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 they don't budge from a 2% raise are from the employers side pretty low. The odds of a new hire saying "Nevermind, I'm out" when unwilling to budge on salary negotiation is a lot higher.

Hence it becomes easier to give some additional leeway in that situation. Also if companies already have a large workforce, giving a raise to all current employees is a whole lot more expensive than giving more money to all new hires.

Lastly, there has been plenty of research that has shown that salary is not that big of a predictor of whether people stick around or leave in any given year. Whether that research is also true for software developers is up for debate, but it is what most companies rely on.

Lastly an anecdote, I was told by a manager once that if I wanted to get a significant raise, I could quit and come back as a contractor or "Senior Developer" after 6 months. At that time I was considered a junior, and promotion to senior was only possible after 10 years experience internally.

This is one thing I've coached career-focused and executive aspiring women on.

If they are worried about being assertive and being called a "bitch" at their current organization then they are already playing at a disadvantage.

The competition is full of men that got called "cocky" and self absorbed at many organizations, before landing in one at a senior level in a different place that needed someone new to shake things up or "make the hard decisions".

I don't really see that factored in to the outcomes.

Whether this idea results in a bunch of women finding that no organization wants their assertive attitude? Time will tell. A level playing field definitely involves normalizing behavior.

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.

In the teams I've been part of, average tenure at the company was over 5 years in every single case. In one case over 15 years.

These are all development positions. Management positions and marketing positions did tend to move around a bit more often.

I’m guessing you’re a webdev and this is normal for that industry but in more “traditional” fields programmers behave much more like other white-collar workers. I’ve met plenty with 20-30 year stunts at the same company.

Regardless, the number of developers at these companies is much fewer than in tech; therefore, they cannot be setting the equilibrium referred to by OP.

Insurance companies change slowly. We still have COBOL, mainframes, etc. Applications that cost $10k/minute if they're down.

Part of the equation is job security. You eat enough shit, put up with enough mgmt BS, but you get a steady paycheck, decent benefits, and little threat of downsizing.

I’ll be on my sixth job since then starting in July.

I have another friend who graduated in 1995. A year ahead of me. He was hired as Cobol programmer. 25 years later, he’s still writing COBOL.

You can live your dream or help someone else build theirs.

How interesting that we can build a system that can fluctuate enough to upend lives both good and bad. You become so focused on it, it is seen as this brass ring. Once you have it, you question everything.

I realize this is a bit philosophical and idealistic. You appear to have a similar viewpoint as mine in terms of a society that supports the whole, I just wonder if you can do that effectively when you have a source of power so specific like money.

There are some very revolutionary thinkers/philosophers/minds that were somewhat detached from money (in that they came from such wealth they didn't have to care or they chose a life detached from it) Plato, Aristotle, Wittgenstein...many more. I'm curious if there is a connection or merely just a representation of the population.

This is something I've rolled in my head for a while but first time I've said it out loud so a lot of people are now coming to my mind now that were not wealthy.

I cannot necessarily see it going away but perhaps more of a direct representation of what it means...our time/energy.

Save consistently and retire?

To play devils advocate to my own point:

There are some jobs that between those hours of 9-5 it is a dream come true. I ran an R&D team, we could buy any technology, kick off any project, success wasn't "Making a unicorn" but merely understanding something and providing guidance/insight to our executives.

It went well for several years...the party ended after leadership changed and they had new opinions on what R&D meant.

It was my dream and theirs for a period of time...then it was no longer my dream, just theirs.

I left to find my dream....I now make 5x as much doing something I love.

It went well for several years...the party ended after leadership changed and they had new opinions on what R&D meant. It was my dream and theirs for a period of time...then it was no longer my dream, just theirs.

And when that happens, I email recruiters and get another job usually paying more within a few weeks. The shortest time from looking for a job to having an offer is 4 days. The longest is about 7 weeks. But I only applied for one job. The process just takes a while for $BigTech.

