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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#101

Post by paulddraper »

battlebot wrote: post #94
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

Supply has increased a lot.

Re: How much does employee turnover really cost?

#102

Post by [deleted] »

battlebot wrote: post #94
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

[deleted]

Re: How much does employee turnover really cost?

#103

Post by phaus »

beat wrote: post #85
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

Money doesn't motivate people past, oh, a half million or so a year, maybe.

Assuming you are correct, which I suspect you are, that means the group of people that aren't really motivated by money make up a tiny percentage of the work force. Therefore anyone running a business can safely disregard any idiot making the claim that money isn't a motivator, except on the rare occasions which they find themselves hiring executives that make north of $500k.

For normal people, its infuriating to hear businesses complain about turnover and a lack of loyalty when their "performance" raises amount to a cost of living increase, and their promotion raises don't bring them in line with the salaries that people getting hired at the more senior position make coming through the door. Money isn't the only reason I work, but it is one of the reasons. Its more about the principle. A company that wants loyalty should show loyalty and not attempt to nickel and dime the talent.

Tech companies are usually responsible for creating the turnover they complain about.

Re: How much does employee turnover really cost?

#104

Post by paulddraper »

jventura wrote: post #100
jcadam wrote: post #82

Earlier quoted context omitted.

My last job gave me a ~2% raise the first year and a ~1% the next. I left shortly thereafter. Should have left after the first lousy raise. The previous job gave me back-to-back 1% raises. Left that job after two years as well. Should have left at the one year mark. I've been in my current job a few months. I'll stick around till the first annual raise cycle to see how they treat me. I don't think I'll give this empl…

On my last job I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired. So after 6/7 months, I went to negotiate a raise with one of the owners and the product manager. I said explicitely that I was quite below market rate and would consider only a raise of at least 20%. The result? I was offered 2%-3%, to be discussed on the next annual review (still some months t…

> I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired

> My conclusion: never accept verbal agreements again.

Was the verbal agreement not honored? 2-3% after 6 months is not nothing.

Re: How much does employee turnover really cost?

#105

Post by paulddraper »

jventura wrote: post #100
jcadam wrote: post #82

Earlier quoted context omitted.

My last job gave me a ~2% raise the first year and a ~1% the next. I left shortly thereafter. Should have left after the first lousy raise. The previous job gave me back-to-back 1% raises. Left that job after two years as well. Should have left at the one year mark. I've been in my current job a few months. I'll stick around till the first annual raise cycle to see how they treat me. I don't think I'll give this empl…

On my last job I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired. So after 6/7 months, I went to negotiate a raise with one of the owners and the product manager. I said explicitely that I was quite below market rate and would consider only a raise of at least 20%. The result? I was offered 2%-3%, to be discussed on the next annual review (still some months t…

> I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired

> My conclusion: never accept verbal agreements again.

Was the verbal agreement not honored? 2-3% after 6 months is not nothing.

It seems your problem was accepted an offer 20% below what you should.

Re: How much does employee turnover really cost?

#106

Post by battlebot »

sputknick wrote: post #63
shanemhansen wrote: post #61

I've often been shocked at how a theoretically rational profit seeking business will happily throw millions down the drain rather than compensate an individual based on value. Ultimately I've concluded that although they may be greedy, most businesses don't make rational profit seeking decisions. They make decisions that stroke their ego, and sometimes their ego can't accept the value that certain employees bring to…

It's not about what salary that engineer deserved, but what they could command. That engineer might have done $1 million worth of work a year, and deserved a $1 million salary; but he couldn't go to another company and proclaim he was worth $1 million. He could probably go elsewhere and get a slightly above average salary, your company knew that, and that is why they paid him that.

You know what's even worse at trying to surface? When you saved your company millions of dollars! I'm not talking theoretical dollars here, I'm talking about last year X cost $Million, and this year due to my finding out some egregious mistakes and fixing them, that cost was measurably less by seven figures, and no one bothers to tell that story to the higher ups! I just wonder what these people do all day? Darn few managers I have ever worked with seemed able to even tie their shoes properly.

Meanwhile, I had to sit through an all hands meeting where some dingy broad got a 5 figure award for cooking up an Access database that some asshat manager used for like a week!

Franz Kafka could not dream this up!

Re: How much does employee turnover really cost?

#107

Post by battlebot »

Arizhel wrote: post #93
mevile wrote: post #40

Earlier quoted context omitted.

In my experience, this is not true in San Francisco. I've never worked anywhere in the bay area where engineers were thought of as easily replaceable. Everyone knows how hard it is to hire competent engineers around here. Even if people were lined up to replace a lost employee, just the interview process for hiring people is expensive as it takes multiple people out of their role to sit and interview someone for a da…

There could be a disconnect between hiring managers and HR and upper management. The hiring managers you know probably do understand the cost of replacing a lost employee and how hard it is to hire. The HR department that's actually in control of this, and of salaries, doesn't, or just doesn't care. I have a theory that a lot of the terrible mismanagement we see with modern American corporations comes directly from H…

It would help considerably if every business school in the nation wasn't following the exact same idiotic playbook.

Re: How much does employee turnover really cost?

#108

Post by battlebot »

vermontdevil wrote: post #9

Not hard to see the obvious. Look at Costco compared with Sam's Club. You can see the difference since Costco employees tend to stay longer there. https://hbr.org/2006/12/the-high-cost-of-low-wages

Costco pays $17/hr. vs. Sam's what? I don't even know. < $15/hr. Maybe $14/hr? Okay, it was in the article, $11.52!

Re: How much does employee turnover really cost?

#109

Post by briHass »

JustSomeNobody wrote: post #86
Inthenameofmine wrote: post #59

It's funny. The smart companies I know are all moving away from hiring full-time devs. They want a very small core team of highly skilled devs, all with relatively high equity, combined with tons of freelancers/consultants on a call-list. By far the biggest cost to software companies is employee turnover because the second greatest cost is employee education and training. We've measured developer productivity in mult…

> Average empployment time at any single company in the tech industry is now 18-24 months. The devs who are ok with this have no idea how bad this will bite them later when they're older and nobody wants to employ them. Hope y'all are good at saving money.

Maybe it will hurt them, but it may not as well.

Tech, for better or worse, is moving so fast that working on the same codebase for 5+ years is likely to greatly reduce your marketability for a new job. While that loyal individual may have been very valuable to his former employer, much of what he learned/specialized in is specific to that company and provides little value to someone else.

One can always blame the individual for not spending his free time staying current, but not everyone is at the life stage where they have the ability/energy to end a 10 hour day at work by coming home and spending another few hours coding.

Personally, I agree with you someone with a string of 18 month jobs would put me off as an employer. However, if you find yourself stagnating in your job, you must move on.

Re: How much does employee turnover really cost?

#110

Post by enraged_camel »

beat wrote: post #85
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

Money doesn't motivate people past, oh, a half million or so a year, maybe.

Yes it does, actually. Not because it leads to any noticeable quality of life improvement, but because at those levels it becomes a pissing contest with other high-earners. Some rich people care a LOT about making more than other rich people in their social/work circle.
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