
Employees That Stay In Companies Longer Get Paid Less - camz
http://www.forbes.com/sites/cameronkeng/2014/06/22/employees-that-stay-in-companies-longer-than-2-years-get-paid-50-less/
======
cpprototypes
Switching jobs works well when developers are in their 20's.  But I've found in
the 30's that a number of factors combine to make it much less attractive:

1) Each jump becomes less and less.  There's an invisible salary cap for
software engineers.  By the time a software engineer is in their 30's, they've
jumped a few times and are already close to the maximum. 

2) There are costs associated with switching jobs.  There's a risk that the new
job could be far worse (team, boss, culture, etc.).  And you start at zero
reputation and connections at a new company.  The lack of reputation often
means less flexibility and influence since the others at the company don't
trust you yet.  The rewards are greater than the costs in the 20's, but usually
not in the 30's. 

3) It also happens to be the time when many get married and have babies.  This
increases the risk factor. 

4) For total compensation there seems to be two tiers of companies, the top
tech (google, facebook, amazon, etc.)  and everyone else.  I've noticed the big
difference is not the base salary (top tech only pays a few % more).  The
really big difference is cash bonus + stock (RSU). 

5) Unfortunately, the interview skills required to get into the top tech
companies is biased against older software engineers.  For an engineer in their
30's college is a long time ago.  They could spend time getting algorithm books
and studying, but there's less free time at this stage in life.  So the only
big jump that's worth it financially (top tech company) is very difficult to
do. 

~~~
nugget
Young developers should save 50% of their after tax income. 

In some ways, this industry is awesome: to be able to make six figures in your
early 20s is an incredible benefit and potential head start on financial
independence. 

In other ways, this industry is incredibly cruel: you will run into age
discrimination and the other headwinds mentioned in your mid 30s, if not
earlier. 

I tell the folks I mentor to think of themselves as professional athletes with
a 15, maybe 20 year career. 

~~~
hnriot
"I tell the folks I mentor to think of themselves as professional athletes
with a 15, maybe 20 year career." 

what terrible advice!  Please stop "mentoring"

"Young developers should save 50% of their after tax income."  I wonder how
long it's been since you were young.  While saving early is likely a good idea,
it's also the time that student loans, young families, buying houses etc are
all huge costs that very likely making saving much impossible.  It's also a
time to have fun, travel, enjoy life. 

I've been a software developer for 27 years and have encountered none of the
"incredibly cruel" discriminations you suggest.  It's definitely true and I see
this often that many as they age don't bother to stay current, they get stuck
in old ways and don't want to keep up to date.  But for those that do, those
that stay at the forefront of their field there's no discrimination.  You just
have to be better than the rest, whether you're 20 or 50. 

please please stop telling people this nonsense. 

~~~
nilkn
I actually think more people should act as if their career is going to end in
20 years.  Thinking in these terms really drives home what you need to do if
you want actual financial independence.  Even if the goal is not realistically
attainable, it shows you exactly where you stand. 

Let's say you think $1M is good enough for your notion of financial
independence.  Well, how can you accumulate that amount in 20 years?  One way
would be to invest $2750/month.  If you can manage an average annual return of
4%, you'll hit the $1M mark right after 20 years.  If you start at 25 (giving
you a buffer period after college to grow some roots), you'll be good by the
time you're 45. 

Note that in this case, "financial independence" doesn't necessarily have to
mean that you're wealthy enough to live your picture perfect life without ever
working a day again.  It could simply mean that you've reached a point where
you don't need to save _more_ and could take a 50% paycut without any serious
long-term implications for your retirement.  An example might be that you make
low six figures up until age 45, surpass the $1M mark in investments, and then
you get hit by ageism and your income drops by half for whatever reason. 
You're not going to be saving much anymore unless you make lifestyle changes,
but you've still got the million bucks in the bank.  The drop in income has
impacted your ability to save and invest more, but it has had no effect on the
savings you've already amassed, and it's still good enough to sustain your
comfortable lifestyle with more modest savings. 

~~~
meowface
Keep in mind software dev salaries often aren't as high in states outside of
CA and NY, especially when working for smaller companies and companies that
aren't tech-centered.  Saving $2750 per month would be far too difficult for
many software devs in other parts of the US. 

