Fixing Engineering's Loyalty and Longevity Problem
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Point two: do not underpay me. I will tolerate a fuzz around market rate, and I will adapt to market conditions. I will quit as soon as I can if you systematically undervalue me (see point one: my value will go up).
Point three: build a company designed for fifty years, to deliver use and value, and you might get people looking to stick around for fifty years.
I ask because I hear things like this all the time, and there seem to be two schools of thought: 1) intangibles matter, 2) tangibles (money) is all that matters.
If the latter is true for you (or anyone in a position to be making as much as SV engineers make, excluding those with debts like children's schooling and loans), that makes me really sad. Jumping to the opportunity that will pay more solely because they pay more seems like a shortsighted, materialistic view of life.
I'm not saying you see it that way, but there are certainly a not insignificant amount of people who view money as more important than challenges. Thats not wrong, of course, just saddening to me.
No one deserves to be underpaid. It's not an outrageous demand, in fact, he is just demanding baseline respect.
The total compensation is a somewhat viscous[1] weighted combination of tangibles and intangibles.
Barring economic disaster, there are financial levels I won't go below, in part to maintain future-valuations, as well as to just keep my financial situation in order.
[1] Buying a house, for instance, would increase my baseline need for cash. Raising a child would increase my baseline need for managing healthcare and other cash needs. A few years down the road, I will be looking for new challenges, increasing intangibles. :-)
Works on challenges (intrinsic) --> gets new skills + generates increasing value for the company
Repeat this cycle for many moons and the worker now has a significantly upgraded skillset that has and continues to produce significant value for the corp. All that is asked is that the salary grows with respect to the skill set being utilized and the value being produced for the company.
If you end up in a situation where skill sets and value are increasing substantially but compensation is stagnating, you end up in a situation where people will eventually take a look around at the market and realize other people with similar skillsets who provide similar value are getting offers at a substantially higher rate (even assume inflation increase of 3-5% for several years, that adds up). Yes, the work might be challenging and the worker might enjoy the work intrinsically but extrinsically they're now asking whether pursuit of the intrinsic challenge is worth it given the disparity in how they're valued compared to their peers.
Pay isn't necessarily about the tangibles but more about how the company values you (scorecard). If your salary gets out of line with market by a substantial amount relative to skills, experience, and value generated, that indicates the company doesn't necessarily value you as much or isn't willing to expend the capital necessary to keep their employees satisfied.
The other angle one could take with this argument is that while intangibles are nice, they cannot offset the increase in price of other things like housing, and food. Without pay raises over time, the percentage increases in basic cost of living will eat into the paycheck more and more. Induced pressure from external sources can undermine intrinsic motivation, especially if there are dependents, and increase the importance of the paycheck amount.
Wow, that said it better than I did.
It does not mean you have tenure, or any non sense like that. It means there are specific, objective causes to terminate your contract, which include but may not be limited to: gross incompetence, contempt for workplace discipline, frequent absenteeism, criminal/delinquent activity against or otherwise involving company assets, etc.
If the employer cannot or will not prove this kind of behaviors from the part of the employee, he still can terminate the contract, but there's a minimal severance mandated by law, which depends both on current monthly salary and on seniority.[1]
i.e In my country, you are supposed to get 3 months salary, plus 20 days per each full year you held the position. Some employers will still low ball you if they think they can get away with it, but they will still give you more than what you'd get after suing and paying the lawyer's commission.
As a more concrete answer to your question, professional athletes do it all the time. The elite among them get the longest-term contracts, and actively push for them. There are other jobs as well that involve guaranteed terms, many of which don't have the unique attributes (limited prime years, injury risks) associated with being an athlete. Those same athletes' coaches, for example. Actors. Corporate-to-corporate contracts often have minimum terms and guaranteed spend, too.
Why would the company offer such terms? I think the OP covered that pretty well. Turnover is expensive.
Employees generally don't get that kind of consideration - especially in established companies. Companies used to have incentives such as pensions that were a generally applicable, long-term retention incentive. However, the market decided that carrying that type of long-term obligation wasn't desirable for companies. In some ways workers benefited too by lowering of their employment switching costs and not carrying the risk that a company doesn't survive or honor those obligations.
The reality is that most people who make a living writing software in the bay area are middle-aged, married or partnered, have children and a fat mortgage, and aren't really a part of "silicon valley". They live quietly, don't go to meetups or write blogs, and they're mediocre to decent contributors at work and they know it. A large minority, perhaps even a majority, are not white; they are Indian, Pakistani, Chinese, and from almost every other national or ethnic background you could name. Many are women, despite the oft-repeated myth of sexist hiring practices. In a nutshell, they're ordinary people with ordinary concerns nothing like the HN echo chamber's perceptions of the world. And you can bet your ass they'd like a little security.
