It's only about 50% about pay for STEM fields. They have to be engaged, feel like they have a voice or influence in the culture/business decisions, have great equipment to use, and flexible time off.
Indeed, pay me $1m a day and I'll stare at a wall for you.
Probably wouldn't do it for long, the first day would be amazing - that buys a great house. The rest of the week and I'm set for a very comfortable retirement.
For a few days. My experience is that high pay will A) keep bad people around for much, much longer and B) keep good people around until they get too fed up with the bad people.
I guess that's where high bonus low pay comes into it - if you are a "good person" you get the high bonus so you stay, if you are a "bad person" you don't, so you leave.
The problem then comes down to defining good person vs bad person, which in the real world is very tricky.
This is part of why stock options are so valuable to organizations as an incentive: the retention power of high pay without the calculus of “do I have enough?” from liquid compensation
Huh? Everyone I've ever known who had significant options knew exactly what they were worth.
I knew someone who changed their bash prompt to (price * unvested count / days left). He said at the time it was the only thing that kept him from quitting or punching his manager.
Long ago companies only bothered issuing options when the stock was illiquid; certainly my startup share options never had a meaningful market value from founding to acquisition.
Publicly-quoted companies issuing options is just a weird form of deferred bonus with a favourable tax treatment.
Well, they also come with the hope that they'll increase in value prior to vesting. But, yes, RSUs in public companies are certainly more like getting bonuses that vest over time than a stock market lottery ticket.
It's still a balance between compensation, interesting challenges, and good work environment. You can provide less of one if you provide more of the others, or less of two if you provide much more of the other.
Yep. I'm a MechE and my pay is decent (not amazing) for the area but I was fine with it due to a lot of other factors.
In the last year or so, my company has had a culture shift leading to down-to-the minute micromanagement and I've lost all autonomy - every decision requires approval of multiple managers. There's no realistic engineering salary they could pay me to continue putting up with this and I can't get out quick enough. Covid has made that a bit tough though.
Less autonomy also means less responsibility which affects growth in a bad way, but there is a small bright side to this, it reduces the cognitive workload and one can have leftover energy for side projects and hobbies. For the ones who have absolutely no taste to bureaucracy/red tape/stupid hierarchies of command, this could be soul sucking though
It doesn’t reduce cognitive workload for high performers.
With my previous boss, I spent 90% of my intellectual effort managing up. Despite his best efforts, the project was delivered above spec and on time (saving his ass), but I burnt so many political bridges making it happen that I ended up moving teams.
My point was exactly to take your high performance outside the organization you’re working for if they don’t offer the conditions necessary such as some autonomy and agency. It’s not worth proving anything, too few people would notice of care
It's probably only "50% about pay" where pay is fairly competitive. For many (of course not all), 25-50% lower comp is going to be a tough sell even if the company is at the top of "great places to work" lists.
Not directly a compensation component but organizations can make sure they have a technical leader supporting software organizations.
Consulting with companies on productivity I can’t express how much devs not feeling like they have representation/a voice at the exec level negates comp effectiveness.
I don’t now that it’s specifically better to have a CEO that was an engineer. It probably is based on my experience.
What I’m referring to is that period where engineers want to stay vs being heavily comp’d to stay. You can see people throughout this thread saying pay me a large amount and I’ll stare at a wall. If you want engineers not to fully optimize comp (read as $$$$$) against the market they need to feel represented and like they have a say in day to day decisions in the company.
What we're saying is that coders are often willing to pay for "a seat at the table". But maybe management can sell them a placebo.
It's not clear-cut that management ignoring coders will always turn out for the worse, even though management that always ignores coders probably has, historically. Maybe sometimes their voice matters and sometimes not.
It can be faked to the engineers, it can't be faked to reality.
Companies for whom engineering is key need to (at least to some extent) organise themselves around engineering. The strategic decisions need to take into account the needs and capabilities of engineering and engineers. If they don't then they won't be good at it. They'll be staffed with mediocre people who generate mediocre output very slowly.
An interesting question is whether paying enough (imagining an unlimited budget) won't end up selecting for coders who care more about the money than the work.
A further question is whether these coders are actually better for the org -- the Henry Ford efficiency wage-type incentive may keep them at consistent pace and quality, whereas rockstars with physics PhD may have parallel agendas to make the project more fun to work with.
Consistent quality requires accurate measurement. If you can't accurately measure quality and there's only external motivation, you get Goodhart's law.
But Goodhart's law applies to anything that's measured at all (it originates from the world monetary policy), even if it can be measured vey accurately.
OTOH maybe quality exists as a qualitative concept but can't be measured -- then you just do pass/fail (like colleges have dropped letter-grades during the Zoomdemic).
What I'm saying is that "shallower" coders, who are motivated by the extra pay, may be more willing to align their concept of quality with the interests of the organization, while self-motivated coders will have their idiosyncratic or fashionable ideas.
When shopping around for a team to make a web app for my startup -- no technical requirements, we were feeling the market for price first -- we got a $$$ proposal for using PHP and Laravel, and a $ proposal for using AngularJS. I regret that decision; it cost us at least a year of time-to-market.
The original team quit (they worked for a trusted friend of our "business cofounder") because they weren't really experienced in web dev and their opportunity cost was off the roof - they were crack coders that did all kinds of different projects. Then we decided to hire someone (with good references) as a consultant and manage him ourselves. Dude was apparently capable but couldn't be screamed into using off-the-shelf components rather than rewriting and refactoring constantly. He eventually flaked on us, got too many projects and we weren't fun anymore I guess. Finally we found a small company online. By all appearances the new team hates being around computers but can be managed by Trello and feature branches. Web dev is a bore, but it's a living, and not everyone manages to make a living out of their surfing passion.
In accordance with the standard hierarchy of needs, culture flows down from compensation. When everyone's material needs and desires are well satisfied, they interact genuinely and naturally. When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.
You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
Definitely agree with the latter part here about execs, but I feel like anxiety around compensation doesn't tie back to material needs as much as to the extent to which people measure their self-worth by compensation.
Years ago, these studies were going around saying that people are happier when they make more money up to about $70k, at which point more money doesn't make you happier anymore. I'm sure that has to be adjusted for inflation etc by now, but very few devs make less money than they need to live comfortably by most people's standards.
It was conducted in 2010, so I wonder if anything would change if it was conducted again today. The current tech industry was in its infancy 10 years ago, and a lot of high paying jobs have been created since.
Of course, but what about Austin or Denver? The tech industry has brought high paying jobs to a lot of smaller cities that weren't accustomed to such high salaries.
I wish I could find back the article that I read, years ago, that demolished the $75k claim of that paper, simply by having a different look at the same numbers.
It is worth noting that "happiness" is distinct from "life satisfaction" in these studies. The latter does scale with income up to very high levels. Just being happy on a day to day basis is a low standard, many people aspire to more in life somewhat independent of happiness.
It definitely starts there, it misses on a key aspect: 70k for how long and how assuredly? Usually once you start making that, your next goal would be
- To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.
- Then you want to account for inflation. (Add a buffer to the above)
- Then you want to ensure this is on top of your car, house, child costs. (Depending on where you like to live and your car choice, add anywhere between 200k -> 2MM)
- Then you realize this car/ house kinda bumps into the 70k limit - especially if you went for a giant house because reasons.
And so on. So yes, folks can definitely start to feel 'safe' at 70k, but that's nowhere close to the checkout point. Once you figure out a target number based on above, you will realize you need to make so much more than 70k to get to that comfort state.
> To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.
> Then you want to account for inflation. (Add a buffer to the above)
A buffer?? Assuming 2% inflation, the "buffer" you're adding is just over 100% of the original amount.
Management and upper management is not friendly, it is cut throat.
The skill people who go up the ladder have mastered, though, is to be deceitful and to maintain appearances, you might call that being professional at all times (at least to know when to be and when it is OK to be more natural).
This is demonstrably incorrect if you look at some of the highest paying companies in SV. FAANG are of course well known for paying way way above what is necessary to satisfy "everyone's material needs and desires", and yet they are well known for still being ruthless political cultures and backstabbing.
Execs might be congenial because at that level, congenial is just how you play the game. It's still cutthroat, but overt backstabbing doesn't get you very far in a tight knit group of execs. But in other groups like a team of devs, IME high pay just attracts the kind of person who wants even higher pay and will do whatever it takes to get it.
