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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

#81

Post by freshfunk »

Having worked for a number of years in the Valley, I can say that the salary part is true. However, now that I work at a large tech company that's public, the big thing that's missing from this is stock / RSUs. After doing my taxes, I realized how much of my compensation came from them and it makes a difference in a couple percentage points for base salary look small. On top of that, companies give refresher stock so that you accrue more of it the longer you stay.

After 4 years and earned all of that initial grant, it probably will make more financial sense to move on as the refresher grants don't come close to the initial grant. It also is a point where salary disparity might be significantly different (depending on economic conditions).

Re: Employees That Stay In Companies Longer Get Paid Less

#82

Post by overgard »

wldlyinaccurate wrote: post #62
overgard wrote: post #46

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.…

> 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. This resonates with me so much. I've left a few companies after having conversations which ended with my manager saying exactly this. In most cases they have ended up hiring somebody else at a salary higher than mine. It really confuses me.…

I don't want to sound like a new age hippy here, but if you were to think of emotional capital as something you have to expend when you make hard decisions, I think managers have to expend a lot more emotional capital on decisions like this then they would like. And if they have to do that, it distracts them from other things.

So, to avoid expending that emotional capital, they create abstract rules and entities that they can point to and say "aww shucks, I wish we could give you more money, but This Other Thing won't let me" (whether that be HR, or a pay scale, or other things). It's usually phrased in a way to say that it's about promoting fairness or organizational principles or something like that, and it is to a point, but I think it's just as much about avoiding the hard work of managing.

The problem is that at a certain point, these abstract entities (HR and "the rules") gain more power than the managers themselves, and now the organization is incapable of doing what it needs to do because the structure it has put into place is more suited to protecting the status quo than it is to making hard but rational decisions.

Re: Employees That Stay In Companies Longer Get Paid Less

#83

Post by watwut »

nawitus wrote: post #64
null_ptr wrote: post #61

Earlier quoted context omitted.

Sure, you learn the most in your first 6 months by quantity but that doesn't mean you learn the most valuable things. You won't learn anything of depth in half a year.

Can you give some concrete examples of in depth learning that one can't learn in a year?

Impact of architectural and design decisions. How hard to decipher certain code parts you are so proud about today are a year later - my experience is that people used to work on small projects or who change projects a lot generate hard to maintain/understand code.

Learning non-trivial codebase often takes much more time. I worked on bigger projects and someone who worked there only six months would not be allowed to do bigger or core changes.

Then there is domain knowledge (finance, healthcare, law, etc) if you do that kind of software. Six months is enough to learn surface in anything non-trivial and everything is much more effective if developer already learned that.

Of course, last two points are not really valid for small projects world.

Re: Employees That Stay In Companies Longer Get Paid Less

#84

Post by kabouseng »

This assumes that you are guaranteed a 10% - 20% raise with every jump, but my experience is that you operate within bands, and once you reach the top of your band, higher offers are rare. If you want to get higher offers you need to have been promoted to the next job level.

As an example, if you are a junior software engineer, you can only earn more as a senior software engineer, and again as a project manager, and again as a product / line manager.

And the only way you get promoted to the next band is by staying for a set amount of time at a company to get promoted. Outright offers from a lower job level to a higher one is rare without demonstrated ability to do the job.

So yes over the short term, jumping ship often is more lucrative, but you'll hit a glass ceiling and have difficulty breaking through to the next level.

Re: Employees That Stay In Companies Longer Get Paid Less

#85

Post by magicalist »

lotharbot wrote: post #79
wldlyinaccurate wrote: post #62

Earlier quoted context omitted.

> 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. This resonates with me so much. I've left a few companies after having conversations which ended with my manager saying exactly this. In most cases they have ended up hiring somebody else at a salary higher than mine. It really confuses me.…

a couple decades back, when my dad was working for one of the big telecom companies, they invented a new job title specifically so they could promote him with the appropriate pay bump while also keeping him coding instead of managing. (They later hired/promoted others with the same title.) I thought it was a great solution. If a dinosaur like a telecom company can do it, why can't others?

Yeah, this is a fairly common compromise, and even helps in the stupid cases where you can't give person A a job title higher than person B who will be mortified if they don't have the best sounding job title, but you still need to give person A a raise and a feeling of advancement (so glad I don't work at a place like this anymore). So you give them some variation on their current job title (it's not a promotion over you, person B!) and a raise, and call it a day.

