I don’t get how corporate is so detached that they’re making these policies. I left my last job about a year ago because a competitor offered 30% more. My manager said they could do 3% and, with regular raises, I’d be at that amount in 10 years. I know his hands were tied and he was just grasping at any reason he could come up with to keep me, but that just makes me even more incredulous that companies are crafting policies like this.
Edit: This job also requires about a year of training to be halfway decent, with multiple business trips overseas, so they didn’t even save any money as far as I can tell.
They’re not detached, they’re playing a different game. The game of the greedy little piggies.
If I give you a raise, well, it just might get out that we give raises around here! Suddenly, I got all these, lazy, do nothing greedy little piggies asking for more money! That 5k becomes 20k, then 50k, etc.! My hard earned slop is drying up quick!
But if I hire someone new, I send the exact opposite message. We don’t do raises here, and if you don’t like it, we have no trouble replacing you, greedy little piggie!
Yeah I just show up to work and try to do a good job, so I can see how I’m not like them I guess. It really sucks having to change from a job I really liked to another just to keep up with inflation or get to the pay range they’re hiring ln
This is the real reason. A universally beaten-down workforce is how you keep people working hard for the minimum pay. One new employee being paid more than the others from the get-go isn’t anywhere near as damaging to the bottom-line as one employee getting a nice raise and inspiring the rest of the office to demand one as well. With the taboo against asking people how much they get paid, nobody will ever know that the new guy gets paid more, and soon enough even they’ll get paid well under what they’re worth with inflation constantly rolling away.
I think it’s short sightedness. If you look at the costs over a decade it would be a no brainer to invest in retention, but if you’re only looking at the change in this quarter’s budget then it’s not as clear.
And we’re just looking at salary difference with the new hire here. Hiring and onboarding the right person costs.
It also sadly risks undeserving employees getting raises and becoming much harder to dispose of, especially in jurisdictions where it’s hard to fire people.
It’s shit. Top talent and young people suffer for it.
The is the world the MBAs have created, saving money in the short term seems to be the only thing that matters to many companies. Also, for every one person who leaves to get more money, there may be several who stay at the lower wage
I always assume they believe you are lying.
They are willing to risk the “ok cya here’s my 2 weeks” to never suffer the “lol I made that shit up thanks for the big raise”
In which case, who cares? If the person can do the job and is happy to do it for $5k less than a new hire and no training is required, you could be Pinocchio for all I care.
Yeah but I addressed that in my earlier comment. These are job positions that require training and skills and it’s still easy come easy go for most of my industry as far as I can tell.
Essentially they’re hedging your bargain
If they can’t really spring for higher salaries, but you’re too lazy to change jobs just yet, get them to pay for credentials and training that make you a more desirable hire. Make them load the gun you’ll shoot them with.
Doing that at my new company. They’re paying for my master’s :)
Hiring budgets are often very different from operational budgets. The job you’re moving to for a 30% raise has the same policies as your current job; you’re just seeing the other side of it.
I’ve come to understand that but it’s a foolish way of operating on their part
They only loss out on the ones that leave. They win big on the ones that stay.
I wonder if anyone’s ever did the maths, I wouldn’t be surprised in many instances if it works out. However, it would be hard to estimate the impact of the employee resentment and loss due to losing knowledge.
They have done the math.
Over the long term, it costs them almost 4-5 times as much to hire a new employee. It takes most new employees 6-12 months to become as productive as their counterparts. Add the cost of recruiting, interviewing, performance management, etc. Giving a raise by far is the cheapest option.
Long term.
But quarterly profits will always, ALWAYS, supercede any long term investments.
Why take the hit in your operating budget NOW when all you care about is making sure you’re hitting next quarter’s numbers? Hell, the employee leaving is going to lower your costs so it’s better for you in time for the shareholders’ meeting.
Their goal is to get employees who get comfortable and will stick around for that 3% raise. Hiring someone new - even at a premium - gives them another shot at getting an employee who won’t demand a big raise later.
As far as they’re concerned, someone who demands a 20% raise today will demand a 20% raise again the same time next year.
Especially when the procedure are garbage written by people hired overseas at the bottom dollar that have never seen the machines. And on top of that there’s a lot of tribal knowledge. But I’m at the bottom of the chain looking up. I’m sure the bean counters have thought this all through already
Yes, middle management gets a bonus for keeping costs down, so it’s in their personal interest to refuse raises.
The one in charge of hiring gets a bonus for bringing in people because work needs to be done and there aren’t enough workers.
The incentives make the system as it is. And good long term incentives seem to be few and far between.