> FAANG are of course well known for paying way way above what is necessary to satisfy "everyone's material needs and desires"
Do they though? Quality of Life is not just how much you make, it's relative to what you have to spend. You can't realistically afford a home -even for most of the engineers- with a decent school with a sub 30 minute commute anywhere around one of these companies unless you want to be house poor or you are a dual earning family.
Yes, they do. This comes up every time compensation gets mentioned on HN. Engineers claim that "I only make $500k/yr at Google and I'm poor because SF prices :(" which is just bullshit. In a previous thread, someone mentioned that they make $300k/yr in SF, and even after paying for housing in a nice area and food/utility expenses, they had over $11,000 per month left over in discretionary income. That is insane.
Unless your material needs and desires are to own a superyacht, even "just" $200k/yr starting salary is still far more than enough to satisfy you.
Most Engineers do NOT make $500k total comp per year at FAANG companies, most engineers don't make $300k TC/yr at these companies, and those aren't the engineers I'm talking about anyways. These companies are made up mostly of engineers who make between $100k-$250k.
That's still not a small amount of money; and I never claimed that these people are poor; just that these salaries don't satisfy their needs and desires and these salaries certainly do not feel like you make $100k-$250k. Part of that is anchoring our expectations to what those amounts of money mean to when we first really began to understand the concept of money which is usually in our tween-teen stage of life, but it's also that these are in incredibly high COL areas.
I don't live in SV. Looking at Mountain View, there are quite a few nice 2000 sq ft houses to rent for about $6500/month.
When I compare that to what I'm paying in a cheaper COL area, I can assure you that the difference in pay between me and typical Google compensation, after taxes, more than compensates for this increase in rent.
I won't say it's "luxury", but it's still better than most people get around the country.
I pay $2200/month mortgage to live in the burbs of a major southeastern city. - 5 bedroom, 3-1/2 bath, 3100 square feet. It was a brand new build in 2016.
I just went to https://paycheckcity.com and did a gross up calculator. At first I thought you were underestimating how much more I would have to make to make the move worthwhile - with downsizing.
But if we were willing to downsize, I would need to make about $70K - $80K more than the average senior software engineer makes in my area.
I was off. $220K - $240K is about the average range for engineer with 3-5 years of experience in $BigTech so $6500/month is not unreasonable.
Not true. The amazon sde2 external hire offer I saw given to people with >=1 year of experience is around 250K in Seattle and higher in California. Amazon is known as one of the lower paying FAANG companies.
The average SDE 2 total compensation is around $215k according to levels.fyi which I have found to fairly accurate. I'm not saying you didn't see that offer, just that it isn't normal.
$215K in Seattle is still quite high. External hire gets a lot more than internal promo and that site lags behind the current offer compensation which is some part of the diff.
I’d be curious to know where that person got such cheap housing. $300k/yr translates to $15k/month take home. Houses are like $10k/month if you’re looking to own. Even if you rent, it’s still close to $5-6k/month if you want a decent neighborhood.
I’m not even talking about nice houses btw.
Maybe they rent an apartment and share the rent. That’s the only way I see them coming up with those numbers.
$300k/year isn’t enough for single income families in the Bay Area.
EDIT: I'm curious if you live in the bay area and where you get your notions.
In less than 5 minutes of looking I found several very nice houses for $4-5k/month in multiple nice neighborhoods.
Renting, there are actual luxury condos and apartments ready to rent for $3-4k, again in multiple nice neighborhoods.
>$300k/year isn’t enough for single income families in the Bay Area.
The median household income for SF families is less than $100k, and you're telling me three times that "isn't enough"? That's bullshit.
Responding to your edit: I don't live in SF, but prior to covid I traveled there every week for work, so I am familiar with the city. For a local example, my best friend makes ~$140k/yr, lives in Nob Hill in a gorgeous high rise apartment, and still has thousands to spend every month on fun discretionary activities. Another close friend who makes ~$250k/yr owns a great house in Inner Sunset and they certainly seem like they are able to afford any other desires they want (a boat, all kinds of tech gadgets, trips all the time, etc).
You're going to have to show listings. Last time, people were posting spam postings they found on Craigslist. If you want an apartment - you can find 1-bedroom "luxury" apartments (also known as normal apartments outside the bay area) for about $3300-4000/month. Even at $7000/month income that leaves "thousands" left over but that is a fucked ratio of expenses. You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
If you want a house, you're not finding a nice house (3+ bedrooms, central air, etc.) and in a nice neighborhood (San Carlos, Hillsborough, Palo Alto, Los Altos, Los Gatos, Menlo Park, etc.) for $4000-5000. I'd love to see the listings... I don't even bother with SF because the prices are even more outlandish for nice neighborhoods.
Familiar with the city and actually paying rent here are different. I've had coworkers who lived with their parents who are wildly out of tune with how much it costs to rent a place. I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
>Even at $7000/month income that leaves "thousands" left over but that is a fucked ratio of expenses. You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
The general guidance is that 30% of your gross income should be spent on rent. After taxes, that equates to ~40-50% of your take home goes to rent. That's normal for everyone, not just in SF. It is not a "fucked ratio of expenses" at all, and in any case, "thousands" left over after rent is still an extravagant amount of discretionary income.
>I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
I'm not going to dox my friend but I just looked up their building and there are 1br apartments for $3-3.3k/mo, and it is a very nice building/apartment. 3k/mo is easily doable on $140k/yr.
>You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
Literally the first result. Gorgeous 2 bedroom, and at 250k you'd have ~7-8k each month left over after mortgage. 7-8k per month is more money than most people in SF make period, even before paying for their homes. You're not even close to being "poor in the end with it". Also well below the "thirty percent rule" with this condo.
Second result. 3 bedrooms, central air, all the amenities. At 250k/yr. At the list price (assuming you can't negotiate lower) with a house note of 5-6k/mo, you are still within the "thirty percent rule" without even stretching your income, and you're still looking at ~6k+ in discretionary spending after paying the house note.
3 bed, 3 bath condo. All the amenities. At 250k/yr, this condo would put you at slightly above the thirty percent rule which isn't wise depending on how much you want to be able to save for retirement, but still doable without worrying about money, and certainly still not even close to worrying about being "poor".
And these are three that I picked off of Zillow in literally 10 minutes without any further research. With any actual effort and talking to an agent, the prices and options would likely be even better.
Your first listing is an apartment. Shouldn't have to explain why that's not a house.
Your second listing has an estimated sale value of nearly $1.7m. Your third is nearly $2mil. Have you ever tried to get a loan for that much at that income with a traditional 20% down? (Assuming you have 350-400k laying around) You will not get approved for a loan on that at $250k/yr. Your monthly cost on that first home is $8,375 after tax (tax is around 1.2-1.6% in CA) + insurance. That's past the maximum 36% of gross monthly income. https://www.nerdwallet.com/article/mortgages/how-much-can-i-... Try the calculator. In general, going past 4x yearly income is not going to get approved by a bank. Theoretically, you might find some lender who'd do it but I haven't seen many. Most people buying here are buying homes with cash or really large down payments.
The fact you're even mentioning negotiations on buying homes in the bay area tells me you have no idea how the market here works. There are bidding wars - there aren't negotiations.
At this point - it's obvious that you're completely out of touch. You think spending 50%+ of your take home pay on rent is sustainable and that you can somehow retire with that expense. Maybe lay off the tidepods?
If you're just going to move the goalposts, then this discussion is pointless. But in good faith, I'll try one last time:
>Your first listing is an apartment. Shouldn't have to explain why that's not a house.
It's not an apartment, it's a condo, which is a form of housing.
>Your second listing has an estimated sale value of nearly $1.7m.
At $1.7m sale price you're still close to the 30% rule and still have more than 5k/mo discretionary spend, which again, is more than most americans make monthly, period, even before paying for a house. The fact that you think this would make you "poor" is absurd and quite frankly, insulting. I'm sure my friend who owns that house in Sunset and has a boat and goes on nice vacations all the time will be bummed to hear that he's apparently "poor". I'll also let my Nob Hill friend know, too. Tell me, do you think commenting on their pic from the St Regis Bora Bora is a good way to break the news to them that they are actually poor?
