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Ask HN: No Profitability and Raises why the guilt?

5 points by djmill ↗ HN
In short I work for a start up who underpays me. This company is ~5 years old and every time I bring this up, they throw a small amount of money at me to shut me up and remind me that the company is "not yet profitable".

Well, Amazon isn't profitable (maybe they are now..? last I heard they were not), but they still pay their employees market value. Why the guilt? Why not give an employee a raise (which I deserve) without reminding me that they're "doing me this favor"? No, I'm doing them the favor by continuing to work for them... I've seen their applicants, I've seen how no one wants to work here... I know exactly what's going on here...

Just curious what people's thoughts are on this. My personal feeling is that I won't get the pay that I'm looking for without finding a job that will pay it - and THEN my employers will try to keep me from leaving by giving me what I was looking for initially.

How does profitability weigh in on paying employees market value?

Edit: equity is extremely small. Tech lead position for bottom 35 percentile pay in the area.

14 comments

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rietta
Not profitable in this contex probably means they do not have the cash flow nor the means to pay a higher wage. The options are 1) increase revenue, which may not be easy or possible in a given market or 2) pay fewer people more.

Now if you believe in the company and what to stick with it is entirely up to you.

Edit to add. Amazon is not profitable but has massive, massive cash flow. That is unlikely the case with your employer.

davismwfl
That's not actually totally true. Amazon is profitable, just with very small margins for the size of revenue they generate. http://www.reuters.com/article/us-amazon-results-idUSKCN0V62...

Also, Amazon doesn't focus on quarterly profits, which frustrates the wall street types. That is different then not ever being profitable though. If there were never profitable Amazon would have to be raising more money constantly or slashing costs just to stay in business. Instead, they just run super thin margins and invest pretty heavily in new areas constantly keeping their margins super thin (sometimes negative).

sharemywin
Do you have decent equity to counter the lost wages? Does the company have double digit monthly growth? If no to either of those questions you really need to question whether you shouldn't find something else.(My BS opinion)
Someone1234
Are you an employee or investor? If you're receiving equity then you're an investor (even if your only investment is theoretically lost wages). If you are only receiving wages (and or bonuses/benefits) then you're just an employee.

As an investor you need to come at it like an investor: Is this business a good investment of those lost wages? Are they growing? Does the business model make sense?

As an employee: You'll never be rewarded for your "loyalty." They won't make it up to you later. If you are being chronically underpaid you should consider finding another job. A lot of startups churn through tons of inexpensive employees, and few if any are later rewarded.

djmill
My equity is extremely small, if not negligible. The company continues to grow, but the engineering teams grow slower than other parts of the company. This puts more and more strain on engineering as work continues to pile on. The good news (and the bad news) is there's never a lack of work. I feel like slave labor for being a tech lead for bottom 35 percentile pay in the area.
lastofus
Without founder level equity in the company, it's simply time to move on. Life is too short to keep working a job that you are not happy at, especially if you are in the lucky minority of people with highly sought after skills.
advice_giver
I was once in the same situation. If you want to be paid market value, stop whining and go get it. What's the point of sitting around being mad.

You have some choices. Wait for the next big project, then ask for a fair raise, and for once, don't take the weak counter. But really you should just get another job. Then you will find out what you are really worth.

Good luck.

djmill
Yeah I'm currently at the 'next big project' and asked for a fair raise. I got a bonus and was told salary reviews will happen within a few months. The company reviews everyone at the same time... maybe they should reconsider if I go and find what I'm looking for.
MalcolmDiggs
Well let me premise this by saying: Getting more money rarely turns a bad job into a good job. If you don't like the place you work, that's the problem, and getting more money won't solve that problem.

That being said: I think you're right about getting other offers lined up. I think you should start interviewing, go out into the market, and get 3 - 5 solid offers lined up. Then bring those offers to your employer and leave it in their hands.

If they won't pay you market-rate (after showing them what market rate is), then leave; simple as that.

davismwfl
So 5 years in and you are still not at/near market rates, are they solely bootstrapped?

To answer your question, profitability plays in regardless of whether they raised money or not, but it weighs far heavier when a company is bootstrapped. Even then though, smart founders will work to take care of their staff so their staff take care of the clients. If they are backed and raised a Series A or further then there is no excuse for not, at least, being very close to market.

Just my 2 cents on profitability too, a company cannot claim to be profitable until the staff is paid competitively and founders are taking a reasonable salary for their role and size of firm. Otherwise the company is not really profitable.

As for staying or leaving, my bet is they will keep making promises but unless you see behavior differences or a light at the end of the tunnel, then it may be time to move on regardless.

One other point, if the company has been taking care of you in other ways like vacations, small bonuses when possible, full health care, and other perks/benefits, then I'd likely feel better for a longer period of time, especially if they were open and recognize that they are underpaying, but it wouldn't last forever.

alexc05
Hey! So forgive the snooping, but I looked at your comment history.

    - This post.
    - "Need a raise how to ask"
    - "100% burnt out"
You're telling yourself something.

Quit.

Give your legally required notice then use the time to start looking for something else.

This is obviously contingent on having enough savings to stay off the streets until you find something new.

Maybe get temp work through an agency. Depending on the market you're in, that should be enough to tide you over.

Don't stay. Give notice, move on.

cblock811
Yeah if there is a consistent pattern like this, I think the poster is just looking for the right push to make a move. Some sort of forcing action. I say go with what this guy says, give notice, and leave (unless you need to save money first).