How Much Should You Pay Your Engineers to Ensure They Stick Around? • Hacker News Board

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#101

Post by blyry » Thu, Jun 18, 2020, 4:20 PM UTC

nurettin wrote: post #68

mywittyname wrote: post #64

I left a job which paid in the 95+ percentile of my area for one that paid right about the median wage (maybe a little less). My reason: I like to own the software I write. We had an influx of people on our team who began to rewrite sections of stuff I wrote a long time ago for no real reason. Basically, some of them didn't like promise chains and decided to rewrite every one they encountered. Things finally bubbled…

I would've changed your code from promise chains to await statements (after warning you, of course) because they just look awful. And I would then have expected you to buy me a beer for getting rid of all that ugly code.

So you would've spent company time rewriting working code to match your personal aesthetics?

Sounds like parent didn't have a reasonable structure in place to generate consensus amongst the org about stylistic preferences vs tech debt, and where developer priorities should lie.

There's some ego in both of your comments as well. Async is nicer looking that promise chains, but there risk in changing working code, no? Growing with an org means letting go of your old code but joining an org requires empathy and understanding for the old timers and their code babies as well!

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#102

Post by xigency » Thu, Jun 18, 2020, 4:20 PM UTC

vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

I got a pretty good tip from a longer working employee on this. They told me to go to HR rather than my supervisor and ask for a market salary adjustment based on my position and expertise. It actually did work for getting an intermediate raise, but still not the same as switching companies.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#103

Post by bumby » Thu, Jun 18, 2020, 4:20 PM UTC

vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

Outside of HR pay band constraints, I’ve often wondered if there’s some psychological anchoring at play [1]. No matter how many more duties you take on, your monetary value may be heavily anchored by what you were previously paid.

However, a new employer doesn’t have access to this information so they can make a more objective determination of worth without being biased by this pay anchoring aspect.

[1] https://en.m.wikipedia.org/wiki/Anchoring_(cognitive_bias)

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#104

Post by Pfhreak » Thu, Jun 18, 2020, 4:22 PM UTC

js8 wrote: post #52

zffr wrote: post #37

The article's title is pure click-bait. It would be more accurate if it were "How to Keep Your Engineers Interested in Sticking Around" Very little of the article says anything about how much to pay engineers. I only found 2 paragraphs about engineering compensation: > The most comprehensive study, though, is Daniel H. Pink’s Drive, which is summarized in this animation from the RSA. Pink suggests that money isn’t th…

Be careful though. For example, I don't really care that much about money, but I do care very strongly about fairness. So if you try to cheat me by paying me unfairly (for example, compared to coworkers), even if I would be happy with the money all things considered, I could be unhappy just because you're being unfair.

I'll even add that engineers should understand the value they bring to the company and adjust their concept of fair not just against their peers but against what the company is earning from their labor.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#105

Post by mcgrathpm11 » Thu, Jun 18, 2020, 4:22 PM UTC

I worked at Netflix for several years, where they actively practice paying ‘top of market.’

This is an oft misunderstood tactic, but in action means: 1) Yearly, employees are asked to seek evidence for their top of market compensation. 2) employees do two things as a follow up - They either interview elsewhere to get competing offers to establish ‘top of market,’ or they feel fairly paid and do nothing.

Having worked at a few large tech companies that practice the typical equity grant and vesting structure designed to maximize retention, Ive never seen a more effective tactic to completely remove the concern of ‘am I paid enough’ from the employee. As a result:

1) The really high impact people are paid extremely well, as Netflix always overbids. 2) The average performers either go elsewhere or retain without jockeying for greater comp and ownership.

The proactive seeking top of market is a good feedback loop to pay for/reward impact and to build trust with your team, and is something I still practice with my teams outside of Netflix.

This was back in 2015, so some things may have changed. Regardless, the net to the business has compounding returns. At an average company:

1) Most employees do not pay for their salary in business impact. 2) Top performers drive outsized impact relative to their compensation.

If you find a way to mitigate 1), you can pass the savings into 2), protecting and retaining your highest value employees.