All of this is also completely ignoring the fact that this is talking about someone making $250k/yr (which is near the beginning of their career for a FAANG engineer) paying for this house by themselves, when in reality the expectation in the entire rest of the world is that you shouldn't be expecting to buy a home like this until your 30s or 40s. There's a reason "starter homes" are a thing, and these listed homes are not that. You have incredibly warped expectations if you think that the target market for these 3br, 3bath homes are 25 year old single people. If you were an engineer in your 30s, you're looking at an income more like 300-400k at a FAANG, and if your spouse also has an income, these houses are trivially affordable.
Again, the median family income in SF is less than $100k, and they seem to be doing fine. For you to sit here and try to argue that "$300k isn't enough" is ludicrous and reeks of ultra privilege. You need a reality check.
> You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with.
> You're not even close to being "poor in the end with it"
> The fact that you think this would make you "poor" is absurd and quite frankly, insulting
"House poor" is a distinct term that describes a home purchase where home expenses (not just mortgage) drain cash flow in a way that prevents hitting other goals - hence this point:
> You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
A very different notion than "poor" alone. Also, you'd have to put at least closer 25-30% down on that home without absolutely perfect credit; jumbo loans have been tightening awhile.
> Again, the median family income in SF is less than $100k, and they seem to be doing fine.
What do you mean by doing fine, exactly? Not to nitpick, but I was under the impression most people buying in SF are not native to the city.
I don't have firsthand experience, but craigslist seems to have what look like normal apartments to me in the bay area for around $2800/month. Something like 600 apartments below that if I filter by off street parking and washer/dryer in the apt, which is my idea of a nice place. Looking for ads that double that brings up furnished apartments and luxury high rises with "24 hour concierges".
My reference point would be, for a young single person in a "normal" area of the country, $55K and $1250/month rent means you have $2K/month left over. A lot of people don't make this much.
To have the same amount left over after taxes and rent of $2800/month, it appears you'd need to make about $78K. So anything above $80K seems on the face of it to be livable at least for one person.
By the way, I noticed that total income taxes seem to actually be lower than in upstate NY.
Depending on the landlord, you wouldn't get the apartment. Some landlords require you to make 40x the monthly rent per year. I don't see many people renting $2800 apartments here at $80k/yr. If people are at 80k/yr, they're almost always renting a room.
Btw, I wouldn't necessarily use the entire bay area as your reference - as we weren't talking about the entire bay area either. Specifically only nicer neighborhoods. The price varies wildly by region. Apartments in south San Jose are much less expensive than in Palo Alto - but both are part of the bay area. There are many places in the bay area where my coworkers wouldn't even want to walk on the street - let alone live there... but there are cheaper housing options there.
You should be using ratios - not absolutes. If someone had $100,000/month rent then by your logic, they'd be just fine if they only had $2,000/month left over. That's very little buffer.
>If someone had $100,000/month rent then by your logic, they'd be just fine if they only had $2,000/month left over. That's very little buffer.
If you scale things up to that extent, then $2K becomes small compared to the possible variance in income or rent. But it's also small compared to the credit you'd have access to.
Without visiting I can't tell for sure, but I can compare apartments to what I'm used to by amenities, square footage, and such. If I had an offer and needed to move there, I'd judge the neighborhood by the housing, not vice versa.
This idea of FAANGs having a culture of ruthless political backstabbing is new to me, is it really the case?
I have heard about things like misaligned incentives (eg launching a chat app to get people promoted and then discontinuing it a year later) but that actually seems like the opposite of ruthless to me (complacent?)
I remember these articles from when they were posted. I don't know of any specific articles for Apple or Google, but I know that my friends at Google think Google is a brutal place to work for most (Google of early 2010s apparently was much more chill, but not anymore). As for Apple, Steve Jobs and Tim Cook are of course known for their incredibly ruthless management style.
Yes, those misaligned incentives mean rewarding the cutthroat psychopaths who are obsessed with claiming credit for others work, instead of genuine team players who care about delivering a quality product. There is lots of cronyism, like all Indian or Chinese teams who protect and promote each other while only hiring others to fill their PIP quota. The higher you go in the org chart the worse it gets.
There are many companies in our industry that disprove this. Culture can be toxic/abusive despite well paid employees. Culture certainly flows down, but it's the execs/managers who create it, not the compensation. See Tesla, Uber, Yelp, and most major video game studios.
> You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
i assume this is some sort of very subtle reductio ad absurdum?
> When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.
i was working at a place where the salaries were flat across the board, and set at a perfectly reasonable level, and it still didn't eliminate concern for appearances and bickering.
Keep them too stressed out and busy with work that they don't have the time and energy to really look for something new and grind dozens of LeetCode problems to get them through the grueling technical interview gauntlet? Seems to be working with my company to keep me there, at least.
I changed jobs in the past year and only received a slight pay increase. For the first time in my engineering career, I really enjoy my job. There are a lot of factors but the thing that stands out the most is the senior leadership here. They actively seek to engage the entire organization in strategy and planning and are really working towards a more transparent and realistic process of growth and advancement. My experience previous to this had been leadership only paying lip service to these ideas at best. I am not sure what increase in compensation would be required for me to leave and I honestly hope I don't find out.
100% agree with this article, but would also caution against any kind of generalization. Different people want different things.
For the first ~7-10 years of my career I strongly believed that everything was about salary. I picked jobs solely based on the comp package, and the work I did was motivated by bonuses and promotions. I'm sure that's still the case for a large chunk of engineers, but for me, with more experience under my belt, I now think more and more about stuff like fulfillment, ownership, real world impact of my work etc.
Also, for many people, their salary out of school isn't "enough" for the lifestyle they want to live, they have student loans, need to buy a car, etc. So even relatively modest salary differences can seem like a big deal.
While not true of everyone, people in tech fields tend to have a more comfortable financial cushion as they get older, and at least modest differences in pay don't matter as much as other factors.
Agreed. I think what happens for many of us is that when we're first out of college we just need money more than most other things to get our life in order (ex. buy a house/condo, kickstart retirement savings, a car in some cases, start a family, etc). So, we'll spend a lot of effort increasing our salary as quickly as possible to get to an income where we can afford to buy and sustain those things.
Most "things" are not fulfilling however. So, once our income satisfies all of those wants, then we feel more comfortable. When our income far exceeds our basic needs, we have the luxury to work (or hobby work) for things beyond paying the bills... fulfillment, positive change for self/family/community/world, achieving non-monetary goals, health, etc.
Indeed! "Autonomy, mastery, and purpose" in terms of dev opportunities: mastery is somewhat common, autonomy is rare, and purpose is ultra rare.
I have straight-up told managers that I'd be willing to take a pay cut in exchange for more autonomy. Haven't found a taker yet :)
It is so frustrating to repeatedly demonstrate value, endlessly repeat the story about how "gmail was the result of 20% time", yet be forever told "nah, we just need you to stick to grinding tickets".
I took my first programming job with the intent of staying 3 years and then getting a new job that would pay me what I was worth.
I got very lucky and they kept pace with what I could have gotten elsewhere for about 5 years. At that point, I stopped getting raises and about a year later, switched jobs for that 40% raise.
It's pretty much the norm for IT until you get to your pay level. It's complex, but I think it's mainly that it's hard to justify pay raises beyond what a job is worth and actual promotions are hard to swallow for management, especially if they don't need someone at that level.
When you left each job, they probably filled it with someone making about what you were when you left, but the new job you got was more demanding and better-paying.
I think for the first part of your career, aiming for pay is the right choice. After a while, the pay is fairly settled and you can look for other compensation instead.
The trick to retaining engineers, besides paying them fairly, is to hire good managers that understand engineering. A huge component of workplace satisfaction can be traced back to how much an employee likes their boss.
Pay is not everything. But it also depends on the engineer as well. I've taken pay cuts to work on interesting and engaging work in the past. But then again my lifestyle is pretty simple and minimalistic and for me the trade-off was worth it.
IMO, the only reason above-market pay doesn't raise retention as much as people want is that it's possible to have above-market pay and a job people enjoy doing.
And on the other hand, you can offer enough above-market and people will do any job, as evidenced by the other thread I saw yesterday where people were making crazy salaries to implement unethical, deceptive practices against their users.
Money alone doesn't keep many problem solvers around.
