This is what Ben Horowitz has to say about matching competing offers:
An excellent engineer decides to leave the company because she gets a better offer. For various reasons, you were undercompensating her, but the offer from the other company pays more than any engineer in your company and the engineer in question is not your best engineer. Still, she is working on a critical project and you cannot afford to lose her. So you match the offer. You save the project, but you pile on the debt.
Here’s how the payment will come due. You probably think that your counteroffer was confidential because you’d sworn her to secrecy. Let me explain why it was not. She has friends in the company. When she got the offer from the other company, she consulted with her friends. One of her best friends advised her to take the offer. When she decided to stay, she had to explain to him why she disregarded his advice or lose personal credibility. So she told him and swore him to secrecy. He agreed to honor the secret, but was incensed that she had to threaten to quit in order to get a proper raise. Furthermore, he was furious that you overcompensated her. So, he told the story, but kept her name confidential to preserve the secret. And now everyone in engineering knows that the best way to get a raise is to generate an offer from another company then threaten to quit. It’s going to take awhile to pay off that debt.
For what it's worth, most competent managers I know agree with this idea.
Edit: I should mention that I am NOT advocating paying people less than market wage, but as managers know, sometimes you end up in this position with some employees for periods of time without meaning to.
"...but the offer from the other company pays more than any engineer in your company and the engineer in question is not your best engineer. Still, she is working on a critical project and you cannot afford to lose her. So you match the offer."
Jesus that all sounds so ridiculous to me. That's a funny shell game around admitting that someone was more valuable than you were paying them, and then guess what - lots of other people are.
If the argument is "But she isn't always this valuable.. she's just this valuable on this project" then attach a financial incentive to the project.
Sadly, I don't get the sense that Ben is suggesting that there's a problem with not compensating commensurate with value here or with depending on the employer-preferential taboo of the secret salary. He seems to just argue you should let this engineer walk and the project die.
If I were the engineer, I would also walk and let the project die. Because when that project is over, you're going to be the "highest paid but not best person on the team" and there's no reason they shouldn't be looking to release you for that anyway.
If you threaten to leave to another company and that's how you get a raise, the relationship's been poisoned and it's just a matter of time until you leave.
This is just another reason why I love project based consulting more than FTE. The incentives are properly aligned. Adam Smith would smile.
This can be a double edge sword. you enjoy your new responsibilities? good for you. not everybody wants to get more and more on their shoulders until the point of realizing that there ins't much time for that little thing called life. Also, most people who get promoted/raised around me end up working much more compared to raise they've been given.
Personal experience - in every single work I've done (roughly 10 customers/employers, perm+consultant) in 3 different countries, there was/is always room to grab more responsibility, more tasks etc. State of IT usually just a variation of a term MESS, with some technical debt here and there, everywhere. You work harder, solve more, take more responsibility and your career progresses along (or you go to place where it does faster).
But with this might also come 9-10 hours at work instead of 8 (plus lunch), company phone which is there just to remind you of the work when you're not in, maybe more weekends screwed up and so on. Even in otherwise very work/life balance oriented employers.
Want another advice? When having a formal talk with your boss, tell him you want a raise, but you don't want it for free, rather bringing added value. Define clear terms what is expected from you to get there, fulfill them and watch the magic happen :)
The damage you can cause is not necessarily the same as the value you contribute. When you're negotiating on threat of tanking a project, it seems to me like you've turned it into a hostage negotiation- a different beast.
(Just imagine a project worth $X with two lynchpins, both of whose absence would tank the project. Both can cause $X in damage, but you obviously cannot pay each $X)
Ultimately if a (large) project is in danger because one or two key engineering people quit, then it's the fault of the managers involved for not mitigating that risk.
Either by increasing their title or pay as they are that critical, or by not distributing the key knowledge around so that everyone is dispensable.
stick around for long enough, and you'll probably become critical. sad true is, most of these people don't have salaries as high as those jumping around frequently. but as long as they're OK with work, not much to complain about
For the employer, sure. But it'd have to be pretty high, as in much higher than the raise for me to consider the possibility of that over just getting a raise.
Here's what happens if you don't counter: she leaves. Critical project fails. Everyone in engineering knows that the market rate is greater than what you are paying and that you won't counter. Expect a flood of 2 week notices.
Here's the thing. By the time someone is actively interviewing, you've already lost. Treat your compensation like you would any other product and try and figure out how to differentiate your product. Cash by it's very nature is interchangeable. Benefits, perks, camaraderie aren't.
In general, you can expect all the good ambitious people to leave. The ones who stay are those who think they can stay and play politics better, or have a "beaten wife" mentality that they think is loyalty, or are on a visa.