Which brings up an even better example. The company I work for announced an across the board pay cut because our customers were losing money because of Covid. The company is having to cut prices, come up with payment arrangements, get money from the government, etc. I bet the owners aren’t sleeping well at night.

The next day after they announced the pay cut, a recruiter from $BigTech reached out to me about a remote role. I applied for the job, got it, with a 50% pay bump and I still sleep well.

I left to find my dream....I now make 5x as much doing something I love.

Survivorship bias. Statistically how will most software developers make more money over a lifetime - starting their own company or in the immortal words of r/cscareerquestions, “learn leetCode and work for a FAANG”?[1] Or depending on where you are living, just bring your run of the mill “Enterprise Developer” in any major city in the US that’s not on the west coast.

[1] Not that I went down that road to “work for a FAANG”. I took another route that pays as well to get into $BigTech.

I got into generating passive income. I am now in a position where I can maintain a lifestyle I enjoy and homeschool my small children.

I could pay for the best schools and keep track but I love education...I love passing that on. If I built a company it would be around that. I would not like the money struggles that you talk about so I would probably aim for something non/not for profit assuming it would lessen that burden.

I don't know that I care so much about money but before when I struggled, it was my singular focus.

It may seem like a silly question but if you had all the money in the world would you show up to work? If the answer is yes I hope you have that job for a lifetime, if the answer is no I hope you have all the money you need for a lifetime.

Edit: As a side note...perhaps because of the R&D nature of my previous role I had an advantage in the low barrier to entry of this. I saw a lot of acquisitions. Companies that were startups, bought, cannibalized, and then repurposed as a product. Sometimes these products internally thought up by us or other LoB's. They were all rough, prototypical in nature... Realizing that millions was "exploratory money" whether internally developed or purchased to have a product that looks and feels like something became a realization that you can profit on ideas...not full blown products bulletproof and cemented into history.

There are many that are not in it to make a legacy, just to get the thing airborne and sell.

The first time I saw a group spin up ten webpages of fake products to market test a brainstorming session was a lightbulb on what is happening under the surface in many areas.

As it is now, why wouldn’t I enjoy my job? I get to work remotely in a relatively low cost of living area making $BigTech money.

Will I be where I am for the rest of my life? Statistically, probably not. I can’t see that far ahead for a change. But 3 of the 5 biggest technology companies offer similar roles and if the local economy ever recovers there will be local companies.

A smaller number of people are actively willing to take the personal cost and move around, and in a near saturated market those people end up defining the price of new labor. But paying everyone that rate would be irrational because the cost (to the business) of them moving, hiring and integrating their replacement and the opportunity costs loss, is less than what it would cost to pay everybody that rate.

Having another firm offer that you are absolutely willing to take is also the best way to get a raise where you already work, so there is also an intermediate option to handle some of the pressure of willing-to-movers without giving everybody a raise.

Some of it has to do with stock based compensation. I’ve not heard of any companies that, by default, renew RSUs at a dollar value comparable to what they gave the employee as a new hire (even if they’ve promoted the person!)

Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior).

I’ve heard people call this effect the “salary cliff.” I know a manager at $bigco that has an elaborate system to push it out a few years by gaming the system. The idea is to get a few extra years out of people before they switch jobs.

I’m not sure why this is the equilibrium the system has chosen. It might be that people put a large monetary value on having a stable set of coworkers.

More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management.

Questioning these things when offered is probably the best way to get the employer to change them, or at a minimum it may make it clear what your future prospects at the company are.

Regardless of what it's called though, the question remains. Why does your value to other companies increase faster than your value to your own company? Presumably you're learning more about your company's business and your specific domain problems, which should make you more valuable to your company than it would to others. Is that assumption not valid?

I think there's a lot that goes into this, which also shows how complex the topic is.

- There's your actual value and your perceived value

- When you're there and filling a niche, there may not really be a lack for a specific skill set which (might exist if you left) which there might be at the other company.