Problem solving is as important as the compensation.
A great environment to solve problems, and to be able to work with other smart, conscientious people, while pursuing new levels of mastery is a really good sell.
People who are driven solely, or primarily by money can't be paid enough and will on that mindset, tend to move on.
The article does ignore the fact that some engineers are paid below market value, and for that reason, compensation is a higher priority.
You might ask yourself these questions after compensation was not a determining factor:
What if the company I worked for offered a competitive salary that was agreeable for both parties. What other benefits am I looking for outside of monetary compensation?
I agree... and I don't. I work primarily for money, but not totally.
My job probably doesn't pay me absolutely the maximum that I could make anywhere. If the work environment turns sour, I can hopefully make an approximately lateral move - not significantly more or less money, but a better environment.
I once worked for a medical device manufacturer. We failed an FDA audit. As a result, our procedures became much more stringent, and life turned into a huge amount of paperwork. I couldn't take it. It didn't take a raise to get me out of there.
The problem with a stressful job is that part of that stress invariably become intertwined with the prospect of losing the said job, hence an expected loss of salary. This means that even if you primarily work for money you'd have priced in the positive environment.
Anecdotally, the place where people are uncertain of their future are highly stressful, even when the work is not heavy.
> When it comes to engineers, the key to employee retention isn't just about pay.
Maybe I’m atypical, but at a certain point all the other factors just don’t cut it. If you’re trying to pay me $400k/yr total comp and I can get $600k/yr elsewhere, the disparities in culture or whatever have to be pretty significant to dominate.
For example, it can mean whether your spouse has the option to stay home to spend more quality time with the children, without having to sacrifice expenses due to income reduction; or it can mean how well (or not) you can take care of aging parents.
Of course. And I don't mean to imply it isn't. $200K is a lot of money to most people and may be enough to make a significant lifestyle choice that wouldn't otherwise be possible.
But in general percentage salary increments affect lifestyle more at the low end than they do at the high end. (And, of course, the absolute differences matter far more at the low end.
My experience is very anecdotal, but there's a point where the pay/stock options are definitely enough to keep people around. I have a few friends in this exact position now, where the golden handcuffs are too sweet for them to walk.
The article's title is pure click-bait. It would be more accurate if it were "How to Keep Your Engineers Interested in Sticking Around"
Very little of the article says anything about how much to pay engineers. I only found 2 paragraphs about engineering compensation:
> The most comprehensive study, though, is Daniel H. Pink’s Drive, which is summarized in this animation from the RSA. Pink suggests that money isn’t the main driver for highly skilled workers who choose to stay in their jobs. Instead, he identifies a combination of three factors: the ability to be self-directed, getting better at the job, and having a purpose in one’s endeavors. In other words, once a person’s basic financial needs are met, money starts to become less and less relevant as a criterion for job satisfaction, especially compared to purpose, self-improvement and self-direction.
> Unsurprisingly, this conclusion mostly matches my own experience with engineers. Whether companies pay at market level or 20%-30% above market makes very little impact on staff retention. You might stretch retention slightly in the latter case, but the investment is often not worth the net result. Keeping your engineers engaged and motivated makes a much more substantial difference, so that’s what we’re going to look at next.
Even these paragraphs are primarily about how money is not the primary way to keep engineers engaged and motivated.
Be careful though. For example, I don't really care that much about money, but I do care very strongly about fairness. So if you try to cheat me by paying me unfairly (for example, compared to coworkers), even if I would be happy with the money all things considered, I could be unhappy just because you're being unfair.
I'll even add that engineers should understand the value they bring to the company and adjust their concept of fair not just against their peers but against what the company is earning from their labor.
This is one of those things that sounds reasonable but is impossible to compute. Does the company earn more from the developer who makes the product, or the infra engineer who keeps it online? Well, without either they're not making anything...
Also, if the company makes a bit less money this year vs last year, are you willing to take a pay cut?
It might be impossible to compute, but we still want to compute it.
Or rather, get some agreement. I would say not only it is impossible to compute, the question of relative human pay for different types of work is a meaningless question, like asking, what is more important on a car, tires or engine?
That isn't how salaries work. If there are many people who are willing to do the work at a given salary, it doesn't matter if the company earns 5x from that labor.
Supply and demand are obviously not the only factors, but they are very important and must be considered when looking at compensation for employment.
Place was great to work, brilliant team, laid back culture. But refusing to give me an annual raise, on top of paying me below market value (and below my peers) for my experience and skill set was precisely what triggered my departure a month later for a nearly 90% raise. Sacrificed other things, but at the end of the day, "thank you's", "good jobs", and a kegerator doesn't feed my family.
Money isn't everything, but competitively compensating engineers is still a big factor for retention imo.
> paying me below market value (and below my peers) for my experience and skill set was precisely what triggered my departure a month later for a nearly 90% raise.
I'm curious - how did you end up accepting that job in the first place that was underpaying by nearly 100% ?
They offered me nearly the same kind of raise over the position I was in before it.
The first company I worked for paid me $36k/yr. Given I don't have a degree, and it was the first offer I received (was my break-into-the-industry offer), I took it. After nearly two years, I was still below $40k/yr. Couldn't afford to rent a two bedroom apartment by myself, let alone support a then pregnant girlfriend.
That's when the next company offered right below market value, but when I started with them, it seemed like a fair offer given I had to learn new frameworks, containerization, etc. After a year, and the value I'd added to the company, I assumed I'd receive a raise.
Low and behold, it didn't happen, so like the previous position, I found somewhere offering a median salary for my region.
Still not where I should be with all the responsibilities and skills I have now, but at least the financial stress isn't nearly as bad as it used to be. Plus, I'm secure in my position, so that's helpful.
yes, this is explicitly taught in business school--that companies and managers should strive to develop intrinsic over extrinsic motivation (lke pay), to both increase productivity and create a good working environment (whether students paid much attention is a different matter).
I’ve previously read the the number one employee complaint is not pay but feeling under-appreciated. I think the difficulty for managers is knowing an employee’s particular language of appreciation. One may value being lauded in front of the company with an award or snazzy new title while another couldn’t care less and would rather be shown appreciation through a behind-the-scenes bonus.
yes, that's part of the underpinnings of intrinsic motivation, that you'll be rewarded appropriately for achievement, not just monetarily, but also in status and esteem. expectancy theory [0] is one of the frameworks for understanding this.
as others have pointed out, pay is inextricably tied with perceptions of fairness, so it's a highly relative measure. if programmers are paid 30k on average, then getting 35k seems fair to you. but if the average is 60k, then 35k seems insulting.
I like being praised for my work, and would be annoyed if I was never congratulated for doing a good job. But if I'm often praised and never see a compensation increase, that will make me feel the praise is fake: if my work is so valuable, why am I not being compensated for it?
I hear you, but I think it depends on the context of your job.
Are you doing good work within the context of the duties in the job description? I think a good manager will praise that work but that’s essentially fulfilling your end of the work/pay contract. Expecting continuous raises for meeting agreed upon expectations comes across as entitlement beyond the scope of that labor agreement.
But if you’re consistently doing well beyond your previously agreed upon duties, then there’s grounds for expecting a pay increase because the employer is no longer upholding their end of that bargain
Pink suggests that money isn’t the main driver for highly skilled workers
Consider that the people who benefit from convincing engineers that other engineers aren’t motivated by money are those who hoover up that money for themselves.
Or alternatively, managers aren’t “highly skilled”, can’t have it both ways!
I am a big fan of Herzberg's dual factor theory. I find it much more practical and actionable than the ubiqitous Maslow's hierarchy.
In one of my previous jobs, I asked people in my team to make a survey to identify their motivational and hygienic factors. The surprising result for me was how much variation there was among different people. (e. g. for somebody salary was a motivational factor, for anybody hygienic one). Anyway, understanding these factors for individual team members made me much more effective manager.
It probably depends quite a bit on the engineer's life outside of work.
For much of my career, I was the only income earner in a family of 6. Making ends meet was sometimes a challenge, which made me very salary-sensitive and averse to the risk of income disruption.
My family finances have somewhat improved in recent years, letting me unclinch a little regarding money. This lets me put more weight on other factors relating to job satisfaction and feeling of purpose.
"Making ends meet was sometimes a challenge, which made me very salary-sensitive and averse to the risk of income disruption."
