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Employees That Stay In Companies Longer Get Paid Less

forbes.com

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Re: Employees That Stay In Companies Longer Get Paid Less

#41

Post by Jormundir »

alain94040 wrote: post #22

This article should create a fun discussion, but be aware that it's most likely completely bogus. I suspect it suffers from survivor bias: anyone who is in a position to jump ship and get a 20% raise consistently is not average. If you try to change jobs every 2 years and are not great at your current position, you'll likely be sorely disappointed.

Based on my experience, it's more about the corporate structure of assigning promotions and raises.

Depending on the job, 2 years is plenty of time to get well acquainted with the work flow of a position. The jumping ship happens when someone is ready to move up, get more responsibility and more pay, but it isn't happening.

At my last job, after 6 months I felt like I had a firm grasp on what I was doing. After 1 year I was starting to get bored because the work was too easy -- I was good at it, and often consulted by my seniors and juniors. My company did performance reviews every 6 months, and only reviewed for promotions and raises once a year.

At one year six months, I met with my boss and told him I was ready to take on more responsibility. The response -- "Yeah, I'm really happy with your work and will make sure that's clear on your next performance review". Was I going to wait another 6 months? No. I jumped ship and got the responsibility and big pay raise elsewhere.

I don't think it has anything to do with abandoning a job you're not good at. It has to do with wanting more responsibility and pay. Ship jumpers probably feel like their job is too easy and that they are good at their current position, as is implied by your survivorship hypothesis. The good talent is the one jumping ship.

Re: Employees That Stay In Companies Longer Get Paid Less

#42

Post by stonemetal »

alain94040 wrote: post #22

This article should create a fun discussion, but be aware that it's most likely completely bogus. I suspect it suffers from survivor bias: anyone who is in a position to jump ship and get a 20% raise consistently is not average. If you try to change jobs every 2 years and are not great at your current position, you'll likely be sorely disappointed.

I disagree. Software engineering skill and software engineering job interview skills are only tangentially related. The only thing jumping ship regularly says is you jump ship regularly.

Re: Employees That Stay In Companies Longer Get Paid Less

#43

Post by vitd »

alain94040 wrote: post #22

This article should create a fun discussion, but be aware that it's most likely completely bogus. I suspect it suffers from survivor bias: anyone who is in a position to jump ship and get a 20% raise consistently is not average. If you try to change jobs every 2 years and are not great at your current position, you'll likely be sorely disappointed.

And it goes beyond that. Salary isn't the only compensation you receive. There are also benefits like 401k (often with match), stock grants/options, health care, bonuses, etc. If you just look at my salary, I've averaged a 4% raise each year for the last 5 years. But if you look at my full compensation, it's more like a 50% raise the first year, and a 4% raise each year after that. I've had offers to go to other places, but they often don't include the other forms of compensation. (Or they do, but the stock is worthless, or the health insurance isn't very good, for example.)

Re: Employees That Stay In Companies Longer Get Paid Less

#44

Post by thejdude »

Bahamut wrote: post #24

I found this absolutely true in my short stint as a software engineer so far (1 1/2 years) - I have switched jobs twice, the first switch giving a 50% raise, and the second giving an 80% raise. Companies don't seem to be interested in retaining quality talent these days (or developing it), and get used to paying a certain amount for that talent, even if he/she is worth a lot more. It is in each person's self-interest…

My experience is the absolute opposite, but maybe that's the difference between the US (or CA) market and the German one. Germany seems to pay people by seniority, not by their abilities (which, I think, sometimes causes unemployment for older developers). Maybe it's an "equality" thing - so all developers your age will make roughly the same.

Even with excellent reviews by my bosses (not to mention being a well-respected team member and the go-to guy of choice for technical questions), they wouldn't even give me a 10% pay increase. Switching jobs also didn't help (I got maybe 3% more), but at least a single company didn't get to reap all the profit from having me around.

Right now, I don't even bother anymore. All public job offers are for consulting companies, which seems to be very profitable (basically: you get paid less than the internal employees at companies that hire you, and the consulting company keeps 70% of the hourly rate they get paid; you get maybe 30%).

Sometimes there are article what nice salaries you're supposed to get, but if there aren't even jobs available?

Re: Employees That Stay In Companies Longer Get Paid Less

#45

Post by thejdude »

GreenPlastic wrote: post #38
jknightco wrote: post #31

I've been saying this for years now, so its somewhat comforting to see someone else repeat it with a bit more evidence than my personal anecdata. The main reason, in my opinion, is that corporate promotion practices have not responded to the incredible amount of intercompany competition for labor. At my current employer, the promotion process is a 3 month nightmare which requires an incredible amount of an employee's…

The thing is a lot of people value the security or aren't aware of the difference between market and their pay. Let's say this is 80% of people. If you're corporate HR, you can retain 80% of your top talent without big pay increases and promotions while knowing that you'll lose the top 20%. This may be palatable whereas it wouldn't be if you were only retaining 60%. I think Google and FB were the first to figure out…

Depending on the job market it can also be very expensive (time vs yield) to hunt for job offers. If there are hardly any offers, and if the companies all look like rather bad employers, or the job looks like it will pay probably less than you already make, then you waste lots of time on nothing. So people just stay at their jobs.

