Step One: Go find a job at a competing firm, because that's the only way you'll get a meaningful raise.
An excellent engineer decides to leave the company because she gets a better offer. For various reasons, you were undercompensating her, but the offer from the other company pays more than any engineer in your company and the engineer in question is not your best engineer. Still, she is working on a critical project and you cannot afford to lose her. So you match the offer. You save the project, but you pile on the debt.
Here’s how the payment will come due. You probably think that your counteroffer was confidential because you’d sworn her to secrecy. Let me explain why it was not. She has friends in the company. When she got the offer from the other company, she consulted with her friends. One of her best friends advised her to take the offer. When she decided to stay, she had to explain to him why she disregarded his advice or lose personal credibility. So she told him and swore him to secrecy. He agreed to honor the secret, but was incensed that she had to threaten to quit in order to get a proper raise. Furthermore, he was furious that you overcompensated her. So, he told the story, but kept her name confidential to preserve the secret. And now everyone in engineering knows that the best way to get a raise is to generate an offer from another company then threaten to quit. It’s going to take awhile to pay off that debt.
For what it's worth, most competent managers I know agree with this idea.
Edit: I should mention that I am NOT advocating paying people less than market wage, but as managers know, sometimes you end up in this position with some employees for periods of time without meaning to.
Jesus that all sounds so ridiculous to me. That's a funny shell game around admitting that someone was more valuable than you were paying them, and then guess what - lots of other people are.
If the argument is "But she isn't always this valuable.. she's just this valuable on this project" then attach a financial incentive to the project.
Sadly, I don't get the sense that Ben is suggesting that there's a problem with not compensating commensurate with value here or with depending on the employer-preferential taboo of the secret salary. He seems to just argue you should let this engineer walk and the project die.
This is just another reason why I love project based consulting more than FTE. The incentives are properly aligned. Adam Smith would smile.
Personal experience - in every single work I've done (roughly 10 customers/employers, perm+consultant) in 3 different countries, there was/is always room to grab more responsibility, more tasks etc. State of IT usually just a variation of a term MESS, with some technical debt here and there, everywhere. You work harder, solve more, take more responsibility and your career progresses along (or you go to place where it does faster).
But with this might also come 9-10 hours at work instead of 8 (plus lunch), company phone which is there just to remind you of the work when you're not in, maybe more weekends screwed up and so on. Even in otherwise very work/life balance oriented employers.
Want another advice? When having a formal talk with your boss, tell him you want a raise, but you don't want it for free, rather bringing added value. Define clear terms what is expected from you to get there, fulfill them and watch the magic happen :)
This is actually a fantastic idea, for both sides.
(Just imagine a project worth $X with two lynchpins, both of whose absence would tank the project. Both can cause $X in damage, but you obviously cannot pay each $X)
Either by increasing their title or pay as they are that critical, or by not distributing the key knowledge around so that everyone is dispensable.
If one non-manager employee is ever in a position to show other employees they are being undervalued, the employees may do something stupid like demand the company fix the situation. Can't have uppity employees. Employees exist to be subservient to the ever-changing, unanswerable will of the CEO, not set the rules themselves.
The CEO gets to fail upward and become investor-class while shitting downwards on lowly employees who would dare to try and be paid what they are worth. How dare they attempt to confront such holy and monied highness as a CEO. Know your place, employee.
Failing to match when there is value to the company just means that every time you are faced with that choice, you always lose.
While the worst case with letting people know that that's a good way to get raises is that it puts upward pressure on wages until very few employees can get better offers that they'd be willing to threaten to quit for, and you still end up paying people not more than it is worth to retain them.
I'm always surprised at how companies can be so nimble in markets for their products but be so poor at working in the market for their personnel. Often times it seems like getting some counter offers is the only way convince them that the market for engineers has changed significantly.
Also, if the person given this raise is not amongst your top performers and now ends up out earning the rest of team, it ends up affecting overall team morale. Your star performers then start to feel short changed and think they have to leave to get a raise.
Here's the thing. By the time someone is actively interviewing, you've already lost. Treat your compensation like you would any other product and try and figure out how to differentiate your product. Cash by it's very nature is interchangeable. Benefits, perks, camaraderie aren't.
EDIT: A previous boss of mine was unhappy I was quitting, and apologized that he couldn't give me $40k in cash to stay for another year. Me leaving meant they needed to search for a new, qualified person, and then spend the time training them, which was certainly close to $40k of time-money. Unfortunately, upper management didn't care.