This. I think a large chunk of society forgets that after you get past 25 and actually have a life and responsibilities, that a meager $100k in a particular region is barely enough to cover base expenses, childcare, car/home loans, etc.
Out of curiosity, how long were you the sole earner before getting to a better state of financial security?
For whatever reason this is making me think about the narrative from a lot of VC’s, Paul Graham, Tyler Cowen, and many more that remote work will commoditize software engineering and destroy wages there.
And articles like this make me think about institutional knowledge and how there are no standards what so ever in software, and so long as new frameworks, languages, and not invented here syndrome persist there will always be a need to keep your engineering staff around.
Pay is probably pretty good (especially if current rise materialises) for my level of experience, and I have lots of autonomy in how I do things, as I'm the main technical decision maker on non-frontend tasks.
I'm also doing uni part time, and taking half a day off every week is a tough proposition for employees. Despite the chaos, I do like the work I do, and as it's a Greenfield project, I want to see it reach some level of exposure to core clients before I can consider it a job well done.
The large UK broadcaster I work for is having to make large amounts of savings. They've decided that they don't like paying for slack (for £10 per user per month), and instead are going to force everyone to use MS Teams.
Since 95% of people have been working from home (and no plans for most to go back this year), they won't allow people to take unused monitors back because they might end up lost. These are £80 monitors.
It's these pathetic nickle-and-diming that is far more likely to make me look for another job than not paying a £200 a year pay rise.
Someone sees "£80 times 20,000 staff, that's over £1m, we can't risk that!"
from what I hear of our management Slack's enterprise sales folk are a bit shit w.r.t working out deals and the like. 10 quid per person, for context, is roughly the price of all the MS software stack if you're a decent size.
So for 10-bob you get email, word, excel, teams and exchange/AzureAD -- or a chat app.
So that's the context that they're dealing with; but I fucking hate teams with white hot passion. So I still get annoyed.
And yes, these nickle and dime tactics are rife everywhere, we buy 3k computers for people but our budget for a monitor is 70gbp and it is supposed to last 6 years. :|
Accounting uses excel so everyone who interacts with accounting needs excel.
Then those who interact with accounting (HR, Purchasing) use excel so everyone they come into contact with needs excel.
There's is a metric which is called "Cost per head" used in my company, and it goes like;
1 Person:
* 1 Windows license
* 1 Office license
* 1 Visio license
* 1 Swarm license
* 1 Perforce license
* 1 Jetbrains license (optional)
* 1 Slack license
* 1 jira license
* 1 confluence license
* 1 gitlab license
* 1 Terraform Enterprise license (optional)
* 1 headcount in some HR software
and that's just what I can remember.
Controversial hot-take from one of our IT directors:
<user> Just wondering why can't we just use slack and not use Teams at all :thinking_face: Slack seems so much better.
<itDirector> So, just to put this out there, I started this Slack originally. So it's a topic close to my heart.
<itDirector> But ultimately right now, Teams is eating the fuck out of Slack's lunch.
<itDirector> Teams is included within our M365 license, for all users, at a fraction of the price of Slack.
<itDirector> Likewise, all of the integrations, SSO, features, etc., come bundled in the existing license.
<itDirector> For Slack, they continue to push Enterprise Grid licensing costs of over 300 USD per user per year
<itDirector> Additionally, there are more people now starting to push us to formally drop Slack than Teams. Some studios are mandating the usage of Teams over Slack, as well as some projects.
<itDirector> Personally, I see several features still missing before such a conversation can hold weight. Teams will have private channels added in November, and I'm hoping they address file permissions, non-threaded channel chat and lifting of the 250 user limit in individual chats.
<itDirector> But once that happens, it's going to be extremely difficult for Slack to compete.
<itDirector> So, to manage expectations - I would not anticipate a future where Slack is chosen over Teams. It's probably best to start acclimating to that reality now.
By removing slack this adds a ton of work as all the integrations and workflows that have been built into slack over the years need to be rebuilt.
All to save 0.2% of the cost of a person
Now in our specific company the latest hotness only lasts about 2 years, from messanger to lync to skype to zoom to teams. Each is massively disruptive and comes as a major project for a team of project managers.
(They are also trying to downgrade us to office 365, which for our purposes removes archived emails more than 3 years old)
Now for a beancounter it may seem that spending £6k a month on someone, then pissing them off by making a £10 a month saving, it worthwhile. That's because the beancounter doesn't factor in the cost of pissing people off.
Saving £1.6 million/month isn't nickel-and-diming. That's almost £20 million/annually, which is more than many companies make.
As for the monitors, that may be COVID19 related. If the office is locked up, there are almost always physical/security procedures that must be followed in order to allow non-essential staff into the office...and that doesn't include any cleaning or sanitation that might be required by any COVID19 rules. This means that you need to have someone physically come to the office to open it up. On top of that, you need someone knowledgeable about the hardware (i.e., IT) to come in to make sure any employee taking a monitor home doesn't mess up anyone else's setup.
So you're risking exposing at least two lower-paid employees to COVID19 for the convenience of one higher-paid employee who could just buy his own goddamn monitor for £80 if he cares about the screen real estate that much.
Our offices are still open, just with 10% of the staff in them.
And the "£1.6m a month" view is the problem -- if you are spending £5k a month, or 40p a minute, on the costs of keeping an employee (probably more with the cost of office space), an extra £10 a month is neither here nor there. If it costs just 1 minute extra a day, you're losing.
The 1.6M figure is based on a company with 20,000 employees. How many of them have less than 20M in revenue?
Also, your units are wrong. 1.6M is the total amount being risked. There is no realistic risk of losing that much every month unless you think that every employee is going to lose their monitor every month.
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[ 0.30 ms ] story [ 299 ms ] threadProbably wouldn't do it for long, the first day would be amazing - that buys a great house. The rest of the week and I'm set for a very comfortable retirement.
The problem then comes down to defining good person vs bad person, which in the real world is very tricky.
I knew someone who changed their bash prompt to (price * unvested count / days left). He said at the time it was the only thing that kept him from quitting or punching his manager.
Publicly-quoted companies issuing options is just a weird form of deferred bonus with a favourable tax treatment.
In the last year or so, my company has had a culture shift leading to down-to-the minute micromanagement and I've lost all autonomy - every decision requires approval of multiple managers. There's no realistic engineering salary they could pay me to continue putting up with this and I can't get out quick enough. Covid has made that a bit tough though.
With my previous boss, I spent 90% of my intellectual effort managing up. Despite his best efforts, the project was delivered above spec and on time (saving his ass), but I burnt so many political bridges making it happen that I ended up moving teams.
Consulting with companies on productivity I can’t express how much devs not feeling like they have representation/a voice at the exec level negates comp effectiveness.
What I’m referring to is that period where engineers want to stay vs being heavily comp’d to stay. You can see people throughout this thread saying pay me a large amount and I’ll stare at a wall. If you want engineers not to fully optimize comp (read as $$$$$) against the market they need to feel represented and like they have a say in day to day decisions in the company.
What we're saying is that coders are often willing to pay for "a seat at the table". But maybe management can sell them a placebo.
It's not clear-cut that management ignoring coders will always turn out for the worse, even though management that always ignores coders probably has, historically. Maybe sometimes their voice matters and sometimes not.
Companies for whom engineering is key need to (at least to some extent) organise themselves around engineering. The strategic decisions need to take into account the needs and capabilities of engineering and engineers. If they don't then they won't be good at it. They'll be staffed with mediocre people who generate mediocre output very slowly.
A further question is whether these coders are actually better for the org -- the Henry Ford efficiency wage-type incentive may keep them at consistent pace and quality, whereas rockstars with physics PhD may have parallel agendas to make the project more fun to work with.
https://en.wikipedia.org/wiki/Goodhart%27s_law
OTOH maybe quality exists as a qualitative concept but can't be measured -- then you just do pass/fail (like colleges have dropped letter-grades during the Zoomdemic).
What I'm saying is that "shallower" coders, who are motivated by the extra pay, may be more willing to align their concept of quality with the interests of the organization, while self-motivated coders will have their idiosyncratic or fashionable ideas.
