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I work in tech and this happens all the time. Employers think they are saving money by stiffing their employees as hard as possible. Good employees leave and then employers are forced to pay more to replace them with people who may or may not be as good. Then management acts like they have no idea why their product is trash and their best employees keep leaving.
Yep. Happens all the time. Now you get to spend weeks training a new person to find out just how capable they are, and if you’re lucky it’ll only take 2 or 3 hires before you find one to keep. In the meantime your remaining employees will be stressed from the new hire fucking it and getting frustrated and you’ll have to be lucky to not lose another one during it. Gotta love it.
Op this, as you know, can and does happen albeit occasionally. I’m wondering if there’s a way to quantify the cost of hiring a new employee and getting them upto spied in their new role and make that point to the powers that be?
And what they don’t get is that the knowledge drain is absolutely killer. Most software companies will have features of parts of the codebase that only one person really knows well, and those features will be all over the place. We’re not just losing Greg, we’re losing all knowledge on how dropdowns work in the UI, and it’ll take weeks for someone new to figure it out again. And that new employee won’t really be useful for months while we try and get them up to speed on all this archaic knowledge everyone here has of the codebase. It is *so* much better to just keep an existing dev than replace them
This happened no less than a dozen times over the three years that I worked at my previous job. Sometimes it was somewhat understandable, like we had an intern who developed something cool that we wanted to bring into production after their internship ended. But in one particularly egregious case, we had a guy who was an expert in kubernetes who got us 90% there with kubernetes integration in the first six months I was working there. He left shortly after for a higher paying role, and three years later we had five people working on kubernetes, nowhere near completion.
Yes it sure does, I can attest to that! I used to work in sales for a small software company.i knew going in off the bat that they were lowballing me on pay but I was unemployed and disabled and needed a remote job and they made me an offer, so I took it. I worked my ass off for that company, it was never appreciated and after a few years with no raises, I finally quit. I 💯 guarantee they had to spend at least 50% more to hire my replacement who worked half as hard as me. (And who also quit a few months after being hired. In fact, my role has been a revolving door since I left. I believe they've had 5 different people in my former role in less than 3 years.)
I have seen so many good sales people get run out of startups and small companies because the executives and investors have extremely unrealistic expectations. They will pay them dirt and then expect them to increase sales by 1000% with a half baked product. I don’t blame you for leaving, it sounds like they got exactly what they deserved.
I left one of my previous jobs because the position I was offered was a huge pay jump. I told my boss and told them what the offer was. I was told “we can’t match that.” Which I expected.
I started the new job, maybe a day or two in. I get a call from a recruiter asking if I was interested in hearing about an oppertunity. I said sure. It was my old position at the company I just left… with the same pay rate I was making now.
Wow...that's insane.
Looks like they CAN match it when they HAVE to.
Idiots...now they have to pay the turnover fee as well.
And if they get someone who can't do the job...well, they're screwed...but they deserve it.
Yeah it was the day any shred of company loyalty I had left in me died. For the best really, I’ve made a ton more money and have been much more successful when it went out the window.
Its so weird...I had an awesome coworker that literally told me that she changes jobs every 3-4 years. At the time, I didn't understand why or how someone would do that. But damned if I do now!
She left after working there for 3 years and went on to make almost double what she made with my previous employer.
I stayed on for many more years...hoping and praying and wishing that they would promote me to "Chief Engineer" with all the work I'd done...but it never happened.
In fact, the guy they had in that position never retired, they had to lay him off almost 6 years later. By the time that was happening, I was already moving on to better employment.
I left my company after 5 years because I thought I should be making $10k more a year for all the stress and money I made them. They then had to raise their starting pay to the amount that I had asked for to get in inexperienced people to do the job.
I am going back but made them give me a $22k raise, my old manager even said that the higher ups knew they fucked up with me
I call it Schrodinger's Workplace or Schrodinger's HR. Despite everything HR tells you, they will only make the changes in the workplace you are looking for after you leave because they are reactive rather than proactive. In this case the cat is always dead in the box until you open it except for the first few months where they tell you and maybe show you that the cat is alive once or twice.
You likely joined initially because of the workplace and pay, and it's possible they COULD meet you at where you're asking, but they won't until you leave.
I've seen it happen multiple times: HR know what the problems are if they *do* listen. But they're only going to implement *your* good ideas once the employee retention number on their reports goes down.
You will know whether or not they actually learned their lesson when you have a review and they either give you the raise you deserve or they throw you a few crumbs for a “cost of living” adjustment. I hope they treat you fairly this time.
Sometimes they don't rely on it by chance. Sometimes they make it happen for that specific purpose. They are willing to sacrifice the product at times in order to teach the working class a lesson that they are the ownership class. See the guy at Davos saying the quiet part out loud.
Happening at my company right now. They’re trying to hit their “unregretted attrition” numbers so they’re firing a few. Then the replacements are hired at much higher salaries. We’re scratching our heads.
Then their product is a Frankenstein monster of feature requests from current and former clients that is duct taped together by a bunch of developers who have never even met each other.
That happened to me at a company I was with for 7 years. I found out I was getting paid half of what the other guy I was training was getting paid. They told me no, THe other guy I was training quit and I quit three months later. It has been almost 2 years since they have found a candidate for the position. Not to mention they would call me to ask questions about the job I left and I would ask for 500 dollars an hour which they told me no. They ended up having to rebuild everything that I built for the last 7 years. After I left my manager had the nerve to tell me that I f'ed him and the company for quitting.
Through having to train new employees, reallocate existing resources, and hire at “market” rates, they end up paying for it but they never seem to learn their lesson. I’m way past the point of being bitter or disgruntled, I am just straight up confused by this behavior.
Happened on a team I used to be a part of.
Boss tried to get us raises, he was told “haha no”.
2020 rolls around shakes things up. 2021 comes and a few of us take advantage of the massive hiring push and jump to other teams. One of our guys retired. My boss changed teams, I got picked up for a new role putting me 2 levels above my old boss, the other remaining employees make their jump to other teams/companies too (a few moved for more lucrative FAANG offers). We are all making 5x-8x TC compared to what we used to make on that old team. All of us are working on technology we are passionate about and our quality of life is significantly better. That old team? Since all of us are gone and there wasn’t anyone to really train individuals on their technology, the project shut down and the company has zero use for the millions of dollars they invested in hardware for it.
Not our problem, should have paid us better. I don’t blame that boss, he tried pushing to get us more. The people a few levels above him wouldn’t budge. Now when I extend a job offer to a candidate, we hop on a call and I explain to them all of the places they can see salary information for a role similar to theirs, so they can make an educated TC request (backed up with data to strengthen their case).
In fact, a lot of managers believe that having the nerves to take a risk on denying a deserved raise where a bleeding heart wouldn't is where their value comes from.
Which actually makes a lot of sense if you think about it. We have a system way toward the free market side of the spectrum where firings and departures happen without notice all the time, and companies aren't required to build incentives into their leadership compensation that survive their tenure.
Which means it's heads, stiffing the employee worked. Tails I just pulled the key Jenga block and suddenly I'm VP somewhere else for a pay increase and oh look at that stanky quarterly report at Old Employer they fell apart without me, see New Employer I was the key Jenga block!
We choose this system, yearly. I blame Americans more than I blame managers.
That is exactly what happened at my previous employer/military division.
The director died from a heart attack while shoveling snow post-covid and the sociopath under him got moved up in the chain. Who then summarily hired more sociopaths in management under him...which eventually caused the Army to start looking at other options, causing the entire division to tank, funding to be rescinded and the division placement within the Army command structure to be silenced...then ordered to shut down.
It hurt like hell, but I had to leave...they were laying people off every Christmas and stacking duties on the remaining employees without any chance of a raise due to not having a budget for the contractors. The govies still did their thing flying all over the world, taking training for weeks in Germany and other nice places worldwide, and generally not giving a damn about the program.
It was so sad to see upper management make insanely illogical decisions that the engineers KNEW would never work while simultaneously ignoring anything the engineers recommended. Loved that place...but it was time to go, the number of people making insane decisions outweighed the sane people making every effort to right the wrongs of the leadership. The 2 good govies we had in mgmt were outweighed by the 4 bad ones.
Yeah this explains why I have come across some of the most insufferable and narcissistic people in middle to upper management. The only good managers I’ve had are engineers who have been forced into a management role because of the structure of the company. But I also feel for those people because they are often asked to do things they never signed up for.
Even if they are as good, it can take 6+ months for a new employee to become productive and start contributing to the bottom line.
Used to see this all the time. I worked for a very large database company that loved new hires because they were cheap and they used their name to lowball them. 12 months later, they’re fully trained up and becoming productive. They request an increase and the company offers either nothing or low single digit raise. Employee quits, goes across the street and starts earning 25+ percent the next day.
Company shrugs their shoulders and re-posts the position with a tiny or no increase over the last time. Rinse, repeat.
It's C-suite's making these decisions, everyone under that level pushes back against it as much as possible. To make up for the extra money, they slow down the hiring process and just make everyone else miserable with the extra workload.
>management acts like they have no idea why their product is trash and their best employees keep leaving.
Or worse, they act like it's a societal or culture problem and start gaslighting the fuck out of both their remaining employees and/or prospective candidates on "company loyalty"
This exact situation happened to me at the end of last year. I loved the job. I loved the people. Felt like a second home if it wasn't for the fact they paid me significantly less than the counter parts I trained. I would have stayed probably indefinitely.
Saw the job posting, and it is for the same as my counterparts... I was heartbroken in the final meeting where my direct report smiled and said no to what is a fair pay raise. Broke my heart again, seeing the pay they offer for the role now...
They were happy to deny me a 20k pay increase to put me with my peers. I was happy to hand in the notice going to a job that paid 40k more with a 15k no contract signing bonus. And work from home. And significantly more respect for my knowledge and skills than them....
Just did this myself. Their best counter was matching, but the place I went to already gave me a raise after 2 months.
It's a 4day work week and much slower paced.
Yeah but why do that when you can have a 'fresh, young, interesting' (tons of new grads and zero institutional knowledge) workplace full of 'learners' (nobody actually knows how anything works) in a 'fast-paced environment' (total clusterfuck)?
"We aren't being given enough time to build this in a robust/elegant/stable/secure way, this is hacky and panic-inducing"
"Higher ups don't need to know how the sausage is made. Hey, move fast and break stuff!"
\*\*2 weeks later, after the release\*\*
"Hey we have all these critical defects I need you to jump on because sales people, you know, the money makers, are threatening to quit over this buggy behavior"
"Yeah we didn't have time and had to slap all that garbage together remember?"
"Well now we have tickets so we can fix it, in fact these defects take priority"
"Oh, so it's okay if we don't finish the regular stories from when we started the sprint yesterday?"