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Animal Instinct, because "all money is money."Do the good ambitious people never realize that they won't actually accomplish anything worthwhile if they never stick around more than a year or two?
It's not that you achieve nothing in a year tenure, but can you really accomplish anything great? Can you think of any good examples of people who showed up January 1st, changed the world, and left by Christmas?
I worked for a major institution's engineering group where we formally asked "We're getting recruited all the time for more, will you raise comp to market to prevent people leaving?" Answer, "No." Annual attrition was 25%. At a recruiting/replacement cost of ~$40K, raises would have made more sense, but then managers would have failed to wield their power to "constrain their budget."
Logic need not apply.
http://www.joelonsoftware.com/articles/fog0000000024.html
Basically he points out that heavy use of methodology will get you guaranteed results. But that result is of very mediocre quality.
"The thing about this place... Everyone with get-up-and-go has already got up and gone"
You see, the problem with "good, ambitious people" is they want to (1) keep learning new things, (2) work on projects that expand their expertise, (3) continue on a monotonously increasing career trajectory. Sadly 85% of the coding out there is more like "IT" and keeping the lights on, fixing the CRUD apps, etc. Ambitious people are a major flight risk at such companies, and worse, they might bring in some new tech or complicated patterns that the drones that replace them don't understand, and then the firm has to chuck that code and go back to the former, easier to understand but far less performant code. I've seen it happen several times.
Some time later, he honestly told me: "The only way they would give you a raise is to prevent you from leaving. At that point, if you already went through the trouble of getting another offer, you might as well leave." Several months later, I did. Money wasn't the only factor -- the big new project I was hired for got finished -- but it was a major one, they were underpaying me pretty badly.
This off-course does not directly explain to what is being said above in the parent ... just want to share a thought.
Actually, you're problem was forgetting that it's illegal in the US to prevent employee's from sharing compensation information. You can't require that in an employment contract and can't formally punish an employee for disclosing said information. :)
Now that a lot more infrastructure and tooling is in place, we're seeing the effects of that prolonged depressed supply. It's easy (relatively) to hire junior devs, and much harder to hire senior devs. And even still, I talk to senior devs who have trouble getting a raise. I'm like... ok... well I hear X is hiring.
Correction: they are below what people of the quality they want are willing to work for. There are plenty of engineers willing to work for those salaries; the vast majority get rejected.
Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate.
I'd say its more accurate to say "The quality of engineers isn't effectively determined in most hiring processes."
And it only costs about 10% of that per year to pay the engineer. Winning.
Basically, there's no incentive to give raises to current engineers because when your company doesn't care about profits or expenses, but about getting and maintaining investment and stock value, it doesn't matter how expensive it is to train new people and how ineffective they are. As long as they are just effective enough to maintain a N(user) growth, you're good.
If companies want the best, yes they should do all you said. If companies are just trying to grow grow grow, they can probably do better with an approach of 1,000 coder monkeys instead of 10 expert systems builders.
Plus, no reasonable company is going to pay the 10 expert people the equivalent of the 100 coder monkey duties they are actually performing. That would be what... a salary of $10 million to $20 million per expert employee per year. Yes, you are worth that much, but the market finds true-value untenable. We'd rather let companies keep hundreds of billions in spare cash than paying it out to employees who are allowing such hoards of wealth to be, well, hoarded.
Companies do do that. It's called an acquihire. It happens when an expert starts a startup that develops a technology that a bigger company needs. This bigger company then buys said startup for the sole purpose of hiring said expert.
They don't care about the user base or the interface or the company as a whole. They just want the expert to continue developing the technology they're an expert at, but do it for the big company instead of themselves.
Exactly. Wasn't the original question about how to get a raise at the same company though?
The option of "quit, give up all your security, hope to make something amazing, then get acqui-hired" isn't a tried and true path to just getting a raise.
We see people at Google taking that path all the time. Work at Google -> Quit -> Create new company with the same work you were doing inside of Google -> Get acquired by Google.
Cisco is famous for encouraging that tactic too. Lots of serial quit-acquirhire-vest-quit-acquihire loops going around. It's easy once you have the connections in place to drop out and instantly be established as legitimate again.
With extraordinary rewards, come extraordinary risks.
But the bigger point of this comment thread is that you can get raise jumps with practically zero risk as an engineer right now by switching jobs. As an engineer right now you can switch jobs without a single day of unemployment. Just do interviews as a side-project, then when you get hired somewhere else, quit your current job.
