The CTO, who was a generally amiable guy, said "No, no, I get it, America is a capitalist country, you guys don't value loyalty" (he was from another country). I have never been so thoroughly insulted by what was probably meant as an innocuous statement. He told me he had to talk to the CEO about it. They stalled and stalled and the HR guy told me I should 'worry about learning more, don't worry about your salary'. Finally I confronted the CEO about the delay. He told me he needed to run it past the board, and that I would need to go through a two month 'trial' period before they'd authorize it. Little did I know he was himself half the board.
This entire time there were posters up in our kitchen offering $40k to people who could refer 4 developers. But my piddling little raise to market was being stonewalled because they felt they could get away with it.
I am still angry with them because they essentially forced me to go looking for another job, despite my absolute devotion to the team. I almost instantly got an offer almost double.
Disrespect and exploitation are absolutely prevalent. You can ask for a raise, but you'll never have leverage until you have an outside offer.
I'm sorry for your story. I feel the same about the industry. When you're young, job hopping is pretty much the only way to get your value, and it will let you see many different places.
And when you have the outside offer and talk about it, you shatter any remaining trust your bosses have in you, so you'd better take the offer.
Does anyone have any solutions to it?
99 times out of 100 they will resent having their hand forced, and you'll be first out of the door when they get a chance.
The solution is for management to not be cheap.
I still consider that company a nice place to work for, with nice people, but the work itself was unfulfilling and the pay very poor.
Um, no, it was not innocuous--that was your misread. Invoking your loyalty in any context other than purely positive is an "out the door" flag no matter the culture.
That said, while I've worked for some really cool companies, with excellent contact with management, usually the way to get a raise was to get another job. (And usually I was ready for a change anyway; I shouldn't stay too long at the same place, no matter how much I like the people and the company.)
If they are too busy to make sure I'm not having to question my value, I would rather find another employer that may not have this issue.
Having said that, money is one of the last things that cause me to leave a job. If I enjoy what I'm doing and the people I work with, it usually doesn't matter (as much) what raises I receive.
I also recognize everyone is different. This is just my preference and what works for me.
If that kind of interaction makes you uncomfortable, I guess you probably should go find another job since you might not have a great relationship with your company.
Sometimes they are actually trying, if the problem is internal politics preventing paying staff properly, but more often they're hoping you'll either forget about it or leave instead.
That sounds like the kind of job hunt that puts you into the exact same position of frustration.
I (personally) feel that there's an implicit understanding with my employer, wherein my above and beyond efforts will result in increased compensation. If I feel like I've been clearly outperforming my compensation level and that's not recognized, I'm more likely to search for a new job than to ask for a raise, because my current employer has already failed to meet their end of the bargain.
In a well-run shop, managers have a very good idea as to who is worth what, and how much the company stands to lose if they lose good people. Staying one step ahead of this curve is a fundamental part of their jobs as a managers.
Obviously, the rules are a bit different in an early-stage start-up where the founders are doing everything at once and hoping something connects. But once an operation has hit cruising altitude, you really shouldn't have to ask for a raise if you're actually worth what your asking.
Your expectations around compensation should be based on explicit not implicit understandings. Making assumptions about how your emploeyer is going to make decisions about your compensation is not only likely to lead to disappointment, it's a poor way to maximize your salary if that's what you're interested in.
Most startups will hire (or push for hiring) a "senior person" at the "maximum rate allowed by the board". This includes a mix of stock/yearly comp.
Depending on hiring circumstances you can potentially push this. If there is a need, the will find a way to make things work out.
Once hired, from the employees perspective, it becomes a game of maintaining expectations. Unfortunately for the employee, in the case of startups (especially early), the expectations are quite high and any extra effort is tied in to the initial offer/hiring agreement.
Early stage startups are a gamble. There are often unexpected twists and turns. If you agree to X and Y at time T, three months down the line, the expectations at time U may be much greater.
As a non founding employee, your initial contract starts when you join with the expectations around the company when you joined. Carrying those same expectations along the way if the company is not growing in the same manner as you expected is a detriment to yourself.
When you realize this, it is time to re-evaluate and decide what is right for your current situation.
Does if fit your initial agreement? Then maybe you continue. If it doesn't, you need to consider renegotiating or looking elsewhere...
a) They don't value the work I am doing.
b) I am not doing work that is valuable enough to be noticed.
Both options mean it is time to look elsewhere.
And people say jumping from job to job looks bad. If it does, I sure as shit haven't seen that side of it.
Some companies are willing to keep up, because they don't want to replace employees, but for most, it's cheaper to hire someone underpaid for a year or so until they jump ship, then repeat.
Honest question: have you quantified your value to your current employer in dollar terms?
A lot of people I know say they're worth $x because that's what another company might pay them, but I can count on one hand the number of these people who actually did the math on how much revenue/profit their employer derived from their work.
The value to another company, whilst interesting to see if you're at the right place, doesn't necessarily help figure out your negotiation position if you'd prefer not to move.
I made 65,000 per year for four years. What do you think I should have made, money-wise?