And that seems reasonable, but I'm not sure how you expect that to work, given the last bubble caused entire companies to go under, and multi-year commitments to staff might cause even more to go under, or at least through bankruptcy proceedings where they will shed those staff anyway.
I know more than a few engineers who work at larger companies who have climbed up the ladder by switching outside and back.
And no, they've not acquired magical properties in a short stint elsewhere, outside of the "working elsewhere" property.
You can't complain about missing loyalty if you enforce it as a career path.
He both expects people to be very loyal, but for people like him or Mark Suster loyalty flows upwards only. I looked through the whole article for how he rewards loyalty, but couldn't find anything. He claims he wants people who are productive day one -- " hires need to be able to do their jobs on day one", then admits that early engineers don't need (won't?) to be your future cto or coo.
So basically he's whining that it's hard to find skilled engineers who need no training and want to stay at companies for long periods of time in order to be underpaid and who don't demand promotional opportunities. Weird.
From personal experience, the thing ctos and hiring managers miss is this: if you want me to be at your company for the long term, particularly if I have options, I expect you to come through for me. That means demonstrable company growth on a regular basis. If you spend 1.5 - 2 years frittering away a B round with little to show for it besides headcount growth, I'm out. And even after the company growth requirement, and growth in value of my options, I demand raises. We all would love an ipo, but in the meantime, my landlord takes cash only, and rents go up 10%/year. Sandwiches near the office now go for $9-$10 before tax.
Don't start counting "accrued vacation days" in .01 hourly increments to get you "two weeks per year" allow flexible work hours / work from home
Allow for movement between different departments ...
Dont simply look at employees as an interchangeable unit of resource to exploit ...this street has to go two mays...
Note: By diversity I don't mean a team of 30 year old workaholic that graduated from Stanford and then worked at Google/MS for a few years that happen to have different skin colors. I mean a diversity of experience, fresh college student, a 60 year old near retiree, and someone that just spent six months backpacking in South America etc. It might seem like having a bind person on your team will slow you down, but plenty of dumb products get created because everyone has the same exact background and can't see just how tiny the market is.
PS: The world has ~7 billion people and most of them are not like you.
Taking a slightly roundabout example: AFAIK Pinterest was founded by men and the core team is the standard valley profile, however it has primarily a female userbase. In that case the user demographic doesn't match the initial team's demographic. However, one has to wonder whether Pinterest would have happened sooner if there were more women in the startup community, and whether there are other similar opportunities that address a huge need for a demographic not usually represented in the valley. Another example: pigeonly. A really cool company, an idea that springs forth from a different experience in the world.
The benefit of having a particular life experience and point of view is not something you need 24/7. You need it, if at all, at decision points.
As empiricists, though, it's worth asking if there are any real examples of companies exploiting hidden market opportunities thanks to a diversity of viewpoints. A lack of examples wouldn't be quite damning--maybe there's just not enough diversity at all to rise above the noise level--but it'd be a useful test of how valuable diversity actually can be.
This all stands apart from moral and ideological reasons to try to foster diversity, which are in my view more compelling but are understandably less effective when it comes to influencing decision makers.
But at the end of the day, what is the founder trying to achieve? His or her personal and broader definition of success might include being inclusive.
Anecdote: working in a homogenous environment can suck for minorities. Maybe starting out diverse makes it easy to stay that way?
Can you back that up?
As has been said many times before, correlation is not causation though, and other studies have shown that the more females you have, the better a team performs so maybe we dont need diversity and just need more women. I do remember reading other articles about the benefits of racial diversity as well but I'm sure you won't have trouble finding them.
But I dislike the studies that suggest diversity improves financial performance, because I find the conclusions are too politically convenient. Most of the ones I read suggest a sketchy correlation at best. Yet people talk as if it's as conclusive as global warming.
Yes, the diversity of founders can be the reason for a startup's success. There are also many examples where it wasn't needed: Apple, Microsoft, Samsung.
Our industry is seen by outsiders as an old-boys club full of young boys who viciously hate and destroy any attempt at diversifying. Unfortunately, when these sjw types score a small victory, they see it as a big victory. The rest of us see it like a quota system -- we're forced to deal with less talented people just so somebody doesn't get butthurt that there's not enough females or black people or whatever.
Another workplace had 2 female engineers, out of 8 or so. A candidate commented we had, "a lot of secretaries" and was stunned when I pointed out that 2 of the secretaries were engineering peers.
An engineering peer spent lunch speculating about whether the ceo was fucking his secretary until I stopped being subtle and flatly told him to fucking shut up.
I have more stories, but let's stop there for now. Or quietly ask female peers -- most of them will have similar stories.
