much pressure on him that he needed a 1 year break from everything afterwards.

These tech workers who hate interviewing and get "stuck" with cost of inflation raises

This is why you should keep your Leetcode chops up as well as your whiteboarding and interview skills. Don't let hating interviews stop you from fielding another offer.

As long as you're willing to walk if this fails. Also, be aware that your card will be marked and considered somebody who will try this again in the future. I'd expect most companies would reduce the risk of such by making sure what you do has overlap with others. Come the time I expect you'll be managed or re-org'd out the door.

That depends on the situation. Yes, if it was something like "Hey, I know you have this huge project deadline that I am a critical part of, and if you don't pay me a grossly large amount more, I am out" That is hostage taking, and they would not look fondly on you.

But the request of asking for a rate that you are being offered on the open market is not. They have 2 choices there: They can pay you more because you are worth it, or they can wish you the best. If this company had a bunch of employees come in and get take 30% comp less than you and did the same quality of work, do you think they would be "loyal" to you and grossly overpay you? Absolutely not, and they shouldn't. Of course, the company would love to just pay you less, but they realize that your value proposition still exceeds that.

Corporations are completely tone deaf. The way you say things and the details of your situations will not be perceived by the relevant decision managers.

In a small company, it can make a difference. In a large one, it won't.

" card will be marked and considered somebody who will try this again in the future" Not sure this is such a terrible thing. He got far more money than he would have originally if he just said nothing and stayed and if going forward he just gets 3 - 5% it is still a % of a much larger number. Worst case is if for some reason the company gets vindictive they just get a new job and a new raise. Optimally though if the employee is pleasant and up front about a new offer, then the company treats it as strictly business. They decide if the requested salary is worth what the developer delivers, if yes they make the offer, if no they wish the employee well with their new job.

I think the real issue is that changing the companies always gave bigger raise in pay than staying in the company for most of the folks. Most were not changing jobs due to multiple factors like relations, not having to change house, comfort, good office, free food etc. Now this all factors have reduced a lot that staying in current company is looking even worse option. So till employers are able to retain using other means like interesting work or that employers are able to give 20-30% raise each year(which is pretty hard) the time people stay in the same company will low.

>* employers are able to give 20-30% raise each year(which is pretty hard)*

Can’t be that hard if an engineer can just walk out and get that. What do you think the replacement will cost? And with none of the knowledge.

25% raise over 20 years means 86 times increase in salary over a fresher. And no company could pay 5 million dollar or so for an average 20 years of experience. The entire industry hinges on the fact that a person would only change job 5-6 times in 20 years.

> no company could pay 5 million dollar or so for an average 20 years of experience.

Uh, they seem to find that money just fine for execs, who are not even the ones keeping servers up, so to speak...

This is a really important point that is always missing in these threads - execs at most companies (even at FAANG, but esp outside) make massive multiples of their average engineer.

5.000.000 for a single exec means 50.000 for each of the 100 "average engineers" working in their department. You can overcompensate execs because there fewer of them than engineers.

In this example, how much are these average engineers making? Usually, even at FAANG, less than 10% of them will command a 500k peak-SV salary. So for the rest, 50k each is a sizeable amount of money. In my experience, this is 2x the average yearly bonus.

But also because the exec has more power. More power over budgets, over the company, a closer relationship with the people who decide their salary, etc. We just have power over the tech, which may be vital, but it's not power we leverage very hard.

While it may seem that way a lead engineer has more actual ability to swing outcomes than an executive. I can save or loose my company millions in a month but my exec can’t even get us 1-2 people without 3 months of paperwork. He can’t allocate more than 5k in capital without months of review. And he works 60-80hrs a week requesting status. It’s a total joke that he Gets paid 3-4x what engineers do

Was that an executive or a middle manager? It sounds like the latter. But you're absolutely right that it's weird that the people who's job it is to enable engineers, get paid more than the engineers who do the actual work.

You can’t tell the difference but he gets executive pay and title

I've said this before on HN: for a while I thought that execs were overpaid (generally, it is true!) until I worked with some founders and owners of companies who really did bring 10x or 100x the value I did to the company.

It doesn't mean they did 10x the work, but they definitely brought the value.