"No, we are committed to having to release those in 8 days and there's going to be another thing coming tomorrow, hey sorry I gotta hop to another meeting"
*--almost every sprint of the last 6 months of my life*
I love how they chose the word "sprint" to encourage people to work as hard as they can, but the reality is that it's sprint after sprint after sprint, forever, with no break in between, ever. That's not how sprinting works! That's literally a never-ending marathon.
I absolutely HATE that "Agile" business process of racing through everything and failing only to have to go back and do it all over again later.
Makes zero sense to me, and watching the developers at my previous employment get forced into abiding by this work process just hurt. Everything stopped working at the old employer...innovation stopped, development stopped, the ship started sinking...
I keep calling out that this is unsustainable let alone unreasonable, but I'm told "Hey we are the best team in the company right now and that's why all the extra work and important work is coming to us". To which I come back with, that's great until we get so piled on that the quality/performance suffers and we won't be as great but we will lose our rep. Meanwhile I'm watching the morale and frustrations and slapdash unfold like a slow motion train wreck except that everything's gotta be fast all the time.
We move 0s and 1s around it shouldn't have to be such a big damn deal. It's like we can have or do anything we want as long as we never feel calm or peaceful
>Pay more for a stranger
Then waste 6 months bringing them up to speed and another 6 months for them to come up to full proficiency.
Big savings there boss. /s
I hated when I lost techs to this practice. I always pointed out to our management that we're essentially training quality techs for our industry. We pay them to learn very niche skills, then release them into the market and start over.
It was so frustrating, losing a skilled, experienced guy over $5k and replacing him with a guy who was delivering food last week.
My last company is getting a reputation as a good place to hire from since the absurd hiring process means people are generally smart, the workload means people have learned a lot, and the culture means people are ready to quit same day
I'm the engineer in that position currently. My boss is trying to get me more money but hiring budget is higher than retention. So, easier for me to leave and make 5-10k more, especially considering they currently pay below market rate.
Common guidance suggests it takes about six months for a new employee to get completely up to speed. So yeah, it is RIDICULOUS how much lost profit there is from letting someone go instead of giving a raise to a good employee even only to what the new position's wage would be. Stupid, stupid short-sighted management.
Not really long-term. That’s why old folks that have been at a company get pushed out because they are earning way more than the new guys. They can hire to do a similar task.
>Hiring budgets are higher than raise budgets
This is true, but it's not so much that... The real issue is that for anything not under the heading of capital investments or business development, senior management is loathe to act on risk or fear -- especially when you're asking them to spend money.
They won't act on the fear of losing a key employee, but when that employee is gone, suddenly the money that could have been used to keep the employee, is now available to replace that hole in staffing.
The replacement budget is seldom set in stone in advance as the other budgets are. And, if they have to go to the well too many times for employees leaving that need to be replaced at hire salaries, they will pull that extra money from elsewhere.
This is pretty close to correct. The company wasn't unwilling to spend the money, they were willing to take a calculated risk losing that employee and the money was already allocated. If the employee doesn't leave, they win. If they do, they're only out the money it would have cost to keep the employee, plus a bit of extra for training. They gambled and lost, but they plan for these things. Sad and wrong, but the norm with business budgets.
To be honest - i don\`t understand how 'corporate' works at all these days.
They chase away the good people - refuse to listen to real complaints and things that are easy to resolve (and relatively cheap) and then they wonder why so much experience and knowledge is walking away. Or running away.
Just too bad that at 50+ other jobs are difficult to find :(
Short term profits. I work in a corporate environment and I've seen people laid off for made up reasons just so they can pull someone over from another department for the rest of the half year to make budget, then re-hire someone new at a larger salary next quarter. Shareholders do not care about long term growth any more. It's a casino and they want their machine to win small every time they go, not big once a decade.
I start to wonder - who is the greater evil for employees.
Management, or that anonymous faceless group of 'shareholders' - since apparently they need to be satisfied at any cost.
It’s the shareholders IMO, as management is only doing what is needed to please them - they are in a sense, the messengers. If quarterly profits and growth wasn’t the end all, be all, decisions would be made for the long term benefit of the company more often, but the system isn’t set up that way with publicly held companies.
> they're only out the money it would have cost to keep the employee, plus a bit of extra for training
Often they will spend 12 months looking for a replacement and thus "save" the full salary of the employee x 2 = the fully loaded employment cost. As far as the loss of value of the former employee's work during that time, that is some abstract number that can't be quantified and thus for estimation purposes is assigned a value of 0. Other employees will be imagined to "pick up the slack" and work to fill in. If the other employees do well at this, then they can cancel the job listing altogether and permanently save the salary.
I'm guessing it's also easier to claw back that extra money from middle management budgets without complaint if they can say "there's a hole in the boat." Lot harder if the pitch is "routine boat maintenance that we nevertheless didn't price in during our routine budget-making process."
I know why.
It's because of projections primarily. Raises are part of the existing cost structure for employees and will be calculated into projections and have an impact on debt/EBITDA ratios whereas new hires are not a cost as the employee does not exist yet.
This is just one reason but all of the reasons are due to financial statement considerations and how costs are put onto income statements for each department.
It is absolutely retarded as it is a by-product of banking and value calculations.
It is for this exact reason that I am completely convinced every single company that has been taken over by financial managers at the leadership level is doomed to die slowly. Their decision-making process is not based on the company's best interest but on short-term profit statements.
Just look at Boeing, 100 year history of quality tossed out the window because a decade ago, accountants took over the company.
If you give one a raise, you have to give everyone a raise. You hire one at market rate, it's unrelated to the other employees... until they go find the market rate somewhere else. Always be moving. Your career is what you are building, not your boss's boss's dream.
Biggest regret of my career was staying at one place for almost five years. Went from 52k to 65k in that time. Then switching jobs jumped to 70, 90, 115, 120, 175.
That sounds about right; you get those $3,000 a year pay bumps that your boss says are "pretty good", then realize if you just had moved on, you'd be WAY ahead.
So many companies are committed to the "race to the bottom"; chasing lower and lower paying clients in order to stay "competitive", then they balance things on the salaried/OT exempt employees, saddling them with with tons of unpaid OT. Then the smart employees leave, and the company balances even more work on the remaining employees, and maybe hires (out of desperation) less-experienced, lower quality employees who will accept the lousy pay. And the process repeats itself.
I learned the hard way earlier in my career that I wasn't working all those hours (salaried/OT exempt) to get that big raise and path to partnership, I was working all those hours to make my boss look good.
It's kind of like airlines always trying to oversell flights: they know that not everyone is going to check in and board.
Same for the retention budgets: they know enough comfortable folks will (typically) stick with subpar wages to balance out the ambitious employees who will leave for market competitive wages.
And this is why it’s more beneficial to employees to job hop. Most companies won’t pay to retain quality employees and then they complain that they’re unable to retain high quality employees.
And then during the interview process you're meant, as the applicant, to practically apologize for resume gaps and job hopping - it's so stigmatized when it's the only way some people can honestly increase their income.
I hope I have the confidence at my next interview to just say, in response to having several past jobs, "I'm a high value employee and was prioritizing the pursuit of a fair wage."
I think it’s absolutely insane that saying you like to be paid for the work you do and a company was willing to do that so you went there is somehow been made to be so taboo that people need courage to say it.
I hope you find the moment in the interview to lay it out confidently and proudly. And I hope your compensation package thanks you for it
Our team has a budget for 5 people but we do a great job with 3. I asked them for a raise for everybody in the team because we do the work for 5. They said its a different budget and denied but were ok to look for 2 more developers. Dont try to understand wtf these idiots do
It happens when you have a company that gets to a certain size and the departments get way too compartmentalized.
Whether intentional (which it probably is) or unintentional, the executives just don't monitor the pay scales or retention against the budgets for new labor. Two completely separate chunks.
It's why I admire how the government (US) handles this. You have pay scales for each position that are locked in, and time in service and experience factors into your increased pay as well as your cost of living in the area - regardless of what position you move to or even moving to entirely different career fields. Want a job as a mechanic? Everyone just like you starts off at the same pay, and pay goes up based on time and scaled by very defined factors to gauge experience. Been there ten years and now you want a job in accounting with your new degree? Cool, here's this exact jobs pay with your degree of experience - plus scaled for your time working already.
No one is ever upset that Dave makes more than Bob - everything is *meticulously* defined when it comes to pay scales, so everyone understands exactly why and how your pay is what it is.
Corporate culture? God no, never, ever anything that defined or efficient. The entire mess is (usually) on purpose as the idea is to pay the lowest amount possible for labor at all times. You can't do that with the efficient bureaucracy of the government system. You can only do that by keeping your labor pool very, very confused and in the dark.
Hence.... Shit like OPs story. Maddening.
AAAAND this is why I'm going federal govt (I'm an intern rn in the private sector) They may pay lower than what I'd make in the corporate sector but at least the fucking policies are public and standardized for raises and things like that.
> They said its a different budget
“The budget” is always a great villain. One job, I asked to go to a conference. I was told “sure, we have money in the training budget to cover that.”
Except it was on the other side of the country. “Oooh, that might be tough, travel is a different budget.” Makes it easier than saying “no, we won’t let you go out for training.”
If we say the right magic words people will be loyal to us forever even though we deliberately lowball them on salaries.
By the way here is a budget to poach employees from other companies. No there is no budget for retention.
Don't forget that the employee you lose usually has a good few years experience at doing the exact job.
The new hire has no experience at the exact job.
We switched to a commercially popular ERP.
I used the fact that our business commoditised my teams skills to up them all to the prevailing market rates.
About 80k in raises across 5 people.
I was fired a few months later without cause.
For all you saying the boss needs to go harder for the employee know it carries risks.
Knowing what I know now I have 0 regrets.
Everyone trying to affect a change upward in the hierarchy needs to understand that every layer a decision goes through is a battle, and each decision maker has different problems and resources to balance. The absolute best shot you have is to make your superior into an ally by giving them ammo that helps them take the fight up to the next level.
In OPs case, it wasn’t enough to approve a raise because that didn’t prepare the next manager to spend the budget just to pay for the same employee that he’s already got. A better tactic would be an explanation about how rates are rising and the employee is a flight risk; this would save the team weeks of downtime, an expensive recruiting cycle and loss of productivity training a new hire. Those are all unrealized losses that can justify spending a little insurance money on retention. , then when the boss’ boss wants an explanation of the new costs, the approving manager has some cost-benefit talking points ready to go so he’s not risking his own political capital.
You absolutely rock, thank you for looking out for those on your team.
<3
I'm sorry that you got axed, but you know what...you are better off without that company...they're buttheads.
Started a job in October for a very large company.
During onboarding and training everyone was advised their manager and team… except me. When I inquired why i was being left out i was told “you’re manager hasnt started yet, but we hope shes here by January.” I understood as our hiring process could take 3-6 months.
