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Employees who stay in companies longer than two years get paid 50% less (2014)

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Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#251

Post by JohnFen »

synthc wrote: post #241
JohnFen wrote: post #224

Earlier quoted context omitted.

> Top performers get completive raises by going to their boss with an offer letter from a competitor. In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it. Coming to me with an offer letter in an attempt to get a pay raise is a…

This is so shortshighted, it's not about 'respect', its about market value. By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

It's about treating people decently, in my view. It's not necessary to try to set up a bidding war in order to demonstrate market value. The disrespect that rankles me is the treatment of the company that made the offer, honestly.

I just choose not to play that game. It's unnecessary. If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#252

Post by kerkeslager »

oarla wrote: post #96
AlotOfReading wrote: post #76

Earlier quoted context omitted.

Perhaps this is just personal experience, but the worst jobs I've ever had also paid the worst. The places that are badly managed either don't know or can't afford market rates, so they try and hire cheap labor. Think body shops, game dev, government positions, etc. By contrast, a place that has expensive employees is going to see their time as more valuable, so there's a direct monetary incentive not to waste it and…

The worse pay is what adds on to the feeling of the job being terrible. As much as many want to claim, its not very satisfying to slog away and ship an elegant product for peanuts. When the pay is lower than what is the standard, it's always going to make the job feel terrible.

I'll add to this that low-paying companies tend to drastically overestimate the impact that other positive aspects of management can have on your life. I have friends. I don't need my employer to be my friend, I need my employer to pay me.

In recent years, I've worked for clients that didn't give me the information I needed to do my job and then were mad when the work was delayed. Every pay cycle I got paid and every night I went home and slept like a baby.

Contrast this with early in my career when I was at times struggling to make rent. My managers at that time weren't bad so much as unmemorable: what I remember is being unable to sleep because I was worried about how I was going to make ends meet.

The things employers do besides pay their employees usually just don't have the impact on workers' lives they sometimes think they do. Outside of egregious outliers like verbal, sexual, or physical abuse, there really isn't much a manager can do that's going to impact their workers as much as stable pay and benefits.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#253

Post by JohnFen »

assimpleaspossi wrote: post #133
ukoki wrote: post #54

Employers don't reward long-term employees because they don't need to. Even though everyone knows you make more by job-hopping, companies are following a rational strategy because too few people "walk the walk" despite wanting more salary. Arguably unethical, but rational. At the cost of losing a minority of job-hoppers they retain the cheap majority that: - finds job interviews exhausting, or is anxious about being…

I'm pretty convinced that, eventually for most of us, job hopping breaks down when you reach an age where you no longer fit in or lack of new skillset and you can't find a job. Then you wind up as one who stays at one place for more than two years for security--if you can find one.

I haven't noticed that, personally.

> or lack of new skillset

Job-hopping is a powerful way of ensuring that your skillset remains current. That's 80% of why I do it.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#254

Post by aleph_minus_one »

bb88 wrote: post #239
arpyzo wrote: post #105

Earlier quoted context omitted.

My observations suggest that this applies far more to lower performing employees than higher performing ones since the barrier to change jobs is lower for top tier talent. In effect this means that while companies that give paltry pay bumps that don't keep up with the market may successfully hold on to lower performing employees, they'll be continually churning through top performers.

But is this actually a problem for a company? I think most companies can only afford second rate talent with the top tier talent going to FAANG companies anyway. What most companies are really looking for is undervalued high performers. And there's probably a lot of those still that haven't moved to the bay area. I think MBA's these days have decided that they'll hold labor costs low by not rewarding high performers,…

> What most companies are really looking for is undervalued high performers.

I'm not sure about that, since very smart people often tend to be, well, "a little bit difficult to handle", in particular by bosses who got to their position by office politics instead of merits (as many do).

If companies were really looking for high performers, they'd create an environment where high performers can really flourish. Because in my observation there exist quite a lot of high performers who are "held down" by their current work environment, this would attract quite some potential high performers, including undervalued ones.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#255

Post by fishpen0 »

sashank_1509 wrote: post #169
fishpen0 wrote: post #22

Earlier quoted context omitted.