- Companies aren't always good and managing their desire to pay the least amount possible to retain an employee (natural, to keep costs down) with the employees willingness to leave, if they even have any inkling of the latter.

- An employees willingness to leave can have many inputs, some of them nothing to do with work, so it's hard to judge (e.g. lack of ability to work from home some days can go from a small annoyance to a reason to look for alternate employment depending on what else is going on in their life).

etc.

As to whether your skill should always be increased to the company you're at, I think that's generally true, but may not be in the specific instance. People get complacent, and sometimes the work environment can cause a excellent employee to perform in a mediocre manner, and vice versa.

> Even if they did, that would be less than what that employee is paid when the initial grant expired, or what they could make by moving jobs (since they’re now 4-5 years more senior). If employee became more senior that would mean they got promotions (base salary increase in double digits, bonus increases) and their annual refreshers are much bigger now (they almost double between levels [1]). If they did not get promotion over past 4-5 years (that's only possible for senior roles, grad and junior levels need to get promotion in certain time frame otherwise they are out) there's quite low probability they would get hired to more senior role at other FAANG (though they might be offered big initial RSU offer)

> More cynically, it might be political. If only a few cherry picked employees stay, and all the other organizational memory walks out the door every 4-5 years, then all the organizational power eventually accumulates in middle management. Same salary rules apply to management, so they could also walk out if they hit salary cliff. However if you are manager/director/VP you will be higher level and your annual refresher might be high enough to keep you there.

[1] https://www.quora.com/What-is-the-range-of-the-RSU-stock-ref...

However, a new employer doesn’t have access to this information so they can make a more objective determination of worth without being biased by this pay anchoring aspect.

[1] https://en.m.wikipedia.org/wiki/Anchoring_(cognitive_bias)

Netflix seems to be a rare example of a company that is proactive enough with pay raises to counter this (any Netflix folks here that can confirm/refute?). Not sure why more companies don't do that, at least when they're well capitalized.

They even encourage engineers to interview elsewhere and see what the offer is if they feel they are miscalibrated, and they will adjust appropriately.

Finally, a question they encourage engineers to ask their managers is: "if I had a job offer elsewhere, would you fight to keep me?" It's a scary question to ask, but a great way of getting feedback.

Source - worked there for 3 years.

Netflix just seems to be an extreme outlier in terms of base (cash) compensation. I think the only companies that could beat it are some rare and elite financial firms (i.e. Jane Street) that are even tougher to get into than FAANG.

Granted their culture sounds very demanding with the whole "pro sports team" mentality, but I can see that being a positive thing too. I wish my team/company was more like that.

That said, it seems it might be different for each team/department, as my friend claims there's still people there who are not very good but still around for a long time.

The WSJ had a piece in 2018 which sparked a bunch of follow-on coverage:

"Mr. Hastings’ ring of top executives take the keeper test seriously. At a meeting in late spring of Netflix public-relations executives, one said every day he comes to work he fears he is going to get fired. Karen Barragan, the vice president of publicity for original series, asked how many other people felt that way. A number of hands went up. “Good, because fear drives you,” Ms. Barragan said, according to people familiar with the meeting."

https://www.wsj.com/articles/at-netflix-radical-transparency...

Other coverage from 2018:

https://qz.com/work/1439451/the-seven-ways-netflix-culture-s...

https://variety.com/2018/digital/news/netflix-culture-of-fea...

https://theweek.com/articles/805123/netflixs-culture-fear

Older coverage:

https://www.businessinsider.com/netflix-culture-of-fear-2010...

You could splurge it, but you could also manage it well and potentially retire early? My friend seems to be on this path.

You could use your time at a FAANG to get experience, accumulate money, and have the FAANG brand on your resume to leverage for future job prospects?

Also from everything I hear, working as a SWE at FAANG and other top tech companies are still more pleasant to work at than as a SWE in other industries - i.e. finance.

What a fake. Fear of what? That some rich asshole doesn't like you?

