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Fixing Engineering's Loyalty and Longevity Problem

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Re: Fixing Engineering's Loyalty and Longevity Problem

#61

Post by pnathan »

borski wrote: post #32
pnathan wrote: post #17

Point one: if you want me to want to stick around, your company has to have challenges I want to work on over time. Point two: do not underpay me. I will tolerate a fuzz around market rate, and I will adapt to market conditions. I will quit as soon as I can if you systematically undervalue me (see point one: my value will go up). Point three: build a company designed for fifty years, to deliver use and value, and you…

Are these hard rules for you? Do certain harder (more challenging) challenges make up for lower pay? Are there culture benefits or actual benefits that can make up for lower pay? I ask because I hear things like this all the time, and there seem to be two schools of thought: 1) intangibles matter, 2) tangibles (money) is all that matters. If the latter is true for you (or anyone in a position to be making as much as…

Don't underpay me; value me at an appropriate valuation. Do challenge me; do provide me with opportunity to grow.

The total compensation is a somewhat viscous[1] weighted combination of tangibles and intangibles.

Barring economic disaster, there are financial levels I won't go below, in part to maintain future-valuations, as well as to just keep my financial situation in order.

[1] Buying a house, for instance, would increase my baseline need for cash. Raising a child would increase my baseline need for managing healthcare and other cash needs. A few years down the road, I will be looking for new challenges, increasing intangibles. :-)

Re: Fixing Engineering's Loyalty and Longevity Problem

#62

Post by floppydisk »

borski wrote: post #32
pnathan wrote: post #17

Point one: if you want me to want to stick around, your company has to have challenges I want to work on over time. Point two: do not underpay me. I will tolerate a fuzz around market rate, and I will adapt to market conditions. I will quit as soon as I can if you systematically undervalue me (see point one: my value will go up). Point three: build a company designed for fifty years, to deliver use and value, and you…

Are these hard rules for you? Do certain harder (more challenging) challenges make up for lower pay? Are there culture benefits or actual benefits that can make up for lower pay? I ask because I hear things like this all the time, and there seem to be two schools of thought: 1) intangibles matter, 2) tangibles (money) is all that matters. If the latter is true for you (or anyone in a position to be making as much as…

I think the logic train the parent is espousing goes like this.

Works on challenges (intrinsic) --> gets new skills + generates increasing value for the company

Repeat this cycle for many moons and the worker now has a significantly upgraded skillset that has and continues to produce significant value for the corp. All that is asked is that the salary grows with respect to the skill set being utilized and the value being produced for the company.

If you end up in a situation where skill sets and value are increasing substantially but compensation is stagnating, you end up in a situation where people will eventually take a look around at the market and realize other people with similar skillsets who provide similar value are getting offers at a substantially higher rate (even assume inflation increase of 3-5% for several years, that adds up). Yes, the work might be challenging and the worker might enjoy the work intrinsically but extrinsically they're now asking whether pursuit of the intrinsic challenge is worth it given the disparity in how they're valued compared to their peers.

Pay isn't necessarily about the tangibles but more about how the company values you (scorecard). If your salary gets out of line with market by a substantial amount relative to skills, experience, and value generated, that indicates the company doesn't necessarily value you as much or isn't willing to expend the capital necessary to keep their employees satisfied.

The other angle one could take with this argument is that while intangibles are nice, they cannot offset the increase in price of other things like housing, and food. Without pay raises over time, the percentage increases in basic cost of living will eat into the paycheck more and more. Induced pressure from external sources can undermine intrinsic motivation, especially if there are dependents, and increase the importance of the paycheck amount.

Re: Fixing Engineering's Loyalty and Longevity Problem

#63

Post by x0x0 »

pnathan wrote: post #17

Point one: if you want me to want to stick around, your company has to have challenges I want to work on over time. Point two: do not underpay me. I will tolerate a fuzz around market rate, and I will adapt to market conditions. I will quit as soon as I can if you systematically undervalue me (see point one: my value will go up). Point three: build a company designed for fifty years, to deliver use and value, and you…

Bajic sounds... special.

He both expects people to be very loyal, but for people like him or Mark Suster loyalty flows upwards only. I looked through the whole article for how he rewards loyalty, but couldn't find anything. He claims he wants people who are productive day one -- " hires need to be able to do their jobs on day one", then admits that early engineers don't need (won't?) to be your future cto or coo.