When shopping around for a team to make a web app for my startup -- no technical requirements, we were feeling the market for price first -- we got a $$$ proposal for using PHP and Laravel, and a $ proposal for using AngularJS. I regret that decision; it cost us at least a year of time-to-market.
The original team quit (they worked for a trusted friend of our "business cofounder") because they weren't really experienced in web dev and their opportunity cost was off the roof - they were crack coders that did all kinds of different projects. Then we decided to hire someone (with good references) as a consultant and manage him ourselves. Dude was apparently capable but couldn't be screamed into using off-the-shelf components rather than rewriting and refactoring constantly. He eventually flaked on us, got too many projects and we weren't fun anymore I guess. Finally we found a small company online. By all appearances the new team hates being around computers but can be managed by Trello and feature branches. Web dev is a bore, but it's a living, and not everyone manages to make a living out of their surfing passion.
You see this in upper management all the time; execs are friendly and graceful with each other because their material success is guaranteed, and promoting collegiality among execs is usually an orgizational goal.
Years ago, these studies were going around saying that people are happier when they make more money up to about $70k, at which point more money doesn't make you happier anymore. I'm sure that has to be adjusted for inflation etc by now, but very few devs make less money than they need to live comfortably by most people's standards.
It was conducted in 2010, so I wonder if anything would change if it was conducted again today. The current tech industry was in its infancy 10 years ago, and a lot of high paying jobs have been created since.
https://www.google.com/amp/s/www.vox.com/platform/amp/2015/6...
- To ensure that is true for your life time. (at 4% reasonable return, that would mean $1.75MM in savings) assuming you don't want to bite into the principal.
- Then you want to account for inflation. (Add a buffer to the above)
- Then you want to ensure this is on top of your car, house, child costs. (Depending on where you like to live and your car choice, add anywhere between 200k -> 2MM)
- Then you realize this car/ house kinda bumps into the 70k limit - especially if you went for a giant house because reasons.
And so on. So yes, folks can definitely start to feel 'safe' at 70k, but that's nowhere close to the checkout point. Once you figure out a target number based on above, you will realize you need to make so much more than 70k to get to that comfort state.
> Then you want to account for inflation. (Add a buffer to the above)
A buffer?? Assuming 2% inflation, the "buffer" you're adding is just over 100% of the original amount.
The skill people who go up the ladder have mastered, though, is to be deceitful and to maintain appearances, you might call that being professional at all times (at least to know when to be and when it is OK to be more natural).
Execs might be congenial because at that level, congenial is just how you play the game. It's still cutthroat, but overt backstabbing doesn't get you very far in a tight knit group of execs. But in other groups like a team of devs, IME high pay just attracts the kind of person who wants even higher pay and will do whatever it takes to get it.
Do they though? Quality of Life is not just how much you make, it's relative to what you have to spend. You can't realistically afford a home -even for most of the engineers- with a decent school with a sub 30 minute commute anywhere around one of these companies unless you want to be house poor or you are a dual earning family.
Unless your material needs and desires are to own a superyacht, even "just" $200k/yr starting salary is still far more than enough to satisfy you.
That's still not a small amount of money; and I never claimed that these people are poor; just that these salaries don't satisfy their needs and desires and these salaries certainly do not feel like you make $100k-$250k. Part of that is anchoring our expectations to what those amounts of money mean to when we first really began to understand the concept of money which is usually in our tween-teen stage of life, but it's also that these are in incredibly high COL areas.
I won't say it's "luxury", but it's still better than most people get around the country.
I just went to https://paycheckcity.com and did a gross up calculator. At first I thought you were underestimating how much more I would have to make to make the move worthwhile - with downsizing.
But if we were willing to downsize, I would need to make about $70K - $80K more than the average senior software engineer makes in my area.
I was off. $220K - $240K is about the average range for engineer with 3-5 years of experience in $BigTech so $6500/month is not unreasonable.
I’m not even talking about nice houses btw.
Maybe they rent an apartment and share the rent. That’s the only way I see them coming up with those numbers.
$300k/year isn’t enough for single income families in the Bay Area.
EDIT: I'm curious if you live in the bay area and where you get your notions.
Renting, there are actual luxury condos and apartments ready to rent for $3-4k, again in multiple nice neighborhoods.
>$300k/year isn’t enough for single income families in the Bay Area.
The median household income for SF families is less than $100k, and you're telling me three times that "isn't enough"? That's bullshit.
Responding to your edit: I don't live in SF, but prior to covid I traveled there every week for work, so I am familiar with the city. For a local example, my best friend makes ~$140k/yr, lives in Nob Hill in a gorgeous high rise apartment, and still has thousands to spend every month on fun discretionary activities. Another close friend who makes ~$250k/yr owns a great house in Inner Sunset and they certainly seem like they are able to afford any other desires they want (a boat, all kinds of tech gadgets, trips all the time, etc).
If you want a house, you're not finding a nice house (3+ bedrooms, central air, etc.) and in a nice neighborhood (San Carlos, Hillsborough, Palo Alto, Los Altos, Los Gatos, Menlo Park, etc.) for $4000-5000. I'd love to see the listings... I don't even bother with SF because the prices are even more outlandish for nice neighborhoods.
Familiar with the city and actually paying rent here are different. I've had coworkers who lived with their parents who are wildly out of tune with how much it costs to rent a place. I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
The general guidance is that 30% of your gross income should be spent on rent. After taxes, that equates to ~40-50% of your take home goes to rent. That's normal for everyone, not just in SF. It is not a "fucked ratio of expenses" at all, and in any case, "thousands" left over after rent is still an extravagant amount of discretionary income.
>I don't know how your friend affords a high rise on $140k/yr - maybe you should ask what their rent is and if they're sharing it with someone.
I'm not going to dox my friend but I just looked up their building and there are 1br apartments for $3-3.3k/mo, and it is a very nice building/apartment. 3k/mo is easily doable on $140k/yr.
>You can't buy a house now with $250k/yr in inner sunset. Go to Zillow and find me a nice house you can afford on $250k/yr and won't be house poor in the end with. Do it - prove me wrong.
https://www.zillow.com/homedetails/1345-16th-Ave-APT-7-San-F...
Literally the first result. Gorgeous 2 bedroom, and at 250k you'd have ~7-8k each month left over after mortgage. 7-8k per month is more money than most people in SF make period, even before paying for their homes. You're not even close to being "poor in the end with it". Also well below the "thirty percent rule" with this condo.
https://www.zillow.com/homedetails/1485-11th-Ave-San-Francis...
Second result. 3 bedrooms, central air, all the amenities. At 250k/yr. At the list price (assuming you can't negotiate lower) with a house note of 5-6k/mo, you are still within the "thirty percent rule" without even stretching your income, and you're still looking at ~6k+ in discretionary spending after paying the house note.
https://www.zillow.com/homedetails/717-Kirkham-St-San-Franci...
3 bed, 3 bath condo. All the amenities. At 250k/yr, this condo would put you at slightly above the thirty percent rule which isn't wise depending on how much you want to be able to save for retirement, but still doable without worrying about money, and certainly still not even close to worrying about being "poor".
And these are three that I picked off of Zillow in literally 10 minutes without any further research. With any actual effort and talking to an agent, the prices and options would likely be even better.
Your second listing has an estimated sale value of nearly $1.7m. Your third is nearly $2mil. Have you ever tried to get a loan for that much at that income with a traditional 20% down? (Assuming you have 350-400k laying around) You will not get approved for a loan on that at $250k/yr. Your monthly cost on that first home is $8,375 after tax (tax is around 1.2-1.6% in CA) + insurance. That's past the maximum 36% of gross monthly income. https://www.nerdwallet.com/article/mortgages/how-much-can-i-... Try the calculator. In general, going past 4x yearly income is not going to get approved by a bank. Theoretically, you might find some lender who'd do it but I haven't seen many. Most people buying here are buying homes with cash or really large down payments.
The fact you're even mentioning negotiations on buying homes in the bay area tells me you have no idea how the market here works. There are bidding wars - there aren't negotiations.
At this point - it's obvious that you're completely out of touch. You think spending 50%+ of your take home pay on rent is sustainable and that you can somehow retire with that expense. Maybe lay off the tidepods?
>Your first listing is an apartment. Shouldn't have to explain why that's not a house.
It's not an apartment, it's a condo, which is a form of housing.
>Your second listing has an estimated sale value of nearly $1.7m.