Bam.
I won't dispute that this is said, but every once in a while I get the sense people saying these things should double check which column of their balance sheet these things belong on.
Not only that... tech companies like Apple, Adobe, Pixar, Google, Intel, eBay, Lucasfilm, and Intuit all illegally colluded to keep them low. The settlement for the affected workers was appallingly low!
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
Wikipedia seems out of date, what was the final result?
https://pando.com/2015/04/14/apple-wage-fixing-plaintiff-acc...
I've always done freelance/contract work, so I'm not 100% sure what 'significantly' better means in the normal software world, but I'm going to assume 5k/year would be a really significant raise. I know the national average is somewhere around 3%, so 5k seems like it would be absurdly more than average. Please do correct me if I'm wrong.
So, just going on $5,000 lost for a year for the 64,000 litigants, that's $320,000,000. They settled for $324,000,000. I swear I didn't presuppose any of those numbers, they just worked out like that.
And 5k is too low. Google gave a 10% raise across the board around the time this information came out. So assume 150k salary * 10% = 15k. Salaries also continued to rise more rapidly after the 10% raise, but it's hard to say by how much without having access to the internal data.
Hence 4 years of wage suppression. Given tech salaries in SV, $5k is off by about an order of magnitude -- especially when you consider the knock-on effects of job mobility that was systemically quashed by collusion (i.e. moving jobs => better pay => faster career progression => compounded earnings).
60k shitty entry level job (< 3 years)... quit for a
90k slightly less shitty job (1 year) ... quit for a
140k + $350k bonus/equity (< 2 years) ... quit for a
160k + much more equity, nearly certain IPO (hopefully for the full 4 years to vest 100%)
Don't hate the mercenary, hate the employer who won't pay you what you are worth!
Keep in mind that I stayed at none of these companies for more than 2.5 years!
There were 2 brief interludes 1) Non-technical grad school, but that actually netted me a very slick summer internship one year that paid way better than my previous job too. 2) Failed startup, that paid nothing
Unfortunately, I think I've maxed out on the software engineer pay scale now unless I get even luckier.
> Pick a number, any number: somebody does a lot better than that. For most numbers you’d naively think of, its an awful lot of somebodies. $100k? Not the top. $250k? Not the top. $500k? … Not the top.
The less emotional benefit of getting higher in the pay scale is that job-switches can be about something more meaningful than just, "Oh shit, that's more money!" Now, so long as I can get close, I'll be happy to just go wherever would be most fulfilling.
These companies can be found, and you probably know their names. You can get through their interviews by adopting the mannerisms of their interviewers (be it old cynical guys, or Stanford new grads, or whatever) and studying your SAT interview question book.
The way to really strike it rich is look for say a social network with 30+ million active users that is willing to give you options. It's hard to fuck up 30+ million users.
EDIT: Just because I got lucky does not mean the OPs post is wrong. My luck was aided by me jumping ship as frequently as I could whenever a good new opportunity presented itself.
My trajectories been
25k 6months, 45k 6m, 75k 1yr, 110k now.
Hoping to get to 150k in one more year. 150+ would be a sweet salary!!
(Throwaway)
I think you fail to see a fact, the same fact that was overlooked by all your former bosses actually.
Your 6-years-ago self was probably not worth half of what your current self is. Your ability to land each new job was built upon the foundations of higher skills and professional maturity you achieved on the previous job.
Ambitious, talented employees keep growing, positions are static by nature. Job hopping is the de-facto career path.
1) Management in all but one job I've had invested nothing in training and helping new employees grow. My technical growth has come through personal projects and taking on extra work.
2) Promotion never offered anything like the salary increases a new job offered. The incentive to stay is not there.
I'm in the L.A. area and people want to crap their pants when I tell them to give me 150k.
I think employers massively overweight experience, particularly in a field that changes as fast as ours. Five years ago I was just as smart as I am now, maybe smarter - I didn't have 5 years' experience with tools X, Y and Z, but tools X and Y are already basically obsolete. But the market says I'm worth twice as much now as I was five years ago.
Also, there is the concept of social proof - which you may argue is a form of over-weighting experience, but that's an open ended question. If you have a track record of going to work for somebody else and achieving X, Y, Z goals there, you are perceived to be a safer choice than someone that in theory might be smarter than you, but that is lazy or otherwise unreliable, or with low communication skills, or a first class jerk. Not that you cannot hire this types if you go with someone more experienced, but from HR perspective, you are more of a "known quantity" once you have been around for a few years and built a track record for yourself.
