When new hires get paid more, top performers resign first | Hacker News Reader

When new hires get paid more, top performers resign first

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289 pointsmooreds212 comments

This is one of the reasons I loved Netflix. Each year they would say "to get new people in the door with your level experience, we had to offer them $XXX. Therefore we are raising you to $XXX."

Some years I got 25%+ raises. Netflix understood this like no one else.

Makes me happy that at least someone out there is experiencing pay fairness.

Would the 25% raise be composed primarily of salary or stock?

Netflix is just salary

Netflix doesn’t do stock comp.

apparently for some people they do lol

historically they've had an options program that you could optionally participate in, with your salary.

the rumblings i've heard seems to imply they'll be rolling out an RSU system in the future as they continue to destroy the unique corporate culture they had.

Had that at Wind River years ago. They'd both give you RSUs as a kind of bonus but you could also invest a part of your salary in RSUs. Don't know if they're still a thing.

Pretty sure I've read and heard everywhere that Netflix is a rarity in that the vast majority of your total comp is directly in salary. So it likely resulted in primarily salary increases.

Cash. Netflix lets you basically turn a dial on the ratio of cash to stock, but it starts with a single cash number.

Companies should understand when their business hangs on people, you need to keep the people happy.

Hiring people off the street for more money than people with 20+ years of experience isn't a good way to keep experienced workers employed.

The problem is - historically it hasn't bitten companies badly enough that they stop doing it.

On aggregate, you can get away with massively underpaying your top talent and overpaying new hires - most of which aren't good and will go to other companies before they're even moderately productive.

I question why they're so obsessed with hiring so many new people to do basically nothing. That's the reason they have to over pay for them: The sheer amount that they're trying to hire.

Perhaps it's inevitable that you have to hire 100 people to find 5 or so people that'll be good and stick around for a while that you can underpay in the future.

I suspect there's got to be a better way.

> The problem is - historically it hasn't bitten companies badly enough that they stop doing it.

The reason for that is the culture around keeping compensation secret. Most people (in the US at least) believe it's impolite to talk about salary directly. I do wonder how much of this taboo has been cultivated by corporations that benefit from workers feeling like they shouldn't talk about salary.

On top of that, some companies tell their employees they are not allowed to talk about salary. That practice is illegal, but some companies still do it.

To be clear, Federal law is very explicit that you have the right to discuss and disclose your salary.

You have the right to do it, but your coworkers might become bitter and envious if you make more than them. You have to judge how mature your coworkers are and whether it would cause trouble for you if they made a complaint to your manager. For example, if you are on a team of like 5 people, it could be impossible for them to maintain your anonymity as they say "Why am I making less than others?" You might also imagine that if your coworkers don't get the raise, they will not be as motivated to work, and may cause problems for you that way.

I've been on both ends of this, usually the lower end, and I can say first hand it is hard to not take getting paid less as a personal affront to your dignity. And every time I was underpaid I not only didn't get a big raise, but I took much longer than expected to find another job. If you are underpaid, your best option is to leave in most cases. Don't underestimate how long you have to tolerate the low pay while you try to leave.

That's all true. I've usually asked co-workers I'm friends with, and believe we can both be mature enough, if they want to exchange pay info. I've also told a few people what my salary was when I'm leaving a company, and tell them to share it freely.

Everything you say is true though, it can cause a lot of drama if people start having hard feeling over pay. This is why companies sometimes tell people not to share their salary, or even put it in the company handbook, etc, and I'll say again: it is illegal for a company to tell or even suggest that you not to share you salary.

> And every time I was underpaid I not only didn't get a big raise, but I took much longer than expected to find another job.

How are the two related? Why does being paid less cause you to take longer to find a new job?

>How are the two related? Why does being paid less cause you to take longer to find a new job?

Being paid less didn't actually make me take longer to find another job. But I looked for other jobs to get more money. My point is, simply knowing you are paid less/unfairly is not a silver bullet. Most companies will refuse to give raises on demand, on principle. You most likely can't just get a new job right off either or you would have just done it. So you'll be stuck for months or even years knowing how much less you make than your coworkers. Nobody thinks they'll mind knowing the truth, because they underestimate their own ego and how difficult it is to get more money.

Most businesses would rather pay someone new and unproven significantly more than you're asking rather than give you, say, a random 10% raise. It kinda makes sense, because there's no limit to what you can ask for. Most non-tech people seem to resent how much more we make as well. So for various reasons, they don't want to pay you more and/or don't believe you are worth more, and you have to prove it to them by leaving.

Isn't it good to know how underpaid you actually are relative to your coworkers? If your colleagues are being paid less than you are for the same work, shouldn't they direct their ire at the company rather than you?

I am 99% convinced that pay secrecy primarily benefits employers and management at the expense of most employees. It creates an asymmetric information environment that makes it difficult for employees to negotiate raises or even to be paid market wages.

The 1% uncertainty is that government jobs (which have pay transparency) tend to be underpaid, and the rare (?) private workplaces with pay transparency don't seem to have done much better than their pay-secret counterparts, with the exception of law firms, where the associate/partner model seems to have caught on. Union negotiated rates seem to have up and down sides.

Of course, you should really consider how much money the company is making, where it is coming from, and how it is being spent. In my experience, (non-founder) technical staff members are often paid very poorly compared to the money that they bring into the company, even after considering large amounts of overhead, expenses, benefits, taxes, etc.

>Isn't it good to know how underpaid you actually are relative to your coworkers? If your colleagues are being paid less than you are for the same work, shouldn't they direct their ire at the company rather than you?

