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How Much Should You Pay Your Engineers to Ensure They Stick Around?

200 pointsby engineertorquealmost 5 years ago

47 comments

dangalmost 5 years ago
We&#x27;ve banned this site for using sockpuppet accounts, voting rings, and astroturfed comments. Such abuses are extremely not ok, and this was an egregious and repeated case.<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;newsguidelines.html" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;newsguidelines.html</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;newsfaq.html" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;newsfaq.html</a>
vbtempalmost 5 years ago
I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility.<p>There&#x27;s obviously some kind of prisoner&#x27;s dilemma-like iterated game that reaches that Nash equilibrium, and I&#x27;m trying to figure out what it is exactly.<p>I would have loved to stay at my first organization. Interesting work and research. I was PI and PM for interesting projects by the time I left. Now I make almost double. The thing is, my current salary at my original organization isn&#x27;t unheard of for that level of responsibility at all, the problem is that getting that kind of adjustment is impossible. It&#x27;s possible to be hired in at that salary, though. I&#x27;ve noticed this is true for most organizations I&#x27;ve worked at.
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zffralmost 5 years ago
The article&#x27;s title is pure click-bait. It would be more accurate if it were &quot;How to Keep Your Engineers Interested in Sticking Around&quot;<p>Very little of the article says anything about how much to pay engineers. I only found 2 paragraphs about engineering compensation:<p>&gt; The most comprehensive study, though, is Daniel H. Pink’s Drive, which is summarized in this animation from the RSA. Pink suggests that money isn’t the main driver for highly skilled workers who choose to stay in their jobs. Instead, he identifies a combination of three factors: the ability to be self-directed, getting better at the job, and having a purpose in one’s endeavors. In other words, once a person’s basic financial needs are met, money starts to become less and less relevant as a criterion for job satisfaction, especially compared to purpose, self-improvement and self-direction.<p>&gt; Unsurprisingly, this conclusion mostly matches my own experience with engineers. Whether companies pay at market level or 20%-30% above market makes very little impact on staff retention. You might stretch retention slightly in the latter case, but the investment is often not worth the net result. Keeping your engineers engaged and motivated makes a much more substantial difference, so that’s what we’re going to look at next.<p>Even these paragraphs are primarily about how money is not the primary way to keep engineers engaged and motivated.
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xkcd-sucksalmost 5 years ago
In accordance with the standard hierarchy of needs, culture flows down from compensation. When everyone&#x27;s material needs and desires are well satisfied, they interact genuinely and naturally. When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.<p>You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
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mywittynamealmost 5 years ago
I left a job which paid in the 95+ percentile of my area for one that paid right about the median wage (maybe a little less). My reason: I like to own the software I write. We had an influx of people on our team who began to rewrite sections of stuff I wrote a long time ago for no real reason. Basically, some of them didn&#x27;t like promise chains and decided to rewrite every one they encountered. Things finally bubbled over when I ended up in merge hell where I&#x27;d have the codebase drastically change while I was on my branch and I&#x27;d be reimplimenting the same feature every time I tried to submit a merge request, but all of these changes amounted to largely meaningless &quot;refactoring.&quot;<p>It&#x27;s kind of petty on my part, but I&#x27;m not the type that wins arguments. So I decided, despite loving the people I worked with, that I was not in the right job. Now I design and develop software mostly individually and I&#x27;m infinitely happier. Someone who is competitive and enjoys confrontation would thrive in that role though.<p>Point is, people have lots of different reasons for changing jobs. And something that makes one group happy may make another miserable. I also hate traveling to conferences, but that&#x27;s the nature of the job sometimes.
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mcgrathpm11almost 5 years ago
I worked at Netflix for several years, where they actively practice paying ‘top of market.’<p>This is an oft misunderstood tactic, but in action means: 1) Yearly, employees are asked to seek evidence for their top of market compensation. 2) employees do two things as a follow up - They either interview elsewhere to get competing offers to establish ‘top of market,’ or they feel fairly paid and do nothing.<p>Having worked at a few large tech companies that practice the typical equity grant and vesting structure designed to maximize retention, Ive never seen a more effective tactic to completely remove the concern of ‘am I paid enough’ from the employee. As a result:<p>1) The really high impact people are paid extremely well, as Netflix always overbids. 2) The average performers either go elsewhere or retain without jockeying for greater comp and ownership.<p>The proactive seeking top of market is a good feedback loop to pay for&#x2F;reward impact and to build trust with your team, and is something I still practice with my teams outside of Netflix.<p>This was back in 2015, so some things may have changed. Regardless, the net to the business has compounding returns. At an average company:<p>1) Most employees do not pay for their salary in business impact. 2) Top performers drive outsized impact relative to their compensation.<p>If you find a way to mitigate 1), you can pass the savings into 2), protecting and retaining your highest value employees.<p>While other factors do obviously matter, and comp isn’t everything - <i>removing</i> comp from the hierarchy of needs entirely dramatically changes the mindset towards ownership of work and outcome.
