Why don't tech companies pay their engineers to stay? • Hacker News Board

Re: Why don't tech companies pay their engineers to stay?

#11

Post by Kranar » Tue, Aug 03, 2021, 3:08 PM UTC

To chime in with my own anecdotal opinion that is likely to anger some people... in my experience most developers do their best work after about 6-8 months of starting a job at a new company, and that comes to an end after about 24-36 months of working at the same company. After that the vast majority of people just stagnate, get complacent, the job stops being interesting to them and they move on.

After observing this I don't really mind hiring people to work for 2-3 years and then have them move on to another role, and most people I hire I do so with the expectation that I'll get a good two years of work and not much more.

A very small percentage of people continue to improve over the long term, and those people I am happy to continue increasing their pay, but I don't really go out of my way to retain employees and I don't think it's particularly worth it to do so.

This blog post mentions a kind of impact based compensation structure, and while I can respect the idea behind it, I am skeptical that they've managed to find a deterministic and impartial way of measuring "impact". I don't presume to have such a system so I pay based on what I observe in the market and let the market decide what the value is of software developers. For example, I genuinely don't know if software developers have more of an impact than the product designers, or the legal department even though I pay software developers much much more. What I do know is that it's much easier for me to hire a competent lawyer or UX designer than it is to hire a competent software developer and there are many more competent lawyers and designers out there... so I pay them less, regardless of whatever objective measure of impact may exist.

Re: Why don't tech companies pay their engineers to stay?

#12

Post by ukoki » Tue, Aug 03, 2021, 3:11 PM UTC

mauving wrote: post #4

ukoki wrote: post #3

> The hard truth that many companies struggle to wrap their heads around is that they should be paying their long-tenured engineers above market rate. From an ethical point of view, maybe. From a rational point of view, maybe not. Jobs are "sticky" — it's a pain to apply for jobs, arrange interviews, deal with the possibility of getting rejected. And if you do get an offer and accept you will be leaving colleagues th…

> [...] Jobs are "sticky" [...] My experience has been the opposite, in that sticky jobs are jobs held by people who aren't in demand. There's a balancing act for employers ("brilliant but flighty" is less desirable than "good but sticky") so it's certainly possible to argue that jobs being sticky for less-than-brilliant people is a good thing... but in my experience, jobs aren't sticky because of inertia for brillia…

You might be right. As a counter-argument I can only offer my anecdata of being a contractor who has met quite a few people deep in the bowels of large enterprises who I would class as brilliant, but who are coming up on five, ten and sometimes fifteen year anniversaries. Perhaps they do have good reasons for staying, but whatever they are those reasons are they are out of reach of my make-as-much-money-as-fast-as-you-can monkey brain :)

Re: Why don't tech companies pay their engineers to stay?

#13

Post by ilrwbwrkhv » Tue, Aug 03, 2021, 3:12 PM UTC

vsareto wrote: post #7

>I’ve watched talented engineers leave companies for greener pastures after painfully short tenures. I’m even guilty of this myself — I left an amazing company after less than two years to join Ethena as VP of Engineering. Engineers can leave after months and still get jobs. You're not guilty of anything for leaving after 2 years for a VP position.

Also director and VP positions skip the leetcode.

Re: Why don't tech companies pay their engineers to stay?

#14

Post by 535188B17C93743 » Tue, Aug 03, 2021, 3:14 PM UTC

Kranar wrote: post #11

To chime in with my own anecdotal opinion that is likely to anger some people... in my experience most developers do their best work after about 6-8 months of starting a job at a new company, and that comes to an end after about 24-36 months of working at the same company. After that the vast majority of people just stagnate, get complacent, the job stops being interesting to them and they move on. After observing th…

While I think it's an organizational failure, even if folks aren't "growing" after 36 months, I definitely think there's institutional knowledge they have that helps them be more effective... the more time that elapses, the more of that institutional knowledge is lost and not documented.

Obviously it's not great to have companies hanging on by the thread of a single person's knowledge over 10 years, but I feel like at a lot of companies (especially smaller companies), this is the reality.

Re: Why don't tech companies pay their engineers to stay?

#15

Post by sparker72678 » Tue, Aug 03, 2021, 3:20 PM UTC

Management tends* to undervalue software development in general, and see software developers as generally replaceable pieces. So, why bother paying above rate when even paying at rate feels like too much for many companies?