Exceptions don’t prove a rule. There are engineers who are also similarly valuable - and they get paid well. But exec/manager/admin pay is always inflated, regardless of that value. I say this from personal experience and insight into salaries at various kinds of companies, FAANG included.

I'm not saying you're wrong.

Ok. I was a bit hyperbolic. But people aren’t even moving because their current jobs value them for what they are worth.

People literally jump around chasing pay increases. If you got a decent raise comparable to a job change would you jump around every couple years?

They seem to have no problem finding that kind of money for execs and shareholders.

> And no company could pay 5 million dollar or so for an average 20 years of experience

Just how many 20 year experience engineers do you think the average company has?

I have a feeling you will find that the (very small number of) folks who have been at the same FAANG continuously for the past 20 years are indeed making compensation in that ballpark (we're talking Google's Senior Staff Engineer or Amazon's Distinguished Engineer level) - particularly if you take into account the massive stock price increases over that period.

If I could get 30% every time I changed jobs, I'd change jobs once a month.

"Pretty hard" is an understatement. In ten years, somebody receiving a 30% raise each year sees their pay go up by a factor of nearly 14. Over a 30 year career it is a factor of 2600. Somebody starting at 50k would end their career making 130,000,000 annually.

Some people do actually end up at that kind of a multiple of their initial salary. It’s not that such growth is impossible it’s just really really uncommon and generally takes regularly changing roles.

"Some people" are also born in poverty and become billionaires. Not nearly enough to make it worth talking about like it's anything but a statistical aberration.

Quite a few people do cap out in the 7 or low 8 figures though. The old “climbing the corporate ladder” adage is based on actual people even if most people never climb vary high it’s a real possibility if you actually want to make serious money.

Personally, I and most developers don’t think it’s worth it which is one of the reasons why it’s not actually difficult to get started.

> Quite a few people do cap out in the 7 or low 8 figures though.

Gonna be the [citation needed] guy here again; "quite a few" is doing an awful lot of work in that sentence. According to the most recent wage statistics from 2020, there are less than 100,000 people reporting incomes of $1M or over; that alone doesn't just put you in the top 1%, it puts you in the top 0.1%. "Low 8 figures" is in the low thousands.

https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2020

I'm not the first person to point out that Silicon Valley (and SV-style) software engineering incomes seem to have skewed HN's idea of what "average" salaries are and I won't be the last, but I think it's really true. If you make a six figure income, you're pretty much in the top 10% of that wage statistics chart; the median income is around $30K.

> Personally, I and most developers don’t think it’s worth it

The number of people who started as developers and increased their salaries to that $1M+ level have got to be very, very low, and I don't think you can really imply that most developers have the opportunity to do so and simply choose not to. That kind of "engineering founder" success requires skills beyond engineering (and, as much as we sometimes like to pretend otherwise, a certain amount of good fortune).

First you read that chart wrong. 94,130 people make between 1M and 1.5M from the data you linked, an additional 34,060 make 1,500,000.00 — 1,999,999.99 etc. The actual number is (167,593,971 + 358 - 167,409,340) = 184,989 Americans make over 1M per year based on SSA data. Next that number is a massive underestimate based on how SSA calculates wages due to how Federal income taxes are calculated and the normal tax avoidance strategies used to minimize that W-2 number.

Beyond that the relevant question is not what percentage of people currently make that much money out of all people or even all workers. The relevant question is what percentage of people that aim for it eventually make that money. If hypothetically people make 1+M for on average 7 years of their life then your looking at something like ~10 x 184,989 people or roughly 1 out of every 180 people in the population. But again not everyone is in the running, a Teacher is hardly aiming to climb the corporate ladder to millions. Depending who you cut out the actual odds might be as high as 1-5%.

And of course ignoring actors etc who might make that much money but aren’t getting it on a W-2.

PS: To see just how biased official income statistics are try and calculate Bill Gates official lifetime taxable income some time vs how much his current net worth + total donations + 2.4B divorce added up to even ignoring all actual spending.

It doesn't just require changing roles. People making 140,000,000 annually are basically only the founders of the very largest tech companies. CEOs of the very largest tech companies will get stock grants in the nine figures on occasion, but not annually. No staff engineer who changed jobs every three years for three decades is making nine figures.