You would think that, but imagine you are making less than someone who does less work than you, or is clearly less skilled. Although you might initially blame the company, you may grow to resent your coworker who is getting more for less. Especially if it's a lot more. You can't really start making more demands of them because they make more, or else slack off because you make less.

I think there are situations where secrecy can be good and others where it can be bad. When salaries are public and negotiated by groups, that can lead to other worst-case scenarios. Your company can always decline to pay you more by coming up with a delusionally low pay scale, while claiming the high ground of fairness or some shit. When people can negotiate for more, they can potentially raise the bar gradually. And with the legal protection behind salary disclosure, and websites that make it easy to share your salary, I think it's better to let salaries fluctuate with the market. It might be nigh impossible to demand a raise without switching jobs, but at least the current norm lets employers effectively bid on you.

Suppose at the end of 1 year you found out that your coworkers were being paid twice your salary for the same work.

Now suppose after 5 years you found out that coworkers were being paid twice your salary for the same work, and had been for years.

It seems to me that you want to find this out sooner rather than later.

Yes I see what you mean now. Of course it would be important to know that sooner rather than later. But I suspect if you are paid that little, you would know it from industry averages. But awareness of how screwed over you are is not going to make you happy. If you can be paid that much less than the next guy and not know it from industry averages, you should probably be able to guess it.

At one job where I was perhaps making 70% of what my coworkers did, and I found out a couple of years before I was able to leave. It did upset me a lot. I knew I was underpaid before that because of how other companies paid, but knowing specifics definitely rubbed salt in the wound. I suppose knowing specifics might be a necessary evil but I think back then it might have been better to not know. On the other hand, that experience set me down a path that eventually worked out ok, so I can't really say I wish I didn't know.

This thread and study seem to disagree with your assessment: https://x.com/captgouda24/status/1773031323604488342?s=20

> I do wonder how much of this taboo has been cultivated by corporations that benefit from workers feeling like they shouldn't talk about salary.

I don't know if corporations originated the taboo, but they absolutely cultivate it so that they can retain the upper hand in salary negotiation, enabling them to pay below-market wages to everyone except for new hires with multiple offers.

There is an unfortunate cultural problem where people are morally valued by how much money they make. Pay is often very disconnected from economic benefit (consider the enormous economic value produced by underpaid teachers, or grad student researchers) and nothing to do with moral value.

Thinking about this a bit, wealth (in the US at least) confers social status, which is taken as a proxy for personal honor, character, dignity, etc.

> there's got to be a better way

Be better managers. Do more human work during the hiring selection process. Take HR away from the lawyers. Take Responsibility and Accountability for the management layers of the company (including the C-suite).

But we all know these are just pipe dreams.

I would argue it does bite them, but by the time it does it's someone else's problem.

>I would argue it does bite them, but by the time it does it's someone else's problem.

In almost all cases, it's the consumer that gets bitten.

> historically it hasn't bitten companies badly enough that they stop doing it.

Because VC money based around vague promises of selling data to advertisers have traditionally propped up even fundamentally unprofitable businesses so software quality hasn't significantly contributes to success or not. Now that we're out of ZIRP then companies might start learning that in 10 years or so after they've replaced a few generations of programmers, nobody knows how anything works, and suddenly software quality starts to actually matter to investors and consumers

> companies might start learning that in 10 years or so after they've replaced a few generations of programmers, nobody knows how anything works, and suddenly software quality starts to actually matter to investors and consumers

I suspect in software specifically, there will never be such a reckoning because compared to maintenance, replacement is too easy.

> I suspect in software specifically, there will never be such a reckoning because compared to maintenance, replacement is too easy.

Maybe when it's not important to be bug for bug compatible. For most important software, it kind of is.

Actually quite a lot. You can check the glassdoor and then search the companies market cap over the years. One company I research recently, Philips seem to have this problem 15 years ago. Compounding effected today, it is just a very small insignificant company. Meanwhile it gave birth to titans like ASML.

But they don't. The people calling themselves managers will justify not paying existing people more once they have to pay new people more by saying that that is what they signed up for when they started. And then when people leave, they convince themselves that we are all interchangeable. No matter what happens, they have some sort of excuse or justification.

High staff turnover some companies consider as a good thing

That's better than being forced to do interviews at other FANGs, getting offers and only then getting raises matching those offers. I heard Netflix suggested this as well, for determining the current "market rate". Offloading the market research to engineers basically.

In finance this is called price discovery. In the labor market it’s called waiting until someone is one foot out the door. It’s much more expensive to correct the situation once someone has already decided to leave.

But corp logic: it's cheaper to raise ONE top performer when he wants to go than to raise EVERYBODY (even those not interested in leaving) to match market

No argument, but if I'm interviewing and get a better offer, I'm probably gonna leave.

Further in some corporations, interviewing for other positions is a bright shiny red flag for that person to be let go or fired. Even if they accept the counter offer.

> if I'm interviewing and get a better offer, I'm probably gonna leave.

If I could get the same amount of money from my current job I would probably stay unless I'm sure I would love the other job more. Because when money is a constant, it's either do I want to keep doing what I'm good at, or jump into something possibly different (and riskier).

Yup! We were encouraged to take interviews at other companies for multiple reasons. One was to report back the offer as data for the HR team. They used that both in level setting new offers as well as making sure you got an appropriate raise.

It was also because Netflix understood that if you found a better job, it was better for both you and Netflix to leave and take that job, because it meant that you weren't truly happy at Netflix and may not be doing your best work.

It was truly an enlightened way to think about talent, and I've never seen anything as good since.