At $1.7m sale price you're still close to the 30% rule and still have more than 5k/mo discretionary spend, which again, is more than most americans make monthly, period, even before paying for a house. The fact that you think this would make you "poor" is absurd and quite frankly, insulting. I'm sure my friend who owns that house in Sunset and has a boat and goes on nice vacations all the time will be bummed to hear that he's apparently "poor". I'll also let my Nob Hill friend know, too. Tell me, do you think commenting on their pic from the St Regis Bora Bora is a good way to break the news to them that they are actually poor?
All of this is also completely ignoring the fact that this is talking about someone making $250k/yr (which is near the beginning of their career for a FAANG engineer) paying for this house by themselves, when in reality the expectation in the entire rest of the world is that you shouldn't be expecting to buy a home like this until your 30s or 40s. There's a reason "starter homes" are a thing, and these listed homes are not that. You have incredibly warped expectations if you think that the target market for these 3br, 3bath homes are 25 year old single people. If you were an engineer in your 30s, you're looking at an income more like 300-400k at a FAANG, and if your spouse also has an income, these houses are trivially affordable.
Again, the median family income in SF is less than $100k, and they seem to be doing fine. For you to sit here and try to argue that "$300k isn't enough" is ludicrous and reeks of ultra privilege. You need a reality check.
> You're not even close to being "poor in the end with it"
> The fact that you think this would make you "poor" is absurd and quite frankly, insulting
"House poor" is a distinct term that describes a home purchase where home expenses (not just mortgage) drain cash flow in a way that prevents hitting other goals - hence this point:
> You shouldn't be spending close to 50% of your take home on RENT. You will never be able to retire and live the same lifestyle.
A very different notion than "poor" alone. Also, you'd have to put at least closer 25-30% down on that home without absolutely perfect credit; jumbo loans have been tightening awhile.
> Again, the median family income in SF is less than $100k, and they seem to be doing fine.
What do you mean by doing fine, exactly? Not to nitpick, but I was under the impression most people buying in SF are not native to the city.
My reference point would be, for a young single person in a "normal" area of the country, $55K and $1250/month rent means you have $2K/month left over. A lot of people don't make this much.
To have the same amount left over after taxes and rent of $2800/month, it appears you'd need to make about $78K. So anything above $80K seems on the face of it to be livable at least for one person.
By the way, I noticed that total income taxes seem to actually be lower than in upstate NY.
Btw, I wouldn't necessarily use the entire bay area as your reference - as we weren't talking about the entire bay area either. Specifically only nicer neighborhoods. The price varies wildly by region. Apartments in south San Jose are much less expensive than in Palo Alto - but both are part of the bay area. There are many places in the bay area where my coworkers wouldn't even want to walk on the street - let alone live there... but there are cheaper housing options there.
You should be using ratios - not absolutes. If someone had $100,000/month rent then by your logic, they'd be just fine if they only had $2,000/month left over. That's very little buffer.
If you scale things up to that extent, then $2K becomes small compared to the possible variance in income or rent. But it's also small compared to the credit you'd have access to.
Without visiting I can't tell for sure, but I can compare apartments to what I'm used to by amenities, square footage, and such. If I had an offer and needed to move there, I'd judge the neighborhood by the housing, not vice versa.
I have heard about things like misaligned incentives (eg launching a chat app to get people promoted and then discontinuing it a year later) but that actually seems like the opposite of ruthless to me (complacent?)
Netflix: https://www.cnet.com/news/netflix-workplace-culture-often-ru...
Amazon: https://www.nytimes.com/2015/08/16/technology/inside-amazon-...
I remember these articles from when they were posted. I don't know of any specific articles for Apple or Google, but I know that my friends at Google think Google is a brutal place to work for most (Google of early 2010s apparently was much more chill, but not anymore). As for Apple, Steve Jobs and Tim Cook are of course known for their incredibly ruthless management style.
i assume this is some sort of very subtle reductio ad absurdum?
> When people feel like good compensation is difficult to achieve, they put more effort into zero-sum internal politics, maintaining appearances, and so forth.
i was working at a place where the salaries were flat across the board, and set at a perfectly reasonable level, and it still didn't eliminate concern for appearances and bickering.
For the first ~7-10 years of my career I strongly believed that everything was about salary. I picked jobs solely based on the comp package, and the work I did was motivated by bonuses and promotions. I'm sure that's still the case for a large chunk of engineers, but for me, with more experience under my belt, I now think more and more about stuff like fulfillment, ownership, real world impact of my work etc.
While not true of everyone, people in tech fields tend to have a more comfortable financial cushion as they get older, and at least modest differences in pay don't matter as much as other factors.
Most "things" are not fulfilling however. So, once our income satisfies all of those wants, then we feel more comfortable. When our income far exceeds our basic needs, we have the luxury to work (or hobby work) for things beyond paying the bills... fulfillment, positive change for self/family/community/world, achieving non-monetary goals, health, etc.
I have straight-up told managers that I'd be willing to take a pay cut in exchange for more autonomy. Haven't found a taker yet :)
It is so frustrating to repeatedly demonstrate value, endlessly repeat the story about how "gmail was the result of 20% time", yet be forever told "nah, we just need you to stick to grinding tickets".
https://en.wikipedia.org/wiki/Drive:_The_Surprising_Truth_Ab...
I got very lucky and they kept pace with what I could have gotten elsewhere for about 5 years. At that point, I stopped getting raises and about a year later, switched jobs for that 40% raise.
It's pretty much the norm for IT until you get to your pay level. It's complex, but I think it's mainly that it's hard to justify pay raises beyond what a job is worth and actual promotions are hard to swallow for management, especially if they don't need someone at that level.
When you left each job, they probably filled it with someone making about what you were when you left, but the new job you got was more demanding and better-paying.
I think for the first part of your career, aiming for pay is the right choice. After a while, the pay is fairly settled and you can look for other compensation instead.
Yes, at some point most people can end up "satisfied", but part of the reason you got there in the first place was the choices you made along the way.
It still is about salary. Except now you can self-actualize since you got the more base pleasures out of your system earlier.
Compensation is important but if they are golden handcuffs, your organization (and employee) will suffer.
And on the other hand, you can offer enough above-market and people will do any job, as evidenced by the other thread I saw yesterday where people were making crazy salaries to implement unethical, deceptive practices against their users.
* non-functional requirements - great culture.
"great" - is a variable here. People define it to their own understanding and advantage.
Problem solving is as important as the compensation.
A great environment to solve problems, and to be able to work with other smart, conscientious people, while pursuing new levels of mastery is a really good sell.
People who are driven solely, or primarily by money can't be paid enough and will on that mindset, tend to move on.
Couldn't disagree more. Pay me.
You might ask yourself these questions after compensation was not a determining factor:
What if the company I worked for offered a competitive salary that was agreeable for both parties. What other benefits am I looking for outside of monetary compensation?
My job probably doesn't pay me absolutely the maximum that I could make anywhere. If the work environment turns sour, I can hopefully make an approximately lateral move - not significantly more or less money, but a better environment.
I once worked for a medical device manufacturer. We failed an FDA audit. As a result, our procedures became much more stringent, and life turned into a huge amount of paperwork. I couldn't take it. It didn't take a raise to get me out of there.
Anecdotally, the place where people are uncertain of their future are highly stressful, even when the work is not heavy.
Maybe I’m atypical, but at a certain point all the other factors just don’t cut it. If you’re trying to pay me $400k/yr total comp and I can get $600k/yr elsewhere, the disparities in culture or whatever have to be pretty significant to dominate.
But that aside, a lot of people would care less about the delta between $400K and $600K than the delta between $50K and $75K.
For example, it can mean whether your spouse has the option to stay home to spend more quality time with the children, without having to sacrifice expenses due to income reduction; or it can mean how well (or not) you can take care of aging parents.
But in general percentage salary increments affect lifestyle more at the low end than they do at the high end. (And, of course, the absolute differences matter far more at the low end.
Very little of the article says anything about how much to pay engineers. I only found 2 paragraphs about engineering compensation:
> The most comprehensive study, though, is Daniel H. Pink’s Drive, which is summarized in this animation from the RSA. Pink suggests that money isn’t the main driver for highly skilled workers who choose to stay in their jobs. Instead, he identifies a combination of three factors: the ability to be self-directed, getting better at the job, and having a purpose in one’s endeavors. In other words, once a person’s basic financial needs are met, money starts to become less and less relevant as a criterion for job satisfaction, especially compared to purpose, self-improvement and self-direction.
