Is compensation stagnation to blame for the great resignation?
tomtunguz.com
tomtunguz.com
We pay competitive salaries and offer generous option grants, but it's not the reason why people join. I know this, because we typically work out the compensation once people have already decided to join (contingent on a fair offer, of course)
Developers (at least the ones we're trying to hire) want end to end responsibility, to do meaningful work, to not be micromanaged, and to have their voice and opinion heard and taken into account. They don't want to be another cog in the machine turning out code according to preprocessed requirements.
Our developers write their own user stories, go on calls with customers so they have the full picture, and can take on any responsibility in the company that isn't currently being handled well.
We also let you work from home and manage your own hours. You're an adult, we don't want to decide for you how you work best.
I'm open to hearing contrary opinions, but this has worked very well for us
It does sound like money is a big factor.
Did any of your employees take your offer with a significant pay cut from their previous job?
We've had employees choose us over other offers with higher salaries.
An unfair offer can make people avoid your company, but a higher salary is rarely the reason why people say yes.
Fwiw, my personal experience as a developer also matches this. Before starting Robusta, I turned down a very high offer from Microsoft to go to a development job at a startup because I preferred a high impact job over better compensation.
I guess the question here is, how much higher?
If I was offered a good package with sizeable equity and/or options, in a startup with a good outlook and decent valuation, I could forsake a slightly better cash offering.
But if I was to be paid say 25% more in cash, I doubt I would have gone for the startup gig.
Mostly because I have a family to feed and a mortgage to pay. I would love not to have to think about money, but realistically, I can’t afford to say “no” to cash.
Not saying it's right or wrong, I'm just saying that this type of situation (giving up higher wages for opportunity or mission) definitely selects for certain types of people in certain situations.
Money isn't everything and there are more ways to be family friendly than offering the highest salary. For example, we offer 1 month of paid parental leave (at 75% salary) for all genders.
We're possibly the smallest startup in the world to offer something like this. But I think it's morally correct, not damaging from a business perspective (employees aren't focused on work anyway with a new child), and it certainly helps us compete with companies that are much bigger and even give higher compensation.
*Depending on your country and your gender, you might get better benefits for a longer period of time. This is the minimum you'll get (at our expense)
What’s the distribution, though.
When I started as an engineer in a small startup over a decade ago, the ratio was similar, but mostly the higher ups were parents. The vast majority of engineering, sales and marketing were either unmarried or childless.
> Money isn't everything and there are more ways to be family friendly than offering the highest salary. For example, we offer 1 month of paid parental leave (at 75% salary) for all genders.
Many companies offering high salaries also have parental leave, so this may not be a factor either.
There is some aspects of process, like creating adequate test code and root cause analysis, that needs to be formalized. But apart from the it makes no sense for coders in a first tier tech company to be managed by bureaucratic methods like SAFe. I recently recruited a very high achieving engineer out of an organization that I would not have thought would be so bureaucratic.
I wish more people thought this way.
I think the reality is it’s complicated and many things need to be above a threshold, and reasonably better than their current role.
Not if your next company has customers in more than one timezone and one of them is polar opposite of yours and by "manage your own hours" the implicit expectation from you was that "manage customers as well whether it's your sleeping hours or waking hours".
That's exactly how my company played its cards by allowing "flexibility" and then later confidently telling "well, it's your responsibility" while hiring in other timezones has been "on the cards" since 2+ years now.
Some CEOs tell devs at the time of hiring - "we are a family", "we don't differentiate between day and night", "we are hustlers".
Anyway, besides the bleak possibility I painted I hope OP's company does it better.
I very much hope that we will manage to stay the same as we scale and grow.
The closer you get to an IPO the less options you get (in terms of equity percentages). On the other hand, there is far more certainty that those options are worth something.
At an early stage startup you can get very substantial equity, but in exchange for higher risk.
Allowing people to work undisturbed has, for my team at least, allowed faster delivery of goals.
They'd be terrible capitalists if they are paying people more then they had to.
The wage difference is a function of power asymmetry, it's not the employer trying to do some kind of syndicalist wealth redistribution
Many companies profits went up, yet they still slashed compensation. Well some of that profit was because they slashed.
I achieved my financial goals. They just don't run to a Tesla or a holiday home.
So, I'm hardly poor or underpaid. To the contrary: I'm in the top 3% But if I was 20 or 30 years younger I could understand "I'm sorry I'm worth more" I haven't been paid more than a CPI raise in a decade but I did get sweet bonuses which probably made up for it.