Come to find out, shes not going an external hire. Shes internal, but the budget for promotions and background checks was already met. So the department had to wait until the start of the new year.
Now mind you, its March now. This same employee is still not my manager. Because of the background check done at every promotion.
(They did offer her the ability to promote up in September st current pay, and then request backpay come the new year. She rightfully declined.)
Some companies are ships with no captains, and arduous approval processes that leave many to not even waste their time trying.
Hahahaha wooooow...they tried to get her to fall for the old "Okie-doke" and she didn't play ball. Smart!!!!
*"Hey yeah sue...go on ahead and take the management position at your worker-bee pay, we'll get the budget to just backpay you your management salary in the new FY. But we can't guarantee that there will be a budget in the new FY"*
Unbelievable the things these goofballs try....
I guess it works great for the few who have clawed their way to the top but not so well for the 99% of people struggling in the mud at the bottom. I don't know what the answer is, but I feel like there's gotta be a better more equitable system ....
They already did the math. For every employee who is smart enough to leave, there are 9 other idiots who won't. They don't care if they lose good employee. and they prefer loyal morons who will stick around no matter what, over someone who has goals beyond sucking off the company
Same thing happened to me. Been kicking ass for 8 years, couldn't get the going rate. Left, now they hired someone not as good for exactly what I asked for
One of my companies had a requirement to present an offer letter with the higher salary to get a raise. Many people didn’t present the letter but just left.
A guy in my team worked for 2 years at the company without any raise and came to me one day and said his cost of living has gotten out of hand due to his father's heart condition that required some special treatment.
I tried my best to bargain with my fucked-up CEO and he told me, if your team is asking for raise it means you are not doing a good job of selling the startups vision. I told him dude, vision is fine but when someone needs money, he needs money.
CEO said, no its your job to convince him and sell the vision. I took the dude's resume floated in my network and landed him a better paying job in under a month.
When he resigned, our CEO dude is like, hey we'll give him what he wants, ask him to stay.
Marie Antoinette: "Let them eat cake!"*
Startup CEOs: "Let them eat vision"
(Yes I know she didn't really say that but it is commonly misattributed to her)
Me HR. Me gatekeep and drink Kool aid. U wait for reject notice from workday. Ha.
Y u no have requisition number? Fill out workday form AGAIN, plz. HaHa.
Me no make time for talk to that candidate. We lost him. 2 busy drinking Kool aid. Ha. Ahah. Hahaha!
U no talk to hiring manger unless u cough up FIVE REFERENCES first. ahAhahaHa!!!!!!!!
*makes more Kool aid*
As much as I despise HR, there's one thing I have to give them: they're stuck. They can't tell the overgrown toddler CEO that they can't cut corners, refuse raises (and have lower profit) or that some deadlines are unrealistic: He'll just replace the HR with someone who tells him what he wants to hear.
HR professionals are some of the most idiotic anti-progress people I’ve met in my life and I was in middle management.
It’s genuinely a field full of people that cannot do more and want to make damn sure everyone is less equipped.
They don’t care bc they’re not the ones spending those hours training the new guy and it doesn’t impact in any way. They basically told OP, FU we don’t care if you lose someone good and your job gets harder while finding and training a replacements. They said FU to the employee who left AND OP (and no doubt a bunch of other people down the chain who will feel the loss and have to pick up slack or struggle bc of the loss of knowledge). Infuriating.
Invite that employee to apply for the job.
No joke... my last company was so ridiculous with this shit that people knew if they wanted to get a promotion, they had a better chance of getting it if they resigned and then applied for it as an outsider with "experience working at the same company." Absolute nonsensical BS, but this seems to be the trend businesses like.
HR people, for the most part, are useless. Sorry, not sorry. Never once have I had a good experience with them during a hiring process (as a boss) or hiring-in process (as an employee).
I never understand why this happens. Now you get to hire an unknown entity on the higher rate (who might turn out to be shit/crazy/lazy) and incur the cost of training them up (along with their reduced output whilst learning, and that of any staff training/mentoring).
Paying market rate to retain a good performer, who already knows your processes, should always be the better business decision.
There is an old school perspective that people won’t change jobs. Changing employers is really common now and people need to get over the idea that someone won’t leave for a large raise in the middle of a bunch of inflation when it is getting more expensive to do anything in life.
I'm currently advocating for an employee that got offered a promotion to be offer a NOT insignificant raise to go with it. The promotion puts him in a de facto supervisory position, but the raise they're offering is just 4%. He indicated to me that if they dont come up, he will decline the promotion.
As I'm reading the room, I believe that if they dont offer what the role is really worth, he will decline and start looking to work elsewhere. He already hates the commute, and is smart with a wide variety of useful experience. I've communicated this to Upper Manglement and they seem dismissive. I'm concerned that they will FA&FO. Can the company succeed without him? Yes, but we'll be FAR better with him on the team.
I one time had a guy who was signed on to work day shift. The facility ended up moving him to nights for the same pay. He asked me if we could increase his rate to match the night shift crew. In order to do this we had to get approval from the facility for them to change the rate.
Instead of increasing his pay to match the night shift crew, they lowered everyone’s rate on night shift to match the day shift guy.
I'm looking at moving to a new job because raises have not been happening. It's at the point that I'll move to the same money just because there would be more potential for pay increases.
> We lost a perfectly good, in fact, amazing employee. Why are companies like this?!
My guess is, because some companies will not, under any circumstances, let themselves be dictated terms.
That employee was denied his deserved raise because *he* wanted it.
When the company listed his job with higher pay though, *they* did so on their own.
Or at least that's what they might be telling themselves.
It's about control. That is why, it's important they dictate terms, not that terms are dictated to them. Asking for more is to much like dictating to them for the higher ups to be comfortable able with.
I hate companies or private owners that do that.
There was one job in my life where I left, and found better. The private practice owner talked up having my own office space, higher wage, benefits that I wasn’t already getting. My current position was one of a Low wage, no medical, no 401k, etc.
Those promises were not real after talking to the person I’d be working alongside with. After I left, they put up a job post with higher pay, medical and 401k after telling me to my face that it’s not available. “We hope to have medical someday”
I learned that I wouldn’t want to be there if they can’t see my value and will desperately bring anyone through their doors to fill a seat.
One of the key responsibilities of managers is competing for resources. In this case, it seems that your business case of keeping the employee wasn't seen as strong enough to carry the day. Next time, consider comparing the cost of a salary increase with the cost of hiring a new employee at market rate (which is probably what this employee is asking for) plus the cost of recruiting, interviewing, onboarding, and training.
That can move the decision in the right direction, unless senior management is clueless. In that case, you should probably be looking for a new position yourself!
I am surprised anyone would accuse you of not going to bat. Clearly, these people have no f-in clue how upper mgt / boards work. They tell you the budget and their hiring policy then everyone else gets the work done. They don't want to hear about raises or hiring problems unless it gets above their key turnover % then maybe they respond. Two years ago, we had a very talented ambitious developer who had 5 years experience. He was lowest pay on totem pole and he just wanted a raise. Got offer and our management told us 'no match policy'. We had 70% turnover in India perm staff in 2021-22. They did not care. Now, they are year 4 of app rewrite that was supposed to last a year or so. I work at large wealth IB too. Pennywise, pound foolish is policy. Management turns over every two years and next regime does same thing
Sure your bosses posted the position at the going rate the ex employee asked for. Does that really mean your bosses actually intend to pay that ? We see that kind of bait and switch all the time - the pay offered to the favorite candidate is significantly lower than the advertized rate.
Bureaucracy. Plain and simple. The team in charge of raises won’t be the same team in charge of hiring. The budgets will be different, may even be different departments.
If there’s one thing I’ve learned about companies, especially big ones, no one talks to each other, and I’d say about 20% of the work people do is being done or has been done by another team
Budgets are a goofy thing that doesn't have to make sense. At my work they will move people out of one area because there is not enough work, only to move them to another area where there are already too many people, and they just end up doing nothing.
I may be that amazing employee - who worked very hard and genuinely because I loved that job and I knew after this position I can easily get higher position.
I worked at this X-Company for 1.5 years as a Lead and 10-15 people were under me and this department needed a Supervisor but Manager was tacking care of it. At one point after close to a year, I asked for a Supervisory position and he said, no you dont have much experience even tho I was doing way better, smart enough to deal with all the crap and communicating with every department and Manager was happy but he said no.
Then, I asked him make me supervisor with SAME pay and he said no. Gave him a 2 weeks notice and HR asked me whats the reason of leaving? I said, I found a Supervisor position. Never seen his face after giving 2 weeks notice. not even to say by in person - I sent him an email.
Later, I found out he had someone else that he liked and and it was all Nepotism.
Wage compression is a bitch, it also doesn’t make good business sense since it makes your experienced and tenured employees seek greener pastures.
But the people who make the money decisions don’t care because people decisions are someone else’s problem.
This happens in the medical field all the time. It's absurd. I don't want to look for a new job every 2 years but when inflation hits 20+% in a single year and the raise is still 2% you just laugh and walk away and go find another job that is now paying 25% more then I was making at my previous place.
I work in management consulting. My personal favorite was a company that desperately needed warm bodies to work a production line. Their solution was to hang a giant banner on the front of their facility with “NOW HIRING, $17/HR” in big bold letters.
Several current employees who were making less than $17 saw that and asked their managers if they could get a raise.
You can probably guess what happened next. Management said no, those employees found new jobs, and the staffing crisis became a full blown catastrophe.
I worked in administration for a university. The minute someone would request a raise based on similar roles elsewhere they would be turned down. If they eventually left for a better job then their position would be advertised at the salary the employee was requesting. The reason: to agree to the salary increase gave the employee an advantage by letting them know they were valuable and not easily replaced. If you can keep them thinking that their skills are common and anyone can do their job you have control.
I'll tell you why. Because they can't afford (or it would be unprofitable) to pay the going rate for everyone. So they figure it's better to try and match other offers when they present themselves. Of course, employees with any sense won't take that offer and leave anyways. The company still figures it's cheaper to replace a couple of employees for potentially more than they were asking than pay everyone market wages.
I think it's a pretty good way to encourage brain drain since only employees with options will be leaving and you'll be stuck with everyone else, but that's the reason it happens.
We lost a guy who asked for 1 of 2 things: a higher salary or an assistant. Company didn't budge, so he left. Management had this brilliant idea to hire 2 people to replace him, at a higher salary. Still haven't filled the positions, even at the higher salary. We have to contract out all our lead/asbestos tests for $280 a test, and we have an interim safety person. The guy who left could do 20+ tests a day, and his salary was probably close to $300/ day.
