Comment by scarface74
5 years ago
The other side of the coin is salary compression and inversion.
That’s where HR policies dictate that no one will get more than slightly above cost of living raises no matter what while at the same time having to bring new employees in at market rates.
You find a situation where the more tenured employees are getting paid less than new employees with the same skillset but without the corporate understanding.
This varies enormously by the history of the company. I've seen situations where companies are quite stable and very happy to give tiny increases to manage their costs and don't care if they lose engineers because it's not like an individual engineer is actually going to make or break the company. This tends to be true at very large organisations with mature markets. These are the sort of companies that kind of know they aren't going to increase their revenue beyond a certain point so they're focused on reducing costs. A side effect is managers hire in at high salaries because they know the increases won't be big and you end up with a shuffle of slowly inflating everyone's job title. Suddenly you're hiring senior staff out of university.
On the flip side though I've also seen senior (long serving) staff massively overpaid, because they got massive bumper promotions and pay rises during growth periods for the company, and then when things tighten and growth slows, they're still sitting on very generous pay. Particularly in 2010-2015 where staff had got big increases in 2000-2007 but all the new staff had been hired during the recession.
That’s still a problem. When the company eventually has a change of direction and lays off the overpaid (for their marketable skillset) developers and then they have to go back out on the market and find that no one wants a 45 year old ASP.Net WebForms developer.
They will end up on HN complaining about “ageism” in the industry.
At 45 myself, I can’t afford to allow myself to get comfortable at a company that isn’t using technology that keeps me marketable. If I see that starting to happen it’s time to change jobs. I never want to be beholden to the shins of a single company for my livelihood.
I would much rather be able to depend on my marketable skillset, my updated resume, and my always warm network of former managers, coworkers, and local recruiters.