It’s an awesome mentality, but I think it comes out of Netflix being a company that sells to consumers and not enterprises. I work at a big cloud company. We don’t have enough engineers to do the work our customers want us to do. Each piece of work comes from someone spending millions of dollars a year that has executive visibility. Letting someone go means some committed project goes unfunded and an unhappy customer.

> We don’t have enough engineers to do the work our customers want us to do

> Each piece of work comes from someone spending millions of dollars a year

You can afford to hire, you have the work. Where's the bottleneck? I'm hearing lots about unemployed people, especially on here.

Sounds pretty ideal! But it also sounds like you're talking about all of this in the past tense... why did you end up leaving, if you don't mind me asking? :)

Had a baby and retired. :) Retirement didn't last though, now that both kids are in school I'm back at work. FWIW I would go back in a heartbeat if they had a role for me.

Ahh, those seems like great reasons. Double congrats, and thanks for answering!

Wasn't Netflix a family-friendly place? How common was part-time employment? Did the culture of fear prevail?

They were plenty friendly to families, but I was ready to go full time at home. We didn't really have anyone working part time, and at the time there was no remote work either.

That's awesome! It comes down to mindset by the people running the company

Would they also do the opposite now that the tech labor market is going sour? "

We got 1000 qualified applicants and a bunch accepted our low ball offers, your salary is reduced by 25% "

As far as I saw they never lowered salaries. They would say "the market is down this year, so you won't get a rise, but you're still at the top of your market". You could always go out an interview and come back with new data if you got a better offer.

Yeah. just don't go on paternity/maternity leave.

Netflix has a one year paternity/maternity leave policy, and some people take the full one year.

Paid / unpaid?

Paid. Looks like they changed it to "take whatever time you need", and most people are taking 4-8 months.

https://jobs.netflix.com/work-life-philosophy

Sure. Did they stop punishing people with their "actual meritocracy" metrics for taking it?

In other words, they're trying to keep the variance of the distribution of salaries constant over time.

Limiting economic disparity have always been beneficial to the group I believe (I don't have data for that).

In the same company, the top should not be paid x% more than the lower salary. In the same country, the maximum wage should not exceed x% more than the minimum wage (after taxes).

Used to be a high performer at Big Tech. Found out a coworker with less experience at the same level had $200k/year more in comp. I didn’t care about the money, I care about being taken for a fool.

There were additional factors, but I left and started my own company within three months and nobody in my old team has anywhere close to my experience.

Not only is it an example of the idiotic decision making processes that companies use that are not effective in the long run, it demonstrates how they are happy to pit employees against one another.

It is awkward for a person to know that they make substantially more than coworkers. It forms a feeling of guilt and other negative feelings. But what are they supposed to do? Negotiate lower salaries when starting or after working for a while? And it's definitely frustrating knowing other coworkers with the same or less experience and responsibilities as you make a whole lot more. It forms feelings of jealousy, not feeling valued, self worth, and other negative feelings. And all of this is caused by the company simply not caring about actually employing and managing humans.

And it's always been insane to me that companies will let an experienced person leave because they won't raise their salary and then immediately put out a job requisition at a salary that would have kept the experienced person. It makes no sense, and yet, this happens constantly.

The social order is fundamentally nepotistic. Family/Tribe/Caste matters more than experience/performance within the managerial bubble. Keeping the actual workers down helps to keep them desperate to put food on the table, but you better perform well enough to float the non-workers. Deloitte/Wipro/Infosys/et.al know how to play this game very well to discourage anyone not in the tribe from advancing.

Yep. It's not the clueless HR but systematic. I have yet to read anything specific about why this happens and the benefits of it.

One of the reasons I have realized is that it's sometimes about control. A manager (people, project, product) will not have as much control over an experienced employee who has potentially been at the company a long time or just has a lot of experience in general in terms of getting what they want from the employee, despite the employee having the business' best interest in mind. So it's an implicit attrition that seems to sometimes be desired.

Shhhh…never mention caste in SV.

Honestly is it company culture, or is it just clueless HR teams who can't hire for shit?

I'm not complaining though, stupid HR and hiring policies are the reason we're consistently getting some really good people from FAANG to join our tiny firm.

> It is awkward

This is why I don't discuss my salary, nor do I want to know what my coworkers make. It's not information that is terribly useful, but can make for very awkward situations.

I do want to know whether or not I'm making a salary that is in line with the norms in my area, but I can easily find that information without knowing what any individual is making.

> I can easily find that information without knowing what any individual is making.

How do you usually find that information?

The city and state governments have pretty solid data that is easily available.

> It's not information that is terribly useful

This opinion feels alien to me. Some of the most useful information you can have in a company is around salary/bonus/commission structures. From a purely self interested perspective, knowing this makes you a far better negotiator around review season. And from an organizational perspective, understanding what kind of things get people their bonus or commission goes a long way to understand what kind of decisions they make and how to influence them.

As a manager, though: thanks, employees with this perspective reduce the number of awkward meetings I might have.

I think that it's a matter of priorities. I am not interested in making the most money I possibly can, I'm interested in doing the most interesting work that I possibly can. I have even taken jobs where I was paid well below market rates because the work itself was interesting enough to me or taught me a skill that I really wanted to learn.

As long as I'm being paid at least an amount that I consider fair, it doesn't matter to me what anyone I'm working next to makes. If I disclose my salary and I'm making substantially more or less than my teammates, that can cause reactions in them that make the job much less tolerable regardless of my pay rate. So I don't want to know what they make, and I don't want them to know what I make. I have to work with these people, and want that to be as pleasant as possible.

