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Why Don't Tech Companies Pay Their Engineers to Stay?

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Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#61

Post by ryandrake »

dimitrios1 wrote: post #20

In my experience, the job hopping for an increase only works up to senior / lead level (or engineering manager for manager counterpart). Anything after that requires time in role having a consistent, positive impact, and building up a portfolio that you can then use to sell yourself at the company for one of the coveted principal / staff / otherwise distinguished roles.

My first job hop was for about +33%. The next one was for +15%. The next one maybe +8%. Fast forward to today, my most recent job hop was probably even, maybe +0.5% at most. You definitely plateau at some point.

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#62

Post by BirAdam »

_yb2s wrote: post #26
yieldcrv wrote: post #14

Earlier quoted context omitted.

> It was for other reasons that usually included frustrations with management. and here I am thinking this was a meme by HR myself and all my competition leave jobs due to - and for - money. if you're sticking around to stay in graces of your comfortable management you are contributing to the wage gap for your respective gender in the wrong direction.

A job with good management and a good work environment is hard to find… that is worth lower pay to a lot of people. I’m a person with tech skills in academia… myself and most of my coworkers and colleagues could make at least 2x in industry yet we’re still here because we like the job better. I have however lost a lot of colleagues.

I make “okay” pay at a non-profit, and I could make more if I left. However, I would then have more hours, more stress, and less freedom. Why do that?

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#63

Post by simonw »

BadHumans wrote: post #31
steelframe wrote: post #25

Earlier quoted context omitted.

You should try leaving a company for money sometime. Financial independence really is life-changing, and you can get there surprisingly quickly in the tech industry by putting yourself on the market more often. Anecdotally, at my current company nearly everyone I know who left did so within a few months of hitting the 4-year cliff on their signing equity. I've left 3 companies in my career primarily because the next…

I make low six figures in a low to medium cost of living area. I don't think even doubling my income would change my life too much.

Have you considered worst-case scenarios?

An injury that prevents you from working, or something like cancer in the family, could be a whole lot easier to deal with if you have a sizable nest egg.

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#64

Post by kennyloginz »

ryandrake wrote: post #56
sokoloff wrote: post #42

Earlier quoted context omitted.

Money isn’t everything, but the math behind retirement saving is compelling. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

Yep, I look at every extra dollar I could make (that I don't technically need to survive) as some number fewer minutes until I can retire. So every extra dollar is worth it, no matter how frugal my lifestyle is.

Wow. Is this really true? Do you live in a studio apt in the Midwest while working for a FAANG?

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#65

Post by BadHumans »

simonw wrote: post #63
BadHumans wrote: post #31

Earlier quoted context omitted.

I make low six figures in a low to medium cost of living area. I don't think even doubling my income would change my life too much.

Have you considered worst-case scenarios? An injury that prevents you from working, or something like cancer in the family, could be a whole lot easier to deal with if you have a sizable nest egg.

I have considered it and it is a legitimate concern to think about. I'm still fairly young and healthy and I have enough money to not work for years if it came down to it so you could call it hedging my bets but it is something that does lurk in the background as time passes.

On an unrelated note, big fan of your work :)

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#66

Post by the_jeremy »

The issue no one here seems to be talking about is that paying people according to tenure is anticompetitive for the company on both sides.

If you pay people more because they've been at your company longer (the way the follow-up post by Ethena describes[0]), you're explicitly choosing to pay them more than they can get elsewhere. You don't want to pay more than you have to for talent, so this is a hard sell to whomever manages the budget.

On the flip side, if you're attempting to pay people in proportion to their worth to you as a company, you're going to be paying less than the competition, because the competition front-loads this money. A new engineer takes a few months or more to ramp up, so if you're making an attempt to pay engineers based on their impact, you will be outcompeted by companies willing to give sign-on bonuses and extra comp to convince people to switch. That's built into the plan of the four-year cliff - you pay them a lot to start with and hope you get the savings on the other side when they don't spend the effort to switch jobs later.

Lastly, turnover isn't as much of a negative for the company as everyone seems to ascribe. Being forced to keep up with industry best practices and technologies to be able to recruit talent, to onboard new devs when someone leaves, and to retire unmaintainable legacy cruft when the creator leaves are not strictly negatives - they are risk reduction. That's not mentioning the benefit of fresh eyes and fresh ideas.

(Honestly, I think all of this discussion on both sides ascribes too much rational decision-making to what is essentially cargo-culted hiring processes. The biggest companies copy decisions from each other to the point that it's literally collusion[1], and everyone else follows suit because they are smaller and don't have the economies of scale to make researching alternatives positive expected value. People at the top setting policies don't have lines of communication to front-line managers to be able to determine whether their particular company needs extra focus on retaining developers for business continuity reasons, so to the extent that it's a conscious decision at all, it's based on industry-wide studies or company-wide turnover statistics.)

[0]: https://www.goethena.com/post/a-public-and-transparent-formu... [1]: https://www.theguardian.com/technology/2014/apr/24/apple-goo...

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#67

Post by WrongAssumption »

maxlamb wrote: post #49
sokoloff wrote: post #42

Earlier quoted context omitted.

Money isn’t everything, but the math behind retirement saving is compelling. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

Right but what if you enjoy your job and don’t want to retire?

What if you stop liking your job?

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#68

Post by dataflow »

notepad0x90 wrote: post #27
BadHumans wrote: post #9

This entire piece starts from the conclusion that engineers leave because they aren't paid enough then works backwards from there. This is wrong from my experience. Anecdotally, I have never left a job because of money. Sure, I left jobs and got ones that ended up paying more money but the reason I started looking in the first place wasn't money. It was for other reasons that usually included frustrations with manage…

HR has a saying "employees don't leave jobs, they leave managers". Pay has motivated me to look for other jobs, but only after I was already worn out and frustrated with my current job. Switching jobs isn't like getting a new car or moving to a new apartment. It's traumatic, kind of like going through a break-up. You work with the same people for years and then suddenly you will never see them again. That isn't pleas…

> HR has a saying "employees don't leave jobs, they leave managers".

I'd say they leave people. The people aren't necessarily managers.

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#69

Post by pixelatedindex »

hintymad wrote: post #21

Amazon used to have an internal Slack channel that allowed employees to share their total compensations anonymously. Thousands of people shared and the numbers were eye opening. Basically, if one was not a star and got consistently promoted every two or three years, she would not get compensated at market price. As a result, an L6 who stayed in the company for years often got lower total compensation than an L5 new h…

I can relate to this. I was hired as an L4, got a promotion after 3 years to an L5. I later found out that my L5 TC was high-mid band for new L4s.

To rub salt into the wound, I had to have “consistent” L5 level output (translates to about a year) before I could even apply for promotion and compensation only kicked in at the next review cycle. The ~13% salary bump was retroactively granted but RSUs were not, which was upsetting.

Why try to get promoted?

Re: Why Don't Tech Companies Pay Their Engineers to Stay?

#70

Post by VirusNewbie »

hintymad wrote: post #21

Amazon used to have an internal Slack channel that allowed employees to share their total compensations anonymously. Thousands of people shared and the numbers were eye opening. Basically, if one was not a star and got consistently promoted every two or three years, she would not get compensated at market price. As a result, an L6 who stayed in the company for years often got lower total compensation than an L5 new h…

This is true at Google too, because you get a large four year grant, while people who have been there are getting smaller refresher grants staggered.

I am making more this year than managers one level higher than me because of stock increases, and the way my stock vests.

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