EDIT: A previous boss of mine was unhappy I was quitting, and apologized that he couldn't give me $40k in cash to stay for another year. Me leaving meant they needed to search for a new, qualified person, and then spend the time training them, which was certainly close to $40k of time-money. Unfortunately, upper management didn't care.
That's why you shouldn't hire "good, ambitious people." I jest, but really. Sure startups want that ambition, but not run of the mill companies. I've worked at a few mega financial firms and what they really want are mildy competent drones that are prepared to idle in their carrier working 9:30-4:30.
You see, the problem with "good, ambitious people" is they want to (1) keep learning new things, (2) work on projects that expand their expertise, (3) continue on a monotonously increasing career trajectory. Sadly 85% of the coding out there is more like "IT" and keeping the lights on, fixing the CRUD apps, etc. Ambitious people are a major flight risk at such companies, and worse, they might bring in some new tech or complicated patterns that the drones that replace them don't understand, and then the firm has to chuck that code and go back to the former, easier to understand but far less performant code. I've seen it happen several times.
I've had this exact conversation more times than I care to remember. Not only does upper management not care but they probably told him off (as they did me) for not sacrificing his integrity and reputation to BS you into staying with promises they knew he couldn't deliver.
I brought up the topic of raise with one of my previous bosses, and he promised to check with the higher-ups.
Some time later, he honestly told me: "The only way they would give you a raise is to prevent you from leaving. At that point, if you already went through the trouble of getting another offer, you might as well leave." Several months later, I did. Money wasn't the only factor -- the big new project I was hired for got finished -- but it was a major one, they were underpaying me pretty badly.
I have always thought this. It can take up to 6 months to get properly up to speed on a large project. So for those 6 months you are maybe averaging 50% productivity. That's basically 3 month salary a company is loosing by swapping staff. How many people get offered that sort of month to stay?
I worked for a major institution's engineering group where we formally asked "We're getting recruited all the time for more, will you raise comp to market to prevent people leaving?" Answer, "No." Annual attrition was 25%. At a recruiting/replacement cost of ~$40K, raises would have made more sense, but then managers would have failed to wield their power to "constrain their budget."
I turned down a job offer because it was about 10% below what I wanted. Four months later I saw the company complaining that they still hadn't filled the spot - I wonder if they think they made the right choice in refusing to negotite. (Probably they do, and they continued to do so with other candidates).
I keep seeing the same ad for a job that I was contacted about a few months back. I refused to do their hour and a half hacker rank challenge on the basis that is nothing like how I work on a day to day basis, and I have examples of real work online if they need to see that I can code.
Maybe I am overstating a little, but all the works we see as great required staying power. Apollo was a ten year program. The Manhattan Project took 6 years to develop the bomb. Firefox took 2 years to exit beta, and the iPod took several years to pick up steam. and Tesla has been going 12 years, Space X 13.
It's not that you achieve nothing in a year tenure, but can you really accomplish anything great? Can you think of any good examples of people who showed up January 1st, changed the world, and left by Christmas?
50 Cent Talks Bitcoin: 'All Money Is Money' | | Observer
observer.com/2014/12/50-cent-talks-bitcoin-all-money-is-money/
Dec 22, 2014 - 50 Cent is happy he took Bitcoin for his album
Animal Instinct, because "all money is money."
Most competent managers I know realize that under paying your team is another sort of debt that piles up and comes due. Compensation certainly isn't the only thing that matters to your team, but it is almost always an important factor. I certainly always considered it part of my management responsibilities to get proper compensation for my team by making clear to people making compensation decisions the value they brought to table and how expensive in time and money it would be to replace them.
I'm always surprised at how companies can be so nimble in markets for their products but be so poor at working in the market for their personnel. Often times it seems like getting some counter offers is the only way convince them that the market for engineers has changed significantly.
From a company's perspective, just because one person gets a market rate that is higher than the rest of the team, the entire team can't simply be given a raise. While this sort of largesse may work for Google & FB, I doubt it would for those companies that grow in single digit to low teen % per annum.
Also, if the person given this raise is not amongst your top performers and now ends up out earning the rest of team, it ends up affecting overall team morale. Your star performers then start to feel short changed and think they have to leave to get a raise.
The problem with that theory is everyone that is capable of basic reasoning (which includes every competent engineer) already knows that getting an offer from another company at a higher pay and then quitting if it is not matched is a certain way to get increased compensation, wherever you end up working.
Failing to match when there is value to the company just means that every time you are faced with that choice, you always lose.
While the worst case with letting people know that that's a good way to get raises is that it puts upward pressure on wages until very few employees can get better offers that they'd be willing to threaten to quit for, and you still end up paying people not more than it is worth to retain them.