I had something similar happen. I lined up a second job that was offering almost double the pay. And my current company was just at a loss they couldn’t even offer me online work it was just like a goodbye. Though now I’ve kind of hit a paid cap for my particular field so I doubt that golden moment will happen again
I think that’s the point where I’d start considering trying to find something else in the same company. If I can make lateral moves for pay raises, I’d prefer that to toeing the company line and hoping they’re nice enough/like me enough to promote me
And that’s exactly what I’m doing 👍. Going for that senior role. While trying to avoid management lol
Me too. Trying to get to R&D or Integration and Testing but it’s gonna be a while
I had that happen to a team member (me as a manager). She came to give me notice, the pay jump was huge. 45k to 70k. I loved her and I tried to swing it with my boss, but the ultimate answer was no and she left. I hope she is happy now. She really was awesome and I wish she stayed working for me, but I’m happy for her. She was a single mom to 2 teenagers so there’s no way she couldn’t accept that money
In my experience, a lot of management positions are filled by people that are meeting a need of feeling a sense of power and control over others. They don’t care about the company anymore than they have to to meet this need.
Also, it’s possible that they’re worried that if they give you a raise, you’ll tell others and they will demand one as well. They rather hire a new person without social ties to other workers that wont share what their salary is.
The lower management people that I’ve worked with haven’t been like that for the most part. I guess my frustration is mostly with the fact that the message of retaining people isn’t getting to the people who make decisions on things like that
That seems pretty credulous based on your anecdote. Also, you’d surpass 30% in 9 years of 3% raises.
One less year is not a compelling reason to stay either. 2 weeks << 9 years
I’m an engineering student.
I like to say: “You know the joke that business majors are stupid?” and that’s it.
The answer is you already have the 40k person, it’s not broken, there’s no urgency for HR to approve additional funding.
That person says they’re leaving, now HR can approve a counter offer, but also, can you trust they won’t leave later? Maybe we shouldn’t.
You’ve failed to give a raise and they’ve now left. Now there’s a gap and the team can’t pick up the slack. Oh shit, guess we better hire someone else. Oh, the market average rate we all pay the same company to provide says the rate is higher than 4 years ago, so they get hired with the higher rate.
Isn’t that unfair to the existing employees? We’ll see point 1. It ain’t broke, we can’t approve more funding.
This is why the idea of maintenance is something that should be better appreciated. If that person’s pay kept up in the first place, an employee can expect to not need to find another job and the problem never appears in the first place.
Shitty companies will never care about things which can’t go on a spreadsheet or entry in their earnings report.
But I agree.
It’s because they know one dissatisfied person leaving is cheaper than either giving everyone a raise or creating 1 satisfied but many angry people after the others were ‘unfairly’ looked over for a raise.
That and for many people/managers it’s just the default to do nothing until required.
Edit: this is part of why unions are so important.
That is only true when employees are not skilled and do not gain inside knowledge.
Small business with one person leaving having a catastrophic impact, sure.
Giant corporation, one person can’t tip the scales, regardless of skill and knowledge.
Then why do we pay CEOs millions of dollars?
This is a rhetorical question.
Small businesses do the same shit.
As an embedded systems engineer, I left a small business to triple my pay. They eventually replaced me with someone at twice my old salary, but they couldn’t hack it and the company folded not long after.
Definitely agreed. I’m just saying that example can crush a small company, but in a larger one the risk is spread out to be more of a “the house always wins” situation. Even if they lose some of the time they will come out ahead with the shitty exploitative strategy.
You’d be surprised. I’ve worked for a fortune 500 and knew people that, if the left, would cause a multi million dollar facility to grind to a halt for at least a month. And management was only barely aware of how important they were
I was at a small company for 7 years working 50-60 hours weeks. I left for a large company where I work 40…at most. Usually I get my stuff done and have a “free” day.
Even including the overtime pay at the first job, my checks here are over 50% bigger.
It took the threat of poaching for the boss to do anything but they wound up giving my coworker a raise. Clearly they had the money.
Didn’t forget paying 20% of their salary to a recruiter
Plus the lack of productivity for onboarding and training the new hire…
And the sapped productivity from existing employees training the new employee
Yes, the best way to increase your salary drastically is to change jobs.
clearly the creator of this is an inexperienced writer.
Almost maliciously stupid enough to justify the Drake template.
Probably saves money in the long run unfortunately.
Quite dumb, but it is what it is
How would it save money in the long run?
Because not enough people quit to make the business feel the loss in the end.
If you can underpay 10 people at the cost of losing and having to rehire 1 at a higher cost, then that might unfortunately be the more lucrative choice for the business.
Hence we unionize
Depends on the situation, but one thing I can think of is certain benefits don’t kick in until you’ve worked at the company a certain amount of time (say, a full year).
How so? Genuinely curious how that works. Doesn’t sound like it should, if you end up paying more, for less.
The employee may not quit.
Consider the system as a whole. If not enough underpaid people quit, you as a business might just make it out ahead.