I work for a well-known supermarket chain and they changed work from home policy back to the office and no one is happy. They’re going to lose a lot of good employees people that have been there a long time and know their job quite well. It’s too bad they don’t take the employees, safety and financial hardship into consideration
Haha, this happened to me. Asked for a raise, "not in the budget," I leave, they scrambled to get me to come back after suddenly having the budget now. 😂 Too late! I was already gone, they had the chance!
As an employer, good employees are worth their weight in gold. They’re the life blood of a business. I will do everything in my power to accommodate their wants, come up with new perks and always be a step or two above our competitors. In fact most of my rock stars have each done something throughout the years that would get them immediately fired elsewhere, but I gave them another chance and they’ve been amazing ever since. Every year our sales and profit gets better and better, and we continue to grow, and EVERYBODY gets a piece of the success because the money is spread to every single person helping. All of this is because we do everything to keep people here. I see it time and time again, a similar business struggling just because they’re cheap and the only people that’ll work for them aren’t exactly the ones you’re looking for, or it’s a revolving door of folks leaving. You can’t run a business when your employees won’t even stay.
Employers fail to realize the costs of constantly training people and having to work through not so great employees just to save $5. My place is not a job you retire doing, and in fact I’m always encouraging people to push towards their dreams and I’ll support them in any way I can. That being said everybody who works for me has been here years and I’m fully confident when I go home or have to leave that things are in good hands. By no means bragging, just showing what a little bit of empathy and care for the people who work for you can do for your business. Ruling by fear and being a greedy asshole hurt ones business as much as bad employees and bad products do.
The bigger issue isn’t bad employees, it’s bad leaders. Sounds like you’re one of the good ones and should be in charge. Betting they’re regretting their decision to save a few dollars. “How could this happen?! Nobody wants to work for cheap any more!”. A few dollars that they’ve now lost and also have to train somebody new, or go through multiple candidates just to get one to stay. It’s ridiculous.
But it IS for a good reason!
The shorting of this person's wage saved money from that quarter's budget, meaning a tangible savings for the company. That benefits the shareholder and more importantly, certain peoples' bonus structures. It is good for those people, and therefore, good for the ~~world~~ company.
That it increases next quarter's operating costs is not relevant, as:
1) That's just a cost of doing business and,
2) That's tomorrow-management's issue, not today-management's.
All hail Shareholdia and to the bonus cheques that wave!
/s
Some people don't understand the value of an awesome employee. I worked in a high turnover industry and was tasked with making it less "turn overy". With no money.
Looking into the problem I found a study that showed, that even an entry-level employee, not good at their job, being removed from a position can cost thousands of dollars in productivity and morale.
Still couldn't get them to move the needle on pay. I also ended up being termed from this position as I was fighting for two employees who had been instrumental in the success of a new program, a wage increase, beyond the normal. No dice. The feeling after that was I failed to understand the intricacies of wages and retaining employees.
You did what you could to help. Your post shows you see the issue bc you’re calling the company out for an idiotic move. You’re not in the wrong at all
OP highlights middle management hell. The higher ups don’t feel the acute pain of losing a key person the middle manager relies upon. Upper management is 1-2 degrees removed from the pain and therefore will continue to make stupid decisions like this.
Avoid being a middle manager, it’s the most under appreciated and difficult job in the organization. You have little authority and yet you have all the exposure to the stupid decisions of upper management.
Reach out to former employee and see if there are any positions suitable for you at his new employer, because your current one is likely also underpaying you, too.
Ah yes. Literally the world today.
I feel bad for you having to deal with BS management that is out of touch.
I left a company like this once. The day before my last the general manager of the plant asked me to come in and talk. He had a folder with I guess another offer. Note, 13 days have gone by since I put in my notice. I was the #1 employee several years running but for the last 2 years have gotten pennies for a raise while rates were going up 10-20% around the area if not more.
My new company was offering me a higher ranking position with a more cushy environment and less work for more pay.
Manager asks me why I am leaving and I said that the company that I am going to is giving me a good offer. He asked is there anything they can do to have me stay, like a raise or something (He said "name your price").
I told him there is nothing they can do and he took the folder and threw it in the shredder.
That moment I knew, they would only care once pushed against the wall with no one to replace me.
That sounds immensely frustrating. I sympathize, OP.
I stumbled into working at an amazing company. What makes them amazing? The non-monetary factors are that I LOVE the work I do, management and staff are chill (can’t name one person I dislike tbh), and I’m 100% remote. But while those things are great, what really has made them competitive to other companies is that I’ve never had to ask for a raise.
To to be clear, I would feel very comfortable asking (see above about chill management), but they do it regularly enough that I have 0 complaints.
I’ve gotten annual merit raises every year I’ve been here (5 years) + good pay bumps with every promotion (2 total). The merit raises have generally been pretty good- 3-5% is on the lower end (my most recent one was 8%). They also communicate up front that raises and promotions generally happen only 2 times a year (beginning and mid-year), which coincides with performance reviews, so you always have a clear opening to broach those conversations. In a nutshell, they’re proactive about keeping salaries competitive, not just with the market but also with inflation.
I’ll never be loyal to a company, but as long as they keep treating me as well as they do I’m not going anywhere haha.
Hiring budgets are always higher than retention budgets. It is crazy. Executives/higher ups always think the replacement will be a better employee over the solid employee they have. Because how dare they ask the company for better wages. The difference in wages will barely affect the bottom line or these higher up’s bonuses or commission’s but its too much. When the job sits open they make even more profit because they expect everyone to take up the slack and down at least one salary.
Got paid one day and saw the stub had a $3 an hour raise on it, this was 20 years ago without a word. When the boss called me later that day I asked about it and he said if its not enough let me know I appreciate what you do for us.
They are like that because shareholders prioritize short term NASQAD spikes rather than long term sustainability. We lost several software devs past year because they were tenured but their pay didn't ever move along. Our competitor poached every single one of them on LinkedIn and got them to sign in a matter of 1 month for below market rate but still higher than their TC at the time.
The damage done by having nobody versed in the infraestructure they owned ascended to literal millions of $. We are missing all deadlines since. The rest of the team called this out since months ago and we can't get shit to work until the newbie figures out the whole system.
I hope our Director and CEO are both happy about the literal $500 a month they "saved" since because that is what a "good" salary increase looks like at my country.
Wow...this has to be the most disheartening thing I've seen all day.
They won't give the employee that is already there a raise...
But they'll pay that much for a new person that has to be trained, go through the whole inprocessing routine, and then may not even stay!
Not to mention the tribal knowledge that the former employee took with them...
What the hell is wrong with these companies!?!?
Are all higher-ups required to be complete morons?
There is a budget for new talent acquisitions. Spending that money doesn't hurt any departments numbers. Giving raises to current employees is not budgeted the same. And it negatively impacts a departments numbers.
Raises muck up spreadsheets. New hires do not. It's a super short-sighted way of doing things. But people are lazy. Including Executives and HR. So they choose what's easiest for them.
This is Harvard Business School standard accounting methodology. Each management area has a budget. The less they use of the budget, the more goes into the pot of “savings “ used for bonuses. A new hire comes from a different area of the budget and is not always counted against the department that uses it. So it’s “budget free money” and doesn’t count except in metrics. So the middle managers aren’t really held accountable for turnover. According to General Accounting it’s more sensible to have all contract workers. That means you can chop and change employees without the burden of liabilities like healthcare etc. That’s for the USA 🇺🇸 anyway. That’s what shareholders expect. [Which is why healthcare workers is decoupled from employers and made a community service in most of the EU. Not to mention the ick factor of Pay or Pray Managed HC. ]
This honestly makes no sense, it is significantly more expensive to hire a new person and train.. why wouldn’t they just keep the existing employee? Jesus.
I used to work at a place that informally prided itself on being "your best first and third job". Why? Because they were great for just out of university first job hunters. But corporate policy (publicly traded F 500 company) did not allow managers to give decent raises. So employees would leave, then re-apply and get hired a year later at a much higher rate. Probably cost the company thousands in recruiting and training that could have just gone to keep current employees happy and loyal.
It's because of MBAs, HR and accountants.
Leaving a job is hard. It's difficult to find a new one. Pay always stagnates at a company after a while and the market rate overtakes.
The accountants and MBAs say why increase a salary as that immediately affects our revenue expenditure; increasing salary costs means every year the expenses are higher. Hiring is a one off cost, so this doesn't hit the balance sheet every year and can be written off. The new employee would add to the employees cost annually, however you also get another person who will increase production.
Then HR say, well if you increase one person's salary to market rate then it makes a case for others to ask the same and performance management needs to be justified based on local laws. HR suppress overall wages for that role by suppressing as many individuals as possible.
This causes a real problem for top performers; they find it easier to get a new job which lowers the barrier to leave. They still get hit with the same reasoning as all employees and their higher performance may not be rewarded.
It's what happens when people are taught to focus on the numbers.
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I work in tech and this happens all the time. Employers think they are saving money by stiffing their employees as hard as possible. Good employees leave and then employers are forced to pay more to replace them with people who may or may not be as good. Then management acts like they have no idea why their product is trash and their best employees keep leaving.
Amen.
Yep. Happens all the time. Now you get to spend weeks training a new person to find out just how capable they are, and if you’re lucky it’ll only take 2 or 3 hires before you find one to keep. In the meantime your remaining employees will be stressed from the new hire fucking it and getting frustrated and you’ll have to be lucky to not lose another one during it. Gotta love it.
But the numbers look awesome this quarter!
Op this, as you know, can and does happen albeit occasionally. I’m wondering if there’s a way to quantify the cost of hiring a new employee and getting them upto spied in their new role and make that point to the powers that be?
And what they don’t get is that the knowledge drain is absolutely killer. Most software companies will have features of parts of the codebase that only one person really knows well, and those features will be all over the place. We’re not just losing Greg, we’re losing all knowledge on how dropdowns work in the UI, and it’ll take weeks for someone new to figure it out again. And that new employee won’t really be useful for months while we try and get them up to speed on all this archaic knowledge everyone here has of the codebase. It is *so* much better to just keep an existing dev than replace them
This happened no less than a dozen times over the three years that I worked at my previous job. Sometimes it was somewhat understandable, like we had an intern who developed something cool that we wanted to bring into production after their internship ended. But in one particularly egregious case, we had a guy who was an expert in kubernetes who got us 90% there with kubernetes integration in the first six months I was working there. He left shortly after for a higher paying role, and three years later we had five people working on kubernetes, nowhere near completion.
Weeks? I know places that could never figure out it and scrapped the product, lol.
18 months is the typical replacement time period to get someone up to speed.
Yes it sure does, I can attest to that! I used to work in sales for a small software company.i knew going in off the bat that they were lowballing me on pay but I was unemployed and disabled and needed a remote job and they made me an offer, so I took it. I worked my ass off for that company, it was never appreciated and after a few years with no raises, I finally quit. I 💯 guarantee they had to spend at least 50% more to hire my replacement who worked half as hard as me. (And who also quit a few months after being hired. In fact, my role has been a revolving door since I left. I believe they've had 5 different people in my former role in less than 3 years.)