So yes, if you start as a junior engineer and end your career as a CEO of one of the most successful companies on the planet then you can see this growth. But those aren't regular raises for doing good work. Those are completely different pay strata for completely different jobs.

I agree, anyone who thinks 9 figures is likely would have to be smoking something. But, failing to reach the absolute top number possible is hardly failure. Last year over 4,000 Americans made 10+ million in direct W-2 compensation Aka not stock options or capital gains etc.

4 000 out out 330 000 000. So 4 out of 330 000. That's a bit more than 1.2 every 100 000.

Good luck with those odds!

Lifetime odds don’t work like that.

That’s just last showing years W-2. Someone that made that much but retired in 2019 doesn’t count. It also excludes anyone that will cross the threshold at some point in the future. It even excludes people that got stock options worth that much but can avoid calling them taxable income right now.

Lifetime odds for a random American might be ~1:10,000. But not everyone tries to make that much money from a W-2 either. Becoming a school teacher is hardly putting your hat in the ring for that kind of compensation. Which arguably drops lifetime odds closer to 1 in 1,000 if not better for people that make a real attempt. I am trying to avoid any kind of truss Scotsman argument, but IMO there is a meaningful difference between random chance and stuff people work for.

Thank you for hilariously illustrating how bubble-y the current moment feels.

If you think dramatically increasing compensation is going to continue in the next decade like it has in the last one, I think you might be disappointed.

Now that companies are comfortable with remote, HR departments are eventually going to realize that services like Deel exist, and that its not actually that hard to hire employees overseas.

Once job ads start removing the "US only" part from the requirements, comp is going to come crashing back to earth.

A remote worker in the US being paid 4-5X as much as a remote worker in Europe is a massive market inefficiency just waiting to be arbitraged by companies.

As the tech giants growth inevitably slows over the coming years, they're going to have to start looking more closely at their cost structure to meet investor expectations.

Nope. Cheap, outsourced labor has been available for decades. If what you’re saying was true, the shift would have already happened. The reality is that the vast majority of outsourced labor is significantly lower quality than the onshore talent. Mix that with poor communication and a ten hour time zone difference … it’s usually net negative.

This is an easy observation to make yet so many fail to see it. We already have contractors at my company and they aren't that productive. They are handed the easiest tasks with no business knowledge required because well, they are just contractors. Well, that and the fact that they live in a completely different timezone which means communication is async which means slower cycles of understanding and learning.

Instead of outsourcing, even relatively small businesses are now opening international branch offices with full time local employees, tapping the pool of talented engineers who would prefer not to emigrate. The grandparent poster is correct: if there's real savings to be had, eventually someone will find a way to get to it.

I think you’re both right: outsourcing jobs rarely saves money due to the communications & cultural gaps if you’re trying to closely manage someone’s work and they don’t have a very clear understanding of where their work fits in the larger scheme of things.

What works better is outsourcing entire business functions so all of that routine coordination can happen in the same team/time zone, and you have an easier time measuring performance.

My company has been in the foreign contractor market for a while. I still make a massive US salary. Having been on the hiring team for many of these contractor shops I can tell you that the skill level of contractors in India/Africa/China/Ukraine has another 5-10 years before it even begins to approach the average skill of a seasoned American engineer. For a while my business as an independent contractor was quite literally fixing code written by foreigners because the company thought they could play this arbitrage game.

For example, we've hired several engineers through a very big name, silicon valley backed, foreign contractor firm. They perform at the level of a junior engineer at best.

Another perspective to consider is that the best talent in those countries (specifically China and India) are not going to these consulting firms.

China in particular have large tech companies (e.g. tiktok) that offer pays that almost matches the US, which skimmed the best engineers away from these contracting jobs.

The best ones also usually end up in California with a H1B visa. Also, why would one prefer to do random consulting work for a company exploiting salary arbitrage when they can choose to work for various companies doing more interesting work (either remotely or locally)?

In my experience, it is less about skills but more about cultural differences that make them appear less skilled.

I'm not talking about old school companies replacing their "IT" departments with Indian contracting firms.

I'm talking about tech companies directly hiring employees from other countries.