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exabrialalmost 5 years ago
It&#x27;s only about 50% about pay for STEM fields. They have to be engaged, feel like they have a voice or influence in the culture&#x2F;business decisions, have great equipment to use, and flexible time off.
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iso1631almost 5 years ago
The large UK broadcaster I work for is having to make large amounts of savings. They&#x27;ve decided that they don&#x27;t like paying for slack (for £10 per user per month), and instead are going to force everyone to use MS Teams.<p>Since 95% of people have been working from home (and no plans for most to go back this year), they won&#x27;t allow people to take unused monitors back because they might end up lost. These are £80 monitors.<p>It&#x27;s these pathetic nickle-and-diming that is far more likely to make me look for another job than not paying a £200 a year pay rise.<p>Someone sees &quot;£80 times 20,000 staff, that&#x27;s over £1m, we can&#x27;t risk that!&quot;
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paxysalmost 5 years ago
100% agree with this article, but would also caution against any kind of generalization. Different people want different things.<p>For the first ~7-10 years of my career I strongly believed that everything was about salary. I picked jobs solely based on the comp package, and the work I did was motivated by bonuses and promotions. I&#x27;m sure that&#x27;s still the case for a large chunk of engineers, but for me, with more experience under my belt, I now think more and more about stuff like fulfillment, ownership, real world impact of my work etc.
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nistenalmost 5 years ago
I find the reasoning of this article pretty obnoxious to be honest.<p>They start off with a valid argument, that if you treat engineers better than everyone else it creates resentment in other parts of the company and that makes sense.<p><i>If that weren’t enough, all of this “special treatment” towards engineers can create resentment throughout the rest of the company. Such negativity hurts performance and retention in other business units where employees might feel that they’re treated unfairly.</i><p>I&#x27;ve actually experienced this myself as the new guy, even within the engineering department. Then 5 paragraphs later this is what they write:<p><i>Maybe instead of offering free lunches on Fridays, you can provide funding to attend Apple’s Worldwide Developer Conference (WWDC, once that’s hosted in real life again) or a Coursera subscription. If you’re in the mobile apps space, you might offer to buy the newest iPhone or Android device for your engineers annually on a “yours to keep” basis.</i><p>I&#x27;m sorry for the negativity, I just don&#x27;t think I can trust the judgement of the author on this issue after reading that. Also as a mobile developer, shouldn&#x27;t you be aiming for your app to perform well on low to midrange devices first, thus targeting the largest ammount of potential users? If you&#x27;re styling for the iphone x&#x2F;11 notch you&#x27;re gonna be doing that in the simulator first regardless.
travisgriggsalmost 5 years ago
Pay me enough so I can feed my family and have comfortable shelter.<p>Don&#x27;t create a culture where I am a doer but not allowed to be a decider. I will eventually walk away from asymmetric power structures.<p>If you don&#x27;t&#x2F;can&#x27;t trust me, I probably won&#x27;t trust you. I prefer relationships of trust.<p>I want to learn and improve. Use your extra money to do that and act is if it matters to you.<p>If you must use pay as your sole means of appeasing me, pay me LOTS. So very much that I&#x27;m willing to put up with the bureaucratic shitshow that is your company, spending all my drone-ish non-innovative 9 to 5 day thinking about the rush I&#x27;m going to experience doing cool things with all of the excess cash you&#x27;re giving me.
wuliwongalmost 5 years ago
I changed jobs in the past year and only received a slight pay increase. For the first time in my engineering career, I really enjoy my job. There are a lot of factors but the thing that stands out the most is the senior leadership here. They actively seek to engage the entire organization in strategy and planning and are really working towards a more transparent and realistic process of growth and advancement. My experience previous to this had been leadership only paying lip service to these ideas at best. I am not sure what increase in compensation would be required for me to leave and I honestly hope I don&#x27;t find out.