So basically he's whining that it's hard to find skilled engineers who need no training and want to stay at companies for long periods of time in order to be underpaid and who don't demand promotional opportunities. Weird.

From personal experience, the thing ctos and hiring managers miss is this: if you want me to be at your company for the long term, particularly if I have options, I expect you to come through for me. That means demonstrable company growth on a regular basis. If you spend 1.5 - 2 years frittering away a B round with little to show for it besides headcount growth, I'm out. And even after the company growth requirement, and growth in value of my options, I demand raises. We all would love an ipo, but in the meantime, my landlord takes cash only, and rents go up 10%/year. Sandwiches near the office now go for $9-$10 before tax.

Re: Fixing Engineering's Loyalty and Longevity Problem

#64

Post by crpatino »

tomjen3 wrote: post #41
fredkbloggs wrote: post #39

Earlier quoted context omitted.

In line with these points but more nuts and bolts: if you want people who won't leave within at least N years, give them N-year guaranteed contracts that can be terminated only for cause/good reason (these are terms with specific legal meaning). Since I will have agreed in advance to the pay rate for each year, you can't undervalue me unless I'm complicit, and you can't lay me off just because your company is doing p…

Who in the world would sign such a contract? The only employee would be one that couldn't get a better deal elsewhere and the only employer would be one you wouldn't want to work for.

These are standard contracts in many places of the world with stronger labor laws than the US.

It does not mean you have tenure, or any non sense like that. It means there are specific, objective causes to terminate your contract, which include but may not be limited to: gross incompetence, contempt for workplace discipline, frequent absenteeism, criminal/delinquent activity against or otherwise involving company assets, etc.

If the employer cannot or will not prove this kind of behaviors from the part of the employee, he still can terminate the contract, but there's a minimal severance mandated by law, which depends both on current monthly salary and on seniority.[1]

i.e In my country, you are supposed to get 3 months salary, plus 20 days per each full year you held the position. Some employers will still low ball you if they think they can get away with it, but they will still give you more than what you'd get after suing and paying the lawyer's commission.

Re: Fixing Engineering's Loyalty and Longevity Problem

#65

Post by pnathan »

floppydisk wrote: post #62
borski wrote: post #32

Earlier quoted context omitted.

Are these hard rules for you? Do certain harder (more challenging) challenges make up for lower pay? Are there culture benefits or actual benefits that can make up for lower pay? I ask because I hear things like this all the time, and there seem to be two schools of thought: 1) intangibles matter, 2) tangibles (money) is all that matters. If the latter is true for you (or anyone in a position to be making as much as…

I think the logic train the parent is espousing goes like this. Works on challenges (intrinsic) --> gets new skills + generates increasing value for the company Repeat this cycle for many moons and the worker now has a significantly upgraded skillset that has and continues to produce significant value for the corp. All that is asked is that the salary grows with respect to the skill set being utilized and the value b…

> Pay isn't necessarily about the tangibles but more about how the company values you (scorecard). If your salary gets out of line with market by a substantial amount relative to skills, experience, and value generated, that indicates the company doesn't necessarily value you as much or isn't willing to expend the capital necessary to keep their employees satisfied. The other angle one could take with this argument is that while intangibles are nice, they cannot offset the increase in price of other things like housing, and food. Without pay raises over time, the percentage increases in basic cost of living will eat into the paycheck more and more. Induced pressure from external sources can undermine intrinsic motivation, especially if there are dependents, and increase the importance of the paycheck amount.

Wow, that said it better than I did.

Re: Fixing Engineering's Loyalty and Longevity Problem

#66

Post by fredkbloggs »

tomjen3 wrote: post #41
fredkbloggs wrote: post #39

Earlier quoted context omitted.

In line with these points but more nuts and bolts: if you want people who won't leave within at least N years, give them N-year guaranteed contracts that can be terminated only for cause/good reason (these are terms with specific legal meaning). Since I will have agreed in advance to the pay rate for each year, you can't undervalue me unless I'm complicit, and you can't lay me off just because your company is doing p…

Who in the world would sign such a contract? The only employee would be one that couldn't get a better deal elsewhere and the only employer would be one you wouldn't want to work for.