Now, saying that is not saying that people who prioritize maximizing pay are wrong at all. They just have a different priority.

I don’t care about money, that’s not my personal issue. I’ll happy to pay my bills, have good food on my table, and have a roof over my head.

It’s the feeling that I’ve been hoodwinked that I refuse to tolerate.

If I'm making less than someone else doing the same job, I don't feel that I've been hoodwinked. I negotiated a rate that I found acceptable, and so did they. Nobody was deceived.

I'm curious if you would feel the same if all products were bought and sold this way? Let's say you bought a new TV and you negotiated a price of $3. Then your friend tells you that she bought the same TV on the same day from the same store for $1k. Wouldn't you feel cheated? If so, how is that any different?

depends on whether you feel like you have the leverage to do something about it, or if all that happens now is you do the same job with the same pay and the additional knowledge that someone else is making more.

More curious about your story of starting your own company on a near-whim! I've been grinding out trying to do the same over a year or so without any traction at all and I'm finding myself almost back at Square 1 without any more solid ideas.

Dalton and Michael talk about folks pivoting too much and not fully learning/validating from each pivot in this recent video. Obviously I don't know anything about what you've been doing but perhaps there's some wisdom here: https://www.ycombinator.com/blog/when-to-pivot-and-when-to-s...

This just tells me you’re not well versed in sales and marketing. Learn those first (specially direct response) and the other pieces will glide into place with less effort.

What are some good resources to learn this?

I'm interested in developing in this area as well, but I can say for sure that "The Mom Test" is basically an essential read.

Unfortunately, experience. A good dose of people skills help, but you need to know what makes real money move and get contacts in your area. Find someone who has succeeded in your area, and try to get into those circles.

I’ve been working at the forefront of my speciality for many years. It doesn’t really matter where I am, I’m always working on solving the same challenges.

Jobs and stuff are an annoying necessity, the business is really just a thing I had to build to keep working on my primary tasks.

A lot of what looks like success on the outside is really just stubborn focus on a hard problem across many years. So I’ve had many prestigious jobs and titles, but it’s all just to allow me to do what I want.

Was it the result of them getting lucky with timing the RSU grant or was it just their original offer?

I got fucked on my offer. Something of a phyrric victory for HR - lost a high performer and gained a competitor over a rounding error in the budget.

> I didn’t care about the money, I care about being taken for a fool.

Truly one of the worst feelings there is... But I sure would have cared a lot about the 200kUSD/year too.

The money from big tech is dirty money, ironically the more one piles up the less they are aware of the stench.

You turned challenges into opportunities for growth!

Always. :-)

How did you find out?

I just had a very valuable teammate quit this week from lack of salary progression. New-ish grads are making more than him for much lesser jobs. The business refused to do even a token salary increase because of the ‘economic climate’

Now a critical project won’t happen on time, which will cost the company many magnitudes more in revenue than it would have cost them with a token increase.

Oops.

But, viewed on a small-enough scale, the managers did get their way.

And "small" is usually quite descriptive of managers.

Are you all extremely underpaid or something? Or how are new grads getting so much in a down market? I'm decently experienced saw lots of relatively low paying jobs in general

What market is down?

The regular software engineering market is very rough to get jobs in right now, particularly at lower levels of experience

Agreed. This is in line with experience of friends (Metro Denver, USA). Even senior folks are having a harder time than in the past few years.

Low to mid experience and trying to land FAANG-alike or finance jobs, I think. The “merely” 1.5-3x median household income comp range sure seems to have remained healthy, even for newbies.

The company puts A LOT of effort into its program for hiring new grads. But is horribly inept when it comes to providing a career path for individual contributors.

So unless you manage to get a promotion to a senior IC position (like me), your compensation stagnates.

Apparently I'm underpaid lol, someone upthread says "Friend getting paid $200k more than me" and I've never been paid $200k in my life

Only a very small proportion of developers make enough that they can be making what must have been north of $200k and still have another $200k difference in comp vs a peer. Low side of single-digit percentage. And I’m talking the US only, not globally.

This is easily fixed by giving management attrition targets. Some companies (Amazon) say "you need to let go of ~6% of your headcount every year."

Others will flip this and say: "you need to retain 94% of your headcount every year."

The effect on salaries is more or less the same. If you know you need to keep employees, you give salary increases to the one's most at risk of leaving. If you know you need to let go of employees, you don't provide salary increases to the one's you want to get rid of.

Many companies don't have an attrition target at all, though.

Teams start to battle to have low performers on their team in a climate like that, though, as an insurance from being let go. It's absurd.

But a rank stack is cause for insurance because somebody is being let go. Needing to keep at least 94% of headcount, with no penalty to management for being above (and possibly a bonus for staying above the minimum) sounds like the opposite.

What do you mean “cost them money” I legitimately can’t think of situation where releasing a product behind deadline would cost a business money? Obviously they just allocated resources more efficiently because they have fewer people. Likely they made more money because of increased demand.

It is fairly obvious. If it is expected that a product or set of features will drive X revenue per month, and you are late by Y months, then a decision that directly contributes to that delay just cost the company money.

I have a product that can bring in $10,000 in profit each week. If I launch it four weeks late, I just lost $40,000.

Or I have a product that relies on certain hardware. I've already bought/leased that hardware, so I'm now paying depreciation/lease payments for that hardware. Every week I delay the launch I'm losing money on those payments because the hardware is sitting unused.

In addition to the other good answers here:

If your product isn't ready and your competitor's is, you lose contracts and possibly life time customers.

Different businesses have different meanings to deadlines and timelines.