I'd really really like to have something like Stackoverflow jobs (i.e. well-described jobs), but also with information what they would pay (seriously: this should be public; hiring is a business decision, and hiding the price only wastes people's time), and with something like the company's kununu profile linked directly, so I can see how well they treat their employees.

Maybe software development is different from more traditional professions, but if you can hire a top performer for 20% higher salary, they'll probably be as productive as 5-10 average developers, so it's really worth it. Well, over here nobody in HR seems to share that opinion.

Re: Employees That Stay In Companies Longer Get Paid Less

#46

Post by overgard »

HR is really a problem here (at least in the software industry). Pay is usually based on title and how many people you manage, but I think that's pathological for managing developers because developers aren't interchangeable. You have huge variances in skills and knowledge. The thing is, development skills scale in a way most job skills can't. You can have at developer that has 10x more impact than other developers. (It's not common, but it certainly happens). But those people are definitely not making 10x more. Or even really 2x more.

I think companies really need to realize that they have to compensate their best developers to get them to stay even if they're not giving them management responsibilities, because the good ones are going to realize they're good and either job hop or freelance. Saying "we can only give you this much because your title is X and we don't have an open management position, but we really value you!" is a great way to lose your best people.

Re: Employees That Stay In Companies Longer Get Paid Less

#47

Post by GreenPlastic »

GreenPlastic wrote: post #38
jknightco wrote: post #31

I've been saying this for years now, so its somewhat comforting to see someone else repeat it with a bit more evidence than my personal anecdata. The main reason, in my opinion, is that corporate promotion practices have not responded to the incredible amount of intercompany competition for labor. At my current employer, the promotion process is a 3 month nightmare which requires an incredible amount of an employee's…

The thing is a lot of people value the security or aren't aware of the difference between market and their pay. Let's say this is 80% of people. If you're corporate HR, you can retain 80% of your top talent without big pay increases and promotions while knowing that you'll lose the top 20%. This may be palatable whereas it wouldn't be if you were only retaining 60%. I think Google and FB were the first to figure out…

I forgot to mention that every time you change, assuming you have a PTO balance, you also get that paid out as a bonus.

Re: Employees That Stay In Companies Longer Get Paid Less

#48

Post by thejdude »

lucisferre wrote: post #40
michaelfeathers wrote: post #10

For those of us in software development, an important thing to think about is what this does to code. The industry is full of old codebases tended by people who were never involved in the planning and initial design of those systems. Knowledge transfer rarely happens sufficiently to prevent accelerating maintenance headaches. I think that we really need to find different ways of developing software to deal with this…

This is interesting, because I've also seen something that is quite the opposite. A codebase where an initially a small but quite inexperienced team wrote most of the original code and while these people are in fact still around they've been promoted to management roles based on their seniority in the company. Usually they never really advanced that far as software developers and are neither really experienced techni…

The problem with technical management is often that good developers stay where they are (they are NEEDED), but bad developers are often promoted because it's convenient, and because they don't exactly cling to their technical position - they're expendable.

So you have people that were bad coders to begin with and that don't have lots of technical know-how and experience making decisions that impact the project in very bad ways (like choosing absolutely the wrong frameworks or tools that HAVE to be used).

Also, good engineering skill isn't rewarded, because - of course! - a management or team lead position has more status and salary than a technical position, because it's worth so much more to the company.

Re: Employees That Stay In Companies Longer Get Paid Less

#49

Post by philsnow »

cowbell wrote: post #29
arkitaip wrote: post #11

Earlier quoted context omitted.

Have you seen any of Daniel Pink's work on what motivates people in business? It might inspire you to focus on other incentives than just pay salary increases. http://www.youtube.com/watch?v=rrkrvAUbU9Y

>Autonomy >Mastery >Purpose That's great. Really. Then you get invited to the company holiday party at the CEO's house. Meet his six children who are in college and traveling the world. Then you realize you and hundreds of others paid for that by living in a rental townhouse. True story. There's no amount of motivation for me that will make up for a raw deal in pay.

One is not likely to get to the same place in life as that CEO by job-hopping as a software engineer.

Re: Employees That Stay In Companies Longer Get Paid Less

#50

Post by njharman »

alain94040 wrote: post #22

This article should create a fun discussion, but be aware that it's most likely completely bogus. I suspect it suffers from survivor bias: anyone who is in a position to jump ship and get a 20% raise consistently is not average. If you try to change jobs every 2 years and are not great at your current position, you'll likely be sorely disappointed.

As long as I've been in tech industry, 25yrs, the (at times only) way to get a raise was to change jobs. I've only have experience with small/mid-size companies, No "corporate"/"enterprise" type jobs. Expect dynamic is much different there.
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