You don't even need to leave the English speaking world to find massive arbitrage opportunities.

If you think there's no React developers in the UK/Australia/Etc who can do leetcode problems...I've got news for you.

HR departments are eventually going to realize that services like Deel exist, and that its not actually that hard to hire employees overseas

The only fly in the soup there is that I see loads of remote roles that can only be performed in the USA because of PII. It's not so much that the workforce is getting globalized, but that the country-specific workforce is going remote in whatever boundaries they're legally allowed to work (in this case, within US borders).

Pay isn’t about “worth” or “value,” it’s about the labor market.

Very few of us are paid based on a value calculation. We’re pod based on what the market values our labor and then we either fit or don’t fit into a business model that has some value.

So you’re right, but the reason we don’t get 40% raises after a year is because we can’t quit and get a 40% raise to go elsewhere. We know this and our employers know this.

Now if the market for programmers were 40% higher then we would just get that to start.

Basically employers are overpaying us that first year while we learn stuff because we come up to speed after a while and then finally “earn” our salary.

I think the theory is that in aggregate they save money since most people are too lazy to jump

Speaking as the Devil's advocate, organizations want headcount to be fungible.

If hiring and churn were huge issues for most companies, they would actively combat it. Instead, they've all mostly settled into the practice you see. Engineers typically do a 1-2 year tour of duty, vest, then bounce onto greener pastures. Steady state flux. In some senses, new talent also bring in new ideas and combat skeptical dispositions and organizational ossification.

Engineering salaries are without a doubt one of the biggest expenses for organizations to deal with. Companies love that they can now hire remotely and pay adjusted cost of living. They'll hire as many workers in middle America as they can, and once enough of the workforce is concentrated outside of expensive cities, you'll see them stop hiring in SF and NY entirely.

But it won't stop there. Startup capital is already beginning to shift to new opportunities in burgeoning emerging markets. Employment will eventually head there too, whether it's chasing after the new capital or simply finding more talent at better market prices. Covid and WFH opened up a world of possibility for talent sourcing and cost reduction. America doesn't have a monopoly on good engineers, just the expensive ones.

I wouldn't be surprised that if in ten years, our salaries begin to dip below six figures. Inflation adjustments notwithstanding.

Make your money now while the iron is still hot.

>"Covid and WFH opened up a world of possibility for talent sourcing and cost reduction"

I was doing remote work and hiring remote subcontractors for 20 years already. No need for COVID ;)

You are ahead of the general “herd” then. Which for 20 years had been either “in the office no remote” or “what if we outsource it all to India that will cut those annoying costs”

The counterpoint is - it’s very easy to waste a lot of money building very subtly the wrong thing! In theory it shouldn’t matter, if your processes and specifications are perfect. But in practice the closer your engineers deeply understand the problem space of your customers the better

Speaking as someone hiring engineers in APAC, it's extremely difficult to find developers who are competent, experienced and have sufficient command of English to operate in an English-speaking team. The few that tick all three boxes and have in-demand tech skills (ML, k8s, AWS etc) can command Silicon Valley level salaries even in their home countries.

Of course the pool will expand over time and the situation will look different in 10 years, bit nevertheless the English requirement will remain a blocker for many, many engineers who could otherwise code circles around a random mid-level American programmer.

Word gets out, though. Once people figure out that lack of language skills is the blocker, well, we already know that they're reasonably smart people, they'll learn English.

Talk to me! I'm not that experienced, but I'm trying to get into the Junior DevOps space and get some good work experience under my belt while living in an APAC time zone, but the difference with me is that I'm a native English speaker from the Acela corridor in the US with the highest caliber of written and spoken English fluency. If that sounds like something you can accept (i.e., hungry junior guy who is eager to learn and accept training, certification, et.al), my email is in my profile.

Sorry, but it sounds like you're missing the experience bit? But if you speak English and a local language, check out the careers page of your favorite FAANG, there may still be something for you.

I have junior level experience in Python, Django, JS, AWS, &c. But what I've found is that most companies are hiring Seniors only.

> new talent also bring in new ideas and combat skeptical dispositions and organizational ossification

Ossification happens when most of the employees stay in the same company and even the same team for 20 or 30 years.