If it's v6.8 of your internal software product, no, the deadline doesn't usually matter that much. Maybe you are a bit behind your competition, but the only problem with just being at the 6.7 feature set a little longer is a small percentage of customers not sticking around. Your manager probably overpromised and underestimated, but aside from a bit of abuse and panic, you're right, it doesn't really matter.

But if you're one of 120 companies building parts for the 2025 F150 and your part isn't ready and the other 119 companies are ready, whether it's your supplier or you or your customer who is behind, you'd better believe that they've got you over a barrel in the contract. Like, the contract has a line that reads "for every minute of downtime after [date] you owe $25k". Your PM hopefully underpromised with an aim to overdeliver, but missed really bad. And all the checks and balances failed. If you've got adequate financials you can survive a miss once in a great while, but two or three in a row and even big shops will go under.

It's often important to understand the consequences of missed deadlines that your coworkers, vendors, or especially customers are accustomed to, people have wildly disparate experiences in this area.

EX: Contract with commitments to release on a certain date, making them liable

Some contracts specify liquidated damages if deadlines are not met. The contracts I’ve been a party to have daily cash penalties that will quickly erode any margin away.

Legal change requires a go live on a certain date.

Modernizing and moving functionality to the cloud now instead of in a few months prevents renewal of a expensive contract.

In addition to everything mentioned here, projects based on holiday dates (Christmas sale feature, Thanksgiving promotions etc) not rolling out on time means that the feature can go out only in the next year.

In my experience, this kind of thing might not even register with most companies

There's a meta-game that most sociopaths/narcs are playing like their lives depend on it to get their supply and climb the internal ladder, that's taking up so much energy/time/resources of the company, falling upwards

That there's nothing left to care about this sort of thing

I've seen this before so many times, and recommend people quit and sometimes even apply back at their same company.

I got my friend a 30% raise after he quit, worked at a new place for two months, it blocked implementation of key projects and the CEO started freaking out.

I asked him how much he would pay to fix the problem, and he gave me a number. I said if we paid that as the new salary to my friend we could have him working there in a week.

The CEO made the call in front of me lol.

That’s a great tactic. I’d love to use that, but I’m afraid a lot of leaders are not rational enough (or have to big of ego’s) to hire the person back

It really takes a big desperation for money to allow such ego death, absolutely.

I hate this shortsightedness of business leaders.

I’ve seen similar problems. Not wanting to give a raise to a critical person, and then having to replace them with 3 people. Not wanting to pay 10% more and ending up paying 300% more…

And that's 3 people onboarding & increasing the amount that needs to be communicated over that 1 person.

There was an article at Forbes that said employees who stay with the company for more than 2 years are underpaid by as much as 50%.

So why do they stay for so long? Humans are resistant to change.

Speaking of myself, when I was working as a programmer, finding a new job meant going through endless interviews with leetcode tests even though I had 15 years experience.

Turns out it was Joel Spolsky who invented that practice. I'm sure most programmers want to strangle that guy. Lol.

As for me, I became a contractor. All my underpaid overtime turned into a paid one. Plus my contracts lasted a lot longer than my full time jobs. But even that what I later found out is what they call "trading hours for dollars".

In order to really succeed I need to start my own business. Which required me to learn "direct response marketing and copywriting".

Because being an Engineer I sucked at selling, finding hungry markets for my products, creating products and selling them by the millions.

Once I figured that out, it's like a new world opened up to me. Turns out you can make as much money as you want. Unlimited amounts. It's up to you how much you want to make. I wish I would've figured that out earlier.

> Which required me to learn "direct response marketing and copywriting".

How’d you go about getting good at these things?

Not an answer to your question, more bolstering your comment, hoping someone else will come along and be encouraged to answer. Trying to learn about this on the internet is a nauseating series of blogspam.

Edit: Although, this particular article doesn't seem so bad: https://mirasee.com/blog/direct-response-copywriting/

Any recent books you suggest on "direct response marketing and copywriting"? I've tried to read "how to win friends and influence people" "ogilvy on advertising" "traction" but haven't taken actions yet.

I have contracted about 1/2 my career. I love the freedom and the honesty about outcomes and money. I missed the benefits (esp group health insurance) and the sense of teamwork.

How do you get new contracts without using recruiters, is the million dollar question.

Wrote more about that here: https://www.mooreds.com/wordpress/archives/3552

You can only do this so much before you hit the pay ceiling of your role more or less. Then there is also the age factor, which whether it's justified or not the older you get the more expectations there are and the harder it becomes to jump ship.

Personally my biggest gripe is how technical careers evolve into non-technical roles because of how companies underestimate the engineering and overestimate people skills. The pay gap would be easier to bridge if yearly reviews were based mostly on technical skill growth instead of other corporate jargon like "impact" or "leadership".

> "Turns out it was Joel Spolsky who invented that practice. I'm sure most programmers want to strangle that guy. Lol."

Really? Here's Joel writing about his interviewing technique for software developers, it's a 1 hour interview with the focus on letting the interviewee talk about how smart they are: https://www.joelonsoftware.com/2006/10/25/the-guerrilla-guid...

    1. Introduction
    2. Question about recent project candidate worked on
    3. Easy Programming Question
    4. Pointer/Recursion Question
    5. Are you satisfied? [with your whiteboard code answer]
    6. Do you have any questions?

Has he changed from that in the last 20 years?

> Turns out it was Joel Spolsky who invented that practice. I'm sure most programmers want to strangle that guy. Lol.

Did he though? or did you mean Fizz Buzz? But that was by his friend Jeff Atwood

> So why do they stay for so long?

Sad thing is because it might actually be interesting work.