You probably think that your counteroffer was confidential because you’d sworn her to secrecy. Let me explain why it was not.
Actually, you're problem was forgetting that it's illegal in the US to prevent employee's from sharing compensation information. You can't require that in an employment contract and can't formally punish an employee for disclosing said information. :)
While undergoing an MBA, one of the HR professor told the class which I still remember. That is "Good & competent candidates choose the companies they want to work with. Companies does not choose them." Its upto the org to make it enticing and attractive for the good candidates. That is why working in Apple, Google or Microsoft is still an aspirational thing for considerable number of people.
This off-course does not directly explain to what is being said above in the parent ... just want to share a thought.
His entire argument is that the company must retain power in employee relationships, never the employee.
If one non-manager employee is ever in a position to show other employees they are being undervalued, the employees may do something stupid like demand the company fix the situation. Can't have uppity employees. Employees exist to be subservient to the ever-changing, unanswerable will of the CEO, not set the rules themselves.
The CEO gets to fail upward and become investor-class while shitting downwards on lowly employees who would dare to try and be paid what they are worth. How dare they attempt to confront such holy and monied highness as a CEO. Know your place, employee.
I also read Ben's book. Here's the flip side of that. You don't counter and your engineer leaves. The other company needs more engineers so the one that left helps poach more.
I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed.
Now that a lot more infrastructure and tooling is in place, we're seeing the effects of that prolonged depressed supply. It's easy (relatively) to hire junior devs, and much harder to hire senior devs. And even still, I talk to senior devs who have trouble getting a raise. I'm like... ok... well I hear X is hiring.
> wages were probably below what they should've been for years...
Not only that... tech companies like Apple, Adobe, Pixar, Google, Intel, eBay, Lucasfilm, and Intuit all illegally colluded to keep them low. The settlement for the affected workers was appallingly low!
I agree that the settlement was definitely low, but I really disagree that the settlement was absurdly low on aggregate.
I've always done freelance/contract work, so I'm not 100% sure what 'significantly' better means in the normal software world, but I'm going to assume 5k/year would be a really significant raise. I know the national average is somewhere around 3%, so 5k seems like it would be absurdly more than average. Please do correct me if I'm wrong.
So, just going on $5,000 lost for a year for the 64,000 litigants, that's $320,000,000. They settled for $324,000,000. I swear I didn't presuppose any of those numbers, they just worked out like that.
Given that the suit was about wage collusion, not about suppressing raises, calculating based on raises seems like an incorrect method. The reason prices were lower was not due to a lack of raises, but rather because those companies were artificially suppressing the demand for software engineers by agreeing not to poach, which makes calculating exact losses extremely difficult (unless we can precisely quantify the loss in demand).
This, exactly. We aren't talking about a typical annual wage increase percentage, but collusion that effectively set a cap on salaries for certain types of employees couldn't test the market. I'm wildly guessing, but i would think the difference in salary for many was 40k+ a year.
The period in question is 4 years so multiply by 4 (although not all litigants were present during all 4 years so you can back it off a little).
And 5k is too low. Google gave a 10% raise across the board around the time this information came out. So assume 150k salary * 10% = 15k. Salaries also continued to rise more rapidly after the 10% raise, but it's hard to say by how much without having access to the internal data.
I'm not being snarky; where does 4 years come from? Do we have start/end dates on when the agreement was formed/ended? If we do, then I'm totally willing to revise my judgement on this. Also, 10% from Google does not translate to 10% across the board, only to any employees who would be hired by Google, which would surely not be 100%.
From the linked wikipedia article: "The civil class action which was filed by five plaintiffs, one of whom has died, accused the tech companies of collusion to not recruit one another's employees between 2005 and 2009."
Hence 4 years of wage suppression. Given tech salaries in SV, $5k is off by about an order of magnitude -- especially when you consider the knock-on effects of job mobility that was systemically quashed by collusion (i.e. moving jobs => better pay => faster career progression => compounded earnings).
Your first question is answered by beambot. The 10% argument is that Google felt it had to raise salaries by that much for everyone after collusion ended, in order to retain employees.
>On September 8, 2014, Judge Koh set April 9, 2015 as the actual trial date for the remaining defendants, with a pre-trial conference scheduled for December 19, 2014. Also, as of early September 2014, the defendants had re-entered mediation to determine whether a new settlement could be reached.
Wikipedia seems out of date, what was the final result?
What I don't understand is that the X that is hiring likely also has a bunch of senior devs who are having trouble getting a raise. It would be far more efficient to give raises to current employees who already have expertise at the company than to hire externally.
Company valuations are based on N(engineers). It is said that hiring a full-time engineer increases your valuation by $1M.
