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When new hires get paid more, top performers resign first

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Re: When new hires get paid more, top performers resign first

#41

Post by hinkley »

Groxx wrote: post #22

> Interestingly, even employees who aren’t actively looking for a new job may become more aware of shifting market prices when a new hire joins at a higher salary, sparking concerns that they may be being taken advantage of. Because being paid less to do more means they are being taken advantage of. That's blindingly obvious. It's just that it was thrust in their face by the new hire occurring.

It’s not obvious to narcissists or little feudal lords, though I may be repeating myself.

Give a man a little power…

Re: When new hires get paid more, top performers resign first

#42

Post by rufus_foreman »

tombert wrote: post #8

Can someone who understands economics better than me explain how the workforce can "shrink" in 2024? The number of people isn't going to dramatically decrease, are just a ton of people retiring? Or does this imply that there's going to be a reduction in the number of available jobs?

Even though 1/3 of the Baby Boomer generation are already dead, they are still a larger percentage of the population than Generation X. Generation X also has a smaller share of population than the Millenial Generation and Generation Z.

-- https://www.statista.com/statistics/296974/us-population-sha...

Re: When new hires get paid more, top performers resign first

#43

Post by akavi »

tombert wrote: post #35
cbhl wrote: post #30

Earlier quoted context omitted.

If you do not have a job and are not actively looking for work, you are not part of the "labor force". The "labor force" is defined as (working + actively looking). Also, the denominator of the unemployment rate is the size of the labor force, not the size of the working-age population. In particular if someone gives up on looking for a job because they're too discouraged, or if someone decides to become a stay-at-ho…

> In particular if someone gives up on looking for a job because they're too discouraged, I've never understood that either; do other people just not have to pay rent or buy groceries? How do you "give up looking for a job"? I understand becoming a stay at home parent, but what else would make it so you "give up" looking for paid work? This isn't a rhetorical question, I am actually asking because I feel like I'm mis…

They rely on the incomes of family members, savings, or governmental transfer payments (social security, welfare, disability, etc).

Not sure the percentages of each, but those categories probably about cover it.

Re: When new hires get paid more, top performers resign first

#45

Post by bell-cot »

dragon-hn wrote: post #37

I just had a very valuable teammate quit this week from lack of salary progression. New-ish grads are making more than him for much lesser jobs. The business refused to do even a token salary increase because of the ‘economic climate’ Now a critical project won’t happen on time, which will cost the company many magnitudes more in revenue than it would have cost them with a token increase. Oops.

But, viewed on a small-enough scale, the managers did get their way.

And "small" is usually quite descriptive of managers.

Re: When new hires get paid more, top performers resign first

#46

Post by shaneoh »

bevekspldnw wrote: post #4

Used to be a high performer at Big Tech. Found out a coworker with less experience at the same level had $200k/year more in comp. I didn’t care about the money, I care about being taken for a fool. There were additional factors, but I left and started my own company within three months and nobody in my old team has anywhere close to my experience.

More curious about your story of starting your own company on a near-whim! I've been grinding out trying to do the same over a year or so without any traction at all and I'm finding myself almost back at Square 1 without any more solid ideas.

Re: When new hires get paid more, top performers resign first

#47

Post by hinkley »

tombert wrote: post #8

Can someone who understands economics better than me explain how the workforce can "shrink" in 2024? The number of people isn't going to dramatically decrease, are just a ton of people retiring? Or does this imply that there's going to be a reduction in the number of available jobs?

The Ballard neighborhood of Seattle experienced a lot of business turnover starting about ten years ago because many of those stores don’t own their own buildings, the landlords got dollar signs in their eyes, and a lot of older business owners looked at their books, realized how much extra money they were going to have to make per square foot just to keep the lights on, and opted to “retire” instead of renewing their lease or selling the business.

“I am too old for this shit.” Seems to have been the common refrain.

You can also shrink the employee pool by having more 20-something’s living at home and fewer dual income families.

Re: When new hires get paid more, top performers resign first

#48

Post by tombert »

hallway_monitor wrote: post #32
rjbwork wrote: post #14

Earlier quoted context omitted.

In the industrialized world, the fertility rate is almost universally below replacement rate, and has been for a long time. So, as boomers are retiring, there are not as many people replacing them.

[flagged]

I live in the US, have a decent-paying job, but I don't have any kids, and I got a vasectomy so it seems unlikely that I will have any kids. If something happens by accident (e.g. the vas deferens heals), my wife and I would almost certainly keep it and we'd be parents, but I don't think that's terribly likely.

I actually do really like kids, I like my nieces and nephew, but the problem is that the value proposition for having kids is not terribly high. They're expensive, and time consuming, and honestly kind of a liability. It's especially hard for women, because pregnancy takes you out of the workforce for a long time, and women are still (however unfairly) typically the "primary caretaker" for the child. Since your 20's are generally the optimal time to grow your career, it's an extremely high opportunity cost to have a child.

I've never wanted to have my own kids. My wife and I have agreed to take care of our nieces and nephew if something happens to their parents, but I don't think I'd be a terribly good parent, and I would prefer to avoid screwing up another human.

Re: When new hires get paid more, top performers resign first

#49

Post by dragonwriter »

cbhl wrote: post #30
tombert wrote: post #8

Can someone who understands economics better than me explain how the workforce can "shrink" in 2024? The number of people isn't going to dramatically decrease, are just a ton of people retiring? Or does this imply that there's going to be a reduction in the number of available jobs?

If you do not have a job and are not actively looking for work, you are not part of the "labor force". The "labor force" is defined as (working + actively looking). Also, the denominator of the unemployment rate is the size of the labor force, not the size of the working-age population. In particular if someone gives up on looking for a job because they're too discouraged, or if someone decides to become a stay-at-ho…

Its worth noting that the “working age population” has a starting age but no ending age; once you cross 16, you are in the denominator for the labor force participation rate until you die. 106? Still in the “working age population”.

There's also a “prime age labor force participation rate” which has both a start (25) and end (54) age for the denominator population, and the prime age LFPR has been strong [0] as the full LFPR has dropped [1] because of the Boomer demographic bulge making age-related exits from the labor force.

People who like to sell unemployment as underrated by the official statistic in recent years like to point at the drop in the full LFPR and insinuate its because of prime-age population being pushed out of the labor force, when looking at the prime age LFPR reveals that that is not at all true.

[0] https://fred.stlouisfed.org/series/LNS11300060

[1] https://fred.stlouisfed.org/series/CIVPART

Re: When new hires get paid more, top performers resign first

#50

Post by onlyrealcuzzo »

theshrike79 wrote: post #31
jedberg wrote: post #9

This is one of the reasons I loved Netflix. Each year they would say "to get new people in the door with your level experience, we had to offer them $XXX. Therefore we are raising you to $XXX." Some years I got 25%+ raises. Netflix understood this like no one else.

Companies should understand when their business hangs on people, you need to keep the people happy. Hiring people off the street for more money than people with 20+ years of experience isn't a good way to keep experienced workers employed.

The problem is - historically it hasn't bitten companies badly enough that they stop doing it.

On aggregate, you can get away with massively underpaying your top talent and overpaying new hires - most of which aren't good and will go to other companies before they're even moderately productive.

I question why they're so obsessed with hiring so many new people to do basically nothing. That's the reason they have to over pay for them: The sheer amount that they're trying to hire.

Perhaps it's inevitable that you have to hire 100 people to find 5 or so people that'll be good and stick around for a while that you can underpay in the future.

I suspect there's got to be a better way.

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