I do agree that saving a lot early on is a good idea though. 

~~~
nilkn
One big life hack is to learn to balance salary with cost of living.  It isn't
always about pursuing the highest possible salary, because that might mean
you're paying most of it in rent. 

Consider a $75k salary in Texas.  That's $4766/month net (or thereabout), due
to lack of state income tax.  Let's say you pay $1k/month in rent (very
realistic for most of Texas).  That leaves you with $3766.  That $2750/month
figure won't be too far off if you don't have any dependents and live
frugally, especially if you take advantage of tax-advantaged savings (like a
401(k)). 

The thing is, you can make more than $75k in Texas, especially once you've got
a few years of experience under your belt.  So while I completely agree that
it's not going to be attainable for everybody, I think it's not so far off as
many might think. 

~~~
meowface
Absolutely.  Unfortunately, I live in a state where housing costs tend to be
unusually high, with salary not that much higher than average to compensate
(Maryland). 

~~~
dennisgorelik
What stops you from moving to Texas (or someplace else)? 

~~~
meowface
I may move in the next few years.  Just not practical for me right now.  Plus, I
generally like Maryland's other aspects. 

------
notacoward
This "loyalty penalty" is far from new.  It was totally obvious to me, and to
many of those around me, over twenty years ago.  If you stayed at one company,
you'd fall behind the industry-wide trend.  You'd start to see people who were
more junior overall, and clearly less familiar with your product, hired with
salaries above yours.  If you wanted to keep up with that industry trend, you
were _forced_ to keep moving.  I even know people who deliberately did "out and
back" jumps to leap-frog over others _at the same original company_. 

Where I part ways with the author is regarding what goes through employers'
heads to perpetuate this.  People who decide compensation seem to be in denial
about the fact that people leave, or that their actions have any impact on how
often that happens.  Their biggest worry seems to be that if they make an
adjustment for one person then everyone else will demand one as well . . .  as
though the cost of making such adjustments even across the board is greater
than the cost of having to re-hire half the team every year.  As a result they
make such adjustments rarely, and try to keep them all hush-hush so nobody
finds out, but _it never works_.  People who were hired because they're smart
tend to figure things out. 

Obviously, some companies have figured out that plain old-fashioned money is
sometimes the key to employee retention.  Google has sucked in _and kept_ a lot
of people this way, for example.  Unfortunately, the current wage inflation has
its own down side.  Maybe some day we'll find a place between these two
extremes that doesn't either screw employees or stifle innovation by smaller
competitors. 

~~~
SDGT
> I even know people who deliberately did "out and back" jumps to leap-frog
> over others at the same original company. 

This is commonly known as a valid strategy at the place I work.  It's very
difficult to come in giving a shit about my code when the future of my
position is a dead end. 

~~~
nickonline
The company I previously worked at advertised a position to work alongside me
at my same level doing the same work, the salary being offered was 50% higher
than my salary at the time. 

I took this to my manager and all he had to say was "there's nothing I can do,
I don't set these things"

It's downright insulting to see this kind of behaviour. 

~~~
gaius
They were obviously discriminating against you.  Equal pay for equal work,
right? 

------
michaelfeathers
For those of us in software development, an important thing to think about is
what this does to code.  The industry is full of old codebases tended by people
who were never involved in the planning and initial design of those systems. 
Knowledge transfer rarely happens sufficiently to prevent accelerating
maintenance headaches. 

I think that we really need to find different ways of developing software to
deal with this reality.  A commenter here mentions the London financials
community and people job hopping < 12-18 months.  I've heard terrible horror
stories about some of that code. 

~~~
dustingetz
Pair programming fixes the turnover problem

~~~
michaelfeathers
It trades it for the problem: convince people to pair program. 

------
overgard
HR is really a problem here (at least in the software industry).  Pay is
usually based on title and how many people you manage, but I think that's
pathological for managing developers because developers aren't
interchangeable.  You have huge variances in skills and knowledge.  The thing
is, development skills scale in a way most job skills can't.  You can have at
developer that has 10x more impact than other developers. ( It's not common,
but it certainly happens).  But those people are definitely not making 10x
more.  Or even really 2x more. 

I think companies really need to realize that they have to compensate their
best developers to get them to stay even if they're not giving them management
responsibilities, because the good ones are going to realize they're good and
either job hop or freelance.  Saying "we can only give you this much because
your title is X and we don't have an open management position, but we really
value you!"  is a great way to lose your best people. 

~~~
wldlyinaccurate
> _Saying "we can only give you this much because your title is X and we don't
> have an open management position, but we really value you!"  is a great way
> to lose your best people._ 

This resonates with me _so_ much.  I've left a few companies after having
conversations which ended with my manager saying exactly this.  In most cases
they have ended up hiring somebody else at a salary higher than mine. 