I've been rated in top tier/exceeds status for the last two years as a Senior level tech employee at a FAANG. This is after working up from entry level at hire, and promoting two times. Despite high performance and successful delivery of large projects, my base salary* has increased less than 3% in three years.

Every single year, the company has come up with an excuse to not raise base salaries. It typically relates to economic intangibles, stock performance, or whatever corporate alphabet soup they choose. People hired halfway through my tenure got hired on with substantially higher base salaries, some who are a level below me.

I really enjoy the work I do, but I just can't sustain less than 3% income growth over the course of the next three years. That's why I am looking elsewhere, not because I want to, but because I have to. Some roles I'm seeing below Senior level have starting salaries 50% higher than mine.

*I am aware of the concept of total compensation and I do get company stock, but you can't pay bills month-to-month on funds that are six months away from being available, and you aren't sure whether you'll see a 6% upside or 6% downturn.

> I am aware of the concept of total compensation

I'm with you on this. When I'm evaluating an offer, the only part of the total compensation package that I really pay any attention to is salary because the rest is too uncertain.

Recently experienced an excellent colleague ask for a raise to $X, get rejected, leave, the replacement was hired for more than $X, the replacement complained about the workload being too much, and so we hired another body to cover the original developer leaving, again for more than $X. Absolute madness.

Word of mouth means that the attrition will forewarn those who have the same thought process.

>Interestingly, even employees who aren’t actively looking for a new job may become more aware of shifting market prices when a new hire joins at a higher salary, sparking concerns that they may be being taken advantage of.

Because being paid less to do more means they are being taken advantage of. That's blindingly obvious. It's just that it was thrust in their face by the new hire occurring.

It’s not obvious to narcissists or little feudal lords, though I may be repeating myself.

Give a man a little power…

Yeah, I'm struggling to understand how this could be noted as "interesting". "Wow, my employees think they should be paid for the work they're doing _without_ having to threaten me about leaving to get a raise? What a revelation!"

Makes sense. New hire gets paid a lot, everyone updates on what they should be getting paid, top performers have the best chance of getting jobs elsewhere and they now know they should be getting paid more.

Seems like this consideration makes hiring new people much more expensive. Either you pay everyone (or just top performers) more or pay the new hires less and likely attract a lower tier of new hire which has its own cost.

Employees should do more to share their pay so everyone knows how much everyone else is getting paid. I mostly think there should be a law mandating this - every employer with more than 100 employees must publish summary statistics on wages at every job category.

I recall reading that CEO pay skyrocketed after a law intended to reduce CEO pay required that CEO compensation had to be disclosed. It had the opposite effect and CEOs started to make much more. Seems like we should apply that same thing to the average worker.

Basically anything companies don’t want workers to be able to do is good for the workers and bad for the companies.

They don’t want us sharing pay. They don’t want to have to post comp ranges in job postings—they don’t want it to be easy for us to compare job postings.

That means it’s a safe bet that both of those tend to increase worker comp.

What broke me was seeing new employees get the same option grants as those of us who’d been there before our product launched. We took on all the risk and the years of startup salary to build the thing, and new people walk in with the same ownership? What the hell. I couldn’t forgive that.

Sounds plausible. The obvious Q though is - were the researchers able to identify a causal effect? Or could it be that the highly-paid new hire is a sign of the market being hot, so the top performers are able to get new better offers? i.e. would they have left even without the new hire?

Agreed they don’t really address threats to validity (HBR almost never does). Another objection - they claim that adjusting salary sooner rather than later has a big effect on turnover, but do they control for the general effect that getting a raise or not affects turnover rate, independent of whether someone was hired at a higher salary?

In the late 90s I worked at a place that recognized the issue where they were having problems bringing people onboard so they offered more. But in our department they also did a yearly "adjustment" across the board to make sure they avoided paradoxical issue of new guy / longtime hire guy unexpected pay disparity.

In that case the new guy getting paid more or close to the same was a largely non-issue as you knew you'd get adjusted. It was arguably good news for you.

I’m in the unique situation where I’m hiring my replacement after having made a promotion. I know they will make (substantially) more than me. How would I negotiate a matching or superior salary?

Competing offer. Go interview.

Leave.

Unfortunately this is the answer.

The bean counters do not give a shit about your experience or value. They just need warm bodies. They know the friction of leaving a company is high so they'll intentionally make you feel like a sucker until you finally quit, getting more years and months out of you for a lower rate than you deserve. When you finally do leave, they'll pat themselves on the back for retaining you for so long at a depressed wage.

I guess the problem with bean counters is they don't know how to count our beans. The low performers look exactly the same as the high performers to them. So they make foolish decisions.

Leave? Into what is anecdotally the worst job market for developers since 2008 and maybe even the dotcom bust?

I don’t understand this remark. It’s still incredibly hard to find engineers here in Europe (I’m hiring at 5x the minimum wage, to give an idea). Where are the swathes of unemployed people that you are describing? Are a quarter of American IT professionals unemployed?

Offer to step back into that position because taking the promotion will reduce your pay to under the going rate for the position you’re leaving.

Everyone else is telling you to leave or try a power play, but food for thought -- you may actually be less valuable now in your new role because you aren't experienced in it. If you just moved from IC to manager, you might be a pretty new manager.

It's normal for managers to have reports that make more than them. Just because you manage them doesn't make you more valuable.

I'm not saying this is the case for you in particular, but it might be, so something to consider before playing hardball.

That’s very insightful and the argument I would expect if I were to start discussions about salary. How would you counter this?