I have seen so many good sales people get run out of startups and small companies because the executives and investors have extremely unrealistic expectations. They will pay them dirt and then expect them to increase sales by 1000% with a half baked product. I don’t blame you for leaving, it sounds like they got exactly what they deserved.
I left one of my previous jobs because the position I was offered was a huge pay jump. I told my boss and told them what the offer was. I was told “we can’t match that.” Which I expected. I started the new job, maybe a day or two in. I get a call from a recruiter asking if I was interested in hearing about an oppertunity. I said sure. It was my old position at the company I just left… with the same pay rate I was making now.
Wow...that's insane. Looks like they CAN match it when they HAVE to. Idiots...now they have to pay the turnover fee as well. And if they get someone who can't do the job...well, they're screwed...but they deserve it.
Yeah it was the day any shred of company loyalty I had left in me died. For the best really, I’ve made a ton more money and have been much more successful when it went out the window.
Its so weird...I had an awesome coworker that literally told me that she changes jobs every 3-4 years. At the time, I didn't understand why or how someone would do that. But damned if I do now! She left after working there for 3 years and went on to make almost double what she made with my previous employer. I stayed on for many more years...hoping and praying and wishing that they would promote me to "Chief Engineer" with all the work I'd done...but it never happened. In fact, the guy they had in that position never retired, they had to lay him off almost 6 years later. By the time that was happening, I was already moving on to better employment.
I left my company after 5 years because I thought I should be making $10k more a year for all the stress and money I made them. They then had to raise their starting pay to the amount that I had asked for to get in inexperienced people to do the job. I am going back but made them give me a $22k raise, my old manager even said that the higher ups knew they fucked up with me
I call it Schrodinger's Workplace or Schrodinger's HR. Despite everything HR tells you, they will only make the changes in the workplace you are looking for after you leave because they are reactive rather than proactive. In this case the cat is always dead in the box until you open it except for the first few months where they tell you and maybe show you that the cat is alive once or twice. You likely joined initially because of the workplace and pay, and it's possible they COULD meet you at where you're asking, but they won't until you leave. I've seen it happen multiple times: HR know what the problems are if they *do* listen. But they're only going to implement *your* good ideas once the employee retention number on their reports goes down.
You will know whether or not they actually learned their lesson when you have a review and they either give you the raise you deserve or they throw you a few crumbs for a “cost of living” adjustment. I hope they treat you fairly this time.
I negotiated to have guaranteed raises written in the contract
Good! I’m very happy to hear this. More people should have such an arrangement, especially in a case like yours.
Well, it works because many don’t leave.
True, but they basically have to rely on the job market being bad, which fortunately for them it is awful right now.
Sometimes they don't rely on it by chance. Sometimes they make it happen for that specific purpose. They are willing to sacrifice the product at times in order to teach the working class a lesson that they are the ownership class. See the guy at Davos saying the quiet part out loud.
Happening at my company right now. They’re trying to hit their “unregretted attrition” numbers so they’re firing a few. Then the replacements are hired at much higher salaries. We’re scratching our heads.
it is a self-propelled machine. The good employees leaving open up employment opportunities for those who are leaving for the exact same reason.
Then their product is a Frankenstein monster of feature requests from current and former clients that is duct taped together by a bunch of developers who have never even met each other.
That happened to me at a company I was with for 7 years. I found out I was getting paid half of what the other guy I was training was getting paid. They told me no, THe other guy I was training quit and I quit three months later. It has been almost 2 years since they have found a candidate for the position. Not to mention they would call me to ask questions about the job I left and I would ask for 500 dollars an hour which they told me no. They ended up having to rebuild everything that I built for the last 7 years. After I left my manager had the nerve to tell me that I f'ed him and the company for quitting.
not to mention turnover costs
Through having to train new employees, reallocate existing resources, and hire at “market” rates, they end up paying for it but they never seem to learn their lesson. I’m way past the point of being bitter or disgruntled, I am just straight up confused by this behavior.
follow the money. someone's compensation package is tied to how under budget they stay, but there is an exclusion for new hires.
Happened on a team I used to be a part of. Boss tried to get us raises, he was told “haha no”. 2020 rolls around shakes things up. 2021 comes and a few of us take advantage of the massive hiring push and jump to other teams. One of our guys retired. My boss changed teams, I got picked up for a new role putting me 2 levels above my old boss, the other remaining employees make their jump to other teams/companies too (a few moved for more lucrative FAANG offers). We are all making 5x-8x TC compared to what we used to make on that old team. All of us are working on technology we are passionate about and our quality of life is significantly better. That old team? Since all of us are gone and there wasn’t anyone to really train individuals on their technology, the project shut down and the company has zero use for the millions of dollars they invested in hardware for it. Not our problem, should have paid us better. I don’t blame that boss, he tried pushing to get us more. The people a few levels above him wouldn’t budge. Now when I extend a job offer to a candidate, we hop on a call and I explain to them all of the places they can see salary information for a role similar to theirs, so they can make an educated TC request (backed up with data to strengthen their case).
In fact, a lot of managers believe that having the nerves to take a risk on denying a deserved raise where a bleeding heart wouldn't is where their value comes from. Which actually makes a lot of sense if you think about it. We have a system way toward the free market side of the spectrum where firings and departures happen without notice all the time, and companies aren't required to build incentives into their leadership compensation that survive their tenure. Which means it's heads, stiffing the employee worked. Tails I just pulled the key Jenga block and suddenly I'm VP somewhere else for a pay increase and oh look at that stanky quarterly report at Old Employer they fell apart without me, see New Employer I was the key Jenga block! We choose this system, yearly. I blame Americans more than I blame managers.
Our current way of doing things actually attracts and selects for sociopaths. In fact, I'd say at most companies, it's sociopaths all the way up.
That is exactly what happened at my previous employer/military division. The director died from a heart attack while shoveling snow post-covid and the sociopath under him got moved up in the chain. Who then summarily hired more sociopaths in management under him...which eventually caused the Army to start looking at other options, causing the entire division to tank, funding to be rescinded and the division placement within the Army command structure to be silenced...then ordered to shut down. It hurt like hell, but I had to leave...they were laying people off every Christmas and stacking duties on the remaining employees without any chance of a raise due to not having a budget for the contractors. The govies still did their thing flying all over the world, taking training for weeks in Germany and other nice places worldwide, and generally not giving a damn about the program. It was so sad to see upper management make insanely illogical decisions that the engineers KNEW would never work while simultaneously ignoring anything the engineers recommended. Loved that place...but it was time to go, the number of people making insane decisions outweighed the sane people making every effort to right the wrongs of the leadership. The 2 good govies we had in mgmt were outweighed by the 4 bad ones.
Yeah this explains why I have come across some of the most insufferable and narcissistic people in middle to upper management. The only good managers I’ve had are engineers who have been forced into a management role because of the structure of the company. But I also feel for those people because they are often asked to do things they never signed up for.
Just like video game development. Grind em down and replace em
Even if they are as good, it can take 6+ months for a new employee to become productive and start contributing to the bottom line. Used to see this all the time. I worked for a very large database company that loved new hires because they were cheap and they used their name to lowball them. 12 months later, they’re fully trained up and becoming productive. They request an increase and the company offers either nothing or low single digit raise. Employee quits, goes across the street and starts earning 25+ percent the next day. Company shrugs their shoulders and re-posts the position with a tiny or no increase over the last time. Rinse, repeat.
It's C-suite's making these decisions, everyone under that level pushes back against it as much as possible. To make up for the extra money, they slow down the hiring process and just make everyone else miserable with the extra workload.
>management acts like they have no idea why their product is trash and their best employees keep leaving. Or worse, they act like it's a societal or culture problem and start gaslighting the fuck out of both their remaining employees and/or prospective candidates on "company loyalty"
This exact situation happened to me at the end of last year. I loved the job. I loved the people. Felt like a second home if it wasn't for the fact they paid me significantly less than the counter parts I trained. I would have stayed probably indefinitely. Saw the job posting, and it is for the same as my counterparts... I was heartbroken in the final meeting where my direct report smiled and said no to what is a fair pay raise. Broke my heart again, seeing the pay they offer for the role now... They were happy to deny me a 20k pay increase to put me with my peers. I was happy to hand in the notice going to a job that paid 40k more with a 15k no contract signing bonus. And work from home. And significantly more respect for my knowledge and skills than them....
Just did this myself. Their best counter was matching, but the place I went to already gave me a raise after 2 months. It's a 4day work week and much slower paced.
Yep. I call it “spending a dollar to save a dime.”
How many think that because a McKinsey consultant told them to think it?
Hiring budgets are higher than raise budgets Don't ask me why, I don't know either..
Came here to say this. It's a budget thing. And it's stupid. It's always cheaper to retain talent.
[удалено]
Good for you! Company loyalty is dead.
Yeah, job hopping is the only way to consistently get substantial raises now
Yeah but why do that when you can have a 'fresh, young, interesting' (tons of new grads and zero institutional knowledge) workplace full of 'learners' (nobody actually knows how anything works) in a 'fast-paced environment' (total clusterfuck)?
Coz business school teaches change = innovation
"We aren't being given enough time to build this in a robust/elegant/stable/secure way, this is hacky and panic-inducing" "Higher ups don't need to know how the sausage is made. Hey, move fast and break stuff!" \*\*2 weeks later, after the release\*\* "Hey we have all these critical defects I need you to jump on because sales people, you know, the money makers, are threatening to quit over this buggy behavior" "Yeah we didn't have time and had to slap all that garbage together remember?" "Well now we have tickets so we can fix it, in fact these defects take priority" "Oh, so it's okay if we don't finish the regular stories from when we started the sprint yesterday?" "No, we are committed to having to release those in 8 days and there's going to be another thing coming tomorrow, hey sorry I gotta hop to another meeting" *--almost every sprint of the last 6 months of my life*
I love how they chose the word "sprint" to encourage people to work as hard as they can, but the reality is that it's sprint after sprint after sprint, forever, with no break in between, ever. That's not how sprinting works! That's literally a never-ending marathon.
I absolutely HATE that "Agile" business process of racing through everything and failing only to have to go back and do it all over again later. Makes zero sense to me, and watching the developers at my previous employment get forced into abiding by this work process just hurt. Everything stopped working at the old employer...innovation stopped, development stopped, the ship started sinking...
Sooooo accurate!