DoofusOfDeathalmost 5 years ago
It probably depends quite a bit on the engineer&#x27;s life outside of work.<p>For much of my career, I was the only income earner in a family of 6. Making ends meet was sometimes a challenge, which made me very salary-sensitive <i>and</i> averse to the risk of income disruption.<p>My family finances have somewhat improved in recent years, letting me unclinch a little regarding money. This lets me put more weight on other factors relating to job satisfaction and feeling of purpose.
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mjayhnalmost 5 years ago
There&#x27;s a style of management I encounter still that is very unsupportive of it&#x27;s employees. Untrusting, thinking they&#x27;re always out to leave just to make more money. It&#x27;s interesting because the engineers I know tend to be pretty altruistic people and I won&#x27;t say they don&#x27;t care about money but it&#x27;s not their leading factor in employment (I definitely know the other spectrum as well so don&#x27;t think I&#x27;m ignoring that).<p>I&#x27;ve worked at places specifically didn&#x27;t want to send employees to conferences because they think everyone uses them as farming tools (whether that&#x27;s true or not, some engineers just want to go learn and it&#x27;s pretty upsetting if you have a SME in some subject and don&#x27;t allow them to attend a con while plenty of other $leaders go).<p>I&#x27;ve also worked for tech places where a boss would come in and fire you on Monday then call you up and offer you $1k to return on Tuesday, me being about 21 at my first sysadmin job kept me around for that abuse.<p>It&#x27;s really, really not a good feeling to feel untrusted or like you&#x27;re constantly being tested by your employer.
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awatalmost 5 years ago
Not directly a compensation component but organizations can make sure they have a technical leader supporting software organizations.<p>Consulting with companies on productivity I can’t express how much devs not feeling like they have representation&#x2F;a voice at the exec level negates comp effectiveness.
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InfiniteRandalmost 5 years ago
&quot;As an engineer, I experienced firsthand the dual relationship most of us have with the rest of the business. One day you’re a hero for delivering something “magical,” then the next you’re a jerk for not delivering something “so simple” in a short amount of time, or refusing to make certain “easy” changes, even if those requests carry a hidden but critical risk of destabilizing the whole software.&quot;<p>That part of the article really struck a cord with me. From my experience, I think that a big factor in whether engineers start looking for another job is how much the manager acts as a filter for the unrealistic expectations of the rest of the company. Engineers should not be too isolated, after all some interaction is good to get feedback and it feels good to directly see people benefit from your work, but managers have to be able to shield their engineers from the mood swings of the CEO or the pie-in-the-sky promises from marketing. I think this is a big component of a &quot;good working environment&quot; and is often worth more than pay or promotions.
cableshaftalmost 5 years ago
Keep them too stressed out and busy with work that they don&#x27;t have the time and energy to really look for something new and grind dozens of LeetCode problems to get them through the grueling technical interview gauntlet? Seems to be working with my company to keep me there, at least.
the_jeremyalmost 5 years ago
IMO, the only reason above-market pay doesn&#x27;t raise retention as much as people want is that it&#x27;s possible to have above-market pay <i>and</i> a job people enjoy doing.<p>And on the other hand, you can offer enough above-market and people will do any job, as evidenced by the other thread I saw yesterday where people were making crazy salaries to implement unethical, deceptive practices against their users.
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neilwilsonalmost 5 years ago
In Herzberg&#x27;s theory, Money is merely a hygiene factor, not a motivating factor.<p>Generally by the time engineers start thinking about money you&#x27;ve already lost them.<p>My rule of thumb has always been that when I start thinking &quot;I&#x27;m not getting paid enough to put up with this&quot;, it&#x27;s time to move on whatever happens.
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laurentdcalmost 5 years ago
A nice, laid-back, zero-bs team is all I need. I value that much much higher than money. I have no interest in workplace drama. I&#x27;ve always considered career and competition to be quite pointless: if I had a good idea I&#x27;d build the product myself and keep all the margins in my pocket. It&#x27;s computer stuff afterall.<p>Often I have no interest in the work itself either, but if the team is good I&#x27;m happy. They could make us shovel snow all day, I&#x27;d still come to work.