If you get a Netflix job, you can trade down to a ton of other companies with better life balances.

GOOG vests monthly, but if you're going to receive less than 1 share that month, then I guess they might round that down to 0 and effectively vest less frequently.

Year 1: At Netflix you get 400k in cash, you buy 200k of FB stock, so you have 200k cash, 200k worth of FB stock At FB you get 200k of cash and 200K worth of stock

Year 2 - FB stock goes up by 10% so 200k of FB stock from last year is now worth 220k: At Netflix you got another 400k in cash and you will buy another 200k worth of FB stock. So now you have 400k of cash and 420k worth of FB stock At FB you get 200k of cash and 220k of FB stock, so now you have 400k of cash and 440k of FB stock.

Also RSUs vests quarterly so you can (and should) sell it and invest in other things to diversify.

There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world.

The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employees yearly, associate this to overhead, and report back to shareholders. This trickles down to managers as "room to work with their employees." If someone gets rewarded, this means someone else is getting punished. Need an exception....take it to the top.

Now you have a system of incentives and disincentive...want to get more for your people, take from others or take on more work.

You now have potential for lost information at your inability to display value (doing work quietly and not advocating for yourself), your manager (overloaded/ignorant of effort), the process (outdated or accounting for a percentage of unhappiness), and arguably the stock market....

You can get very analytical with game theory here which I think can be very interesting. If you find that interesting you may find Thalers "Guessing Game" and Keynes "Beauty Contest" interesting as well.

My opinion has been the more layers, the more places to lose information. These companies are accounting for external factors/information on the hiring front, once you are inside, it is internal factors/information.

Makes me think of the Einstein quote: "Pure mathematics is, in its way, the poetry of logical ideas."

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)?

Here's something that doesn't get mentioned a lot on HN: That "every time" will eventually come to an end. It will eventually plateau unless you change careers (become a manager or exec or something). I'm a little more than 20 years into my career. My first job change as a fresh grad + 2 years got me about a +50% raise! My next one was about +30%. Every job change I've had since has been less than +10%, and my last job change was pretty much flat +0.5% MAYBE.

This idea that job changes are always/necessarily huge salary increases is largely an artifact of the age demographic here on HN.

EDIT: To put it another way, let's say my first salary as a software engineer in 1998 was $45K (it was!). If I changed jobs every two years and consistently got a +30% raise each time, I'd be making over $800K now, which would put me in what, the top 0.001% of software engineer salaries?

The weird thing about paying at the 50% line is that it means that your policy is, in effect, "we do not want any above average programmers."

Honestly being given anything under 2.5% is just insulting. Pay freeze or COL adjustment in line with inflation is for a few years in bad recessions imo, like 2009-10 or, probably the upcoming 12-18 months.

Being given 3% is in the neighborhood of "better than nothing", but nowhere near what it should be for an employee trying to get ahead and putting in the required effort.

The lucky team member gets a 5% raise, everyone else is usually ranked as "Meets standards" which merits a 2.5% raise. A few people who need time in the penalty box get a 1% raise.

So what happens is your actual performance doesn't matter unless you make the boss look great, or look terrible. He's a non-tech person, so he can't effectively evaluate you on any other criteria.

This leads to employees doing enough work to avoid being fired, or (as is usual with Stack Ranking) sabotaging other workers.

But then you’d have to run the interview gauntlet again, and frankly that’s just so distasteful that I don’t want to.

1. Your internal leveling scheme for SDEs needs to have been sorted out. External titles like "senior" are pretty meaningless, so one reasonable solution is mapping SDEs to an internal numerical tier so you can differentiate between "senior" and actual "senior".

2. Radford data comes with a trillion job titles. You need to identify the relevant ones and how your internal tiers map to them.

3. In markets where compensation is exploding (Seattle a few years ago), compensation data is a trailing indicator of what market rates you need to pay for new hires. You get fresher, but noisier, signals from candidates who reject your offers and from your personal network.

