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Comment by returningfory2 | Hacker News Reader

This is a common response to this issue, but I think there is a logical flaw in it.

Employers don't know ahead of time which employees will leave and which will stay. In order to improve their employee retention, employers have to pay _all_ of their employees more, not just the ones that eventually will leave. This changes the math entirely.

For example, suppose it costs 50% extra to replace someone who leaves. In retrospect, sure, giving the sole employee who leaves a 10% raise each year to retain them makes sense. But if you have to give all of your employees a 10% raise per year, just to retain that one person, it doesn't make financial sense anymore.

To be clear I'm not endorsing this system at all! But from a pure financial perspective it makes sense to me and is why, I suspect, it persists.

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It's almost like you need to identify which employees are key contributors and pay them appropriately. Imagine that.

Well obviously it isn’t necessary to pay them ‘appropriately’ (as I assume you’re suggesting that many don’t. It may also be the case that the cost of losing a key employee times the expected number lost is less than the cost of paying them all enough that they’re paid ‘appropriately’).

But I think the more important question is: who are these key contributors? It’s perhaps easy to identify some of them, particularly those who are louder, and perhaps it is also possible to identify those who appear important but are, in some sense, bluffing. But there are also likely those who are key but whom the system for evaluation overlooks. It’s probably better for those people if they leave as they may find an employer who can better recognise their talents (and leverage them and pay them for it). I don’t think I’d do a great job at recognising such key people even among those I work closely with but maybe I’m just bad at that sort of thing.

I think peers in a team always know who is the one who gets almost everything done. Maybe people in managament or in leadership positions don't know, but me in an individual contributor role always know who is the most productive and the one with the most business knowledge of my team.

Obviously identifying key people is hard, or everyone would get it right. Most important things are like that.

(I don't think it's quite as hard as you're making it out, though. Who are the people you go to first with questions about how stuff works?)

Maybe we have a mismatch on what "appropriate" pay means. If the expected cost of losing someone is less than what you're paying them, maybe you're paying them more than what's appropriate. But it does sound a bit like you're falling into the same trap as GP in assuming you have to pay everyone the same rate; I could be misreading you.

In my experience this is a challenge because everyone believes they are a key contributor.

Not just that, but few people have both the depth to recognize competency and the breadth to know which competent people are key.

In practice, most places I've been have a few people who are "obviously" key and then a lot of ambiguity.

Easier said then done. Firstly it requires for you to know what you’re doing is both a key project and something in which paying more would be more likely to result in its completion.

Is it though? I've never worked as an actual employee, but I'm working in long-time contracts as a freelancer with companies. I've always found it pretty easy to tell who was carrying a project and who was dead weight. Might be different and harder to calculate for new projects, but for existing ones that are maintained, observing who gets asked when weird things happen and who solves the strange issues usually identified the people who were instrumental. If someone is off a week and nothing moves, that's someone you probably want to keep (and probably also a situation you want to resolve, because that's not a good thing).

Managers responsible for promoting usually aren't in the trenches and getting honest feedback is actually hard.

When asking people about the performance of their peers, you usually get equally positive feedback unless folks are fucking up.

You have a good point though. Perhaps managers shouldn't be asking for feedback on specific individuals, but ask individuals who they go to for help and mentoring.

What you are describing is actually a rare skill / talent. Most people (including managers) do not possess it, IME.

"Employers don't know ahead of time which employees will leave and which will stay."

That is their fault. I used to work in a well managed company. It was never a surprise when someone left as career progression was always an open topic between colleagues and supervisors.

You don't know when people are going to disappear if they are crouching and ducking around every corner to avoid management.

I disagree related to the SF Bay Area and the Tech world specifically. It is usually written in the wall who is going to leave if things do not change. Now you could say the upper management can't read the wall, and the middle management might not want to share what has been stated -- or they kid themselves.

Good managers and HR leaders will recognize when people are teetering on leaving. Not always, but I've known a few who have given raises to keep people around and knew that others were planning on leaving before they announced it. In a healthy organization you can have frank conversations. Or even ambiguous ones. It's just rare.

> For example, suppose it costs 50% extra to replace someone who leaves. In retrospect, sure, giving the sole employee who leaves a 10% raise each year to retain them makes sense. But if you have to give all of your employees a 10% raise per year, just to retain that one person, it doesn't make financial sense anymore.

Yeah, so basically this argument is realpolitik, machiavellianism, game theory -- things that work 9/10 years, bring in profits but have enormous hidden costs that ravage companies/economies/countries in that 1/10, 1/50, 1/100 years.

The argument is "be a dick as much as you can get away with, because people are sheep and being a dick is a virtue actually". Until a lot of people start being dicks, then we cry about the long lost art of not being dicks to eachother.

>Employers don't know ahead of time which employees will leave and which will stay

I may be a bad example, but I can assure you every employer I have ever left new I was unhappy in my role before I left.

I always have frank and open conversations with my managers about my expectations for growth, wages, etc. These are not Ultimatums, but more "In 5 years I would like to be" type conversations.

Now as a manager I have gotten similar feedback from people that work from me, sometimes you have to listen closely to understand what they are saying in reality as many are not as direct as I am, but the feedback is there

I think managers just simply ignore it in most cases

Yes but sometimes they do - at my last job at a large corporation I was paid 80% below the median rate for an engineer in my area/YoE/etc. - I threatened I would quit and showed them a counter offer that was 30% more than what I was currently making and they said "sorry nothing we can do" so I quit and found a better job.

I would agree, but employers actually usually do know who is a flight risk.

Presumably not everyone is as valuable or risky.

This is exactly how we look at it. Those who are more valuable get larger annual raises.

Also, during a high turnover period around a year ago, we even bumped a few people up mid year when we normally do salary increases at the beginning of the year. These folks were very happy and I think it earned a lot of trust that we looked at the market rates, determined they were underpaid, and made sure they were at least getting what they'd get paid elsewhere.

There is nothing like an unexpected raise to make a person feel some serious company loyalty. I started a position at a new company a few years back, run by a friend and senior colleague of mine. He had been with me at the previous company and had observed while I fought and fought to get a raise to market rates in that position.

He called me a few months into the gig and told me that he felt I should be making more than my starting salary and that I was getting a fairly substantial raise effective immediately.

I can't describe how good that felt, after having had to struggle to demonstrate my value at the previous gig only to be met with bureaucracy at every turn. I'm still with that company and genuinely love working with them. I make a pretty nice salary, and though I'm sure I could easily get a 20% raise to jump ship, I'm finally in a place where I can say "nah, I'm happy where I am" and not feel like I'm giving something up.

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