It really confuses me.  I usually don't want to leave these companies because
the work is good and finding a new job can be stressful.  They usually don't
want me to leave because I do good work and finding a replacement is costly.  I
don't understand why all this bureaucracy and nonsense about job titles has to
get in the way of finding a middle ground. 

~~~
watwut
That is what you get when you isolate decision maker from consequences of his
decisions.  HR does not feel the pain of you leaving, so he does not care. 
However, he has trouble to find a new person for low salary, so he is forced
to raise the offer. 

~~~
usrusr
HR may not see the loss of institutional knowledge of high worker turnover,
but they do see a lot of the more monetary costs: with all that constant
hiring of replacements going on, HR sure needs a bigger budget next year!  We
might be looking at an incentive problem, amongst others. 

------
alain94040
This article should create a fun discussion, but be aware that it's most
likely completely bogus.  I suspect it suffers from survivor bias: anyone who
is in a position to jump ship and get a 20% raise consistently is _not_
average. 

If you try to change jobs every 2 years and are not great at your current
position, you'll likely be sorely disappointed. 

~~~
GreenPlastic
Agree with this.  One of the side effects of this is your top performers are
always jumping and the people who tend to stay the longest tend to be average
or below average. 

~~~
debian69
or they might just enjoy there jobs enough to not need to move. 

~~~
Chronic28
Everyone has their "jump ship" price

------
lucisferre
This is fascinating that there is actually hard evidence for this, but it's
not surprising to me given my own experiences. 

When I first started out as an "intermediate" software developer (after a
couple years as doing contract work) I was poached twice within a year of
taking a position, both times the offers were at least 30% higher, an amount
my existing employers where highly unlikely to match (in fact in the second
case I knew this because I had already attempted to negotiate a salary
increase with them before leaving). 

These were, as they say, offers I couldn't refuse.  To financially cripple
myself for the sake of loyalty would have been stupid.  Moreover I felt it
would also be stupid to remain with an organization that clearly had broken
retention policies for employees. 

What's somewhat surprising is that this occurred in Vancouver, a city that is
notorious for low pay in the tech sector.  Nowadays, if I wasn't doing my own
startup I'm quite certain I would have received another offer of at least a
50% increase by now. 

As a potential employer now I'm trying to figure out how best to ensure that
I'm not making the same mistakes I saw at the places I worked for.  Best as I
can figure out, at least in Vancouver, this means paying salaries that exceed
expectations and typical local numbers and look more like what people would be
getting if they looked outside of Vancouver.  I think this also means regular
raises and bonuses so people don't feel like staying is going to hurt them
financially. 

~~~
arkitaip
Have you seen any of Daniel Pink's work on what motivates people in business? 
It might inspire you to focus on other incentives than just pay salary
increases. 

[http://www.youtube.com/watch?v=rrkrvAUbU9Y](http://www.youtube.com/watch?v=rrkrvAUbU9Y)

~~~
cowbell
>Autonomy >Mastery >Purpose

That's great.  Really.  Then you get invited to the company holiday party at the
CEO's house.  Meet his six children who are in college and traveling the world. 
Then you realize you and hundreds of others paid for that by living in a
rental townhouse.  True story. 

There's no amount of motivation for me that will make up for a raw deal in
pay. 

~~~
philsnow
One is not likely to get to the same place in life as that CEO by job-hopping
as a software engineer. 

~~~
cowbell
One is not likely to get to the same place in life as that CEO.  You can stop
the sentence there.  The rest of your statement makes you sound judgmental
against job-hopping. 

Capital distribution in the US is a Paretian/long tail distribution.  It is
statistically very unlikely for anyone, regardless of their actions, to get to
the same place in life as that CEO if they are from anywhere in the bottom
90%. 

[http://i.huffpost.com/gen/1077681/thumbs/o-INCOME-
DISTRIBUTI...](http://i.huffpost.com/gen/1077681/thumbs/o-INCOME-
DISTRIBUTION-900.jpg?5)

~~~
philsnow
Fair.  I had originally wrote "One will not get to the same place...", but
wanted to modify it to allow for exceptional cases.  Went too far modifying it. 

I agree that nearly everybody is unlikely to reach the same place in life as
that CEO.  If that were not the case, truly we would be living in a utopia. 

------
wallflower
I've known people who stay for 4 months at a new higher-paying gig and then
leave.  Because the paycheck and new title didn't make up for the toxic
culture/culture clash that they dove into.  Since you see them more than you
see your real friends, the people you work with become your extended family of
sorts. 

"If all you get from work is a paycheck, you are underpaid" -Jim Rohn

Daniel Pink says it best.  The best jobs give you autonomy, mastery, and
purpose.  Even better, if you create a business that does the same. 