The FIRE movement may have a lot to do with it too. Not all FIRE believers want to be insta and vanlife. Some just want to drop out in a more mainstream manner.
Many of the tech firms that are bleeding out have become everything they fought against. The MBA-isation of big tech is so jarring when you land in the valley coming in from Florida, Colorado or many a foreign country where the rules of engagement and speech are still "normal" ie, casual, ie, ideas win respect not rank, ie there are perspectives outside of what the headlines in techmeme alone speak to.
If you work at a large tech firm today, you will see this play out every 6 months in the promotion discussions that have essentially dissolved into political horse trading and are the single most important events to anyone not directly involved in very very senior roles (Where you speak to investors or are involved in company-level change)
This is so strange to live through as a mid/mid-senior level VP, Manager, Lead what have you. Here you are, apparently at the pinnacle of your achievement, having beaten thousands of intelligent people in competitive exams and studied at the most prestigious institutions only to . . . spend a significant portion of your promotion cycle trying to play the Game of Thrones with a bunch of MBAs ?
Compensation is not a significant differentiator anymore as it has been in the past, infact, one may argue, for the top 10-15% of the company that handles the most crucial products, quitting and starting up would easily get them overnight valuations orders of magnitude returns over their expected 20 year earnings were they to continue climbing the corp ladder (Nuvia, anyone?)
So, in short, the environment externally has changed. The environment internally has absorbed a lot of the lifers and MBAs from "Successful" incumbents to the point where the internal culture reflects everything that was wrong with those guys that these firms "Disrupted" and there's plenty of money to go around.
It's not about MBA's or generational issues, it's all about your abilities to talk the talk, nothing more.
You don't see this in crucial roles in sport, for example, where athletes who once possessed the talent for glory can't hide it when they perform poorly or are past their prime.
Thankfully, there are no deteriorations in performance for physical ability alone in tech, rather, mental abilities improve over time (Except for roles where the grind is important), but in the early tech days, "Winning" meant creating things that were measurable and clearly showed that.(Mostly at least, there will always be exclusions to the norm).
The past decade and a half have been near unbearable with the progressions in tech culture at companies resembling what internet memes on corporate culture are made of. Heavily verbose emails and pointless discussions of low intellect for the most minor of issues or features.
Power is concentrated not in software engineering ability, but in the boardrooms of clueless MBAs and while you say it isn't about that, what i see indicates it is largely because of that.
The real equation is how much of your life do you trade (contracted hours, overtime, life-shortening stress, compromising your hopes and dreams) for financial compensation.
If the money stays the same, but the job got worse, the pay got worse.
The VPE today is getting more equity but the startup is overvalued and won't exit to the public market at the save growth rate. 10 years ago, you'd get less equity but the valuation is also lower so your multiplier is significantly higher.
Case and point, Peter Thiel's investment into FB at 5m valuation at today's market is likely a multi hundred million dollar valuation. Which VPE do you think is getting the better deal?
Why? Because when I'd ended up with full custody of my children two years prior to the pandemic, I needed to reduce my hours in the office, but I'd make them up at home.
After a decade of doing unpaid overtime (prod problems, talking to product owners in a different timezone), I figured they knew I was good for it.
But, no, it was a huge problem apparently.
But then the pandemic happened, and working from home all the time was absolutely okay.
I grew resentful that full time remote was quickly okay, but I'd been hauled over coals for wanting to leave an hour earlier to pick my youngest up from daycare before it closed.
So, I moved on. And absolutely no regrets.
I think a lot of us have been looking up the ranks for years seeing very little mobility, and all of the sudden there has been a shift up.
I’ve been effectively managing r&d and production (I work in electronics) operations for small companies for about 4 years now, of course without the actual “title”. The amount of offers I’ve been getting for big managing positions has shot up significantly during the last year.
In the companies I visit and work with, the “old timer that still holds the job at 70” figure has disappeared. I guess part of it was COVID, but something tells me going remote has also shown a lot of them the truth that they were holding the company back in some aspects.
The ones who did it still visit and work on reduced schedules, but have become less hands on and are more trusting towards younger coworkers.
People are resigning because there’s a bug reshuffling of the labor markets.
My only fear right now is that, at least here in Spain, every company seems eager to go back to 5 days in the office, while everyone I know wants to keep some form of remote work(from full remote to 3 days remote 2 in office). We’ll se where everything lands on, but labor markets here have been always been a “buyers” market..
Tell them thanks, but no thanks. Fuck you, pay me.
The idea is that, in a lot of places, unskilled wages don't pay enough for a single bedroom and commute so you have to work two jobs.
If you're going to love in poverty either way, why keep the job