As a manager, one way to get yourself some wiggle room in the situation you mentioned is using that strict policy against them. Request as detailed a list of roles and compensation bands as possible[2], then creatively interpret the job duties such that you can justify opening the requisition with whatever role provides the most favorable "70th percentile" salary band to attract the talent you want to bring in.

Success varies between companies, but it's not uncommon for larger companies to have latent roles/titles set up in the system that are rarely used, but exist in the benchmark data and have far more favorable salary bands than the roles you'd typically use for your reqs. Or if you can get the full benchmark data itself, you can look through it all and try to get HR to add a net new one to the system based on what you find.

[1] https://radford.aon.com/surveys

[2] https://apps.adp.com/en-US/apps/79131/benchmarking-powered-b...

They will deviate if the field is hot enough and it translates to money for them. They were paying FAANG money to AI/Data Science fresh out of college.

The McKinseys/Gartners/etc of the world talk about the coming advantage...exec hears it and they become more open to these "critical sectors"

I think if software engineers ever decide to collectively bargain, and they want to include comp as an area to bargain on, the easiest thing to do is buy these same datasets and share with members.

This leads to the same phenomenon where you need to work for 2 years to get promoted but if you jump ship your new manager will set your level in line with your salary expectations. And of course the levels are largely meaningless outside of compensation and office politics.

At my original company I was performing Senior-level work (like, literally according to the staff level formalism from HR). But I was told by my manager that to be classified as a Senior-level staff, you have to have been performing Senior-staff level work for at least a year. Therefore being promoted within the organization is a long process. Moreover, with the usual 1-3% raise, you're still in the (low-end) of the pay band for Senior staff, so from management's point of view there's no real problem.

.. and then of course, if you're hired in, you just have a few phone calls, couple of interviews, discussion with the hiring manager and you're at a pay-level and job-level far ahead of existing employees even with identical experience.

Your new company will offer you a level (and compensation) based on your expected performance in future cycles.

If you're on a growth trajectory, jumping jobs will usually give you a bump because your new company treats you differently than your current company. And it doesn't matter much whether you're coming from company A to B, or from B to A!

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

What I think is a more interesting question is why is there such wide discrepancies between companies regarding a specific employee’s worth?

The reason most companies don't pay FAANG salaries is largely some combination of: 1) they don't have the money; 2) they objectively get less value from those skills; 3) they subjectively don't put as much weight on the skill set (think "sticker shock"); 4) they low-balled their first few engineers and nobody asked for more. I'd bet that last one is more common than you'd expect, especially with junior devs who don't know how much they could be making elsewhere.

I can see how other positions like sales can be more quantitatively measured in terms of contribution but my hunch is that many positions fall into this area of nebulous value estimation.

Or perhaps is more pronounced in software because of the amount of margins these companies work with

There is also the issue that the value of two different knowledge workers, even at the same company, may be wildly different depending on their specific skills and the project they are working on. For instance, someone working on product features at a software company is much more valuable than someone maintaining an internal reporting tool, even at the same company and even if their skills and the type of work are nearly identical.

The point is, there are a ton of variables at play here, most of which can't really be measured, so everyone plays a guessing game to determine what engineers are "worth". The asymmetry of information also doesn't help, because it's hard to know how much you could make if you don't know what anyone else is offering—many people take salaries well below their potential and don't even realize it.

More roles will hopefully become remote.

It doesn’t matter if I am providing 40% more value if I can jump ship and get a job that pays 40% more.

It’s more that I’ve been providing 200% value for 40% of the cost for a while, so they have plenty of space to raise my salary significantly without losing any money.

But you interview with another company and you reinvent yourself. They have a problem to solve and you have experience in it. You interview well, now you are a principal engineer with a big raise.

Raises and bonuses are based on how much can keep the engineer motivated and prevent them from looking for new work (I don't want to sound too cynical here, I think when it comes to measuring how much someone deserves in a raise/bonus is essentially how much it takes to keep the engineer providing this level of work, more or less) (based on management's assessment, and often constrained by general salary policies).