And it only costs about 10% of that per year to pay the engineer. Winning.
Basically, there's no incentive to give raises to current engineers because when your company doesn't care about profits or expenses, but about getting and maintaining investment and stock value, it doesn't matter how expensive it is to train new people and how ineffective they are. As long as they are just effective enough to maintain a N(user) growth, you're good.
> It is said that hiring a full-time engineer increases your valuation by $1M.
I won't dispute that this is said, but every once in a while I get the sense people saying these things should double check which column of their balance sheet these things belong on.
yes but when we're talking about the real world where maintaining N(user) growth translates into designing, implementing, and maintaining complex systems, it can be fatal to simply view engineers as a commodity that can be discarded or replaced on a whim...
Your argument failed once you said "yes but" — when valuation is a function of number of employees, adding fine-grained nuance and deeper levels of consideration just won't happen.
If companies want the best, yes they should do all you said. If companies are just trying to grow grow grow, they can probably do better with an approach of 1,000 coder monkeys instead of 10 expert systems builders.
Plus, no reasonable company is going to pay the 10 expert people the equivalent of the 100 coder monkey duties they are actually performing. That would be what... a salary of $10 million to $20 million per expert employee per year. Yes, you are worth that much, but the market finds true-value untenable. We'd rather let companies keep hundreds of billions in spare cash than paying it out to employees who are allowing such hoards of wealth to be, well, hoarded.
> Plus, no reasonable company is going to pay the 10 expert people the equivalent of the 100 coder monkey duties they are actually performing. That would be what... a salary of $10 million to $20 million per expert employee per year. Yes, you are worth that much, but the market finds true-value untenable. We'd rather let companies keep hundreds of billions in spare cash than paying it out to employees who are allowing such hoards of wealth to be, well, hoarded.
Companies do do that. It's called an acquihire. It happens when an expert starts a startup that develops a technology that a bigger company needs. This bigger company then buys said startup for the sole purpose of hiring said expert.
They don't care about the user base or the interface or the company as a whole. They just want the expert to continue developing the technology they're an expert at, but do it for the big company instead of themselves.
Exactly. Wasn't the original question about how to get a raise at the same company though?
The option of "quit, give up all your security, hope to make something amazing, then get acqui-hired" isn't a tried and true path to just getting a raise.
We see people at Google taking that path all the time. Work at Google -> Quit -> Create new company with the same work you were doing inside of Google -> Get acquired by Google.
Cisco is famous for encouraging that tactic too. Lots of serial quit-acquirhire-vest-quit-acquihire loops going around. It's easy once you have the connections in place to drop out and instantly be established as legitimate again.
Yes, the original post was about getting a normal raise. But if you want to be paid as much as 100 code monkeys, an acquihire or other large stock sale event is your only option.
With extraordinary rewards, come extraordinary risks.
But the bigger point of this comment thread is that you can get raise jumps with practically zero risk as an engineer right now by switching jobs. As an engineer right now you can switch jobs without a single day of unemployment. Just do interviews as a side-project, then when you get hired somewhere else, quit your current job.
But companies are likely to lose the engineers that they aren't giving raises because of the same effect at other companies, so then it's a wash even under the N(engineers) valuation model, and I once again fail to see the rationality of it.
> Don't hate the mercenary, hate the employer who won't pay you what you are worth!
I think you fail to see a fact, the same fact that was overlooked by all your former bosses actually.
Your 6-years-ago self was probably not worth half of what your current self is. Your ability to land each new job was built upon the foundations of higher skills and professional maturity you achieved on the previous job.
Ambitious, talented employees keep growing, positions are static by nature. Job hopping is the de-facto career path.
I am definitely worth more now; I agree. Unfortunately:
1) Management in all but one job I've had invested nothing in training and helping new employees grow. My technical growth has come through personal projects and taking on extra work.
2) Promotion never offered anything like the salary increases a new job offered. The incentive to stay is not there.
> Your 6-years-ago self was probably not worth half of what your current self is. Your ability to land each new job was built upon the foundations of higher skills and professional maturity you achieved on the previous job.
I think employers massively overweight experience, particularly in a field that changes as fast as ours. Five years ago I was just as smart as I am now, maybe smarter - I didn't have 5 years' experience with tools X, Y and Z, but tools X and Y are already basically obsolete. But the market says I'm worth twice as much now as I was five years ago.
You are not worth more because you know more technologies, though it is an unfair fact on this industry that there will be one or two over-hyped stacks at any time. But back to the point, you are worth more because you have been exposed to the social dynamics patterns that repeat themselves over and over in each new development process. You don't learn that kind of stuff hacking on your bedroom and open source contribution, while valuable, can only take you so far. This is, IMHO, as far as and objective reason to hire someone experienced as you will get.