I would also say I’m more qualified for the job than those that are applying now, so I’m not sure if this really is applicable to me.

> How would you counter this?

"I asked for a promotion, not for a complete career switch".

maybe it's no the right time to negotiate your salary ? given there is competition for your job position and your competency is not proven. why not wait till next year ?

You just got a promotion, so now you're in a better position to make more money by leveraging the new level/status at another company.

Leave or get a competing offer to use as leverage if you really like your company.

Read a book or watch some Youtube videos about negotiating (in general)?

Anything you would recommend, specifically for salary negotiations?

Josh Doody's stuff is pretty good: https://fearlesssalarynegotiation.com/

Cambell's "Start with NO" is a great book to read.

With higher pay plus less experience comes entitlement. It’s the attitude of I shouldn’t have to do x, y, or z. Usually it’s because they can’t do those things and in full fear mode vomit some bullshit excuses.

That, more than anything else, is why I’m in another line of work full of former programmers who are eager to do something else.

What line of work is that?

Probably wood working, seems to be where all the burnt out programmers end up.

I can think of half a dozen former programmers I know who now do things like finish carpentry, furniture building, luthierie, and other fiddley wood stuff, and it's been a private joke with friends. I didn't know it was such a widespread phenomenon though!

Or teachers.

What line of work is full of former programmers?

Nowadays, that's the unemployment line.

Can someone who understands economics better than me explain how the workforce can "shrink" in 2024? The number of people isn't going to dramatically decrease, are just a ton of people retiring?

Or does this imply that there's going to be a reduction in the number of available jobs?

In the industrialized world, the fertility rate is almost universally below replacement rate, and has been for a long time. So, as boomers are retiring, there are not as many people replacing them.

If only there were lots of people from not-the-US who wanted to live in the US...

Expanding legal immigration is a political impossibility at the moment. We'll have a lot of near slave-wage bodies for the worst jobs around though.

> Can someone who understands economics better than me explain how the workforce can "shrink" in 2024?

There is a generational demographic bulge in an age range where both death and retirement of those who have not yet done so are things that are not unlikely.

On the other end, there is the opposite of a bulge at the age people enter (for statisticsl purpose) the workforce.

if you click on the word shink in the article, it takes you to another article that explains boomers are retiring and they are a larger generation than the younger ones who will replace them.

If you do not have a job and are not actively looking for work, you are not part of the "labor force". The "labor force" is defined as (working + actively looking). Also, the denominator of the unemployment rate is the size of the labor force, not the size of the working-age population.

In particular if someone gives up on looking for a job because they're too discouraged, or if someone decides to become a stay-at-home parent, this causes the size of the labor force to go down by one person.

Search for: "labor force participation rate".

Also some definitions here (US-specific): https://www.bls.gov/cps/definitions.htm

Here's also the transcript of the Planet Money podcast from March 2023 which talks about reasons folks left the workforce at that time: https://www.npr.org/transcripts/1162753771

> In particular if someone gives up on looking for a job because they're too discouraged,

I've never understood that either; do other people just not have to pay rent or buy groceries? How do you "give up looking for a job"? I understand becoming a stay at home parent, but what else would make it so you "give up" looking for paid work?

This isn't a rhetorical question, I am actually asking because I feel like I'm missing something.

They rely on the incomes of family members, savings, or governmental transfer payments (social security, welfare, disability, etc).

Not sure the percentages of each, but those categories probably about cover it.

That's fair, I guess if you're already around retirement age, being unable to find a job might be an impetus to quit looking.

I think there's also nuance in what "actively looking" means. Someone might decide to stop actively looking but not permanently retire and instead wait until conditions are different; maybe someone in their 20s or 30s might move back in with their parents for a bit, or maybe someone just decides that living more modestly for a year and then trying again either when more jobs are available or when they're less burnt out. Even less common things, like having to go on disability to to an injury or illness might add up to a decent number when aggregating across an entire country. I think the main point is that the single statistic alone doesn't describe "why" or "for how long", only "how many"; there's (almost literally) a world of potential reasons that aren't necessarily going to be related to any others.

To put a positive spin on it, within a certain age and savings range, someone might choose not to be underemployed or just say screw it if they weren't finding anything they were looking for. Admittedly that's basically a fairly high earner story so a fairly small part of the mix. But I can absolutely see someone checking out a few years before they might have chosen to if they're not finding what they're looking for and don't want or need to be a Starbucks barista.

The devs that I've known who've dropped out of the market have lived on their savings and investments.

I've see this happen to a number of friends. Most of them have enough saving that they can 'retire', but none of them wanted to retire yet. It often means moving away from friends to implement a lower cost-of-living. Once you are >40, it can be hard to find a job. You are too experienced for mid-level roles, but your core skillset may no longer be relevant. e.g. There are far fewer Win32 developers than 10 years ago, but retraining to be a web developer can be a big challenge. I've also seen people get promoted to a managment level, based on a targetted skillset, where it can be hard to find find a new role.

Its worth noting that the “working age population” has a starting age but no ending age; once you cross 16, you are in the denominator for the labor force participation rate until you die. 106? Still in the “working age population”.

There's also a “prime age labor force participation rate” which has both a start (25) and end (54) age for the denominator population, and the prime age LFPR has been strong [0] as the full LFPR has dropped [1] because of the Boomer demographic bulge making age-related exits from the labor force.

People who like to sell unemployment as underrated by the official statistic in recent years like to point at the drop in the full LFPR and insinuate its because of prime-age population being pushed out of the labor force, when looking at the prime age LFPR reveals that that is not at all true.