[http://deliveringhappiness.com/the-motivation-trifecta-
auton...](http://deliveringhappiness.com/the-motivation-trifecta-autonomy-
mastery-and-purpose/)

~~~
rdtsc
Beyond a certain point where a person can afford the basics, housing, food,
healthcare, ability to go on vacation, provide for family.  A higher paycheck
might not necessarily translate to feeling better. 

The little things -- bad toxic co-workers, a long commute, un-interesting
projects, clueless managements, unfairness, all those things might seem minor
at first in face of a large paycheck but just like water grinding a rock,
those little things every day will eat your soul. 

~~~
Chronic28
For enough money, I'm willing to bet anyone will "suck it up"

------
GreenPlastic
Top recruiters have known this for a long time and call it marking to market. 
The article nails what's going on but the implementation is a little more
nuanced.  You don't just switch jobs every few years to lock in pay raises. 

When you're in a hot market where labor demand outstrips supply, you should
leave multiple times.  For example, most people are shocked at how high
software salaries are when they actually take a look at GlassDoor.  The market
is hot, you should be using it to increase your pay.  When supply outstrips
demand, you should stay at your current company and your above market pay.  The
other thing is you should get what you can when you come in the door because
some companies go multiple years without pay increases and, when they do, they
use a percentage of your existing salary (1-3%). 

If you're not leaving, you're getting screwed, plain and simple.  At Oracle,
there were high performers and they came in 5-10 years ago and only received
small raises.  You'd see senior developers at 100k after being there for 10
years and then you'd see a new grad from MIT hired in at 100k.  You wouldn't
really see VPs promoted from within but you'd see them hired in from the
outside all the time.  One woman left at 75-80k for maternity leave and got
hired back in at 125k for the same position. 

Moral of the story is be prepared to seek and get your actual market value
because it's probably higher than you think. 

------
jknightco
I've been saying this for years now, so its somewhat comforting to see someone
else repeat it with a bit more evidence than my personal anecdata. 

The main reason, in my opinion, is that corporate promotion practices have not
responded to the incredible amount of intercompany competition for labor.  At
my current employer, the promotion process is a 3 month nightmare which
requires an incredible amount of an employee's (and his/her manager's) time,
including the compilation of a detailed packet which describes the reasons for
why the promotion is deserved and involving an approval process through a
separate committee.  Meanwhile, any software engineer at one of the big guys
can walk down the street to one of their competitors, say "I want a job," and
probably have a seat and a 15% raise by the end of lunch time.  With pay,
benefits, perks, and culture being about the same at any of these companies,
its easy to see why a career-focused individual would choose to jump ship
every two years. 

~~~
GreenPlastic
The thing is a lot of people value the security or aren't aware of the
difference between market and their pay.  Let's say this is 80% of people. 

If you're corporate HR, you can retain 80% of your top talent without big pay
increases and promotions while knowing that you'll lose the top 20%.  This may
be palatable whereas it wouldn't be if you were only retaining 60%. 

I think Google and FB were the first to figure out that you could get the top
5%, that they would make a big difference in your org.  You'd have to greatly
increase compensation but those individuals are probably contributing and
worth more than that. 

~~~
SoftwareMaven
You can retain 80% of your talent.  You will be able to retain approximately 0%
of your _top_ talent, which is certainly a number less than 20% of your total
talent pool. 

~~~
potatolicious
You may be surprised how many top engineers have no idea what they're worth,
and can't self-promote worth a damn.  I've known some _incredibly_ talented,
capable people being woefully underpaid, and not ever trading up. 

------
candoprog22
Very much this. 

In London, certainly within Financial Tech, it is almost expected that you
will job hop every few years, so the employers tend to price this in, with
small incremental pay rises, little training, but often reasonable bonuses, to
at least keep you there for about three years. 

We also saw this was more prevalent with our offshore outsourced colleagues -
over there anyone with even a modicum of skill would job hop every 6-18
months.  Each time to lock in a payrise. 

Employers will give you the shaft without a heartbeat of second thought; never
seen why they should expect more from their "resources". 

------
yalogin
The one missing piece here is the age of the employee.  Of course this is true
when you start out.  Does it still hold after you acquire 15 years experience? 
Isn't that when the stagnation and preference towards younger worker bees
supposed to happen?  The article is kind of useless without that one piece.  It
does not give the whole picture. 

------
steveax
> It’s a fact that employees are underpaid. 

I just have to comment on that line in the conclusion of the article... When
Forbes, Forbes!,  states unequivocally that employees are underpaid, it's
probably time to sit up and take notice. 

~~~
Chronic28
Here on HN, we would rather fully understand and rationally discuss the
publishers claims rather than taking their conclusion as final word solely
based on the Forbes name. 