If you don't understand this, put yourself in the shoes of someone who has to work for a living. Is the flexibility to change jobs at will worth a 30% chance of being out of work for 2 years when you get laid off during a bust (when no one else is hiring either)? Most people would say no. The reality, one that more people are accepting these days, is that every employer offers pretty much the same work environment and pay, whether a product of collusion or parallel evolution. Ceteris paribus, as it usually is, security is a perk.

As a more concrete answer to your question, professional athletes do it all the time. The elite among them get the longest-term contracts, and actively push for them. There are other jobs as well that involve guaranteed terms, many of which don't have the unique attributes (limited prime years, injury risks) associated with being an athlete. Those same athletes' coaches, for example. Actors. Corporate-to-corporate contracts often have minimum terms and guaranteed spend, too.

Why would the company offer such terms? I think the OP covered that pretty well. Turnover is expensive.

Re: Fixing Engineering's Loyalty and Longevity Problem

#67

Post by digikata »

tomjen3 wrote: post #41
fredkbloggs wrote: post #39

Earlier quoted context omitted.

In line with these points but more nuts and bolts: if you want people who won't leave within at least N years, give them N-year guaranteed contracts that can be terminated only for cause/good reason (these are terms with specific legal meaning). Since I will have agreed in advance to the pay rate for each year, you can't undervalue me unless I'm complicit, and you can't lay me off just because your company is doing p…

Who in the world would sign such a contract? The only employee would be one that couldn't get a better deal elsewhere and the only employer would be one you wouldn't want to work for.

CEOs sign agreements like this regularly - well, maybe structured a bit differently. The company doesn't want the CEO to leave shorter than some nominal time - so some portion of the compensation is structured to mature over time. The CEO doesn't want some uncontrollable market or political shift to put him out of work (with some reputation cost), so some compensation for early separation is negotiated.

Employees generally don't get that kind of consideration - especially in established companies. Companies used to have incentives such as pensions that were a generally applicable, long-term retention incentive. However, the market decided that carrying that type of long-term obligation wasn't desirable for companies. In some ways workers benefited too by lowering of their employment switching costs and not carrying the risk that a company doesn't survive or honor those obligations.

Re: Fixing Engineering's Loyalty and Longevity Problem

#68

Post by rifung »

golemotron wrote: post #29
rifung wrote: post #15

Earlier quoted context omitted.

I imagine the founder is trying to make a successful company. Being that diversity is correlated with financial performance, it makes sense to try to have a diverse team. On the other hand, you're right in that you can't just throw different people in a room and let them work things out.

> Being that diversity is correlated with financial performance. Can you back that up?

Sure. I imagine Google will easily give you more results but here's one: http://www.mckinsey.com/insights/organization/is_there_a_pay...

As has been said many times before, correlation is not causation though, and other studies have shown that the more females you have, the better a team performs so maybe we dont need diversity and just need more women. I do remember reading other articles about the benefits of racial diversity as well but I'm sure you won't have trouble finding them.

Re: Fixing Engineering's Loyalty and Longevity Problem

#69

Post by limeyx »

pnathan wrote: post #17

Point one: if you want me to want to stick around, your company has to have challenges I want to work on over time. Point two: do not underpay me. I will tolerate a fuzz around market rate, and I will adapt to market conditions. I will quit as soon as I can if you systematically undervalue me (see point one: my value will go up). Point three: build a company designed for fifty years, to deliver use and value, and you…

Not only that (point3?) Treat employees like you actually want them to be around for five plus years.

Don't start counting "accrued vacation days" in .01 hourly increments to get you "two weeks per year" allow flexible work hours / work from home

Allow for movement between different departments ...

Dont simply look at employees as an interchangeable unit of resource to exploit ...this street has to go two mays...

Re: Fixing Engineering's Loyalty and Longevity Problem

#70

Post by killface »

tomjen3 wrote: post #45
killface wrote: post #18

Earlier quoted context omitted.

But then you deal with the wage problem -- managers (especially ones without a tech background) are often of the "my reports make less than me" school of thought. More money = more power = more respect. So when a manager who makes $90k/yr is talking with a 30yo who wants $150k/yr, he might be insulted or put off. And let's not forget that a lot of developers probably should be in the 200-250 range. The only thing to…

Your manager should make more - because nobody should be a manager of software devs who is not a software developer himself and should be able to command more than a young engineer. You shouldn't get to be an officer unless you were first enlisted.

That would be nice, huh? I've worked for plenty of places where the dev manager was a glorified scrum master and PM
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