That's how I approach these discussions in broad terms, although keeping an engineer motivated and preventing them from looking for new work are not simple things to analyze

plus, margin contribution is basically impossible to determine on an individual level, and wages therefore devolve into fundamentally political arguments (as in, expressions of power and influence).

you're expecting a (more) rational market response, when the labor market is anything but fair, free, and transparent, and coerced into that form over centuries by those in power.

It’s also strange to me that companies aren’t willing to give a nice raise to an engineer, say from 150k to 180k but are completely fine with hiring a replacement at 180k.

This is literally the story of my professional life.

Maybe there is some math done somewhere that says the money saved from underpaying from reduced raises is more beneficial than the risk of losing an engineer that's already familiar only to be replaced by a more expensive engineer that's new.

I've gotten 20-30% raises before but I'm not going to go around and tell people that at my current job.

However, if I find a new job and get a big pay bump, I'd be more likely to mention the pay bump (especially if I'm trying to soft-poach them :-) )

Imagine a bell curve, the system is designed to try and keep everyone in the same role towards the middle of the bell curve. When you get hired, you just have to fit within the bell curve, not near the center. Changing companies lets you reset to somewhere else under the curve, though you may get smaller YoY raises.

If we had a tech workers guild, we could push for much more transparency in all this.

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 OP, but I did some job-hopping right after college in the late 90's. That was a glorious damned time to be a programmer: I doubled my salary twice in four years, changing jobs four times between 1995 and 1999. Then, around early 2000, I decided it was time to do it again (I was young and inexperienced, and it never occurred to me that anybody would have a problem with me job hopping). All of a sudden, I found it really hard to find a new position. Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year. I did finally find something, and started staying at jobs for much longer periods of time (four years is my shortest stint since), but when my last company shut down suddenly and I found myself looking again, the four-jobs-in-four-years from 20 years ago came up as a negative in the interview process again.

Things were still hot but there were at least storm clouds on the horizon at that point.

>Everybody looked at my resume and pointed out that I had never stayed at a single job for longer than a year.

A year means that, to exaggerate just a little, you were basically starting to look for a new job as soon as you started the old one. But, yeah, if someone has moved between jobs like clockwork every year or two, the working assumption of the hiring manager has to be that this time won't be the charm and you'll hop again. Whether they're OK with that doubtless depends on the role.

You might consider just leaving those right out of school jobs from 20 years ago off. If someone really wants to see them, you can tell them but it's not unreasonable to age stuff off your resume if you have lots of jobs.

Well, with any luck I won't need to look for a new job any time soon ;)

- 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).

Inertia means that you have to pay someone more to change their life and come work at a new place. You don't have to pay someone very much more each year to have them continue on the same path.

But growing personel count on the other is definitely a concrete objective/bonus for someone. That someone will allocate whatever possible budget to get his bonus or praise.

Therefore companies know that their engineers will leave anyway, so they chose not to increase the salaries.

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

I work in a field that posts salary publicly (higher education). It is public knowledge what we all make, with databases devoted to this.

When someone is hired at more than a current employee, instead of getting mad at the employer for their compensation plan that takes advantage of existing employees, people inevitably get upset at the new employee.

I don't know why it happens, but it has happened in 100% of the cases at my institution. Every single one.

In essence, how people treat newcomers, especially vulnerable ones, speaks volumes about the values and culture already set in the organization. There are organizations and countries where people can expect nothing good from leadership.

The best thing you can do to improve pay at your workplace is leave. This is the sad truth of the free market.

At two recent jobs where each time i got approx 40% raise, I was the right person at the right time to fill that specific niche they really needed.

I've worked at a company where most engineers have been in the team for 2/3+ years, maybe more, some of them first and only job, so far.