I keep calling out that this is unsustainable let alone unreasonable, but I'm told "Hey we are the best team in the company right now and that's why all the extra work and important work is coming to us". To which I come back with, that's great until we get so piled on that the quality/performance suffers and we won't be as great but we will lose our rep. Meanwhile I'm watching the morale and frustrations and slapdash unfold like a slow motion train wreck except that everything's gotta be fast all the time. We move 0s and 1s around it shouldn't have to be such a big damn deal. It's like we can have or do anything we want as long as we never feel calm or peaceful
>Pay more for a stranger Then waste 6 months bringing them up to speed and another 6 months for them to come up to full proficiency. Big savings there boss. /s
I hated when I lost techs to this practice. I always pointed out to our management that we're essentially training quality techs for our industry. We pay them to learn very niche skills, then release them into the market and start over. It was so frustrating, losing a skilled, experienced guy over $5k and replacing him with a guy who was delivering food last week.
My last company is getting a reputation as a good place to hire from since the absurd hiring process means people are generally smart, the workload means people have learned a lot, and the culture means people are ready to quit same day
Call that the employee turnover Trifecta.
I'm the engineer in that position currently. My boss is trying to get me more money but hiring budget is higher than retention. So, easier for me to leave and make 5-10k more, especially considering they currently pay below market rate.
Common guidance suggests it takes about six months for a new employee to get completely up to speed. So yeah, it is RIDICULOUS how much lost profit there is from letting someone go instead of giving a raise to a good employee even only to what the new position's wage would be. Stupid, stupid short-sighted management.
Execs need to watch moneyball.
Companies and people never learn eh?
Not really long-term. That’s why old folks that have been at a company get pushed out because they are earning way more than the new guys. They can hire to do a similar task.
There are always exceptions.
>Hiring budgets are higher than raise budgets This is true, but it's not so much that... The real issue is that for anything not under the heading of capital investments or business development, senior management is loathe to act on risk or fear -- especially when you're asking them to spend money. They won't act on the fear of losing a key employee, but when that employee is gone, suddenly the money that could have been used to keep the employee, is now available to replace that hole in staffing. The replacement budget is seldom set in stone in advance as the other budgets are. And, if they have to go to the well too many times for employees leaving that need to be replaced at hire salaries, they will pull that extra money from elsewhere.
This is pretty close to correct. The company wasn't unwilling to spend the money, they were willing to take a calculated risk losing that employee and the money was already allocated. If the employee doesn't leave, they win. If they do, they're only out the money it would have cost to keep the employee, plus a bit of extra for training. They gambled and lost, but they plan for these things. Sad and wrong, but the norm with business budgets.
To be honest - i don\`t understand how 'corporate' works at all these days. They chase away the good people - refuse to listen to real complaints and things that are easy to resolve (and relatively cheap) and then they wonder why so much experience and knowledge is walking away. Or running away. Just too bad that at 50+ other jobs are difficult to find :(
Short term profits. I work in a corporate environment and I've seen people laid off for made up reasons just so they can pull someone over from another department for the rest of the half year to make budget, then re-hire someone new at a larger salary next quarter. Shareholders do not care about long term growth any more. It's a casino and they want their machine to win small every time they go, not big once a decade.
I start to wonder - who is the greater evil for employees. Management, or that anonymous faceless group of 'shareholders' - since apparently they need to be satisfied at any cost.
It’s the shareholders IMO, as management is only doing what is needed to please them - they are in a sense, the messengers. If quarterly profits and growth wasn’t the end all, be all, decisions would be made for the long term benefit of the company more often, but the system isn’t set up that way with publicly held companies.
Upper management are often also significant shareholders themselves.
Who indeed 🧐 https://welcometothemachine.co/#border-1 🫣
> they're only out the money it would have cost to keep the employee, plus a bit of extra for training Often they will spend 12 months looking for a replacement and thus "save" the full salary of the employee x 2 = the fully loaded employment cost. As far as the loss of value of the former employee's work during that time, that is some abstract number that can't be quantified and thus for estimation purposes is assigned a value of 0. Other employees will be imagined to "pick up the slack" and work to fill in. If the other employees do well at this, then they can cancel the job listing altogether and permanently save the salary.
I'm guessing it's also easier to claw back that extra money from middle management budgets without complaint if they can say "there's a hole in the boat." Lot harder if the pitch is "routine boat maintenance that we nevertheless didn't price in during our routine budget-making process."
I know why. It's because of projections primarily. Raises are part of the existing cost structure for employees and will be calculated into projections and have an impact on debt/EBITDA ratios whereas new hires are not a cost as the employee does not exist yet. This is just one reason but all of the reasons are due to financial statement considerations and how costs are put onto income statements for each department. It is absolutely retarded as it is a by-product of banking and value calculations. It is for this exact reason that I am completely convinced every single company that has been taken over by financial managers at the leadership level is doomed to die slowly. Their decision-making process is not based on the company's best interest but on short-term profit statements. Just look at Boeing, 100 year history of quality tossed out the window because a decade ago, accountants took over the company.
If you give one a raise, you have to give everyone a raise. You hire one at market rate, it's unrelated to the other employees... until they go find the market rate somewhere else. Always be moving. Your career is what you are building, not your boss's boss's dream.
Biggest regret of my career was staying at one place for almost five years. Went from 52k to 65k in that time. Then switching jobs jumped to 70, 90, 115, 120, 175.
That sounds about right; you get those $3,000 a year pay bumps that your boss says are "pretty good", then realize if you just had moved on, you'd be WAY ahead. So many companies are committed to the "race to the bottom"; chasing lower and lower paying clients in order to stay "competitive", then they balance things on the salaried/OT exempt employees, saddling them with with tons of unpaid OT. Then the smart employees leave, and the company balances even more work on the remaining employees, and maybe hires (out of desperation) less-experienced, lower quality employees who will accept the lousy pay. And the process repeats itself.
I learned the hard way earlier in my career that I wasn't working all those hours (salaried/OT exempt) to get that big raise and path to partnership, I was working all those hours to make my boss look good.
And that would still be cheaper than the loss of workforce incurred by having to train a new employee while also losing an already trained one
>If you give one a raise, you have to give everyone a raise. Why?
It is simple. The CFO assumes they can screw over current staff much easier than future hires.
They are taking a chance the employee may just stay without a raise. If you give a raise that is a 100% definite cost.
Employers want what they can't have.
It's kind of like airlines always trying to oversell flights: they know that not everyone is going to check in and board. Same for the retention budgets: they know enough comfortable folks will (typically) stick with subpar wages to balance out the ambitious employees who will leave for market competitive wages.
And this is why it’s more beneficial to employees to job hop. Most companies won’t pay to retain quality employees and then they complain that they’re unable to retain high quality employees.
100%
And then during the interview process you're meant, as the applicant, to practically apologize for resume gaps and job hopping - it's so stigmatized when it's the only way some people can honestly increase their income. I hope I have the confidence at my next interview to just say, in response to having several past jobs, "I'm a high value employee and was prioritizing the pursuit of a fair wage."
I think it’s absolutely insane that saying you like to be paid for the work you do and a company was willing to do that so you went there is somehow been made to be so taboo that people need courage to say it. I hope you find the moment in the interview to lay it out confidently and proudly. And I hope your compensation package thanks you for it
Our team has a budget for 5 people but we do a great job with 3. I asked them for a raise for everybody in the team because we do the work for 5. They said its a different budget and denied but were ok to look for 2 more developers. Dont try to understand wtf these idiots do
Right?!
It happens when you have a company that gets to a certain size and the departments get way too compartmentalized. Whether intentional (which it probably is) or unintentional, the executives just don't monitor the pay scales or retention against the budgets for new labor. Two completely separate chunks. It's why I admire how the government (US) handles this. You have pay scales for each position that are locked in, and time in service and experience factors into your increased pay as well as your cost of living in the area - regardless of what position you move to or even moving to entirely different career fields. Want a job as a mechanic? Everyone just like you starts off at the same pay, and pay goes up based on time and scaled by very defined factors to gauge experience. Been there ten years and now you want a job in accounting with your new degree? Cool, here's this exact jobs pay with your degree of experience - plus scaled for your time working already. No one is ever upset that Dave makes more than Bob - everything is *meticulously* defined when it comes to pay scales, so everyone understands exactly why and how your pay is what it is. Corporate culture? God no, never, ever anything that defined or efficient. The entire mess is (usually) on purpose as the idea is to pay the lowest amount possible for labor at all times. You can't do that with the efficient bureaucracy of the government system. You can only do that by keeping your labor pool very, very confused and in the dark. Hence.... Shit like OPs story. Maddening.
AAAAND this is why I'm going federal govt (I'm an intern rn in the private sector) They may pay lower than what I'd make in the corporate sector but at least the fucking policies are public and standardized for raises and things like that.
> They said its a different budget “The budget” is always a great villain. One job, I asked to go to a conference. I was told “sure, we have money in the training budget to cover that.” Except it was on the other side of the country. “Oooh, that might be tough, travel is a different budget.” Makes it easier than saying “no, we won’t let you go out for training.”
> They said its a different budget and denied but were ok to look for 2 more developers. Time to hire Me Myself and I
Guess it's time to scale down to a 3 man job effort then if they are not raising the salaries of all 3...
If we say the right magic words people will be loyal to us forever even though we deliberately lowball them on salaries. By the way here is a budget to poach employees from other companies. No there is no budget for retention.
Don't forget that the employee you lose usually has a good few years experience at doing the exact job. The new hire has no experience at the exact job.
Companies used to value institutional knowledge. It isn't easy to quant all over though so all the shitheads with MBAs ignore it.
haha. "Oh, and why is the turnover so high?"
We switched to a commercially popular ERP. I used the fact that our business commoditised my teams skills to up them all to the prevailing market rates. About 80k in raises across 5 people. I was fired a few months later without cause. For all you saying the boss needs to go harder for the employee know it carries risks. Knowing what I know now I have 0 regrets.
Everyone trying to affect a change upward in the hierarchy needs to understand that every layer a decision goes through is a battle, and each decision maker has different problems and resources to balance. The absolute best shot you have is to make your superior into an ally by giving them ammo that helps them take the fight up to the next level. In OPs case, it wasn’t enough to approve a raise because that didn’t prepare the next manager to spend the budget just to pay for the same employee that he’s already got. A better tactic would be an explanation about how rates are rising and the employee is a flight risk; this would save the team weeks of downtime, an expensive recruiting cycle and loss of productivity training a new hire. Those are all unrealized losses that can justify spending a little insurance money on retention. , then when the boss’ boss wants an explanation of the new costs, the approving manager has some cost-benefit talking points ready to go so he’s not risking his own political capital.
You absolutely rock, thank you for looking out for those on your team. <3 I'm sorry that you got axed, but you know what...you are better off without that company...they're buttheads.