------
snorkel
This is absolutely true.  The best opportunity to set your pay is when you get
the offer letter, after that it's all nickel and dime increases.  The next best
time to adjust your pay is when you announce you're leaving for a better role
somewhere else.  You have to be your own agent and demand the market rate for
your role, skill set, and number of roles you're being asked to cover.  The
only time your,manager might jump your pay without asking is when they realize
you are drastically underpaid and could leave any time. 

------
mark_l_watson
My best raises occurred when I went back to a previous employer after working
somewhere else for a few years.  Sure, job hop every three of four years, but
also consider going back to work for previous explorers. 

~~~
caw
Some companies have a limit on the number of times you can work for them, in
order to prevent people from hopping and coming back for more money.  I think a
previous company I worked at had a limit of 2 employment periods, which they
instituted (supposedly) after a large number of people took voluntary
separation and then came back later after the company started growing more. 
The next time a voluntary separation came up the policy was implemented to
prevent another round of that happening. 

~~~
scarmig
This seems equal parts petty and self-defeating to me. 

No one except the worst performers are going to stay at a place when they see
market salaries rising substantially everywhere else.  So what this does is
hamstring the company from re-hiring the top performers who could easily get
new, higher-paying jobs at other companies. 

Equally bad is that the weak employees will have gained substantial
organizational power, so they'll be making decisions by virtue of time served
instead of skill and knowledge. 

------
freshfunk
Having worked for a number of years in the Valley, I can say that the salary
part is true.  However, now that I work at a large tech company that's public,
the big thing that's missing from this is stock / RSUs.  After doing my taxes,
I realized how much of my compensation came from them and it makes a
difference in a couple percentage points for base salary look small.  On top of
that, companies give refresher stock so that you accrue more of it the longer
you stay. 

After 4 years and earned all of that initial grant, it probably will make more
financial sense to move on as the refresher grants don't come close to the
initial grant.  It also is a point where salary disparity might be
significantly different (depending on economic conditions). 

~~~
ryandrake
This is only true for those rare positions (senior/upper management) that
offer such equity grants, or if you lucked into one of those one-in-a-million
rocketship growth companies.  I've been in the tech industry as an engineer and
lower/middle manager for 15+ years and equity has never ended up making up
even a tiny fraction of my compensation.  Often it ends up being worthless
(underwater options).  I suspect my situation is the more common one. 

------
_delirium
This is plausible, though I'd be more confident in the numbers if someone
could get data on total earnings over a period.  Apart from salaries, those are
impacted in either direction by, at least: voluntary termination and/or
signing bonuses (in the plus column) and periods of unemployment between jobs
(in the minus column).  I don't know if those would change the totals
significantly, but it's a fairly dangerous assumption to take two different
groups and assume 10-year earnings are really [10 x $avg_salary], and
therefore that comparing $avg_salary gives the full picture. 

------
chopete
Companies (with middle management) work like a family... all things optimized
to welcome a new kid or take care of a crying child.  As a senior (outside of
executives) you are expected to shoulder the responsibility.  This setup may
look odd in light of this article.  The only reason it works and is working
fine is the setup feels natural and many have accepted it.  Employees who
couldn't express their concerns in a smart way were seen as misfits.  At the
same time employees, worth even a tiny bit, who cried smart every 6 months
were take care of. 

There are limits on how many times you get taken care of for crying as the
articled mentioned and finding another family is a perfect thing to do when
you reach the limit.  That new company is all ready to repeat the cycle for
you. 

Unfortunately, in many companies the middle management is a pack of caring
elders and the people who didn't exercise smart crying.  Another reason why
it(accept 3% annual raise, don't expect more) became a norm. \--  from a middle
manager

------
kabouseng
This assumes that you are guaranteed a 10% - 20% raise with every jump, but my
experience is that you operate within bands, and once you reach the top of
your band, higher offers are rare.  If you want to get higher offers you need
to have been promoted to the next job level. 

As an example, if you are a junior software engineer, you can only earn more
as a senior software engineer, and again as a project manager, and again as a
product / line manager. 

And the only way you get promoted to the next band is by staying for a set
amount of time at a company to get promoted.  Outright offers from a lower job
level to a higher one is rare without demonstrated ability to do the job. 

So yes over the short term, jumping ship often is more lucrative, but you'll
hit a glass ceiling and have difficulty breaking through to the next level. 

------
jgmmo
You know, reading this thoroughly - the statistic is alittle unclear in the
title. 

The real stat is -- Over the course of a 10 year career, if you don't stay at
any jobs for more than 2 years, then you make 50% more.  This becomes a larger
number if the career length increases. 

------
Bahamut
I found this absolutely true in my short stint as a software engineer so far
(1 1/2 years) - I have switched jobs twice, the first switch giving a 50%
raise, and the second giving an 80% raise. 

Companies don't seem to be interested in retaining quality talent these days
(or developing it), and get used to paying a certain amount for that talent,
even if he/she is worth a lot more.  It is in each person's self-interest to
then seek out the compensation & promotion the person deserves, assuming all
other things being equal. 