Most of them were probably low-ish to medium salaries but they were happy with the team and the company. Had no plans to leave or try to argue for salary raises. confortable Some people simply don't care so much about money and will be happy to have a nice stable environment they're comfortable with.

https://www.payscale.com/compensation-today/2020/05/what-is-...

Inversion is just the extreme. When new employees come in making more than existing employees with the same experience.

Existing employees are just fine getting their 1% to 3%.

I self-promote myself every two years, and if anyone asks "I was looking for an interesting organization taking on interesting projects such as yours"

This leads to predictable issues for companies with rigid compensation bands. You get frustrated because you feel you are doing the more senior role job now. You express this frustration or sentiment to your "manager". They tell you that you are doing great, but maybe you need a little more of X before they promote you. Maybe they see things in you that make them feel you should not be promoted to the next role / salary band at that time. This causes you to hunt around. Another company that really needs someone who can do what you can do will just hire you to the senior band because, on paper, they see you look effectively ready for the senior role, whereas your current managers may [right or wrong for their situation] think you are not ready for it. Maybe it is myopia and they should just promote you and that is the right call, but maybe you really aren't quite ready, by their standards, for the role yet.

My experience with all of this has taught me that a big chunk of people are an "edge case" with special circumstances. Like, maybe this one guy who is not ready for the senior role because of performance issues can just go to a competitor and get a job there in the senior role. And maybe they do great in that role in the new environment. Maybe they fixed the flaws they had or they put in that extra effort at at new job, etc. There are so many nuances to this. But I think I would trace a lot of it to imperfect information on both sides. One employer may not be willing to promote you for whatever reason, another one hungry for talent is happy to pay you more and give you a shot because you are "almost" there anyway.

Maybe other companies just have very different comp structure and available cash. Maybe the manager is being stubborn or they just don't have good, objective criteria to measure your performance and you deserve that comp bump. I do think it is easy to not "see" someone and the great work they do when you work with them and manage them every day.

IDK, at the end of the day at my company we try to be as fair as possible, and we are willing to, and have often, made big comp adjustments once someone has proven themselves [in a relatively short amount of time 1-2 years or less] for that exact fear. Someone we trained up, like working with, etc. It would be a shame for them to go to a competitor for a 10-20k pay raise.

One final reason not to be overlooked is plain old greed. Some companies just don't care. They will suck every last thing out of a junior developer or consultant type role and keep you in that pay band for the longest time they can, or maybe they never actually intend to promote you, but they just won't tell you that and figure you will see the writing on the wall eventually and leave. And that is fine with them.

Anyhow, I have seen all of these scenarios play out in various forms over the years as a manager and employee. So, it is a multi-faceted problem that doesn't have one obvious answer. I don't know about the game theory aspects, but I assume on a large scale companies that don't adjust to "market" wages ultimately are forced to adjust to market wages or go out of business because enough people leave and they can't hire new people if their comp is too far from market wage.

Companies don't want to pay you more just because there is a perceived value. They will only pay you once you threaten and you are good for it (supply demand) or you change jobs (supply demand again).

I have thought about this hard. Both as an employee back in the day and now for 6+ years as a business owner. As an employee, I thought the same as you but then stopped expecting from current employers. When I was ready to jump, I jumped. Period. No ifs. No negotiations with current company. As a business owner though, I definitely understand why I am not just going to give someone a 30% raise. Now, if you are a small company and there is no a whole lot of management red tape (like my company), I encourage anyone to ask for a 30% raise and be ready to be able to justify it. If you are worth it (capitalism), I would do it. But if you never ask, I absolutely won't give you a 30% raise. Remember, you are not the only one in the company.

employees don't threaten, they simply leave. Why would someone go through the arduous process of finding another job just to 'threaten'. If you 'threaten' they will agree at that point and fire you later.

Capitalism should account for that. So thats not it.

In terms of productivity it would be rational to pay.

But there's a decidedly different quality between paying for an improvement, and paying someone to not make things worse.

Either the system allows for it, or it does not.