The industry is facing the opposite problem, where the average tour of duty is so short that people don't care about planning for the future or designing lasting, low-maintenance software. Endless, unnecessary churn is not cheap.

I find its the people most invested - the business owners who don’t care about future planning or low maintenance software. Or more accurately they don’t understand it, they do the equivalent of the false economy of buying cheap and paying twice. Normally excused by “well we are growing fast”

Ossification doesn't have to happen though. Continuing education and some time to "practice" and try new things on a smaller scale can do wonders.

Is the problem that people are hopping jobs (this was always the case), or that they're exiting the industry? I thought we're talking about the latter.

I see a lot of software people quitting to take sabbaticals, to work on a project that might turn into a company, or going small and retiring. To my eye, you can't pay those people a 40% raise to retain them.

I think the people that can afford a sabbatical are a limited set. I think the difference lately is that so much of the economy is software focused so there is a need for developers that has not existed before.

The reasoning provided by someone to me was that at a org level, it's more cost effective for the org to replace those 1-2 departures with the market rate salary, than raise the salary of the whole team to the market rate.

Many people stay back in a company even knowing they could probably get more if they try else where (ex: work like balance, friends, job security in the long term, exciting work etc). When a org has sufficient no of such ppl, it doesn't matter to them when they lose some 1-2 start performers. Also, there's no guarantee those star performers would stay back even if they are paid higher salaries !!

> A huge problem with this industry is the inflexibility to pay current engineers LARGELY increasing comp each year

This is not an inflexibility. This is the "leadership" deciding that it is not worth it.

As it turns out, companies aren't all malevolent, omnipotent entities with infinite resources who withhold rewards from employees purely for schadenfreude.

This is probably true for many other industries. Organisation experience / knowledge is very important in being effective in a role. When looking at productivity, organisations tend to overpay new starters (a new starter is often a net loss, particular in a skill based role) and underpay those who've been with the organisation for several years. Of course, people have to live, so you can't pay a new starter next to nothing with the promise of huge increases after 6 months.

It is a problem, but not the problem described in the article, and not the leading problem.

From the article: >> "This result is consistent with a large body of evidence that pay has only a moderate impact on employee turnover. ... In general, corporate culture is a much more reliable predictor of industry-adjusted attrition than how employees assess their compensation."

In short, as with many other stories, what most commonly leads people to quit is bad management, and often specific bad managers. Obviously when pay is tool low and uncompetitive, that'll also create problems. That's also why the major law firms have associate pay in lockstep with big growth that more than doubles their pay in 5-7 years, by which time they're either on Partner track or out. So, yes it would be smart for firms needing engineers to follow suit.

The problem is that, yeah companies are reluctant to give more than a 10% raise because that’s considered a “good” raise. To do better, you now need to convince both your management chain and HR.

To do the latter, you need objective & independent proof of value, like an outside offer.

Not to mention that many companies don't even offer raises, at least nothing of much worth.

6 years, got a raise once, when almost whole crew quit..

I think I got a raise two or three times in 20 years. Most real raises were new jobs.

Aren't large portions of stock compensation at most large companies paid out in years 3 and 4? Assuming you survive past the 2 year mark, you may as well stay for another two years

I thought that was Amazon specific?

Yes, but 4 years vest is standard, and new hire grants are significantly larger than refresher grants, so with stock appreciation the way it's been over the last decade years 3 and 4 have tended to be very lucrative for RSU-holding tech employees.

> So that engineer moves on and accepts a 40% raise elsewhere.

The other thing you see is talented engineers moving into management even we they don't really want to, so that they can get paid what they're worth. In some cases this is even worse than then the engineer leaving the company because, in addition to losing a good engineer, you often also gain a lousy manager.

so, my pay should increase within 10 years of being employed more than six-fold (1.2^10). makes sense!

Seems reasonable enough for a fresh grad. For example 50k->300k. I doubt every engineer could prove to be so valuable in the end spectrum but might work for some companies. Of course if the company fired people the model would lose it's appeal, since you are leaving money on the table on the early spectrum but have no security to reach the end.

Would you leave a company where you got a guaranteed 30% raise every year no questions asked(assuming work was interesting and you were happy with current comp)?