Also, there is the concept of social proof - which you may argue is a form of over-weighting experience, but that's an open ended question. If you have a track record of going to work for somebody else and achieving X, Y, Z goals there, you are perceived to be a safer choice than someone that in theory might be smarter than you, but that is lazy or otherwise unreliable, or with low communication skills, or a first class jerk. Not that you cannot hire this types if you go with someone more experienced, but from HR perspective, you are more of a "known quantity" once you have been around for a few years and built a track record for yourself.
I have five years more "professional" experience, seems to be the difference - I had verifiable coding experience on open-source projects before that that would have demonstrated those skills. I've got more confident in my judgement but I'm not at all convinced that judgement has actually improved.
I stuck to the JVM (since people seem willing to pay more if you have experience on the specific stack, and my first job happened to be Java); for the last 3-4 years I've been doing almost exclusively Scala.
I'm surprised you found a near-certain pre-IPO company who gave you a lot more equity than $350k. Most options I've seen at that stage seem to consistently not even reach 0.1%, which is already much less than $350k for your typical IPO.
These companies can be found, and you probably know their names. You can get through their interviews by adopting the mannerisms of their interviewers (be it old cynical guys, or Stanford new grads, or whatever) and studying your SAT interview question book.
The way to really strike it rich is look for say a social network with 30+ million active users that is willing to give you options. It's hard to fuck up 30+ million users.
EDIT: Just because I got lucky does not mean the OPs post is wrong. My luck was aided by me jumping ship as frequently as I could whenever a good new opportunity presented itself.
Echoing Chinjut's question – I've never seen a jump like that, unless it was equity that turned out to be worth $350k, but looked like less when it was offered. How did that happen?!
Mostly equity; I joined a company the week of the IPO but accepted the offer before that. I basically got very lucky, but the base salary + equity any relatively big name post-IPO company would also be $200k-ish.
Keep in mind that I stayed at none of these companies for more than 2.5 years!
There were 2 brief interludes
1) Non-technical grad school, but that actually netted me a very slick summer internship one year that paid way better than my previous job too.
2) Failed startup, that paid nothing
Unfortunately, I think I've maxed out on the software engineer pay scale now unless I get even luckier.
Those are awesome and I'm sure well-deserved jumps. However, you definitely have not maxed out on the pay scale, especially if you're in SF/NYC. To quote patio11:
> Pick a number, any number: somebody does a lot better than that. For most numbers you’d naively think of, its an awful lot of somebodies. $100k? Not the top. $250k? Not the top. $500k? … Not the top.
Thanks for the response. I'm not a developer (yet... heh), but I think I'm probably within sniffing distance of the top of the pay scale for my particular role. It's a weird feeling to know, "Welp, this is the end of big raises," but at the same time, I'm incredibly relieved by the thought that I could go my whole life without another pay bump, even for cost of living, and still be totally fine. I wouldn't want that, sure, but so long as I don't get myself fired I'll have everything I need. What a ridiculously lucky deal we've found.
The less emotional benefit of getting higher in the pay scale is that job-switches can be about something more meaningful than just, "Oh shit, that's more money!" Now, so long as I can get close, I'll be happy to just go wherever would be most fulfilling.
At that point, it seems like it just comes down to how much you're willing to pay to be happy. If your lifestyle inflates to the point that you can't take a pay cut, then yeah, that's a shitty situation, but I know of some folks who would gladly trade $50,000 for a little more free time, and in the next year or so likely will.
> I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed.
Correction: they are below what people of the quality they want are willing to work for. There are plenty of engineers willing to work for those salaries; the vast majority get rejected.
Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate.
At my last job, the "one review a year" was held just shy of 6 months after I joined -- and the "only time you could be eligible for a raise" was during that review. I had missed the cutoff for first day by 4 days. My boss told me he yelled and fought for me to get the review, but that they said no.
A year later when I told them I was leaving for a better paying job (with much better incentives and work/life balance), he said "is it about the money? we can pay you more why didn't you just ask".
If I could give a professional hint to my former self it would be: the best employers are the ones who are comfortable making a deal -- paying what they need to pay to get it done, and trying to strike the best deal they can. Any hiccup on that road (notably: not paying / checks bouncing / salary negotiations where the numbers decrease at any point, even if it is due to a technical or paperwork error on their end) is a _very_ bad sign.
It depends on the size of the company. Once past a certain size, there is not much a manager, even at director level can do to give an employee a raise out of review time. The HR "partner" have a big rule book on compensation and the poor manager can only "slot" his/her reports into a predefined range. A startup does have more flexibility to adjust compensation.