motohagiographyalmost 5 years ago
Good article on an important topic. I would like to address what I perceive as assumptions in the perspective. We really need to get away from this idea that salaries are these paternalistic expressions of fairness. We earn money from providing value.<p>If you want people to stay, your options are to give them money, prestige, or stability.<p>- Money includes salary, bonus, commissions and contingent comp, stock options and perks and even vacation time.<p>- Prestige is conferences, publications, exposure to high profile brand clients and stakeholders, airline points hotel and travel rewards, charity sponsorship and matching, committee memberships, media and public facing representation, and leadership options.<p>- Stability includes things like investing in training, giving them headcount, bringing them into the strategic fold, partnerships, responsibility for key client or stakeholder relationships, etc.<p>Evaluate your total comp using the triad of Money, Stability, Prestige. Chances are you are weighted toward one, and there is a role out there with a different balance. I think HR salary bands are a wishfull opposite of market rates, and personally I think they&#x27;re stupid for any company that is still growing and not just optimizing an established long term revenue stream. If you are a bank or institution, sure, but your entire business is an optimization problem not a growth problem. If there is any upside volatility in your revenue and you are making something new that people want, pay for value, because I&#x27;d argue you can&#x27;t afford not to.<p>I&#x27;ve watched companies lose key engineers that delayed major product releases over a $10-20k salary bump while flying their marginalized director of special projects around in business class, and my conclusion is that compensation is arbitrary and a negotiations power game. Don&#x27;t spend too much time reasoning about it.<p>The companies that retain people are the ones who figure out the Stability and Prestige elements of the triad.
leonardteoalmost 5 years ago
Honestly I have given up trying to “keep” engineers because it’s a losing battle. It’s impossible to compete with big tech. From the offers I’ve seen, if FAANG&#x2F;Big Tech really wants one of your team members, they will get them and there is nothing you can do.<p>My employees stay because they want to. They enjoy the work, domain, colleagues. The salary is competitive and fair. They can thrive in this environment.<p>But I am under no illusions about creating some special environment that can prevent them from getting poached. You can throw cash, stocks, options all you want but if Big Tech wants them, they will outbid you.<p>Just assume that at any moment they can and will get poached and ensure that the business can continue if people leave. Keep the stack simple, stick to standards, minimize NIH etc.
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pascalxusalmost 5 years ago
I&#x27;ve worked for about 7 different companies over 15 years and at each of those places I&#x27;ve seen a ton of engineers come and go. Most of the time, the reason they leave is one of three things: got fired, got laid off, or was pushed out. So, if you want your engineers to stick around, you gotta find out why so many of them are being laid off or pushed out and prevent that from happening. That&#x27;s where you&#x27;ll get the most bang for your buck.<p>Engineers don&#x27;t just leave for no reason. They leave because they&#x27;re either forced out or there&#x27;s something that really sucks about the company: most of the time it&#x27;s the work life balance that really sucks.
Invictus0almost 5 years ago
The trick to retaining engineers, besides paying them fairly, is to hire good managers that understand engineering. A huge component of workplace satisfaction can be traced back to how much an employee likes their boss.
mylonsalmost 5 years ago
For whatever reason this is making me think about the narrative from a lot of VC’s, Paul Graham, Tyler Cowen, and many more that remote work will commoditize software engineering and destroy wages there.<p>And articles like this make me think about institutional knowledge and how there are no standards what so ever in software, and so long as new frameworks, languages, and not invented here syndrome persist there will always be a need to keep your engineering staff around.<p>&#x2F;end ramble thoughts
sys_64738almost 5 years ago
Needs V Wants.<p>I need shelter but it only costs so much to full-fill need. Then if I&#x27;m get paid sufficient salary to cover all my needs then wants decides the utility of the next marginal dollar. If the value doesn&#x27;t align with my want then I don&#x27;t care. As you get older you realize your time is finite and you want to enjoy what you do if you have the opportunity to make such a decision.<p>So if a job pays 20% more but requires more overtime or more stress then I&#x27;ll pass.
mishftwalmost 5 years ago
Pay is not everything. But it also depends on the engineer as well. I&#x27;ve taken pay cuts to work on interesting and engaging work in the past. But then again my lifestyle is pretty simple and minimalistic and for me the trade-off was worth it.
chapiumalmost 5 years ago
When I worked somewhere 100% for the money, my motivation declined and I ended up in such a rut I was one of the worst performers on the team.<p>Compensation is important but if they are golden handcuffs, your organization (and employee) will suffer.