Getting a 30% raise yoy, is something even the most optimistic entrepreneur starting up out there would salivate at.

Even going from 50 -> 300k, is no easy joke. Its not even worth starting a company if you can make these kind of 6x increase in fortunes in years.

Imagine going to the stock market and claiming to have 30% return yoy.

I'd like to believe even at FAANGs these mad salaries aren't common. And I would be very wary of hiring anyone with a yearly jump trail on a resume, with a high salary. That resume is basically signalling the candidate does no work apart from hopping jobs. Hiring a non performer one has to replace in 10 months is a non starter.

It does happen to people. In 2004, I worked at the University of Chicago making web apps for internal users, and got paid $45,000 a year. In 2017, I was a senior software engineer at Google making around $300,000 a year (that's salary + bonus + stock).

This is probably an anomaly because I was massively underpaid at my first job, but you've got to start somewhere. (The first three years of my career was basically job hopping. I started at UofC, went to a part of Doubleclick in Chicago, then went to a bank. UofC -> Performics doubled my salary. Bank -> Google doubled my salary.)

As for job hopping, you can have whatever weird criteria you want, but the average engineering tenure these days is about a year, so if you want someone who has 20 years of experience you probably shouldn't be surprised by 20 jobs. If you don't want people to leave to get more money, give them a raise. Why should people take less than market compensation because of your odd idea that they should be "loyal"? People stopped being loyal to companies in approximately 1950. The market for software engineers is ridiculously competitive on the buy side. That's just the reality.

> Even going from 50 -> 300k, is no easy joke.

Yeah, it does take a lot of effort. I put in a lot of 50hr weeks to get this kind of gain, but it's totally doable.

> That resume is basically signalling the candidate does no work apart from hopping jobs.

I get a _lot_ of work done in even just 6 months.

> I'd like to believe even at FAANGs these mad salaries aren't common.

My impression -- as someone who is neither an engineer (anymore) or at a FAANG, but is making above the apparent market rate for technical writers in Silicon Valley at a company that needs to compete with FAANGs for talent and chooses to do so by offering high base pay and bonuses rather than stock options -- is that at this moment in time, these mad salaries are common in both FAANG and competing-with-FAANG companies, but only in specific fields and specific locales.

Personally, I'm not convinced this is sustainable any more than the SF Bay Area housing market is sustainable. If the shift to fully remote or "hybrid remote" workforces is truly underway, it's probably just a matter of time before that starts pushing down income levels. If you cut your cost of living in half by moving from Mountain View to Boise, employers will start factoring that into your compensation -- many already do.

In the long run, of course, that would lead to a slow creep toward equalization of cost of living across the country; there are already anecdotal (but loud!) reports of housing costs increasing substantially in surprising places as people leave the west coast and the northeast and move inland. Eventually that should make COL adjustments smaller or less common, but it will likely also make "I'm making $350K right out of college" less common. (Or whatever $350K is adjusted for inflation in a decade.)

it's amazing to see the silicon valley effect on people's' thoughts of programmers salaries... $300,000 at age 30?

Yes, $300k at age 30.

I'm remote too.

Go read Blind posts. You do have to be pretty good, but it's about where I'm at, and there are plenty others like me.

I'm aware that people make it. I'm aware that there's a "plenty", in a law of large numbers way that make it seems common even when it isn't. I guess my concern is that people talk about it like it should be the norm.

Actually these days there are many posts of people who are making double that.

In six years I’ve gone from around $30K to $200K. And I’m not special. I don’t have a college degree either.

Is someone who has been with the company for 10 years worth 20% more than someone who has worked there for 9? Presumably the rate that your value increases slows down once you have a good understanding of what you're doing and the organization.

Not to disagree with your take, but where this "40% raise elsewhere" comes from? Are the other company pays new engineer in advance for all those specific knowledge and skills they will learn in a next three years?

The whole crux of this article is that compensation is incorrectly assumed to be the main driver of turnover.

To me this is clearly worker exploitation and I wish everyone realized that.

"Largely" does not mean what you seem to think it means.

>Grind those code monkeys into dust. t. Every CEO ever.

https://www.levels.fyi/charts.html

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