Combine that with the fact that it takes a while for the impact of someone's loss to be truly felt (and the fact that developers who leave are often scape goated), and most managers just can't get their head around the idea that a competent software developer is worth $200K/year + benefits.

Not to mention that turnover costs are mostly hidden costs; rarely will anyone attribute a problem to a single individual leaving, and then connect that fact to "we should do a better job retaining people."

*Yes, there are great places to work where this is not the case. That's just not everywhere, even in SaaS companies.

Re: Why don't tech companies pay their engineers to stay?

#16

Post by sparker72678 » Tue, Aug 03, 2021, 3:22 PM UTC

535188B17C93743 wrote: post #14

Kranar wrote: post #11

To chime in with my own anecdotal opinion that is likely to anger some people... in my experience most developers do their best work after about 6-8 months of starting a job at a new company, and that comes to an end after about 24-36 months of working at the same company. After that the vast majority of people just stagnate, get complacent, the job stops being interesting to them and they move on. After observing th…

While I think it's an organizational failure, even if folks aren't "growing" after 36 months, I definitely think there's institutional knowledge they have that helps them be more effective... the more time that elapses, the more of that institutional knowledge is lost and not documented. Obviously it's not great to have companies hanging on by the thread of a single person's knowledge over 10 years, but I feel like a…

> but I feel like at a lot of companies (especially smaller companies), this is the reality.

Exactly.

There are many small companies that will be far more impacted be one of their 2 developers leaving than they would be by the owner being hit by a bus, but they'll still balk at raising salaries.

Re: Why don't tech companies pay their engineers to stay?

#17

Post by mensetmanusman » Tue, Aug 03, 2021, 3:22 PM UTC

The flaw with this argument is the assumption that the value add of a given skillset is approximately equivalent in different environments.

We see this for example on a larger scale in OLED tech, where a key OLED engineer in South Korea might be worth $250k to the Korean Economy but worth $2.5M to the Chinese economy, which is why poaching was halted by classifying the job as a national security interest.

The profit/employee ratio at Apple is over a million dollars, so a valuable tech employee there should be making seven figures. That kills MBA’s brains (and the traditional power structure), which is why the cartel worked behind the scenes on wage suppression.

Re: Why don't tech companies pay their engineers to stay?

#18

Post by sparker72678 » Tue, Aug 03, 2021, 3:24 PM UTC

frankbreetz wrote: post #6

heisgone wrote: post #2

You have to see this from the point of view of a middle-manager whose main concern is his own career and salary. First, it's much easier to manage junior than seniors, more so when you are not an engineer yourself. Also, it's more likely you get a better salary when managing a large team of junior than a small team of senior. Even better, you can become a manager of managers if there is a bunch of juniors to manage.…

>>Another problem is that an employee cannot earn more than his boss, and non-tech managers salaries cap at a certain point. This is only a problem in some places and is made up problem by management. Why can't someone make more then there boss, besides ego?

You're right on the facts, but this problem is still pervasive. People are gonna people, everywhere they go.

Re: Why don't tech companies pay their engineers to stay?

#19

Post by p0nce » Tue, Aug 03, 2021, 3:28 PM UTC

> they gain domain knowledge that is specific to that company, and that stuff is incredibly valuable. The wild thing is that it’s only valuable to that one company!

From the engineer point of view, this is a bad deal as the knowledge they get is precisely not transferrable to another company. So staying is a risk (these skills won't even exist elsewhere) and there is a lost opportunity for the employee. They could be at another job, learning actually transferrable skills, thus improving their standing on the market.

Solution: minimize company-specific knowledge, make it easy to grok and not company-specific. To be a bit blunt: your flavour of pile of poo codebase isn't particularly interesting so why should I learn it if compensation doesn't match the missed opportunity?

Re: Why don't tech companies pay their engineers to stay?

#20

Post by delaynomore » Tue, Aug 03, 2021, 3:29 PM UTC

heisgone wrote: post #2

You have to see this from the point of view of a middle-manager whose main concern is his own career and salary. First, it's much easier to manage junior than seniors, more so when you are not an engineer yourself. Also, it's more likely you get a better salary when managing a large team of junior than a small team of senior. Even better, you can become a manager of managers if there is a bunch of juniors to manage.…

>main concern is his own career and salary.

Wait...ICs do not care about their own career and salary? That's news to me (Sr. IC).