HR doesn't actually run the business- they're actually there to serve the business needs.
You were 'let down easy' by whoever told you that. It's human civilization on planet Earth, everything actually is negotiable, and "my hands are tied" is just a negotiation strategy.
Yeah, as someone who has (sort of) hid behind that excuse to shift the blame, let me tell you - that's an excuse people hide behind to shift the blame. It's like 'legal won't let me'. Bullshit, you don't care about it enough to ignore the advice that legal gave you. HR's role is to serve the business, not the other way around.
> My boss told me he yelled and fought for me to get the review, but that they said no.
Unless you witness it, don't simply believe this one.
It's a cheap & easy way to say "no" while still positioning himself as the good guy. After all, he's the one that has to manage a day to day relationship with you.
And stop to think about that for a moment. If you "yelled and fought" with him, would he or the organization tolerate that behavior? If he wouldn't, why would his boss tolerate it from him?
Don't ever think it is OK for a boss to have "yelled and fought" for you. If your boss does not have the authority to actually make changes within his own team, then your organization has more serious issues than your paycheck.
When hiring we will often offer an amount near the lower end of the range provided (assuming their range is reasonable) and include in the offer letter a ~5% raise after 6 months.
Yes we do mention it in the offer letter. Again, we start at their low end of their range though. We want them to know that "if things work out" they'll get a raise.
Staying at one firm is less scary, but is a career killer. You owe it to yourself and your career to move every few years. I aim for 5 years tops at one firm, unless I happen to get lucky and move within the firm to a substantially different job. That's happened to me once.
A different company offers you broader experience, if its well chosen, and of course, a better raise. I don't use a job offer as leverage at the old firm; I think that's a bad career mistake. Of course, jumping is scary, and the new firm might suck, but that's why networking is essential, whether you like it or not.
Can't upvote this enough. Switching jobs vs. getting a raise, is the difference between a 30% raise and a 5% raise.
Also, if you get a 30% better offer, don't be afraid to switch after just a few months. Job hopping won't hurt your career, but throwing away a few thousand dollars of opportunity cost per month will hurt your wallet.
Job hopping too frequently actually can hurt your career.
I've seen people get passed over because they jumped around too frequently. Hiring people is expensive and a hassle, and nobody wants to hire a person who's just going to leave in 6-12 months.
Obviously that doesn't apply if all of a person's past gigs were contracting work or "contract to hire" type things.
If you don't incentivize me to leave, I won't. And I would prefer to work for an employer who understands that than for an employer who plays on my built-in herd instincts and sense of belonging to get me to stay.
There's a lot of opportunity cost in staying at a job where your salary doesn't grow as fast as the market salary does.
Let's say my salary right now is 100k and that is the same as market. Next year I get a 10% raise, which makes my salary 110k. But the market has gone up 30%, which means my salary should be 130k.
Repeat that another year and my salary is 121k, but the market salary is 169k. By not switching jobs every year, I've just lost 68k in two years. Assuming the same numbers, I will have lost 154k after another year. That is more than my whole salary that I've left on the table just because I don't want to hurt my career by job hopping.
In this overblown example (neither raises nor market growth are that fast, I think) I could afford almost two years of retirement after 3 job hops.
What could you do with two years of free time?
PS: this is why companies give you a 4 year vesting cycle with an exorbitant [potential] upside. They understand this calculation and are trying to give you incentive to stay.
PPS: this is also why employers don't like it when you discuss salaries with your friends. To the point that it's become almost taboo to do so
My point was that there's a limit to how frequently that can be done. By all means, get a higher paying job when you can, but be aware employers are hesitant when they see somebody who jumps ship every few months, and it's unlikely they'll come right out and tell you that if they turn you down.
If looking at your resume sends the message, "Nothing you can do will retain me," then a lot of good companies won't even bother with you.
Maybe it's their loss, maybe it's yours, but in any case it's an opportunity missed due to jumping around a lot. Debating about it on HN isn't going to change the fact that it happens.
Anyway, I'm just saying, "it doesn't hurt your career," isn't completely accurate. To use your example, maybe it would have been 15 or 20 other recruiters contacting you if you didn't jump around so much.
some people get quickly bored no matter what kind of job you throw at them. IT is currently too geenerous profession and these spoilings are very common these days. good if you have skillset interesting enough for companies to overlook that (nobody is blind nor stupid enough to not notice that at all). or if you can just sell yourself, it doesn't matter how one gets the job. but for anybody looking for more than short term head count increase, with at least a bit of project management experience, what you describe is simple - a big NO, not worth the hassle. If last 10 comapnies failed to retain you for more than a year, 11th won't be much better, would it...
if you are a true born hopper there is perfect way to do things right - self employed consultancy. it's also paid better most of the time.
and btw getting bored too quickly is terrible, terrible personality trait, for any aspect of life.