TheRealPomaxalmost 5 years ago
Enough to take the issue of money off the table, given how much life costs wherever they live. And not by applying a &quot;rent index&quot; or &quot;cost of living&quot; factor to whatever people get paid in SF.
tidenlyalmost 5 years ago
My job gives me no bonus or raise after a year and a half, despite obvious vast increases in my responsibilities and the assumption of another engineer who lefts&#x27; tasks too.. I just don&#x27;t know how to approach asking because I hate confrontation and those kinds of situations. I basically always change jobs because of this reason - I&#x27;m just avoiding a conversation I don&#x27;t want to have and the raise is bigger by quitting haha
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thanatropismalmost 5 years ago
An interesting question is whether paying enough (imagining an unlimited budget) won&#x27;t end up selecting for coders who care more about the money than the work.<p>A further question is whether these coders are actually better for the org -- the Henry Ford efficiency wage-type incentive may keep them at consistent pace and quality, whereas rockstars with physics PhD may have parallel agendas to make the project more fun to work with.
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mrnookalmost 5 years ago
If you pay me a lot but my job makes me miserable, I&#x27;ll just use that salary as leverage to negotiate a high salary at a company I want to work for.
enriqutoalmost 5 years ago
I hope sooner than later there will be some kind of union of engineers and salaries will be public and standarized (and the median value of the salary for each position will be higher than today, due to the power of collective bargaining). It is shameful that some senior software engineers earn so much less than others, due to out-of-band reasons.
j45almost 5 years ago
Money alone doesn&#x27;t keep many problem solvers around.<p>Problem solving is as important as the compensation.<p>A great environment to solve problems, and to be able to work with other smart, conscientious people, while pursuing new levels of mastery is a really good sell.<p>People who are driven solely, or primarily by money can&#x27;t be paid enough and will on that mindset, tend to move on.
flerchinalmost 5 years ago
You should pay them market rates to replace them (ie, much higher than you currently are). Yes, you should also foster their need for growth and learning, but that&#x27;s because it&#x27;s an investment in their productivity.<p>Investing in engineer&#x27;s productivity, and paying them what they&#x27;re worth, turns out that&#x27;s all it takes.
KoftaBobalmost 5 years ago
This question would be much easier to answer if salary transparency from employers was the norm, or even required.<p>If every job listing on Indeed had a salary&#x2F;compensation range, it would be very straightforward to see what the going rate is for that particular skillset, and it would push employers to be competitive on salary.
C1sc0catalmost 5 years ago
Ah a management consultant producing arguments for lower pay for Hr&#x2F;Accounting to justify cost cutting.<p>I am Shocked Shocked I tell you, can you smell gas :-)<p>Whilst pay isn&#x27;t every thing people do tend to lie when asked about what important to them - the same way you slowdown when the time and motion team are monitoring you
_zachsalmost 5 years ago
My experience is very anecdotal, but there&#x27;s a point where the pay&#x2F;stock options are definitely enough to keep people around. I have a few friends in this exact position now, where the golden handcuffs are too sweet for them to walk.
drooblesalmost 5 years ago
At my company, I think engineers are more concerned with feeling comfortable and having the flexibility to take care of the demands of their lives and families over high pay.<p>Midwest company so YMMV.
the_arunalmost 5 years ago
* functional requirements - great pay<p>* non-functional requirements - great culture.<p>&quot;great&quot; - is a variable here. People define it to their own understanding and advantage.
phtevusalmost 5 years ago
If the matter of pay is the only thing keeping the engineers there, this feels more like a problem with the business model or company culture.
gdsdfealmost 5 years ago
Well let&#x27;s flip it around : you! yes you reading this, why are you staying in your current position ?
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danbmil99almost 5 years ago
Pay them with the experience of building a product somebody wants to use
snicker7almost 5 years ago
tl;dr: Engineers prefer a &quot;positive&quot; work environment over competitive salaries.<p>Couldn&#x27;t disagree more. Pay me.
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kemitchellalmost 5 years ago
Ask them.
centimeteralmost 5 years ago
&gt; When it comes to engineers, the key to employee retention isn&#x27;t just about pay.<p>Maybe I’m atypical, but at a certain point all the other factors just don’t cut it. If you’re trying to pay me $400k&#x2F;yr total comp and I can get $600k&#x2F;yr elsewhere, the disparities in culture or whatever have to be pretty significant to dominate.
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ebgrahamalmost 5 years ago
Our industry&#x27;s asinine interview practices keep people from job seeking and getting their fair value. The sooner engineers refuse to give leetcode interviews, the sooner we&#x27;ll see a natural bump in average engineering salary, and we&#x27;ll have more power in the job market to demand better working conditions.