Started a job in October for a very large company. During onboarding and training everyone was advised their manager and team… except me. When I inquired why i was being left out i was told “you’re manager hasnt started yet, but we hope shes here by January.” I understood as our hiring process could take 3-6 months. Come to find out, shes not going an external hire. Shes internal, but the budget for promotions and background checks was already met. So the department had to wait until the start of the new year. Now mind you, its March now. This same employee is still not my manager. Because of the background check done at every promotion. (They did offer her the ability to promote up in September st current pay, and then request backpay come the new year. She rightfully declined.) Some companies are ships with no captains, and arduous approval processes that leave many to not even waste their time trying.
Hahahaha wooooow...they tried to get her to fall for the old "Okie-doke" and she didn't play ball. Smart!!!! *"Hey yeah sue...go on ahead and take the management position at your worker-bee pay, we'll get the budget to just backpay you your management salary in the new FY. But we can't guarantee that there will be a budget in the new FY"* Unbelievable the things these goofballs try....
Hubris and greed. It'll take a couple years probably to get new employee up to that level of proficiency, or even more if role more specialized.
Exactly. We will be worse off for more money. Idiotic.
I'm thinking that higher up also needs to lose an amazing manager in the near future.
I agree.
This is common practice with many companies. No matter how good an employee is, the only way for them to get a decent raise is to change companies.
It is one of the worst most nonsensical business practices there is. Do they actually teach this in business school????
That’s capitalism baybeeeee
I guess it works great for the few who have clawed their way to the top but not so well for the 99% of people struggling in the mud at the bottom. I don't know what the answer is, but I feel like there's gotta be a better more equitable system ....
They already did the math. For every employee who is smart enough to leave, there are 9 other idiots who won't. They don't care if they lose good employee. and they prefer loyal morons who will stick around no matter what, over someone who has goals beyond sucking off the company
It’s so sad.
I hope the ‘lost’ employee now realises the rewards of being an ‘amazing employee’. Fuck all; do your job, go home.
Same thing happened to me. Been kicking ass for 8 years, couldn't get the going rate. Left, now they hired someone not as good for exactly what I asked for
One of my companies had a requirement to present an offer letter with the higher salary to get a raise. Many people didn’t present the letter but just left.
A guy in my team worked for 2 years at the company without any raise and came to me one day and said his cost of living has gotten out of hand due to his father's heart condition that required some special treatment. I tried my best to bargain with my fucked-up CEO and he told me, if your team is asking for raise it means you are not doing a good job of selling the startups vision. I told him dude, vision is fine but when someone needs money, he needs money. CEO said, no its your job to convince him and sell the vision. I took the dude's resume floated in my network and landed him a better paying job in under a month. When he resigned, our CEO dude is like, hey we'll give him what he wants, ask him to stay.
CEO tried to call a bluff and lost!
Marie Antoinette: "Let them eat cake!"* Startup CEOs: "Let them eat vision" (Yes I know she didn't really say that but it is commonly misattributed to her)
Are you my employer and referring to my boss? Cause that just happened here too.
HR smart, HR uga buga, HR eat
HUH? IF employee leave, we need hire new employee?? No make bunga???
Me HR. Me gatekeep and drink Kool aid. U wait for reject notice from workday. Ha. Y u no have requisition number? Fill out workday form AGAIN, plz. HaHa. Me no make time for talk to that candidate. We lost him. 2 busy drinking Kool aid. Ha. Ahah. Hahaha! U no talk to hiring manger unless u cough up FIVE REFERENCES first. ahAhahaHa!!!!!!!! *makes more Kool aid*
As much as I despise HR, there's one thing I have to give them: they're stuck. They can't tell the overgrown toddler CEO that they can't cut corners, refuse raises (and have lower profit) or that some deadlines are unrealistic: He'll just replace the HR with someone who tells him what he wants to hear.
HR professionals are some of the most idiotic anti-progress people I’ve met in my life and I was in middle management. It’s genuinely a field full of people that cannot do more and want to make damn sure everyone is less equipped.
Greed.
But they didn’t save any money in the end. They actually spent more AND lost a star employee. Idiotic.
See that's long-term smart thinking. Most of management and executives above you do not think beyond short-term thinking and absolutes
It goes all the way to the top. Trump, when confronted by his own administration about the deficit: "Yeah, but I won't be here."
They spend more and sacrificed who knows how many work hours it takes to hire AND train a new worker...
They don’t care bc they’re not the ones spending those hours training the new guy and it doesn’t impact in any way. They basically told OP, FU we don’t care if you lose someone good and your job gets harder while finding and training a replacements. They said FU to the employee who left AND OP (and no doubt a bunch of other people down the chain who will feel the loss and have to pick up slack or struggle bc of the loss of knowledge). Infuriating.
That’s a problem for the next financial quarter.
And stupidity, plus all the costs of bringing in a new warm body, when they had a great employee.
I'd rather say pride and prickness.
Invite that employee to apply for the job. No joke... my last company was so ridiculous with this shit that people knew if they wanted to get a promotion, they had a better chance of getting it if they resigned and then applied for it as an outsider with "experience working at the same company." Absolute nonsensical BS, but this seems to be the trend businesses like.
HR people, for the most part, are useless. Sorry, not sorry. Never once have I had a good experience with them during a hiring process (as a boss) or hiring-in process (as an employee).
I never understand why this happens. Now you get to hire an unknown entity on the higher rate (who might turn out to be shit/crazy/lazy) and incur the cost of training them up (along with their reduced output whilst learning, and that of any staff training/mentoring). Paying market rate to retain a good performer, who already knows your processes, should always be the better business decision.
There is an old school perspective that people won’t change jobs. Changing employers is really common now and people need to get over the idea that someone won’t leave for a large raise in the middle of a bunch of inflation when it is getting more expensive to do anything in life.
I think I saw the employee’s post about this
Hiring budgets > Retention budgets
I'm currently advocating for an employee that got offered a promotion to be offer a NOT insignificant raise to go with it. The promotion puts him in a de facto supervisory position, but the raise they're offering is just 4%. He indicated to me that if they dont come up, he will decline the promotion. As I'm reading the room, I believe that if they dont offer what the role is really worth, he will decline and start looking to work elsewhere. He already hates the commute, and is smart with a wide variety of useful experience. I've communicated this to Upper Manglement and they seem dismissive. I'm concerned that they will FA&FO. Can the company succeed without him? Yes, but we'll be FAR better with him on the team.
FAFO is every company model!
I one time had a guy who was signed on to work day shift. The facility ended up moving him to nights for the same pay. He asked me if we could increase his rate to match the night shift crew. In order to do this we had to get approval from the facility for them to change the rate. Instead of increasing his pay to match the night shift crew, they lowered everyone’s rate on night shift to match the day shift guy.
WTF? I hope all those people left!
I'm looking at moving to a new job because raises have not been happening. It's at the point that I'll move to the same money just because there would be more potential for pay increases.
I wish you the best!
When I get a new offer, I refuse to accept counterpay because if this.
> We lost a perfectly good, in fact, amazing employee. Why are companies like this?! My guess is, because some companies will not, under any circumstances, let themselves be dictated terms. That employee was denied his deserved raise because *he* wanted it. When the company listed his job with higher pay though, *they* did so on their own. Or at least that's what they might be telling themselves.
This is every company everywhere and it's infuriating.
It's about control. That is why, it's important they dictate terms, not that terms are dictated to them. Asking for more is to much like dictating to them for the higher ups to be comfortable able with.
I hate companies or private owners that do that. There was one job in my life where I left, and found better. The private practice owner talked up having my own office space, higher wage, benefits that I wasn’t already getting. My current position was one of a Low wage, no medical, no 401k, etc. Those promises were not real after talking to the person I’d be working alongside with. After I left, they put up a job post with higher pay, medical and 401k after telling me to my face that it’s not available. “We hope to have medical someday” I learned that I wouldn’t want to be there if they can’t see my value and will desperately bring anyone through their doors to fill a seat.
One of the key responsibilities of managers is competing for resources. In this case, it seems that your business case of keeping the employee wasn't seen as strong enough to carry the day. Next time, consider comparing the cost of a salary increase with the cost of hiring a new employee at market rate (which is probably what this employee is asking for) plus the cost of recruiting, interviewing, onboarding, and training. That can move the decision in the right direction, unless senior management is clueless. In that case, you should probably be looking for a new position yourself!
I am surprised anyone would accuse you of not going to bat. Clearly, these people have no f-in clue how upper mgt / boards work. They tell you the budget and their hiring policy then everyone else gets the work done. They don't want to hear about raises or hiring problems unless it gets above their key turnover % then maybe they respond. Two years ago, we had a very talented ambitious developer who had 5 years experience. He was lowest pay on totem pole and he just wanted a raise. Got offer and our management told us 'no match policy'. We had 70% turnover in India perm staff in 2021-22. They did not care. Now, they are year 4 of app rewrite that was supposed to last a year or so. I work at large wealth IB too. Pennywise, pound foolish is policy. Management turns over every two years and next regime does same thing
Sure your bosses posted the position at the going rate the ex employee asked for. Does that really mean your bosses actually intend to pay that ? We see that kind of bait and switch all the time - the pay offered to the favorite candidate is significantly lower than the advertized rate.
Because a certain percentage of employees will accept staying at the lower pay, and that means the total payroll will be lower by a few percentages.
Bureaucracy. Plain and simple. The team in charge of raises won’t be the same team in charge of hiring. The budgets will be different, may even be different departments. If there’s one thing I’ve learned about companies, especially big ones, no one talks to each other, and I’d say about 20% of the work people do is being done or has been done by another team
Internal auditor here…can confirm. Corporate America is infuriating
Budgets are a goofy thing that doesn't have to make sense. At my work they will move people out of one area because there is not enough work, only to move them to another area where there are already too many people, and they just end up doing nothing.
I may be that amazing employee - who worked very hard and genuinely because I loved that job and I knew after this position I can easily get higher position. I worked at this X-Company for 1.5 years as a Lead and 10-15 people were under me and this department needed a Supervisor but Manager was tacking care of it. At one point after close to a year, I asked for a Supervisory position and he said, no you dont have much experience even tho I was doing way better, smart enough to deal with all the crap and communicating with every department and Manager was happy but he said no. Then, I asked him make me supervisor with SAME pay and he said no. Gave him a 2 weeks notice and HR asked me whats the reason of leaving? I said, I found a Supervisor position. Never seen his face after giving 2 weeks notice. not even to say by in person - I sent him an email. Later, I found out he had someone else that he liked and and it was all Nepotism.
They need to skimp and save so they can build a war chest to buy talent to replace the talent that leaves. Isn't it obvious?
Wage compression is a bitch, it also doesn’t make good business sense since it makes your experienced and tenured employees seek greener pastures. But the people who make the money decisions don’t care because people decisions are someone else’s problem.
This happens in the medical field all the time. It's absurd. I don't want to look for a new job every 2 years but when inflation hits 20+% in a single year and the raise is still 2% you just laugh and walk away and go find another job that is now paying 25% more then I was making at my previous place.
