Sorry. I'm not arguing it doesn't happen. (I agree that it's an extremely common outcome.)

I'm arguing that it shouldn't happen and, if it does, that would explain that layoffs disproportionately hit those whose return-on-cost is lowest.

> Slowly accumulating raises as you age without seeking a management role means out eventually.

At whatever the career level is for your org, some people should probably stop getting merit raises entirely. (If their merit isn't increasing, there's no reason their pay should be either. They could drift up as the entire market wage drifts up, but if a 10-years-at-VP is just as valuable as a 20-years-at-VP, they should be paid the same.)

I know this is an aberration during particular boom times, but there’s been a couple of times in my career (circa 2012 and 2020) where new hires were routinely being paid more than more tenured employees at the same level. It’s because large companies try to align comp to some local market benchmark, for example the 75th percentile, but that only ever applies to _new_ offers. I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.

It depends on how big a company is and how their HR works. I worked at big dumb banks that gave outsize raises the year after promotion to "adjust for market rates" but then in high performance years gave negligible raises because we were all just numbers on a spreadsheet.

The incentives this create as well are perverse because performance becomes less a driver of a big raise in the short term.

In the long term of course, the performance probably drives the promotion which is the thing that gets you into the higher band in which you can be awarded random unearned raises.

However in the long term its easier to just jump ship for a guaranteed 20%+ bump than to pray for a random 10% every N years.

> I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.

I have actually had a former employer do this once. I think it worked out best for those with 2-3 years of experience, some of whom got 20-25% pay rises, while those with 0 years of experience were closer to hire date and hence what the company considered market rate, while those with more experience were better at negotiating raises on an ongoing basis.