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Comment by figassis | Hacker News Reader

Almost every average to high performance employee captures less than the value they bring. Companies are not going to pay you 100% of your value as that is always seen as bad deal by the company. They want to feel like they're saving. Why else would you need to negotiate comp?

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Isn't that the subtext? IMO 70%+ seems really really high, especially for larger firms which, by definition, provide a massive amount of leverage to senior leaderships' decision-making.

It’s interesting to do the calculation for one’s own work.

It’s obviously going to be flawed unless it’s a very basic job. The peripheral costs are the devil. Eg: Stationary, payroll costs, uniform, software licences, swipe cards, coffee, water, rent.

However mine is an awful lot higher than the CEOs (as a percentage, not in dollars).

I don't think the peripheral costs are even the bulk of it. The real value of the company is problem selection, brand recognition, coordination, hiring, and elimination of non-value add problems (e.g. an early stage CEO spends a huge amount of their time managing government registrations, which is later managed elsewhere in the company but not by 99.999% of employees)

Yeah as far as product (people that do/make the thing being sold) is concerned, marketing/sales is a cost center and they should be making most of the money, since they're providing the actual value. As far as marketing/sales is concerned, the product is fungible and is a cost center, and they should be making most of the money since they're the only thing differentiating their org from competitors and making actual money come in. As far as accounting is concerned, the company doesn't make any money until they actually invoice and chase down and collect invoices, and if they don't pay invoices neither marketing nor product will have the infrastructure they need to do their job.

Without HR/hiring, the other departments don't exist since they all need to be staffed. Without management, nobody knows what to do. Without facilities/IT/building manager, nobody has internet or water or desks or chairs.

And so on and so forth. Everyone is essential, and everyone also has an overinflated idea of their own importance and an underinflated idea of the importance of others.

It’s not just “seen as a bad deal by the company” - a business can’t give 100% of the value back to the employee because it has this pesky thing called “profits” it has to worry about :)

That’s exactly the point you’re replying to.

> Companies are not going to pay you 100% of your value

Tell us more…

If at your ceramics firm, you make and sell a mug with a ten dollar margin, if you then require ten dollars of wages for that time, then why did the company bother putting the capital at risk?

Not sure if I'm missing a facetious tone

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