[0] https://fred.stlouisfed.org/series/LNS11300060

[1] https://fred.stlouisfed.org/series/CIVPART

Even though 1/3 of the Baby Boomer generation are already dead, they are still a larger percentage of the population than Generation X. Generation X also has a smaller share of population than the Millenial Generation and Generation Z.

-- https://www.statista.com/statistics/296974/us-population-sha...

The Ballard neighborhood of Seattle experienced a lot of business turnover starting about ten years ago because many of those stores don’t own their own buildings, the landlords got dollar signs in their eyes, and a lot of older business owners looked at their books, realized how much extra money they were going to have to make per square foot just to keep the lights on, and opted to “retire” instead of renewing their lease or selling the business.

“I am too old for this shit.” Seems to have been the common refrain.

You can also shrink the employee pool by having more 20-something’s living at home and fewer dual income families.

Developed countries have a low fertility rate, so fewer young people and tons of oldies. Perhaps is not going to be noticeable right away, but it’s gonna hit us hard.

This is why you don't stay at a company for more than X years - IME, it's probably around the 3 year mark? I once received > 2x comp after leaving a company I had been at for 6 years.

Some companies pay fine. I’m not going to find 250k for how easy my work is jumping ship.

Well no shit. If I'm currently a top performer and we hire new workers at a higher pay rate than me, if I have to wait to get a raise because of BS corporate bureaucracy then the company should know from the second they say no I have my foot halfway out the door.

Funnily enough at many companies the second you actually threaten to leave, that corporate BS suddenly isn't an issue. But trust has already been lost.

Exactly as mentioned in the article but what should be basic common-sense. Why would I continue to work as hard as I do being a known top performer just for somebody who is new and has no history to get paid more than me.

But of course some of this may actually be exactly what some companies want in this backwards world, get rid of top performers who expect a pay raise in favor of those who don't expect one anytime soon like new employees. Set the expectation to new employees to not expect raises, etc.

> at many companies the second you actually threaten to leave, that corporate BS suddenly isn't an issue

Not "many" - "every company". Unless you're an useless cog in the machine, you can always leverage a raise by saying you got a better offer somewhere else.

In very rare cases it pays to take the raise from the old company though, your name is already on a List, so better start looking for other jobs anyway.

Covid really pulled the veil back on "BS corporate bureaucracy".

So many bureaucratic sacred cows went out the window.

I have a periodic thought exercise of a counterfactual where our culture had developed in a way that paid early career people relatively more than now and vice versa for late career. The concept behind it is that interest compounds and beyond basic competence it can be difficult to tell the relative value of experience versus eagerness and top performers with/without the supportive environment in which they operate.

On top of that in terms of your life outside of work, some of your biggests costs are up front in your life. Education, childcare, housing, paying into retirement plans through it all, etc. When you are in your 50s-60s with your kids moved out, your healthcare later in life to be subsidized by the government, your home payed off, your student loans long gone, your retirement portfolio built out, with another 20 years lets say on average of life left in you, what do you even need a raise for?

This is happening to me in real time.

New hire will have higher job title than me and more pay but will be taking over my work.

2 people on the team already put in their notices.

Programming as theory building has been the rock that explains how stupid companies are with how they turn retaining employees into a financial game.

https://pages.cs.wisc.edu/~remzi/Naur.pdf

Your employees ARE your company. Every time you lose an employee you are cutting a chunk out of your company. Sometimes this is good. But if you lose a top performer its like losing your kidneys. You are going to be on dialasis for a long time.

...this metaphore makes me think about how insane it would be for a person to look at their organs as a financial puzzle to solve. Like what if dialasis was less expensive than not selling your kidneys.

For those wondering why companies do this, I wrote a post on this awhile back https://bloomberry.com/why-new-hires-often-get-paid-more-tha...

Well duh - when something is/feels wrong those with options bail first. Not exactly rocket science

How often are you supposed to "mark to market?" Quarterly?

What happens when the markets drop? Will employees accept seeing their comp drop?

I suppose you could offer some base level of compensation + have some market adjusted component? Having the entire salary marked to market creates uncertainty in annual compensation.

Or you give employees options on how frequently they want their salaries to be re-evaluated but that comes with the potential of going down?

Can someone tell tech hiring on Wall Street? Financial companies seem to suffer from salary rot, a seasonal affliction appearing towards and after Comp Day.

New hires get paid more. Sometimes a lot. Salaries are geared to stay at or just above inflation while more risk is taken by the employee due to bonus turning after a few years not into "bonus" but "missing piece of salary".

HBR is great at cranking out Just So stories like this. "Shucks, who could have guessed that the leadership style I learned in my 2010's American Northeastern university MBA is scientifically proven to be the best leadership style in all of human history?"

Yearly I'd interview with other companies, get an offer or two, and use those to negotiate mid-year raises / RSU bumps. Turns out this is quite lucrative, I don't have to change jobs, or worry about trying to get promoted.

If you're willing to attract new hires with more pay, your competitors are willing too.

Define "pay equity" please. Does that mean everyone in the same role gets paid the same? Everyone with the same seniority gets paid the same? Something else?

Sure, some people are getting paid too little and others too much. But the concept of "equity" has no place here. It suggests that you "deserve" to paid equally. But equal to whom? And based on what? A new hire can be more valuable than a veteran. Two people in the same role can contribute different amounts.

I don't understand how this practice is legal; don't we all have laws on equal pay for equal work?

Obligatory MonkeyUser: https://www.monkeyuser.com/2020/new-hire/187-new-hire.png

In other news, it has recently been discovered that water is wet.

And in other news: elephants are quite big, the sun is hot, water is wet.

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