This "loyalty penalty" is far from new. It was totally obvious to me, and to many of those around me, over twenty years ago. If you stayed at one company, you'd fall behind the industry-wide trend. You'd start to see people who were more junior overall, and clearly less familiar with your product, hired with salaries above yours. If you wanted to keep up with that industry trend, you were forced to keep moving. I even know people who deliberately did "out and back" jumps to leap-frog over others at the same original company.
Where I part ways with the author is regarding what goes through employers' heads to perpetuate this. People who decide compensation seem to be in denial about the fact that people leave, or that their actions have any impact on how often that happens. Their biggest worry seems to be that if they make an adjustment for one person then everyone else will demand one as well . . . as though the cost of making such adjustments even across the board is greater than the cost of having to re-hire half the team every year. As a result they make such adjustments rarely, and try to keep them all hush-hush so nobody finds out, but it never works. People who were hired because they're smart tend to figure things out.
Obviously, some companies have figured out that plain old-fashioned money is sometimes the key to employee retention. Google has sucked in and kept a lot of people this way, for example. Unfortunately, the current wage inflation has its own down side. Maybe some day we'll find a place between these two extremes that doesn't either screw employees or stifle innovation by smaller competitors.
Also Google participated in an industry wide conspiracy to keep wages down and keep other companies from poaching or even hiring applicants from Google.
> I even know people who deliberately did "out and back" jumps to leap-frog over others at the same original company.
This is commonly known as a valid strategy at the place I work. It's very difficult to come in giving a shit about my code when the future of my position is a dead end.
The company I previously worked at advertised a position to work alongside me at my same level doing the same work, the salary being offered was 50% higher than my salary at the time.
I took this to my manager and all he had to say was "there's nothing I can do, I don't set these things"
It's downright insulting to see this kind of behaviour.
your right, been the case since I started in the 80's. Still the case, best way to get payrise to to show a offer and then they will struggle matching and then say you can expect a substantial payrise over the next few years, or some other excuse.
But what I have seen in the 80's, 90's, 00 and today are people who leave for a new job, then come back a few years later and in that process get paid more than there last job of which the company would not match the offer or come close.
This is why the only real way in many companies to get a pay-rise is a job change/promotion and this and as true work is often not valued and gauged by management tier then we end up with lots of managers. Sounds familiar too many in large companies.
But then in contrast in the 80's older people got paid more and younger people got paid less and personally experienced that in many situations when I would of got much more if I was just older, no more experience, just age.
Now I'm older, that situation has changed and more bias towards younger people in many situations, experience ignored. But young people will burn 80 hours learning and doing work which the older person could of probably done in half the time if not less. But we all go thru that learning curve.
Not all companies still this bad, some better, but at the same time introduce new issues and with that the price of some free food to entrap employee's into doing extra free hours that far out-way they food investment is an area most overlook in a young industry like IT. Acting, accountants and other longer established trades have much more solid practice and rewards and protection. Heck who wouldn't want a repeat-fee like actors every time your code was run.
> best way to get payrise to to show a offer and then they will struggle matching and then say you can expect a substantial payrise over the next few years, or some other excuse.
No, the best way is to keep abreast of what new hires are getting paid, and make sure you are staying ahead.
>> Their biggest worry seems to be that if they make an adjustment for one person then everyone else will demand one as well
Though this is true, but its come back to you in some other form though.
Salaries are never a secret, and generally once you get to know a new hire's salary, hired at your level and experience being higher than yours- What follows is resentment. Generally if you ask for a raise you won't get one, and will likely leave.
There's also the pervasive attitude that people will stay because of the projects, culture, people, etc., and don't care so much about the money. That can be true to a certain extent[1], but I think the people who make salary-bump decisions think way too much of it.
[1] I suspect this is actually very true when an employee starts fresh at a new company, but, over time, the money (or lack of it) becomes more and more important.
Where I part ways with the author is regarding what goes through employers' heads to perpetuate this. People who decide compensation seem to be in denial about the fact that people leave, or that their actions have any impact on how often that happens. Their biggest worry seems to be that if they make an adjustment for one person then everyone else will demand one as well . . . as though the cost of making such adjustments even across the board is greater than the cost of having to re-hire half the team every year. As a result they make such adjustments rarely, and try to keep them all hush-hush so nobody finds out, but it never works. People who were hired because they're smart tend to figure things out.
Obviously, some companies have figured out that plain old-fashioned money is sometimes the key to employee retention. Google has sucked in and kept a lot of people this way, for example. Unfortunately, the current wage inflation has its own down side. Maybe some day we'll find a place between these two extremes that doesn't either screw employees or stifle innovation by smaller competitors.