At my current gig, same thing. Billions of dollars at stake, and I single-handedly design, build, deploy (one-click -- the power of scripting) and maintain systems used by over 1000 people, from executives to line workers. What is my true worth to the org? Do you think they would pay be $900,000 a year? Even at that rate, they would still make money off my work.
Start your own business and keep all the profits you earn.
This leads to why small businesses are hard: the owner has to do everything themselves, and at many things, they are bad.
At my current company, I give the car to the free valet in the garage, grab a cup of tea, walk to my desk and sit down and work, without worrying about all the infrastructure stuff.
True, but more importantly, before all of that, they made something people want to pay for and acquired enough customers to pay for that shit, and for lots of salaries too.
That's a good accomplishment, unless they're part of some government-supported cartel etc. There are plenty of those too.
The minute you enter the realm of "counter offers" you have more than just business interests at play.
Others reasons being: freedom to experiment, work culture, flexibility, and being respected as a person not just as an employee.
I had a conversation with a friend very recently about how our company handles counter offers.
"They don't believe in counter offers."
"Don't... don't believe in them? What's there to believe in?"
"That's what they say."
"That's the dumbest thing I've ever heard!"
"I dunno, it kinda makes sense to me."
"What?!"
"Well, the reasoning is if you're only there for the money, then why would they want you?"
"It's a JOB! Of course I'm there for the money. Otherwise I'd be doing it for fucking free! What if the money is the only thing keeping me from fucking leaving?!"
"Hm... yeah, that's a good point."
I don't know when or how one's passion became some sort of counterpoint to their compensation. Just because I love what I do doesn't mean I don't deserve more money. It means I'm lucky enough to be driven far beyond most, and endowed with a greater amount of ability, and thus a rare and valuable member of the team.
Oh you can't do that? Right, so money IS important then..
Yet they expect nearly every one else shouldn't have any financial expectations at all.
And yet, when I've worked there for two years and learned a lot and did some good things there, and I still haven't gotten a raise, I don't feel appreciated. And when I don't feel appreciated, I look for something else.
1) Cost of Living - This can change bc of higher rent, getting married, having a kid or a million other things
2) I'm unhappy about something else - When I have another issue with my work, it often leads to what many people have said in other comments..."I'm not paid enough for this" which can take many different forms. Addressing this is much more important than whatever financial increase you do or do not get in asking for it.
3) Envy - If you find out all your peers at similar stage companies are paid more than you, or that your coworkers are, you'll probably want a raise.
In my experience, #2 is actually the most common that leads you leave and even if you get the raise, a manager needs to make sure they treat the condition (whatever is bothering you) not just the symptom (I want more compensation for my work).
It's a silly thing, but sometimes you have to leave to get what you want, even if you shoudln't have to.
Your job security = value to you add to the company - what you are paid.
Make sure it is 0 at all times. Or have some written assurance from the employer (such as stock options) that the meager pay now will be compensated for later.
But I disagree with tn13 too - I'd try to extract X^2.
Realistically, you're going to end up with some small ROI. Let's suppose you end up with a 1.05 ROI for the company. For every dollar the company spends on you -- not just your salary and benefits, but also the cost of a desk for your butt and a manager for your ass and an HR department to cover their behinds when you start thinking too much about your coworkers' -- then they make a $1.05 back. If your company's owner has a hundred employees, he'll make five times as much as you, for doing nothing but owning it. If they employee ten thousand people, he takes home 500x your pay.
Why do you think your employer deserves more? Why should he get a 2x or 10x ROI on your labor?
For all the years he ate pasta. But that doesn't mean you don't deserve your right pay too.
For any positive value of Z, there will always be another employer willing to hire me where Job Security = Z1. Z1<Z. Thus in a good market the value will tend to zero.
You are mistaken to think that Company's profits is a the sum of value added by each of the employees. I would say company's real profit should be the additional value generated because of synergy between the teams. For example few ordinary individuals can deliver extra ordinary results as a team.
Show me with mathematics and empirical evidence that chongli is wrong. I can take it, I know an awful lot of math...
Say I'm in the market for a babysitter. If the market rate is, say, $18/hour, and I hire someone for $18/hour, I'm not abnormally benefiting from a low salary, yet I'm perfectly okay with that because I need a babysitter. The rate at which I no longer want to have a babysitter because the benefit they bring is cancelled out by their salary may be much higher than the market rate, because the market rate takes into account other potential babysitters.
In short, market rate is not the rate at which employers can no longer profitably hire, but simply an equilibrium price point that balances supply and demand. Assuming a reasonably well-run company, the price point at which they are better off not having you or anyone else in your position is much higher than your market price or worth.
If that's not the case and your production is separable from the rest of the system, that does set a floor for your market rate because you can just do that on your own and keep the money instead.
In SF/SV it is entirely possible for an employee to state "I'm not being paid what I'm worth" when, to their current employer, they are actually being paid more than what they're worth. The fact that their value varies from employer to employer is something that I think a lot of employees miss.