~~~
thejdude
My experience is the absolute opposite, but maybe that's the difference
between the US (or CA) market and the German one.  Germany seems to pay people
by seniority, not by their abilities (which, I think, sometimes causes
unemployment for older developers).  Maybe it's an "equality" thing - so all
developers your age will make roughly the same. 

Even with excellent reviews by my bosses (not to mention being a well-
respected team member and the go-to guy of choice for technical questions),
they wouldn't even give me a 10% pay increase.  Switching jobs also didn't help
(I got maybe 3% more), but at least a single company didn't get to reap all
the profit from having me around. 

Right now, I don't even bother anymore.  All public job offers are for
consulting companies, which seems to be very profitable (basically: you get
paid less than the internal employees at companies that hire you, and the
consulting company keeps 70% of the hourly rate they get paid; you get maybe
30%). 

Sometimes there are article what nice salaries you're supposed to get, but if
there aren't even jobs available? 

~~~
Pxtl
Start a consulting company with one employee. 

~~~
thejdude
Lots of people actually do that, but it involves lots of work that you might
not want to do if you're interested in (and really good at) software
development. 

------
serverascode
I feel like the ability to job hop like this will be in fairly small,
concentrated geographic areas.  In areas that aren't as concentrated it'll end
up being pretty hard to do this. 

~~~
thejdude
It's also a culture thing. 

In the USA, selling yourself like you're the absolute King is ok, but in
Germany many people would consider you an arrogant snob that's full of it, if
you pretend too hard.  They'd also consider someone who job-hops every year to
apparently not be able to take responsibility and do their job well, and maybe
to be problematic to work with (or they'd not need to run so often). 

Switching jobs after 3-4 years is pretty normal, though.  It shows that you can
keep a job, and if you can show that you also learned something, that's good. 

~~~
CmonDev
Must be very comfortable for employers. 

------
Tycho
To me it's pretty obvious and it's because of a simple, logical dynamic.  If
you apply for a better role within your firm, your current boss works against
you.  They may either block your move completely, or delay it.  If you apply for
a better role in another firm and get an offer, there's no way for your
current employers to act against your interest. 