It depends on how effectively bureaucratic the bureaucracy is. If all workers have to have a job title that's already in the database, and all job titles have an assigned salary, then you're out of luck.

Re: Employees That Stay In Companies Longer Get Paid Less

#86

Post by pyre »

scotty79 wrote: post #36
the_af wrote: post #13

Earlier quoted context omitted.

I had one junior guy who had been working for some years confess to me that he hadn't learned much in all his years of working. The reason? He was always chasing better pay, which in software development almost always means changing employers, and he never stayed long enough to learn the ropes of any job. Granted, he was a junior developer, but I can see this applying to people with more "seniority" (measured in year…

You become senior developer not by advancing technically. You just request salary that's too high for junior developer on your next job hop. If they want to hire you (and some will want to) they have to hire you as developer or senior developer. Also being older helps. Once you are senior developer no one even dreams of offering you position of developer or junior developer.

I've been told that I would be in a entry-level position because I hadn't professionally worked with Python before, even though I had masses of experience in Perl, with Python being my free-time/side project language. Apparently I would be a "Senior Perl developer" but a "Entry-Level Python developer." (and this was at a start-up, not some big corp with an HR department)

Re: Employees That Stay In Companies Longer Get Paid Less

#87

Post by whileonebegin »

cpprototypes wrote: post #75

Switching jobs works well when developers are in their 20's. But I've found in the 30's that a number of factors combine to make it much less attractive: 1) Each jump becomes less and less. There's an invisible salary cap for software engineers. By the time a software engineer is in their 30's, they've jumped a few times and are already close to the maximum. 2) There are costs associated with switching jobs. There's…

This is a great explanation. It's also called "golden-handcuffs".

In your 30's, I think you need to start thinking about exit-strategy (saving enough to live financially independent), rather than hopping to yet another job.

Then, you can job hop down in salary and do something more fun.

Re: Employees That Stay In Companies Longer Get Paid Less

#88

Post by mateo411 »

GreenPlastic wrote: post #28
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.

Agree with this. One of the side effects of this is your top performers are always jumping and the people who tend to stay the longest tend to be average or below average.

This is known as the Dead Sea effect.

Re: Employees That Stay In Companies Longer Get Paid Less

#89

Post by vidarh »

Zenst wrote: post #65
overgard wrote: post #46

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.…

HR but mostly due to computing being still a young trade and with that unlike many other long estabilished trade they are far more protected and clearer qualifications/rewards. Take construction, a contract builder for example in the UK can pay a couple of hundred pound to cover there National Insurance TAX and that's it for the year, no matter what they earn. IT contractors will not only not have access to a equival…

What you say about IR35 is a bit misleading. The point of IR35 was to close a massive tax loophole where people who were in effect employees working for a single employee avoided national insurance payments by being working for their own company, and paying themselves most of their income via dividends, this avoiding NI.

This is no way affected only IT.

Some contracts ends up getting taxed higher if you run them via an intermediary company (because the company gets charged employers national insurance contributions), but this reflects the fact that the contracting company gets away without paying NI, and so a contractor can generally get away with demanding a higher hourly/daily fee even for long term contracts.

There may certainly be some people that get unfairly affected, but the situation prior to IR35 was also quite negative, in that some people could drastically cut their taxes just by spending a couple of hundred pounds setting up a company, and bill their employer and pay themselves dividends, instead of being a paid employee of the same company.

Re: Employees That Stay In Companies Longer Get Paid Less

#90

Post by scotty79 »

pyre wrote: post #86
scotty79 wrote: post #36

Earlier quoted context omitted.

You become senior developer not by advancing technically. You just request salary that's too high for junior developer on your next job hop. If they want to hire you (and some will want to) they have to hire you as developer or senior developer. Also being older helps. Once you are senior developer no one even dreams of offering you position of developer or junior developer.

I've been told that I would be in a entry-level position because I hadn't professionally worked with Python before, even though I had masses of experience in Perl, with Python being my free-time/side project language. Apparently I would be a "Senior Perl developer" but a "Entry-Level Python developer." (and this was at a start-up, not some big corp with an HR department)

Yeah. What I said works for corporations. Start-ups tend to be as creative with ranks as with everything else.
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