A year later when I told them I was leaving for a better paying job (with much better incentives and work/life balance), he said "is it about the money? we can pay you more why didn't you just ask".
If I could give a professional hint to my former self it would be: the best employers are the ones who are comfortable making a deal -- paying what they need to pay to get it done, and trying to strike the best deal they can. Any hiccup on that road (notably: not paying / checks bouncing / salary negotiations where the numbers decrease at any point, even if it is due to a technical or paperwork error on their end) is a _very_ bad sign.
You were 'let down easy' by whoever told you that. It's human civilization on planet Earth, everything actually is negotiable, and "my hands are tied" is just a negotiation strategy.
* I forgot about that, why didn't you confront me every single day about it
* We were just gonna raise your salary anyway, we just kept it secret
* We were just going to implement the promised equity plan now, we just didn't tell anyone to be a surprise
* Ah yeah the shares turned into options with zero context
* The options turned into 1 year forward priced options, but you will get more, nevermind we hoped you don't notice
Unless you witness it, don't simply believe this one.
It's a cheap & easy way to say "no" while still positioning himself as the good guy. After all, he's the one that has to manage a day to day relationship with you.
And stop to think about that for a moment. If you "yelled and fought" with him, would he or the organization tolerate that behavior? If he wouldn't, why would his boss tolerate it from him?
A different company offers you broader experience, if its well chosen, and of course, a better raise. I don't use a job offer as leverage at the old firm; I think that's a bad career mistake. Of course, jumping is scary, and the new firm might suck, but that's why networking is essential, whether you like it or not.
In practice, unfortunately, it seems all too easy to get pigeonholed, hit a political snare, or some other roadblock that makes your career there a trap rather than an opportunity.
I worked at Microsoft for nearly 14 years. I had the privilege of working on 4 very different teams (microBrowser, Palladium/Bitlocker, Robotics, Midori)
So in many respects it was like working at 4 different companies, in that respect I avoided the pigeonhole trap (which certainly also applies when you do move companies) but over time I accumulated corporate cruft which ended up dragging me down. Moving to a new company allows you to reset that.
Also, if you get a 30% better offer, don't be afraid to switch after just a few months. Job hopping won't hurt your career, but throwing away a few thousand dollars of opportunity cost per month will hurt your wallet.
I've seen people get passed over because they jumped around too frequently. Hiring people is expensive and a hassle, and nobody wants to hire a person who's just going to leave in 6-12 months.
Obviously that doesn't apply if all of a person's past gigs were contracting work or "contract to hire" type things.
There's a lot of opportunity cost in staying at a job where your salary doesn't grow as fast as the market salary does.
Let's say my salary right now is 100k and that is the same as market. Next year I get a 10% raise, which makes my salary 110k. But the market has gone up 30%, which means my salary should be 130k.
Repeat that another year and my salary is 121k, but the market salary is 169k. By not switching jobs every year, I've just lost 68k in two years. Assuming the same numbers, I will have lost 154k after another year. That is more than my whole salary that I've left on the table just because I don't want to hurt my career by job hopping.
In this overblown example (neither raises nor market growth are that fast, I think) I could afford almost two years of retirement after 3 job hops.
What could you do with two years of free time?
PS: this is why companies give you a 4 year vesting cycle with an exorbitant [potential] upside. They understand this calculation and are trying to give you incentive to stay.
PPS: this is also why employers don't like it when you discuss salaries with your friends. To the point that it's become almost taboo to do so
My point was that there's a limit to how frequently that can be done. By all means, get a higher paying job when you can, but be aware employers are hesitant when they see somebody who jumps ship every few months, and it's unlikely they'll come right out and tell you that if they turn you down.
If looking at your resume sends the message, "Nothing you can do will retain me," then a lot of good companies won't even bother with you.
Maybe it's their loss, maybe it's yours, but in any case it's an opportunity missed due to jumping around a lot. Debating about it on HN isn't going to change the fact that it happens.
Anyway, I'm just saying, "it doesn't hurt your career," isn't completely accurate. To use your example, maybe it would have been 15 or 20 other recruiters contacting you if you didn't jump around so much.
if you are a true born hopper there is perfect way to do things right - self employed consultancy. it's also paid better most of the time.
and btw getting bored too quickly is terrible, terrible personality trait, for any aspect of life.
