I’m definitely seeing huge salary inflation for software engineers.
Where? I’m seeing big demand increases. Salary increases almost not at all.
Josh[/quote]
All the candidates I’m interviewing. I see their expected salary. Also, head of recruitment does a yearly salary market evaluation, and she kept a very close tab on that. She’s confirming that the market is in line w/ what the candidates are asking for.[/quote]
Here’s an ugly truth.. I’ll give an example.
I have a senior engineer who’s been with the company for some time. He’s never moved around, just stayed at our company for some time. Yes, I’ve heard he’s not too happy about his compensation after working for years here, but since he hasn’t motivated to move around or seek a higher/better position elsewhere, pretty much all the managers/directors before me didn’t do shit.
Me. I’m a weak Director. I actually go out of my way to care about some of my best people, so when I heard about this through the grapevines, I looked at this comp, and indeed he’s well below market, so I gave him a $10k raise to bring him up to something closer to market rate for his level. That was beginning of this year, during covid economy. I don’t know, I guess I care about employee retention even though I had assurance from other directors/vp, there’s no way he would ever leave (IE other directors/vp have already profiled him and figured out he would never motivate to leave even if we didn’t adjust his comp because he doesn’t squeak and motivate enough and asked why I was going to do that)….So anyway, he’s happy now, and probably won’t ask for an adjustment again for some time.
Meanwhile, I’m looking to hire 4 mid-level engineers this month..And guess what? All the good mid-level engineers are asking for the exact same compensation that my senior engineer (the one that I just made an adjustment for at the beginning of the year) is currently making. Because that’s what the market is paying them to move out of their cushy current secure job and get them to work remotely. And since my company isn’t a sexy company to work for, I probably need up the base pay above what others our offering just to attract top talent…
Question: you think HR/VP’s are going to allow me to go back and re-adjust my senior engineer’s pay above what I’m going to have to pay any mid-level I hire now, after already making an adjustment at the beginning of the year?
Why does this happen? Well for a few things…
The best way to stay stagnant with a W2 paycheck is to get too cushy at a current job and get stuck with that 1-3% annual raise that a company gives you. Even if you’re pretty vocal about it, it’s unlikely you’ll get a big bump unless you are indispensable (and chances are most people arent)
Keep in mind that even me, going over backwards, I was only able to bring one engineer up to market rate few months ago…Keep in mind the rest of the directors and VP basically thought I was stupid to do this for someone who probably won’t leave anyway… And I’m sorry to say this, those VP’s directors are a lot more common than people like me….I know for a fact, both when I was an engineer and now talking to people that are my peers….
It’s one of the main reasons why when my tour of duty as a director+ ends, and no one wants me anymore to do this, it’s highly unlikely I want to return back to being just an engineer, unless its for my own company or for a company that I have a sizeable equity stake in that can be measured by double digit percentages. I’d rather retire and open a boba drink place or speed shop…There’s this Taiwanese 29 year old chick that is a family friend, and she did this after she was laid off from her IT job.. And she opened a drink place during covid in Acadia. Does probably 5x what my comp package is.
The best way to get a big raise, if you’re really *that* good, is to walk over to a company that needs your skillset and ask for that 20-25% pay bump that they’ll have to pay you to poach you from your current company. Because in the worst case scenario, you don’t need to move, and in order to change the environment, the new company simply has to give you more. And you want to do this while you have a job, not after you’ve been laidoff/fired. Because then HR will pick up on that and think you are desperate and totally try to lowball you (even if you are not).
The closest analogy I can think is the long term tenant/landlord relationship. Often times a landlord like me doesn’t bother to raise rent prices for someone that’s staying on that’s a good tenant…even though if I kick out the tenant and get someone else, chances are I can get more rent..Just like it pays me to shop around for new tenants that’s willing to offer more money, it pays a employee to shop around for a company willing to pay more. If this sounds like prostituting yourself out. Well, that’s one way to look at it. But consider this. If a company needs to lay people off due to cost, how loyal or good your were is often times irrelevant to that decision process….Now, there is a PITA factor of switching jobs just like there’s is for switching tenants. So the question is , how much is that PITA factor worth it to you. For some people, like me, I don’t like too much PITA factors, even though I can be one at times.
And if you’re really clever. You leave your current company ON GOOD TERMS (IE don’t trash your current company by complaining to HR on your way out) and go to that new company that gives you a 20-25% pay bump…And if you hate it, in 1-2 years, you find a better position with a higher title at your old company, and let them hire you back, with the higher position, higher title, and higher compensation…(because of all the new experience and title(mainly) you got at the new place, while all the other people that didn’t motivate to move are still stuck at the same level doing the same stupid shit because the company didn’t give those people a better opportunity). It’s a lot quicker to “move up” or get a bigger comp package that way, than to expect all the stars to align at your current company, and god forbid you to be picked to get promoted.. (I think that might happen if someone gets fired or dies. Good luck waiting…)…
Now these rules don’t apply if you work at a company that while your position might suck, and your base pay/bonus might suck..but you have a a boatload of stock or stock options that are worth something..(IE Qualcomm, Intuit, ServiceNow, Illumina, etc).. But then if that’s the case, you’re in a completely different category.. You’re in the “rest and vest” category in which basically you really shouldn’t give a shit what they ask you do, so long as you can sit there and fully vest and put in your time…
But other than that, I wouldn’t count on your annual review to really give you a bigger paycheck next year. I mean the difference between a “star” performer and a “regular” performer at many companies is the difference between getting a 3% raise versus a 2% raise..which after W-2 taxes, that 1% *might* be able to get you a couple of extra starbucks coffees.. I say might, because the price of starbucks probably increased more than your raise.
Which is why some of us engineers who have figured this out a long time ago, would rather spend the extra time that we would have been required to spend to get that extra 1% raise doing something else….like buying real estate and doing rentals when the markets crashed years(decade?) ago…..
This very simply axiom probably goes completely against the grain over every shred of hair on an engineer’s body. But it’s the reality..As an engineer, short of you being incredibility talented+lucky who started something on your own and/or either went public, sold something off to someone else, etc….you’re day to day salary isn’t going to cut it imho unless you really want to live like a Spartan. I didn’t want to do, so I swallowed my pride and joined the 75% rest of the population that aren’t engineers to do the same stupid shit that other people do to make money…
Frankly, it’s an Asian thing. Real estate. Every asian person I know always ends up buying real estate no matter how rich or poor they started out. First, second, third generation…My parents bought real. Their parents bought real estate, and the parents before them bought real estate. As I’m buying real estate and my kid is now understanding the importance of buying real estate…etc…
That’s why if you marry someone asian, chances are at one point your in-laws will ask you “when are you going to buy real estate?”. Yes, I know it’s fvking annoying at times, but it is what it is…That’s why you see a bunch of 1st generation asian engineers who make significantly less than their american bosses (due in part to wage discrimination in USA) who drive the shittiest cars..but eventually ends up being a lot wealthier than their bosses…
At my old company, one guy in the office just did that. He’s this Chinese guy 10 years younger than me, and never had any aspirations to be a manager/architect/lead etc. He put in his time as a senior engineer, 40 hours, spent the rest of his time buying selling real estate and getting his license, and when they laid him off, he was laughing all the way to the bank because they had to give him a layoff package…and he was already planning on quitting so he could do run his real estate brokerage business full time… He’s done incredibly well part time. One of the top listing agents i think
