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

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

#211
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…

Some companies are exceptions. Netflix didn't play that game, at least not during the years when I was there. The level of increase year over year was nothing less than shocking, compared with any other company I knew.

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

#212

Earlier quoted context omitted.

But Netflix pays real money, right? FB and G heavily compensate with stock that has historically been valuable, but could always tank with a cooling ad market or strong privacy regulations.

FB and G stock grants vest monthly and employees often have them setup to sell immediately on vesting. While there is some volatility in exactly how much you get paid its much closer to Netflix than to compensation at startups and not yet IPO'd companies where you can't realize the stock options until much later.

Quarterly, with no 1 year cliff. Close enough to monthly it's not that bad thought.

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

#213

Earlier quoted context omitted.

This doesn't track, though, because this happens within the same company . It's not uncommon to struggle to get a small raise, and then have the same manager hire someone new for a much higher salary.

Leave, then. Seriously, just give two weeks and call it a day.

Not every job is about the money. Sometimes a job is worth keeping even if you know that you're leaving money on the table. That doesn't make this practice any less shitty, though.

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

#214
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…

> How come every time I switch jobs I get a 30-40% raise. I see this frequently. I have a question: how many times have you done this? Don't you hit a limit at some point fairly quickly?

Not necessarily, what's happening is 2 things:

- You're growing as a professional so you're worth more. But your current company doesn't necessarily see that, some colleagues might still see you as the intern you were when you joined

- The market of developer salary have been growing steadily for more than 10 years, but you can only capture that growth by changing jobs

So if you've been working for 10 years, you could do about 3 years at each company and have a 30% increase each time - the point is that 10 years ago you were junior with a 2010 salary but today you're senior with a 2020 salary.

Or course things could change if developers salaries stop growing (or even shrink).

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

#215

Earlier quoted context omitted.

This doesn't track, though, because this happens within the same company . It's not uncommon to struggle to get a small raise, and then have the same manager hire someone new for a much higher salary.

Leave, then. Seriously, just give two weeks and call it a day.

Yes that’s a solution to the problem but it shouldn’t be the solution.

Why should I have to give up my coworkers, my domain specific knowledge, my job just to get paid what I’m worth?

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

#216
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 would have loved to stay at my first organization.

Have you considered going back to the original place you liked eventually? I speak from experience. A bit less than a year ago I started back at somewhere I worked previously. If you left on good terms, it can be an extremely easy and low-stress transition compared to starting at a new business, and hiring can be easier too, as the company already knows for the most part whether you're a good cultural and skill fit (depending on how similar the job you're applying for is to what you did previously).

> The thing is, my current salary at my original organization isn't unheard of for that level of responsibility at all, the problem is that getting that kind of adjustment is impossible.

Sometimes it's easier to leave and come back later to reset expectations like that. Hiring salaries seem to be completely disconnected from promotion salary adjustments at some locations, or at least engender a different mindset.

I have a friend that noted at a prior place they worked (I believe it was SAP) that they encouraged, or at least maybe accepted and understood, that employees would leave to work at other places, and had programs in place to encourage them to come back with those new experiences and skills. If a company is large enough to have opening often and expects to be around in 10-20 years, it probably makes a lot of sense to have a program like that. As a company, why not take advantage of other companies paying and training your good employees for a few years (when the alternative is to just assume them lost forever)?

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

#217
post #3

Not directly a compensation component but organizations can make sure they have a technical leader supporting software organizations. Consulting with companies on productivity I can’t express how much devs not feeling like they have representation/a voice at the exec level negates comp effectiveness.

Question is, can this be faked? What we're saying is that coders are often willing to pay for "a seat at the table". But maybe management can sell them a placebo. It's not clear-cut that management ignoring coders will always turn out for the worse, even though management that always ignores coders probably has, historically. Maybe sometimes their voice matters and sometimes not.

Oh it definitely can be faked. But so many orgs don’t even attempt to show they’re faking it.

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

#218
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.

I am pretty sure they would have circled back with your supervisor(s) before handing it out to you.

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

#219
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…

While the times are definitely changing, a lot of people are still very averse to finding a new workplace. This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person. For the company this means a large amount of extra profit year in year out. The odds of you saying "Nevermind, I'm out" when the…

>This means that even at a 1% raise per year, some people will stick around for decades. One of the best developers at one of the companies I worked for was exactly that kind of person.

As someone in their 30s who has spent in-person time at about a dozen companies (a stint in consulting will do that) ranging from start-ups to large enterprise, this is exceedingly rare from what I've seen. Hardly anyone makes it to a single decade, much less multiple. Maybe at a law firm, but not in a development role.

I don't doubt these people exist but I'm a bit skeptical they are that significant in number to the point of defining the equilibrium as mentioned in the OP post.

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

#220
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…

It is the fault of FAANG/unicorn salaries. Engineers always aspire to have FAANG/Unicorn salaries, so no matter how much the companies try to increase it, if it doesn't match them, then the engineers will eventually move on. Therefore companies know that their engineers will leave anyway, so they chose not to increase the salaries.

The thing is - if the engineers leave, it's because they find a better salary elsewhere.

Since not all engineers get offers from FAANG, there must be something else.

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