Employees who want the biggest bucks should go out and get them, but the idea that companies are undervaluing/underpaying their employees just because they're not paying what Company X, Y and Z pay is one of the worst delusions in SF/SV right now.
And I'm not sure what this has to do with anything - within reason and all else equal, employees should go work in environments that maximize their value.
I need to call BS. Just because your business model can't justify paying engineers two years out of college a $120,000/year salary doesn't mean that you don't have a profitable business. It's okay if your business model isn't as profitable as Google's. Heck, a lot of the companies that are paying market salaries have no meaningful revenue o even a business model. They're investor-subsidized.
"employees should go work in environments that maximize their value."
A lot of people work in "environments that maximize their value" and they're miserable. I have friends who make half of what they could make in SF/SV. You would say that their current employers aren't maximizing their value, but most of them own their own homes, live very comfortably and are home by 5-5:30. I don't know many $120,000/year+ engineers in SF/SV who can say that.
A lot of the high-paying jobs in SF/SV that are compensating employees at their highest theoretical value aren't as glamorous as the people who have caught the grass-is-greener-bug would like to believe they are. A lot of the people in these jobs trade whining about salary to whining about the hours, the lack of interesting work, their crazy/incompetent boss, the fear of funding running out, etc. etc. etc. Pick your poison wisely.
Uhm, by definition, no. If your business model requires a resource for which the market rate is higher than what your business will sustain, you do not have a profitable business. I could have a very profitable gold selling business if only I could buy gold at 50$ per ounce. Which I can't, hence it's not a profitable business.
I run a dev shop in San Jose. I hear all the time that the "market rate" is a good 40-50% higher than what I pay my engineers but I have all the engineers I need. Are they the best engineers in the world? If we're talking about pure talent no, but we're not doing anything exotic. We build modestly complex web applications for enterprise clients.
Have I lost engineers? Yes. In the past 3 years I lost 2 of my favorite employees. I was disappointed but it wasn't a surprise and I supported their decisions. They were superb engineers and I knew that they would one day go on to do great things. It wasn't just an issue of not being able to match the salary of a publicly traded tech company. These engineers were destined to work on the type of things we just don't do here. So why would I want to hold them back?
On the flip side I have one engineer right now who I know is looking to leave. He told one of our other employees that he's unhappy with the pay and thinks he can get a better job at a big tech company. Guess what? I heard about this 8 months ago and he's still here. I know he has interviewed elsewhere but you see, for every engineer who can get a $$$$ job at a tech giant or rocketship startup there are 50 engineers who THINK they can. And then they find out they can't.
There is no shortage of engineers. The big names often get 100s of applicants for every open position. But you need to be really, really good, not just at your job, but at the interview process. The interview process at some of these companies is so difficult that a lot of very good people get filtered out.
So I have no problem finding engineers at "below market" and still manage to deliver good work product to our customers at good margin. Apparently I'm doing the impossible!
ok... You may be worth more to them. You may also be working 50% more hours, and you may also be getting paid daily, and not getting benefits, social security contributions, and the like.
IT's very frustrating. Ultimately I try to screen for "Money is the most important thing in my life" during interviews, and then if I have folks like this working for me, I encourage them to chase the better dollar.
You can't stay in business chasing the best offer away for each and every employee.
When my best engineers want to move on to bigger and better things I support them. It would be nice to keep them of course but I'm honest enough with myself to know that I don't need the type of engineers that can get a job at Google.
My retention rate with my "adequate" engineers is very high. Most of the ones that I know have complained about money find out that it's one thing to see jobs that pay $$$$ and another thing to actually get those jobs.
Other times it's not as easy. Even if the low pay is because of a lack of money, if management keeps hiring cheap, and then you're surrounded by undergrads that have no sense of responsability, then the ship is clearly sinking, there will be no money in the future and your coworkers make your work less by not caring and leaving things half done. In that case, run away as fast as possible. Maybe you're not being intentionally disrespected, but any sense of respect for you, your talent and your work has faded away.
It's actually one of the red flags of a poorly run company. Product might be great, team might be great, but a company is run poorly at that point.
Compensation analysis and adjustment should be a clearly defined process, posted somewhere on internal wiki, not a one-off thing that gets initiated by an employee out of the blue.
At what demand/supply ratio for developers would you be willing to ask - 5:1? 10:1? never?
Only once in my career was I called in to my managers office and told I was getting a raise - and that was around 1991.
Manager: "We're adjusting your salary." Me: "Um, up or down?" Manager: "Up."
Also, comp isn't a "little thing" to your employee no matter how much they make - it defines your role both inside the company and outside, measuring a developers skill and throughput is an extremely hard thing to do, comp is often the only thing you can really use to define your worth.
Correct me if im mistaken but that was sort of the intent of the post, to put at least as much effort into retaining staff as you do recruiting. Or did I misunderstand it?
I see my self as pretty average but probably ahead of most the pack developer yet I still get a constant stream of recruiters "touching base". If I feel stagnant or neglected eventually one will say the right thing to get me out the door or at least start looking around for somewhere new to learn.