"Employers are seizing the opportunity to stock up on discounted talent, despite the obvious risks that the new hires will become dissatisfied and leave."
The article provides examples of how growing businesses (e.g., start-ups founded by the hackers who post here) can get highly skilled employees at bargain salaries as they scale up, making their companies grow well and making the newly hired job-seekers happy.
When you hire someone at a bargain salary there is always a question of whether you are really "making the newly hired job-seekers happy" or just relieving them of their temporary desperation only to see their uncontentedness surface later.
Exactly. If you hire someone at bargain salary, they will probably work the minimum amount necessary while still looking for other jobs. When they get the next offer they will jump ship.
But remember in a small and growing business you can look at stock options as part of the compensation. If the newly hired person really believes the company has a chance, that could make them very happy even with bargain salaries.
Also, remember that set up often is harder than maintenance, so even if you expect the bargain talent to leave when the economy picks up later, you can often gain a lot from having them for a while and then replace them by someone less experienced at that point.
The submitted article talks about strategies for avoiding that difficulty (which are also mentioned in replies to your comment by other participants). I note that hiring ANYONE has the risk that the person hired will later dislike your job. If the job were greatly enjoyable, I suppose any hiring manager would rather do the job himself. But if you think you have good reason to hire, why hire less than the best applicant? As another reply to you has already said, having a good person on board for a while can provide benefits to your company that last even after that person has moved on to another opportunity.
When starting a technology startup a massive amount of the company's value is in the heads of the employees. If you're going to go the route of underpaying over-qualified employees you'd better make sure you have them document their systems thoroughly and be fully prepared for when (not if, when) they leave.
If you only have a dozen employees and you lose a couple or a few key employees that can horribly impact your future. It's risky and hopefully there's a plan set up to mitigate that risk.
Of course, it's also excellent advice when you are paying market rate or above market prices for labor, people still leave, if not quite as quickly.
I find that technical people especially seem to be not particularly motivated to maximize their income. Treat your underpaid people well, and you can often keep them around for a few years.
I've seen several MBA beancounters drive software companies into the ground. A few of them, I was surprised to learn, had engineering degrees. I thought that, maybe, they just didn't cut it as engineers and went into "business/management" as an alternative.
They are the former chief financial officer working as comptroller, the onetime marketing director who is back to being an analyst, the former manager who is once again an “individual contributor.”
I am curious about how many of these people were "overemployed" during boom times?
I know this recession has made many competent people loose their job and become willing to accept less, but bubbles and boom times often see companies try to grow fast and become willing to accept less qualified people to fill some positions too...
The idea of people being "overemployed" is described in the Peter Principle which states that people rise to their level of incompetence. Maybe it is reversing itself a little.
http://en.wikipedia.org/wiki/Peter_Principle
For his part, Mr. Carroll admitted that he had caught himself often trying to drop his credentials into conversations at his new workplace.
“Obviously that stems from maybe some embarrassment at the level that I’m at,” he said. “I do want people to know that, to some extent, this isn’t who I am.”
It helps somewhat that most of his former business school classmates are hardly becoming masters of the universe.
“It’s not like anyone else is tearing it up,” he said.
While he is happy for now, Mr. Carroll worries about what will happen once he has finished the more interesting work of overhauling the department. He wonders how long simply having a job will be enough.
This does not sound like a person that is happy. This sounds like a person who feels embarassed, forced into a position he feels above, and typically jealous comparing himself to his friends' success. It's kind of pathetic seeing someone trying to fake taking the high road ending up with remarks like this.
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[ 2.9 ms ] story [ 59.0 ms ] threadThe article provides examples of how growing businesses (e.g., start-ups founded by the hackers who post here) can get highly skilled employees at bargain salaries as they scale up, making their companies grow well and making the newly hired job-seekers happy.
If you give less, you will get less.
But remember in a small and growing business you can look at stock options as part of the compensation. If the newly hired person really believes the company has a chance, that could make them very happy even with bargain salaries.
Also, remember that set up often is harder than maintenance, so even if you expect the bargain talent to leave when the economy picks up later, you can often gain a lot from having them for a while and then replace them by someone less experienced at that point.
If you only have a dozen employees and you lose a couple or a few key employees that can horribly impact your future. It's risky and hopefully there's a plan set up to mitigate that risk.
Of course, it's also excellent advice when you are paying market rate or above market prices for labor, people still leave, if not quite as quickly.
I find that technical people especially seem to be not particularly motivated to maximize their income. Treat your underpaid people well, and you can often keep them around for a few years.
I am curious about how many of these people were "overemployed" during boom times?
I know this recession has made many competent people loose their job and become willing to accept less, but bubbles and boom times often see companies try to grow fast and become willing to accept less qualified people to fill some positions too...
“Obviously that stems from maybe some embarrassment at the level that I’m at,” he said. “I do want people to know that, to some extent, this isn’t who I am.”
It helps somewhat that most of his former business school classmates are hardly becoming masters of the universe.
“It’s not like anyone else is tearing it up,” he said.
While he is happy for now, Mr. Carroll worries about what will happen once he has finished the more interesting work of overhauling the department. He wonders how long simply having a job will be enough.
This does not sound like a person that is happy. This sounds like a person who feels embarassed, forced into a position he feels above, and typically jealous comparing himself to his friends' success. It's kind of pathetic seeing someone trying to fake taking the high road ending up with remarks like this.