Cause they can
They can do a lot of things, but they're consistently doing this. The question is why?
Ask HN: Why do companies pay new hires more than long time employees?
31–40 of 47 posts
Re: Ask HN: Why do companies pay new hires more than long time employees?
#32In my company the new hires are usually the worst payed people. We have a scheme that has a base pay and if you fullfill the requirements, additional money is added to the base pay each month. It used loyalty with the company and certifications to determine the addition to the base pay.
Lol. Loyalty! Not sure if you are serious, but in case you are: your company is very very special. The disconnect comes between what market rate is and what actual pay is. If you want to hire people you must offer competitive pay.
Larger, older companies tend to reward loyalty, often the ones that are making single digit annual growth. There's not a lot of new ground to break into, so they don't need the smartest people. They just want to keep the existing money making system from breaking, so the ones who are running it are better rewarded.
It's also because the ones with the most tenure are the ones deciding how pay works.
Re: Ask HN: Why do companies pay new hires more than long time employees?
#33If they don't, the new hire goes to another company that does. Here is another, but related question: why don't long time employees look for a better paying opportunity?
This is the answer here.
Market rate isn't what the average person is being paid. It's the amount that both parties accept.
Pay = (cost of change) + (value of work)
For new hires, the cost is high (interviews, effort) so the pay needs to be high. For long time employees, the cost of staying is negative (friends, familiar/working code, devil you know) and the cost of moving is positive, and this gap increases with tenure.
Re: Ask HN: Why do companies pay new hires more than long time employees?
#34Earlier quoted context omitted.
I really, really wish we had licensing! Licensing would help with imposter syndrome, too.
You get this with a union/guild. Example: IBEW https://www.ibew.org/ https://en.wikipedia.org/wiki/International_Brotherhood_of_E...
I've been looking at IBEW and the path of pursuing electrical as an alternative now that software development seems to have dried up entirely and need to find something less volatile. Haven't pulled the trigger yet though, because software was such a natural path originally, it's a little intimidating to go back to school and I have no idea what the trades are like. Got the time though, nearing a full year since being laid off and seems like it'll be another if I don't do something else.
It also seems naive to think I'd be capable of becoming an electrician or succeeding in trades, but might be worth a shot.
Re: Ask HN: Why do companies pay new hires more than long time employees?
#35Earlier quoted context omitted.
You get this with a union/guild. Example: IBEW https://www.ibew.org/ https://en.wikipedia.org/wiki/International_Brotherhood_of_E...
I've been looking at IBEW and the path of pursuing electrical as an alternative now that software development seems to have dried up entirely and need to find something less volatile. Haven't pulled the trigger yet though, because software was such a natural path originally, it's a little intimidating to go back to school and I have no idea what the trades are like. Got the time though, nearing a full year since bein…
It is a time commitment, but it can’t be offshored nor automated.
Re: Ask HN: Why do companies pay new hires more than long time employees?
#36Earlier quoted context omitted.
I know very well. But that new hire somehow managed to find that time, didn't they? If they are that much better than the long term folks, than the salary parity seems to be justified by that also.
It's easier to find the time if you're already laid off / between jobs, or your current position is awful for whatever reason. Otherwise, for most folks with tolerable jobs and things to keep them busy outside of work, it's tough to justify the time (especially since it often entails taking time off work).
The effort to search, even in good times, shouldn't be underestimated
The measure differs by the person, but I've legitimately been putting up with a job bad for my mental health for years. We can get accustomed to a lot
This only happened to get better for me in the last week because an opportunity landed in my lap. Had my network forgotten me, I would toil here for years until something broke permanently
Re: Ask HN: Why do companies pay new hires more than long time employees?
#37This is like saying why are potatoes more expensive than tomatoes. Well because the market decided so
That's true, but the question is why is the market doing that? What is it about the new hire that is worth more?
There is no mystery here. It is expensive to bring someone new on and train them.
There is an arbitrage too by the company that once most people are comfortable, they chose stability and the known quantity they have over the unknown opportunity they would have with changing companies.
The real question is how can someone not understand that a company is not going to pay more if they don't have to? Seems kind of obvious.
Re: Ask HN: Why do companies pay new hires more than long time employees?
#38[deleted]
Re: Ask HN: Why do companies pay new hires more than long time employees?
#39Do they?
Any evidence or data to back this up?
Anecdotally, I can say that when I was hiring devs in a large AU Corporate, this wasn’t the case :-)
Re: Ask HN: Why do companies pay new hires more than long time employees?
#40Because long time employees don’t ask for raises, or more accurately, demand them.