Further -- like any other industry, the startup / tech world has received enormous dividends from America. From massive investments in early tech, to R&D subsidies, to R&D tax breaks, to the education of the vast majority of the employees at the companies. Demanding diversity is part of fulfilling their social compact with America, and most of the whining is the companies attempting to duck it.
Here is a simple true fact:
If your hiring pipeline isn't diverse (in a bunch of different ways, but in particular in the ways that represent "the opposite of the approach you just spelled out for building up a team"), then it may be fast and effective, but it is also brittle.
Every team loses people, no matter how carefully designed they are. Companies with huge traction and close-knit management teams where everyone likes each other lose cofounders. People leave, for all sorts of reasons.
On brittle teams, when one person leaves, a whole bunch of people follow.
You want to build a team that is resilient to one or two people leaving every once in awhile. Diversity --- not in the "Benetton ad" sense, but in a more fundamental sense --- is an extremely good mitigating strategy.
You may not care about team resiliency and longevity; "throw it out the window" to get to release and all of that. I think that's a bad plan (getting to a reasonable successful first release only to have your team implode is not a really good use of your very limited window of time to build companies in, is what I think), but that's neither here nor there.
There are evolutionary flows through the work force that don't require this (moving into leadership positions) but as they mentioned, generally hiring into the top levels comes from a tight circle of people, having gone to the same school, or some other such limitation. So if you didn't go to Stanford, what's your play?
I could understand why someone running a company wouldn't want to address this, but paying your engineers solidified salaries while company profits rise, and possibly with limited amounts of share in the company, is a good way to guarantee that they'll have to jump ship at some point, just to keep up with inflation.
The only thing to look for in a company, in my eyes, is how well they pay their employees. They can glad-hand all they want about open workspaces and ping-pong tables and catered lunches, but none of that matters. Show us the money.
You shouldn't get to be an officer unless you were first enlisted.
Salary envy is just a minor side problem of that approach. One of the bigger issue is that bad managers surround themselves with yes people, compounding any possible damage.
If programmers can get a promotion and a 20% raise by switching employers, and a 3% raise by staying, why would they stay?
I find it funny that startups would expect to attract "missionaries" when most of them lack missions of any substance.
And employees have a switching cost, if you're getting paid 5% below market, that's probably not enough to get you to jump ship by itself.
Why are these two concepts mutually exclusive? Experience, money, and mastery are just a few of the side effects of a successful career.
Some of my fondest memories are of building something alone, or with colleagues, all night because it was time-sensitive or something we were really passionate about. That does not inherently make me bad at thinking strategically, working "normal" hours, or building long-term successful projects.
They are different skill sets, but one person can be great at both. The author seems to imply that's not true, which is a common misconception, IMHO.
I wonder how the author would respond to having people, say once every few months or so, do an intense overnight hack session. I would guess he'd be fine with it, but suggest keeping a close eye out so that it doesn't become the rule.
In my experience, that's not necessarily true; some engineers just genuinely enjoy working late at night, and are often proud of the results. Otherwise, they would presumably stop working late at night.
An engineer who starts hacking away a solution and keeps at it 90+ hours a week (or whatever amount) but then because of this burns out and looses interest in 2,3 or 6 months is not as valuable as an engineer who can consistently keep working at something until the product is delivered. The engineer that is burned out probably won't be able to last X years at the company, and since the author is trying to somewhat maximize the time the employee stays the "burn-out approach" engineer is not desired.
Kind of like that other article that popped up in HN a few weeks ago that basically said "discipline over motivation", which I read as "it's better to be able to work 2-3 hours a days every day for 5 years, than being able to work 15+ hours a day for 3 weeks".
Obviously your opinion might vary as to how useful this strategy is, but I think it has a different meaning than just "an engineer that works at night".
It is absolutely not. That assertion - seemingly the crux of the article, if you take the perspective of the primary source - is total nonsense. There are definitely issues in engineering culture, and some good ones are mentioned. But the actual, and most material problem, is in the business culture - not paying employees their actual market value, consistently, and then balking at those employees when adjustments are asked for.
while working on banks that would hold true. a engineer was worth revenue per month while the system was up.
on silicon valey, the engineer is worth a lot as soon as the product is live, but then that means IPO or something and now he is worthless. Remember that most companies in the valley do not even have the concept of revenue...
And when the company does have revenue, then the issue shifts from the money to the product side. The engineer is the guy building the factories. and product can use a better or new factory because they have the talent to build it. but there is nothing they want to build, because, well, they have revenue with the old one, so why bother?
now, when you see all that, it is easy to understand why the engineer VPs on the top drive them to exhaustion. because they know in the end the short term in a engineer work life is all that matters to his financial/product peers.
IF (this company is as great as you say) && (I'll be doing interesting work) && (the culture is good) && (the pay/benefits is fair)
THEN I believe in the company and will stick around.