While other factors do obviously matter, and comp isn’t everything - removing comp from the hierarchy of needs entirely dramatically changes the mindset towards ownership of work and outcome.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#106

Post by exdsq » Thu, Jun 18, 2020, 4:22 PM UTC

blahbhthrow3748 wrote: post #93

decafninja wrote: post #83

Earlier quoted context omitted.

Not a Netflix employee, but one of my best friends is. He got in at a mid/upper 200ks range salary, and within a single year got a double digit percentage bump. Netflix just seems to be an extreme outlier in terms of base (cash) compensation. I think the only companies that could beat it are some rare and elite financial firms (i.e. Jane Street) that are even tougher to get into than FAANG.

The Netflix philosophy is basically that the job sucks and they will drain the life out of you but they pay above market. YMMV

I read it was like a sports team and they paid for the best but wouldn’t hesitate to fire people once their performance starting slowing down.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#107

Post by SubuSS » Thu, Jun 18, 2020, 4:22 PM UTC

prepperpotts wrote: post #31

xkcd-sucks wrote: post #9

In accordance with the standard hierarchy of needs, culture flows down from compensation. When everyone's material needs and desires are well satisfied, they interact genuinely and naturally. When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth. You see this in upper management all the time; execs are friendly and…

Definitely agree with the latter part here about execs, but I feel like anxiety around compensation doesn't tie back to material needs as much as to the extent to which people measure their self-worth by compensation. Years ago, these studies were going around saying that people are happier when they make more money up to about $70k, at which point more money doesn't make you happier anymore. I'm sure that has to be…

It definitely starts there, it misses on a key aspect: 70k for how long and how assuredly? Usually once you start making that, your next goal would be

- To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.

- Then you want to account for inflation. (Add a buffer to the above)

- Then you want to ensure this is on top of your car, house, child costs. (Depending on where you like to live and your car choice, add anywhere between 200k -> 2MM)

- Then you realize this car/ house kinda bumps into the 70k limit - especially if you went for a giant house because reasons.

And so on. So yes, folks can definitely start to feel 'safe' at 70k, but that's nowhere close to the checkout point. Once you figure out a target number based on above, you will realize you need to make so much more than 70k to get to that comfort state.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#108

Post by hedora » Thu, Jun 18, 2020, 4:23 PM UTC

vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

There have been studies of Silicon Valley, and your experience is the common case.

Some of it has to do with stock based compensation. I’ve not heard of any companies that, by default, renew RSUs at a dollar value comparable to what they gave the employee as a new hire (even if they’ve promoted the person!)

Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior).

I’ve heard people call this effect the “salary cliff.” I know a manager at $bigco that has an elaborate system to push it out a few years by gaming the system. The idea is to get a few extra years out of people before they switch jobs.

I’m not sure why this is the equilibrium the system has chosen. It might be that people put a large monetary value on having a stable set of coworkers.

More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#109

Post by Loughla » Thu, Jun 18, 2020, 4:23 PM UTC

Pfhreak wrote: post #97

sgtnoodle wrote: post #85

Earlier quoted context omitted.

I imagine it has to do with avoiding resentment within the team. Folk don't share their starting compensation, but they sometimes share their raise percentage. If they give one person a big raise, they have to give others a big raise too, or suffer a morale hit. Also, from a beancounter perspective, there's no reason to pay more than needed for something. As long as folk aren't quitting, they are paying you enough. I…

Plenty of folks these days are sharing both their starting and current compensations, both internally and externally. I (personally) believe it's super healthy to do.

I agree in theory that it's super healthy to do, but the reality is that people have, what I would argue are, incorrect attitudes about who to blame.

I work in a field that posts salary publicly (higher education). It is public knowledge what we all make, with databases devoted to this.

When someone is hired at more than a current employee, instead of getting mad at the employer for their compensation plan that takes advantage of existing employees, people inevitably get upset at the new employee.

I don't know why it happens, but it has happened in 100% of the cases at my institution. Every single one.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#110

Post by modzu » Thu, Jun 18, 2020, 4:23 PM UTC

vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

this isnt an answer to your question but it just got me thinking, the opposite thing happens too: i had an engineer leave who was earning a good salary -- and i ended up being able to hire 2 new engineers each making half