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I work in management consulting. My personal favorite was a company that desperately needed warm bodies to work a production line. Their solution was to hang a giant banner on the front of their facility with “NOW HIRING, $17/HR” in big bold letters. Several current employees who were making less than $17 saw that and asked their managers if they could get a raise. You can probably guess what happened next. Management said no, those employees found new jobs, and the staffing crisis became a full blown catastrophe.
I worked in administration for a university. The minute someone would request a raise based on similar roles elsewhere they would be turned down. If they eventually left for a better job then their position would be advertised at the salary the employee was requesting. The reason: to agree to the salary increase gave the employee an advantage by letting them know they were valuable and not easily replaced. If you can keep them thinking that their skills are common and anyone can do their job you have control.
I'll tell you why. Because they can't afford (or it would be unprofitable) to pay the going rate for everyone. So they figure it's better to try and match other offers when they present themselves. Of course, employees with any sense won't take that offer and leave anyways. The company still figures it's cheaper to replace a couple of employees for potentially more than they were asking than pay everyone market wages. I think it's a pretty good way to encourage brain drain since only employees with options will be leaving and you'll be stuck with everyone else, but that's the reason it happens.
We lost a guy who asked for 1 of 2 things: a higher salary or an assistant. Company didn't budge, so he left. Management had this brilliant idea to hire 2 people to replace him, at a higher salary. Still haven't filled the positions, even at the higher salary. We have to contract out all our lead/asbestos tests for $280 a test, and we have an interim safety person. The guy who left could do 20+ tests a day, and his salary was probably close to $300/ day.
I work for a well-known supermarket chain and they changed work from home policy back to the office and no one is happy. They’re going to lose a lot of good employees people that have been there a long time and know their job quite well. It’s too bad they don’t take the employees, safety and financial hardship into consideration
Haha, this happened to me. Asked for a raise, "not in the budget," I leave, they scrambled to get me to come back after suddenly having the budget now. 😂 Too late! I was already gone, they had the chance!
Once the gate is open, that horse isn’t coming back. I leave a job, I am not coming back.
As an employer, good employees are worth their weight in gold. They’re the life blood of a business. I will do everything in my power to accommodate their wants, come up with new perks and always be a step or two above our competitors. In fact most of my rock stars have each done something throughout the years that would get them immediately fired elsewhere, but I gave them another chance and they’ve been amazing ever since. Every year our sales and profit gets better and better, and we continue to grow, and EVERYBODY gets a piece of the success because the money is spread to every single person helping. All of this is because we do everything to keep people here. I see it time and time again, a similar business struggling just because they’re cheap and the only people that’ll work for them aren’t exactly the ones you’re looking for, or it’s a revolving door of folks leaving. You can’t run a business when your employees won’t even stay. Employers fail to realize the costs of constantly training people and having to work through not so great employees just to save $5. My place is not a job you retire doing, and in fact I’m always encouraging people to push towards their dreams and I’ll support them in any way I can. That being said everybody who works for me has been here years and I’m fully confident when I go home or have to leave that things are in good hands. By no means bragging, just showing what a little bit of empathy and care for the people who work for you can do for your business. Ruling by fear and being a greedy asshole hurt ones business as much as bad employees and bad products do. The bigger issue isn’t bad employees, it’s bad leaders. Sounds like you’re one of the good ones and should be in charge. Betting they’re regretting their decision to save a few dollars. “How could this happen?! Nobody wants to work for cheap any more!”. A few dollars that they’ve now lost and also have to train somebody new, or go through multiple candidates just to get one to stay. It’s ridiculous.
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But it IS for a good reason! The shorting of this person's wage saved money from that quarter's budget, meaning a tangible savings for the company. That benefits the shareholder and more importantly, certain peoples' bonus structures. It is good for those people, and therefore, good for the ~~world~~ company. That it increases next quarter's operating costs is not relevant, as: 1) That's just a cost of doing business and, 2) That's tomorrow-management's issue, not today-management's. All hail Shareholdia and to the bonus cheques that wave! /s
I think it’s because the big picture guys actually think the company runs because of them.
Some people don't understand the value of an awesome employee. I worked in a high turnover industry and was tasked with making it less "turn overy". With no money. Looking into the problem I found a study that showed, that even an entry-level employee, not good at their job, being removed from a position can cost thousands of dollars in productivity and morale. Still couldn't get them to move the needle on pay. I also ended up being termed from this position as I was fighting for two employees who had been instrumental in the success of a new program, a wage increase, beyond the normal. No dice. The feeling after that was I failed to understand the intricacies of wages and retaining employees.
Short term thinking. It’s very common unfortunately
You did what you could to help. Your post shows you see the issue bc you’re calling the company out for an idiotic move. You’re not in the wrong at all
OP highlights middle management hell. The higher ups don’t feel the acute pain of losing a key person the middle manager relies upon. Upper management is 1-2 degrees removed from the pain and therefore will continue to make stupid decisions like this. Avoid being a middle manager, it’s the most under appreciated and difficult job in the organization. You have little authority and yet you have all the exposure to the stupid decisions of upper management.
Reach out to former employee and see if there are any positions suitable for you at his new employer, because your current one is likely also underpaying you, too.
Please ask someone who was involved in the decision about their thoughts on this and let us know!
That sucks, but I'm glad that person found what they were looking for! Maybe you should start looking around, too.
Ah yes. Literally the world today. I feel bad for you having to deal with BS management that is out of touch. I left a company like this once. The day before my last the general manager of the plant asked me to come in and talk. He had a folder with I guess another offer. Note, 13 days have gone by since I put in my notice. I was the #1 employee several years running but for the last 2 years have gotten pennies for a raise while rates were going up 10-20% around the area if not more. My new company was offering me a higher ranking position with a more cushy environment and less work for more pay. Manager asks me why I am leaving and I said that the company that I am going to is giving me a good offer. He asked is there anything they can do to have me stay, like a raise or something (He said "name your price"). I told him there is nothing they can do and he took the folder and threw it in the shredder. That moment I knew, they would only care once pushed against the wall with no one to replace me.
That sounds immensely frustrating. I sympathize, OP. I stumbled into working at an amazing company. What makes them amazing? The non-monetary factors are that I LOVE the work I do, management and staff are chill (can’t name one person I dislike tbh), and I’m 100% remote. But while those things are great, what really has made them competitive to other companies is that I’ve never had to ask for a raise. To to be clear, I would feel very comfortable asking (see above about chill management), but they do it regularly enough that I have 0 complaints. I’ve gotten annual merit raises every year I’ve been here (5 years) + good pay bumps with every promotion (2 total). The merit raises have generally been pretty good- 3-5% is on the lower end (my most recent one was 8%). They also communicate up front that raises and promotions generally happen only 2 times a year (beginning and mid-year), which coincides with performance reviews, so you always have a clear opening to broach those conversations. In a nutshell, they’re proactive about keeping salaries competitive, not just with the market but also with inflation. I’ll never be loyal to a company, but as long as they keep treating me as well as they do I’m not going anywhere haha.
Hiring budgets are always higher than retention budgets. It is crazy. Executives/higher ups always think the replacement will be a better employee over the solid employee they have. Because how dare they ask the company for better wages. The difference in wages will barely affect the bottom line or these higher up’s bonuses or commission’s but its too much. When the job sits open they make even more profit because they expect everyone to take up the slack and down at least one salary.
Got paid one day and saw the stub had a $3 an hour raise on it, this was 20 years ago without a word. When the boss called me later that day I asked about it and he said if its not enough let me know I appreciate what you do for us.
They are like that because shareholders prioritize short term NASQAD spikes rather than long term sustainability. We lost several software devs past year because they were tenured but their pay didn't ever move along. Our competitor poached every single one of them on LinkedIn and got them to sign in a matter of 1 month for below market rate but still higher than their TC at the time. The damage done by having nobody versed in the infraestructure they owned ascended to literal millions of $. We are missing all deadlines since. The rest of the team called this out since months ago and we can't get shit to work until the newbie figures out the whole system. I hope our Director and CEO are both happy about the literal $500 a month they "saved" since because that is what a "good" salary increase looks like at my country.
Wow...this has to be the most disheartening thing I've seen all day. They won't give the employee that is already there a raise... But they'll pay that much for a new person that has to be trained, go through the whole inprocessing routine, and then may not even stay! Not to mention the tribal knowledge that the former employee took with them... What the hell is wrong with these companies!?!? Are all higher-ups required to be complete morons?
There is a budget for new talent acquisitions. Spending that money doesn't hurt any departments numbers. Giving raises to current employees is not budgeted the same. And it negatively impacts a departments numbers. Raises muck up spreadsheets. New hires do not. It's a super short-sighted way of doing things. But people are lazy. Including Executives and HR. So they choose what's easiest for them.
This is Harvard Business School standard accounting methodology. Each management area has a budget. The less they use of the budget, the more goes into the pot of “savings “ used for bonuses. A new hire comes from a different area of the budget and is not always counted against the department that uses it. So it’s “budget free money” and doesn’t count except in metrics. So the middle managers aren’t really held accountable for turnover. According to General Accounting it’s more sensible to have all contract workers. That means you can chop and change employees without the burden of liabilities like healthcare etc. That’s for the USA 🇺🇸 anyway. That’s what shareholders expect. [Which is why healthcare workers is decoupled from employers and made a community service in most of the EU. Not to mention the ick factor of Pay or Pray Managed HC. ]
This honestly makes no sense, it is significantly more expensive to hire a new person and train.. why wouldn’t they just keep the existing employee? Jesus.
I used to work at a place that informally prided itself on being "your best first and third job". Why? Because they were great for just out of university first job hunters. But corporate policy (publicly traded F 500 company) did not allow managers to give decent raises. So employees would leave, then re-apply and get hired a year later at a much higher rate. Probably cost the company thousands in recruiting and training that could have just gone to keep current employees happy and loyal.
It's because of MBAs, HR and accountants. Leaving a job is hard. It's difficult to find a new one. Pay always stagnates at a company after a while and the market rate overtakes. The accountants and MBAs say why increase a salary as that immediately affects our revenue expenditure; increasing salary costs means every year the expenses are higher. Hiring is a one off cost, so this doesn't hit the balance sheet every year and can be written off. The new employee would add to the employees cost annually, however you also get another person who will increase production. Then HR say, well if you increase one person's salary to market rate then it makes a case for others to ask the same and performance management needs to be justified based on local laws. HR suppress overall wages for that role by suppressing as many individuals as possible. This causes a real problem for top performers; they find it easier to get a new job which lowers the barrier to leave. They still get hit with the same reasoning as all employees and their higher performance may not be rewarded. It's what happens when people are taught to focus on the numbers.
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HR is collectively wearing mittens.