Gambling vs Guarantee. I've lost options or unvested RSU 3 times to companies suddenly rolling over, getting acquired, or doing layoffs. Of the two times I've hit it and actually had them pay out, one payed out at only 1/3 of the original valuation of the equity and one only paid out for two quarters before we were acquired. Take the pay increase vs the equity every time. Plus by changing 5 times, I diversified my eq…

RSU’s most of the time are not gambling. You’re talking about gambling in startups (or small companies ) that can get acquired, run out of funds etc. Tech layoffs, people don’t realize that after the dot com crash this might be the first time layoffs happened at big tech companies (even then Apple and NVIDIA didn’t layoff). Not taking RSU’s in these tech companies is a very bad idea financially, I like to think of it…

> You can always sell your RSU immediately to get cash.

This is not true at all. My current company is privately held and has RSUs. Over the last two years there has been a single buyback and it was at a fixed closed market price and we were limited to selling 10% of our vested RSUs. Lots of startups flipped to RSUs with no plan to go public or be bought out in the last few years.

Additionally, even if your company is stable RSUs are frought with issues like what happened two orgs ago where a blackout period started and our stock went into a 30% free fall during the blackout and never recovered. We ended up getting a tender offer, the company sold to private equity and unvested shares were clawed back

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#256

Post by bb88 »

JohnFen wrote: post #224
s1artibartfast wrote: post #127

Earlier quoted context omitted.

why not do both? thats what I see. Firms give paltry pay bumps as default, but will fight with competitive salaries to retain top performers. Top performers get completive raises by going to their boss with an offer letter from a competitor.

> Top performers get completive raises by going to their boss with an offer letter from a competitor. In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it. Coming to me with an offer letter in an attempt to get a pay raise is a…

I appreciate your honesty here. I would argue, you should appreciate your employee's honesty as well.

If you have a market based salary view of the world, and an employee says they're actually worth more than what your merit/market system is paying them (and has proof), you should probably respect that.

The fact they're coming to you first is a risk in and of itself.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#257

Post by aleph_minus_one »

synthc wrote: post #241
JohnFen wrote: post #224

Earlier quoted context omitted.

> Top performers get completive raises by going to their boss with an offer letter from a competitor. In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it. Coming to me with an offer letter in an attempt to get a pay raise is a…

This is so shortshighted, it's not about 'respect', its about market value. By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

> By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

Leaving is exactly what JohnFen actually recommended to these employees.

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#258

Post by JohnFen »

bb88 wrote: post #256
JohnFen wrote: post #224

Earlier quoted context omitted.

> Top performers get completive raises by going to their boss with an offer letter from a competitor. In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it. Coming to me with an offer letter in an attempt to get a pay raise is a…

I appreciate your honesty here. I would argue, you should appreciate your employee's honesty as well. If you have a market based salary view of the world, and an employee says they're actually worth more than what your merit/market system is paying them (and has proof), you should probably respect that. The fact they're coming to you first is a risk in and of itself.

> an employee says they're actually worth more than what your merit/market system is paying them, you should probably respect that as well.

We are in total agreement here!

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#259

Post by baobun »

ukoki wrote: post #54

Employers don't reward long-term employees because they don't need to. Even though everyone knows you make more by job-hopping, companies are following a rational strategy because too few people "walk the walk" despite wanting more salary. Arguably unethical, but rational. At the cost of losing a minority of job-hoppers they retain the cheap majority that: - finds job interviews exhausting, or is anxious about being…

You forgot this one, might be more common than you think:

    - Visa status

Re: Employees who stay in companies longer than two years get paid 50% less (2014)

#260

Post by kcb »

JohnFen wrote: post #251
synthc wrote: post #241

Earlier quoted context omitted.

This is so shortshighted, it's not about 'respect', its about market value. By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

It's about treating people decently, in my view. It's not necessary to try to set up a bidding war in order to demonstrate market value. The disrespect that rankles me is the treatment of the company that made the offer, honestly. I just choose not to play that game. It's unnecessary. If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

The balance of power is still vastly in favor of the company that made the offer. Meaning, they could rescind the offer at any time for any reason and possibly ruin the potential employees life. Whereas the reverse case of the potential employee rejecting an offer is much less likely to have a material impact on the company. For this reason I don't think the company deserves that much concern.
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