Companies can foster better internal mobility but they can never change this
basic dynamic. 

~~~
gaius
Dead men's shoes, this is called.  You can only get promoted if the guy above
you, for whatever reason, goes away. 

------
spullara
My dad figured this out in the 80s.  Changed jobs every couple of years for a
bigger title and more money.  It seems obvious to me anecdotally. 

------
sanj
The article alludes to data backing up what they're saying, but (as far as I
can tell) doesn't actually reference any.  It is just a collection of
anecdotes. 

I have found that as I've been at companies longer, I'm more able to make
certain things happen and I'm more capable of making a difference.  That
ability corresponds to an increase in my pay. 

------
ArtDev
Longest job 2.3 years..

This is the best thing about contracting.  With every new contract, you get to
adjust your rate :)

------
abmussani
I know few people who are working for company more than 5 years and are
underpaid.  But when I asked them, they were more concerned about seniority not
about paycheques. 

------
dbroockman
Or maybe just "the kind of employees who get paid less also are the kind of
people who have a harder time getting new jobs."  Correlation ! = causation. 

------
galfarragem
"You don't go anywhere and for more money seated in the same seat". 

------
orware
Job hopping worked for me, the only time I've done so. 

Back in 2011, a friend of mine offered an opportunity to switch from where I
was working (a small community college in Southern California) to eBay in San
Jose. 

The jump in pay was pretty good (I believe I was making about $70K at the
college at the time and the new job at eBay was starting me off at $90K, along
with some RSUs and a bonus potential). ( Sidebar: the pay was actually better
initially when they first called me at $105K, but then they called me the next
day and told me they had made a mistake and dropped it down to $90K...even
though that really ticked me off, I ended up accepting anyway because it was
still a pretty awesome opportunity for a small-town guy like myself to work
for a big company like eBay). 

I'm pretty risk averse so while I was there I was looking at a number of
things, such as benefits (health / retirement), longevity / raise
opportunities in the future, rent prices, work enjoyment etc. ( looking at some
of the comments people have made related to doing stuff in your 20's versus
your 30's...I'm in my mid-20's but I probably act as risk-averse as a 40 year
old).  Even more so now that I'm married with a little one (and a bun in the
oven). 

Even though in $$ I was making considerably more, once I included the
increased cost of rent in to live in San Jose (versus Imperial County, CA), I
actually didn't seem to be making a whole lot more.  Plus, I didn't quite feel
like I had the same amount of responsibility / enjoyment out of the work I was
doing compared to the projects I was able to direct / build at my old job. 

So shortly after starting at eBay, when I found out my old job was getting
upgraded into a management position (primarily due to the inability to upgrade
a "regular" position to a higher salary) I opted to go back, even though my
new salary would be a bit less than the eBay one ($80K) overall it'd be a
decent jump since my overall costs were the same. 

Since then, I've been able to complete all of those projects I came back to
finish, along with a slew of new ones that have come up since then, but at the
same time, I've had to start letting go of some of my development duties and
replace them with management ones (mainly because my staff are non-
developers...I'm really the only one handling online services and my other
staff handle printing, publications/copying, and mail duties for the campus). 
It's been enjoyable, but at the same time I still want to become a better
developer and it gets harder to do that at work now (and as someone else has
mentioned, free time starts dwindling too). 

Recently, after staying at the same salary for about two years, the management
pay scale at the college was revamped, and as a newer manager I was able to
receive a sizable increase because of it to my current salary of about $89K.
For where I live that sort of salary is hard to find (i.e. it's damn near
impossible). 

Fast-forwarding to today, I like to keep my eye out for jobs (either in
Craigslist or in the Who's Hiring threads each) in the Bay Area or closer, in
San Diego, that would offer the "full package": a great location, environment
/ team, salary and while I've seen a few good options, it seems the most
difficult thing to get across in an email or resume is demonstrating how much
of an asset I could be as an employee. 

I'm not really complaining (things are definitely in the good-great range
currently) but I'm always looking for additional opportunities to continue
learning and become better at writing software (and being able to focus on
that full-time again would definitely be great, and I could still bring my
additional skills as an entrepreneur/manager to the table). 

In the meantime, I went ahead and scraped our local Chamber of Commerce
websites and sent out some old-fashioned snail mail letters to local
businesses asking if there were any pain points or tasks that take up a lot of
employee time that could potentially be automated or solved with software.  I
figure if I can get some interesting projects out of that it would be worth it
and give me an enjoyable coding project to work on that solved a problem.  So
far, I've only received one response from a local liquid fertilizer / trucking
company so after finishing this message I'm going to go take a closer look at
the info that business provided me on Friday to see what I can do for them
:-). 

P.S. I'm always willing to go and try out for a company...and luckily, I just
happen to be on vacation for the next two weeks _hint_ _hint_. 

------
jokoon
because people who don't ask for a raise have more chances of getting a job,
for longer. 

ask for a raise, expect to get fired. 

------
firstplanthendo
The conclusion of the article- that the easiest way to ensure you secure large
raises every few years is to job hop, is probably true.  But I think it takes a
very defeatist attitude towards negotiating raises with present employers:

"In 2014, the average employee is going to earn less than a 1% raise and there
is very little that we can do to change management’s decision. " 

Most good managers know that it costs much more to find a new employee than to
retain an experienced one- it takes a lot of time and effort to find a
suitable candidate, and then to train them.  I believe that given an
opportunity, they'd rather pay up a larger raise than originally budgeted, to
keep a good performer, than to have to find a replacement.  But this rarely
happens. 

Why?  I blame poor communication and avoidance.  Most employees are loath to
negotiate with their employers, and they're usually not very good at it when
they do.  Negotiating is hard- it can be scary, uncomfortable and awkward to
"demand" hire pay from your manager.  It's easier to just think "there's
nothing I can do to change their minds, so I'll just have to go find a new job
elsewhere".  That path allows you to avoid negotiating and still be offered a
10%-20% raise. 

What would happen if, before any employee decided to leave for a new job, they
met with their manager to discuss the situation?  And really thoroughly discuss
it- meaning a well prepared case for a solid raise: An outline of the
employees successes during the year, details of how they've contributed to the
company's bottom line (even in a tangential way), hard stats on what the
current job market pays for a someone with their experience, and a soft/gentle
reminder of the costs of finding/training a replacement.  All done in a calm
and professional way. 

Would every single manager just hand them a 20% raise and an apology?  No.  But
managers are business minded, and are usually evaluated based on the costs and
revenues associated with their team.  I'd like to think that given a convincing
argument like the one above, a good number of them would respond logically and
offer larger, more reasonable raises. 

Ideally a high performing employee shouldn't have to do that- management
should recognize their contributions and the costs of find a replacement.  But
that's not reality.  Pushing for a 10-20% raise for employees at the annual
budget meeting would be met with responses that a manager is prematurely
trying to solve a problem that hasn't yet presented itself. 

So I believe the best solution is for employees to have those difficult
negotiation meetings before they decide to jump ship.  It won't work every
time, but it'd work more than not having those discussions at all. 