It's often not talked about directly, but established tech companies (not "acqui-hire startup flavor of the month") routinely create hundreds of new millionaires every year. It's one of those weird worst best kept secrets. People don't like to talk about their net worth when it comes from steady work. People tend to only brag when it comes to media popularized lottery/startup windfalls.
Imagine even starting at Apple ten years ago before their stock went all rocket ship. Just by taking your standard options blocks and not getting fired, you'd be extremely well off today without overly exerting yourself (if not overly exerting yourself is even possible at Apple).
Of course, it's always better to have been hired 10 years ago when you could get more stock at lower strike prices anyway.
There are employees at Google with hundred million dollar stock packages, but those obviously aren't bottom-of-the-org-chart drones.
You can either work hard for a lifetime single-company career and get there in 10-30 years, or you can try to hack your way upwards with startups and get acquired by the same company. (or, the even more daring option—create something of value as a startup and get your own team to help grow it.)
As a new grad you might see $5-10k in extra annual compensation coming from vesting RSUs (i.e. in addition to your salary and cash bonus). But RSU grants start to stack. Say your grants start vesting after 1 year at 25% per year. Year by year you might see:
Year 1: $40k/4 = $10k vest, new $10k grant (also vesting over 4 years)
Year 2: $40k/4 + $10k/4 = $12.5k vest, new $15k grant
Year 3: $40k/4 + $10k/4 + $15k/4 = $16.25k vest, new $25k grant
Year 4: $40k/4 + $10k/4 + $15k/4 + $25k/4 = $22.5k vest, new $35k grant
Year 5: $10k/4 + $15k/4 + $25k/4 + $35k/4 = $21k vest, new $40k grant
At year 5 you've seen $82.25k worth of stock vest (assuming a flat share price). Which leaves you with $82.75k left to vest.
Now you're tired of working at BigTechCo #1 and get an offer from their competitor, BigTechCo #2. You know how this works, so you tell them you've got $83k in RSUs. To make it worth your while, they offer you $160k of their own RSUs vesting on a similar schedule. You're an experienced, senior hire at this point so your RSU grants are larger, but maybe because you're a new hire who doesn't know the ropes your first couple of years at BigTechCo #2 show respectable but not explosive growth:
Year 6: $160k/4 = $40k vest, new $30k grant
Year 7: $160k/4 + $30k/4 = $47.5k vest, new $50k grant
Then you interview again and move to BigTechCo #3. Or back to BigTechCo #1. Or you tell BigTechCo #2 you're out and they give you a retention offer. Or you get a big promotion. Either way, the RSU grants add up. All the while you've been pulling in a respectable base salary, raises, and cash bonuses. And maybe, if you're lucky, your company's stock price has gone up too.
Or you realize your gross income of $200-300k in the Bay Area earns you the ability to buy property, which means you pick 2-3 of the following outcomes: [1] small and/or shitty house [2] 2-3 hour daily commute [3] overextended and house poor. So you move to the midwest and buy a palace.
RSUs, when vesting on a regular schedule, are a form of salary. When I consider how much I "make" per year, in order to compare to other offers/companies, I add my yearly wage with the RSUs that will vest in the next year at current market prices. The sum is my real wage.
Could the stock suddenly go up, meaning my RSUs are worth so much more? Yes. It could also go down. But short of my having/using better information than the market has, the going rate of the stock price is probably a good measure of what the stock will be worth in the near future.
Starting out at an agency was so incredibly valuable for me–the endless train of projects provided a massive boost to my skills and confidence. I started out self taught, basically programming for fun ever since I was a kid, never really considering myself a 'programmer'. My boss (and somewhat of a mentor) basically threw me in the deep end with client projects.
I somehow managed to actually do well on my first project, and wound up getting to tackle some of the more ambitious projects we'd land, eventually participating earlier and earlier in the planning process and having more influence in how things were done. It was such great all-around experience. Now I work at a startup (and quite a fast moving one at that), which is great, but I've realized that it would take me so much longer to get to the same level if I'd started out in a single-focus type of company rather than an agency/consultancy taking on all sorts of different projects.
EDIT: But yes, for most people and most companies, you'll need to jump ship to jump up a rung or two on the salary ladder.
Here's a prior HN discussion: https://news.ycombinator.com/item?id=85843
My `raise` has always been 20-40% by jumping.