This has been a pretty constant issue for me. I'm only a few years into my career, but my skills have always grown at a faster rate than my responsibilities (and my compensation). Job-hopping has kind of become the norm – 8 months, then 19/6/11 months each, before this one. I keep stumbling into these great jobs, but I wonder how many times I can bail so early before companies stop believing that I actually want to work there.
Yeah, it doesn't take a brilliant hiring manager to notice you've never stayed at a job longer than 9 months for the last 15 years. SV has a much greater tolerance for it than companies did fifty years ago, but you can still take it too far.
Heh, it hasn't been quite 15 years for me yet, but it's definitely something on my mind. The only thing making me feel better is that the last few job hops have been from being recruited, not the other way around, so people must not mind TOO much yet.
At a significant company (Apple, Google, Microsoft) very soon after getting hired, you'll have stock options and/or RSUs worth millions of dollars vesting vesting on a rotating schedule. "Leaving" can be painful unless the next company wants to make you whole against the millions of dollars in stock you'd vest over the next 6 years by staying.
It's often not talked about directly, but established tech companies (not "acqui-hire startup flavor of the month") routinely create hundreds of new millionaires every year. It's one of those weird worst best kept secrets. People don't like to talk about their net worth when it comes from steady work. People tend to only brag when it comes to media popularized lottery/startup windfalls.
Imagine even starting at Apple ten years ago before their stock went all rocket ship. Just by taking your standard options blocks and not getting fired, you'd be extremely well off today without overly exerting yourself (if not overly exerting yourself is even possible at Apple).
One should never consider RSUs as a form of wealth- you don't have any of that money, and you can't control it, so therefore you don't have it.
RSUs, when vesting on a regular schedule, are a form of salary. When I consider how much I "make" per year, in order to compare to other offers/companies, I add my yearly wage with the RSUs that will vest in the next year at current market prices. The sum is my real wage.
Could the stock suddenly go up, meaning my RSUs are worth so much more? Yes. It could also go down. But short of my having/using better information than the market has, the going rate of the stock price is probably a good measure of what the stock will be worth in the near future.
Well, over time. Not one bulk grant (at least for "unimportant" employees), but every year you get an additional grant with a new vesting schedule. Over time it adds up.
Of course, it's always better to have been hired 10 years ago when you could get more stock at lower strike prices anyway.
I think you are assuming people hold onto the stock over those 10 years. Generally this is a terrible idea, as you are violating the core financial principle of diversifying investments. I've seen multiple friends get burned by this approach when all their net worth is with their employer who then hits a problem. It's very risky and just looking at apple or google over the last ten years is survivorship bias.
I work for a well-known tech company that includes RSUs as a pretty big chunk of compensation. I have absolutely no perspective on the level of the additional grants that come attached to the annual reviews, but I was under the impression it was maybe a $5–8k cost-of-living kind of deal. Now I'm very intrigued...
It really depends. The numbers aren't huge life-changing at the beginning, but they add up over time and if you're really strong^H^H^H^H^Hlucky^H^H^H^H^Hshrewd and get promoted quickly, the numbers can get pretty large. The numbers below are hypotheticals but not too far off from people I know doing the BigTechCo circuit. Some do better, some do worse.
As a new grad you might see $5-10k in extra annual compensation coming from vesting RSUs (i.e. in addition to your salary and cash bonus). But RSU grants start to stack. Say your grants start vesting after 1 year at 25% per year. Year by year you might see:
Year 1: $40k/4 = $10k vest, new $10k grant (also vesting over 4 years)
Year 2: $40k/4 + $10k/4 = $12.5k vest, new $15k grant
Year 3: $40k/4 + $10k/4 + $15k/4 = $16.25k vest, new $25k grant
Year 4: $40k/4 + $10k/4 + $15k/4 + $25k/4 = $22.5k vest, new $35k grant
Year 5: $10k/4 + $15k/4 + $25k/4 + $35k/4 = $21k vest, new $40k grant
At year 5 you've seen $82.25k worth of stock vest (assuming a flat share price). Which leaves you with $82.75k left to vest.