~~~
scarmig
Or, I could send out a resume on Monday and have a new job offer by Friday,
one that includes a 20% raise and a hiring bonus. 

Grueling, painful negotiation processes are, well, grueling and painful.  The
revealed preference of software engineers shows that the concrete benefits of
jumping ship quickly outweigh the merely potential benefits of negotiating a
raise at considerable stress. 

I can see how it makes business sense for companies in the industry to try to
make negotiation easy and the norm, and when they decide to, they'll find
plenty of willing partners. 

------
known
And H1Bs are cheap. 

------
jdrobins2000
TL;DR - this is explained by: 1\. Sociopathic corporate philosophies 2\. Risk-
mitigation against lack of competence and/or integrity of the parties involved
in the transaction (HR, low-level manager, employee). 

My initial response to this was cynical and pithy: if corporations were
people, they would be sociopaths (in far larger proportions than the actual
human population).  In this case, they seem to have zero regard for fairness,
but rather only how they can use others to maximize the benefit to themselves. 

Upon further reflection though, it is more complicated, and there are many
factors and actors in play. 

There is a misguided but universally accepted belief that corporations'
supreme obligation is to maximize shareholder returns, and that it would be
immoral to NOT take any lawful action that would increase profits.  The net
effect of this is equivalent to having a single sociopathic business owner who
will do anything to maximize their own profits without regard for fairness
except when a deficit of fairness begins to negatively impact this end.  The
effects of this philosophy impact decision makers directly and indirectly
throughout the organization, and this phenomenon is one of the results.  Being
fair or rational in treatment of employees is not mandatory or even the
primary driver of decisions. 

One way this manifests itself is that management justifies its large salaries
and bonuses by minimizing costs, of which employees are often a significant
portion.  Thus, incentive structures throughout the organization will likely
reflect this.  It doesn't hurt that executives are likely to be sociopaths to
some degree, and this just helps them justify their natural inclinations. 

Even in a hypothetical case where all levels of decision makers in a company
are benevolent and fair minded, there still remains the difficult problem of
determining fair salaries for each employee.  Developers aren't truly fungible,
but they are difficult to value (especially by those further removed from that
role).  So, in a sense it is rational to treat them as fungible unless you have
a reliably accurate means of differentiating.  If an HR person is 100% certain
they don't know what is fair outside of averages, it would be a rational
decision to let an employee's market price be determined by a public auction
process among other companies (aka job hopping), rather than granting a
request for a large raise outside the normal range. 

Of course, this end could be mostly satisfied merely by matching an offer made
by another company (aka job shopping) without requiring the employee to leave
and return later.  However, that is a very low-friction and low-risk
proposition for the employee compared to an actual job hop, so inevitably
would see much larger participation if accommodated universally.  As HR has no
way of knowing what the market rate is for all of its employees, it would also
have no way of knowing how much this policy would increase the company's costs
if it implemented it and every employee utilized it.  If a worst-case scenario
would cause substantial destruction profits, this would be a high-risk change
to implement, and likely would need other coordinated actions to ensure
acceptable long-term profitability and approval from shareholders. 

Additionally, there is the risk that the employee had no desire to actually
accept the other offer, or even colluded to be given a non-genuine offer (from
a friend, for instance) under the condition they had zero intention of
accepting the offer.  Only once the employee terminates employment and spends a
substantial amount of time at another company have they proven the offer was
genuine, and that their previous salary truly wasn't sufficient to keep them. 
That is, without a high level of trust in the employee regarding the offer.  It
also helps if a trusted party (manager, co-workers, etc) confirms their
exceptional value to the company, both in justifying the raise and in
indicating there won't be cascading impacts upon the rest of employee
salaries. 

Diverting from this policy requires additional risk and lower profits,
mitigated only by a high degree of integrity and competency in all involved in
evaluating fair compensation and the long term cost/benefit of granting a
raise vs. hiring someone else.  The larger the organization, the less likely it
would be a rational decision for upper management to assume this to be the
norm.  Integrity and competency are impossible to objectively quantify or
measure, so for those who manage by metrics, I can see how this would pose a
problem. 

------
finalight
nowadays where got such thing as loyalty? 

every man for themselves already