Now you're tired of working at BigTechCo #1 and get an offer from their competitor, BigTechCo #2. You know how this works, so you tell them you've got $83k in RSUs. To make it worth your while, they offer you $160k of their own RSUs vesting on a similar schedule. You're an experienced, senior hire at this point so your RSU grants are larger, but maybe because you're a new hire who doesn't know the ropes your first couple of years at BigTechCo #2 show respectable but not explosive growth:
Year 6: $160k/4 = $40k vest, new $30k grant
Year 7: $160k/4 + $30k/4 = $47.5k vest, new $50k grant
Then you interview again and move to BigTechCo #3. Or back to BigTechCo #1. Or you tell BigTechCo #2 you're out and they give you a retention offer. Or you get a big promotion. Either way, the RSU grants add up. All the while you've been pulling in a respectable base salary, raises, and cash bonuses. And maybe, if you're lucky, your company's stock price has gone up too.
Or you realize your gross income of $200-300k in the Bay Area earns you the ability to buy property, which means you pick 2-3 of the following outcomes: [1] small and/or shitty house [2] 2-3 hour daily commute [3] overextended and house poor. So you move to the midwest and buy a palace.
Wow, you put a ton of effort into this, thanks. It's basic math but it really helped to see the fractions laid out like that. Now, to get good at my job and buy a palace...
I guess it also helps to become irreplaceable and/or indispensable at something.
There are employees at Google with hundred million dollar stock packages, but those obviously aren't bottom-of-the-org-chart drones.
You can either work hard for a lifetime single-company career and get there in 10-30 years, or you can try to hack your way upwards with startups and get acquired by the same company. (or, the even more daring option—create something of value as a startup and get your own team to help grow it.)
I think it would be fun to be the type of person who throws startup-centric, hail-mary passes with my career, but now that I've actually gotten myself onto a track that I love, I've very quickly turned into the quarterback calling the end-around and screen-pass every play. I might win less, but I'm less likely to screw something up too badly.
One of the theoretical advantages of a large, diversified firm is the plethora of internal opportunities for job and even career changes with less friction than trying to put yourself on the open market.
In practice, unfortunately, it seems all too easy to get pigeonholed, hit a political snare, or some other roadblock that makes your career there a trap rather than an opportunity.
I worked at Microsoft for nearly 14 years. I had the privilege of working on 4 very different teams (microBrowser, Palladium/Bitlocker, Robotics, Midori)
So in many respects it was like working at 4 different companies, in that respect I avoided the pigeonhole trap (which certainly also applies when you do move companies) but over time I accumulated corporate cruft which ended up dragging me down. Moving to a new company allows you to reset that.
> On the flip-side, joining a consulting firm is like a 10x multiplier on experience. You're constantly updating your resume for clients.
Starting out at an agency was so incredibly valuable for me–the endless train of projects provided a massive boost to my skills and confidence. I started out self taught, basically programming for fun ever since I was a kid, never really considering myself a 'programmer'. My boss (and somewhat of a mentor) basically threw me in the deep end with client projects.
I somehow managed to actually do well on my first project, and wound up getting to tackle some of the more ambitious projects we'd land, eventually participating earlier and earlier in the planning process and having more influence in how things were done. It was such great all-around experience. Now I work at a startup (and quite a fast moving one at that), which is great, but I've realized that it would take me so much longer to get to the same level if I'd started out in a single-focus type of company rather than an agency/consultancy taking on all sorts of different projects.
I definitely agree with this. A previous employer of mine had a policy of never matching any competing offers -- you stuck with what you had or took the offer. Combined with very infrequent raises this led to a fairly low morale. I stuck around as long as I did only because it was convenient enough while I was building up my own things.
This is not always true. There are some rare gems like my current place of employment who's managing partners, with a little persuading, allowed me to give raises up to 20% for some individuals.
EDIT: But yes, for most people and most companies, you'll need to jump ship to jump up a rung or two on the salary ladder.
This is exactly my experience (jumping ship and changing titles). I didn't see much discussion in the article about "what do I need to do to get to the next level" as a point of discussion when asking for more money. This is an easier discussion for your manager in many cases, and in theory at least should come with an increase when it happens. For many larger companies, in the long run the key to increasing your salary is getting promoted a lot. The other factor to consider is how is the company doing. Are they doing well financially and expanding their business, starting new projects? Or are they cutting corners on expenses? If they are cutting corners on expenses, not replacing people who leave, etc, you really are probably better off looking somewhere else in many cases than trying to negotiate a higher salary.
Joel Spolsky, I believe, use to say this "Be a revenue producer, not a cost center." Get a developer job working on the product or services your company sells for revenue. Don't get a job working on internal systems designed to save on costs (looking at all the developers working for insurance companies and retailers developing back ends and internal applications designed to cut costs rather than increase sales and revenue).
Step Two: Never accept a counter offer since your loyalty will be in question forever going forward. Only fish for another offer if you are ready to jump ship.
Isn't it advised against negotiating with current company with another offer? Since they'll just get rid of you later because they know you'll jump ship?