> Unsurprisingly, this conclusion mostly matches my own experience with engineers. Whether companies pay at market level or 20%-30% above market makes very little impact on staff retention. You might stretch retention slightly in the latter case, but the investment is often not worth the net result. Keeping your engineers engaged and motivated makes a much more substantial difference, so that’s what we’re going to look at next.
Even these paragraphs are primarily about how money is not the primary way to keep engineers engaged and motivated.
we need fairer, more transparent and liquid labor markets everywhere, not just in the upper echelons.
Also, if the company makes a bit less money this year vs last year, are you willing to take a pay cut?
It might be impossible to compute, but we still want to compute it.
Or rather, get some agreement. I would say not only it is impossible to compute, the question of relative human pay for different types of work is a meaningless question, like asking, what is more important on a car, tires or engine?
Supply and demand are obviously not the only factors, but they are very important and must be considered when looking at compensation for employment.
Place was great to work, brilliant team, laid back culture. But refusing to give me an annual raise, on top of paying me below market value (and below my peers) for my experience and skill set was precisely what triggered my departure a month later for a nearly 90% raise. Sacrificed other things, but at the end of the day, "thank you's", "good jobs", and a kegerator doesn't feed my family.
Money isn't everything, but competitively compensating engineers is still a big factor for retention imo.
I'm curious - how did you end up accepting that job in the first place that was underpaying by nearly 100% ?
The first company I worked for paid me $36k/yr. Given I don't have a degree, and it was the first offer I received (was my break-into-the-industry offer), I took it. After nearly two years, I was still below $40k/yr. Couldn't afford to rent a two bedroom apartment by myself, let alone support a then pregnant girlfriend.
That's when the next company offered right below market value, but when I started with them, it seemed like a fair offer given I had to learn new frameworks, containerization, etc. After a year, and the value I'd added to the company, I assumed I'd receive a raise.
Low and behold, it didn't happen, so like the previous position, I found somewhere offering a median salary for my region.
Still not where I should be with all the responsibilities and skills I have now, but at least the financial stress isn't nearly as bad as it used to be. Plus, I'm secure in my position, so that's helpful.
as others have pointed out, pay is inextricably tied with perceptions of fairness, so it's a highly relative measure. if programmers are paid 30k on average, then getting 35k seems fair to you. but if the average is 60k, then 35k seems insulting.
[0] https://en.wikipedia.org/wiki/Expectancy_theory
Are you doing good work within the context of the duties in the job description? I think a good manager will praise that work but that’s essentially fulfilling your end of the work/pay contract. Expecting continuous raises for meeting agreed upon expectations comes across as entitlement beyond the scope of that labor agreement.
But if you’re consistently doing well beyond your previously agreed upon duties, then there’s grounds for expecting a pay increase because the employer is no longer upholding their end of that bargain
Consider that the people who benefit from convincing engineers that other engineers aren’t motivated by money are those who hoover up that money for themselves.
Or alternatively, managers aren’t “highly skilled”, can’t have it both ways!
Generally by the time engineers start thinking about money you've already lost them.
My rule of thumb has always been that when I start thinking "I'm not getting paid enough to put up with this", it's time to move on whatever happens.
In one of my previous jobs, I asked people in my team to make a survey to identify their motivational and hygienic factors. The surprising result for me was how much variation there was among different people. (e. g. for somebody salary was a motivational factor, for anybody hygienic one). Anyway, understanding these factors for individual team members made me much more effective manager.
For much of my career, I was the only income earner in a family of 6. Making ends meet was sometimes a challenge, which made me very salary-sensitive and averse to the risk of income disruption.
My family finances have somewhat improved in recent years, letting me unclinch a little regarding money. This lets me put more weight on other factors relating to job satisfaction and feeling of purpose.
This. I think a large chunk of society forgets that after you get past 25 and actually have a life and responsibilities, that a meager $100k in a particular region is barely enough to cover base expenses, childcare, car/home loans, etc.
Out of curiosity, how long were you the sole earner before getting to a better state of financial security?
And articles like this make me think about institutional knowledge and how there are no standards what so ever in software, and so long as new frameworks, languages, and not invented here syndrome persist there will always be a need to keep your engineering staff around.
/end ramble thoughts
I'm also doing uni part time, and taking half a day off every week is a tough proposition for employees. Despite the chaos, I do like the work I do, and as it's a Greenfield project, I want to see it reach some level of exposure to core clients before I can consider it a job well done.
What about you?
Since 95% of people have been working from home (and no plans for most to go back this year), they won't allow people to take unused monitors back because they might end up lost. These are £80 monitors.
It's these pathetic nickle-and-diming that is far more likely to make me look for another job than not paying a £200 a year pay rise.
Someone sees "£80 times 20,000 staff, that's over £1m, we can't risk that!"
from what I hear of our management Slack's enterprise sales folk are a bit shit w.r.t working out deals and the like. 10 quid per person, for context, is roughly the price of all the MS software stack if you're a decent size.
So for 10-bob you get email, word, excel, teams and exchange/AzureAD -- or a chat app.
So that's the context that they're dealing with; but I fucking hate teams with white hot passion. So I still get annoyed.
And yes, these nickle and dime tactics are rife everywhere, we buy 3k computers for people but our budget for a monitor is 70gbp and it is supposed to last 6 years. :|
And the people making these decisions use word, excel, teams and exchange a hell of a lot in ways to try to work out how to save some money.
I for one don't need that. I need jira, confluence, slack.
Accounting uses excel so everyone who interacts with accounting needs excel.
Then those who interact with accounting (HR, Purchasing) use excel so everyone they come into contact with needs excel.
There's is a metric which is called "Cost per head" used in my company, and it goes like;
1 Person:
* 1 Windows license
* 1 Office license
* 1 Visio license
* 1 Swarm license
* 1 Perforce license
* 1 Jetbrains license (optional)
* 1 Slack license
* 1 jira license
* 1 confluence license
* 1 gitlab license
* 1 Terraform Enterprise license (optional)
* 1 headcount in some HR software
and that's just what I can remember.
Controversial hot-take from one of our IT directors:
<user> Just wondering why can't we just use slack and not use Teams at all :thinking_face: Slack seems so much better.
<itDirector> So, just to put this out there, I started this Slack originally. So it's a topic close to my heart.
<itDirector> But ultimately right now, Teams is eating the fuck out of Slack's lunch.
<itDirector> Teams is included within our M365 license, for all users, at a fraction of the price of Slack.
<itDirector> Likewise, all of the integrations, SSO, features, etc., come bundled in the existing license.
<itDirector> For Slack, they continue to push Enterprise Grid licensing costs of over 300 USD per user per year
<itDirector> Additionally, there are more people now starting to push us to formally drop Slack than Teams. Some studios are mandating the usage of Teams over Slack, as well as some projects.
<itDirector> Personally, I see several features still missing before such a conversation can hold weight. Teams will have private channels added in November, and I'm hoping they address file permissions, non-threaded channel chat and lifting of the 250 user limit in individual chats.
<itDirector> But once that happens, it's going to be extremely difficult for Slack to compete.
<itDirector> So, to manage expectations - I would not anticipate a future where Slack is chosen over Teams. It's probably best to start acclimating to that reality now.
All to save 0.2% of the cost of a person
Now in our specific company the latest hotness only lasts about 2 years, from messanger to lync to skype to zoom to teams. Each is massively disruptive and comes as a major project for a team of project managers.
(They are also trying to downgrade us to office 365, which for our purposes removes archived emails more than 3 years old)
Now for a beancounter it may seem that spending £6k a month on someone, then pissing them off by making a £10 a month saving, it worthwhile. That's because the beancounter doesn't factor in the cost of pissing people off.
As for the monitors, that may be COVID19 related. If the office is locked up, there are almost always physical/security procedures that must be followed in order to allow non-essential staff into the office...and that doesn't include any cleaning or sanitation that might be required by any COVID19 rules. This means that you need to have someone physically come to the office to open it up. On top of that, you need someone knowledgeable about the hardware (i.e., IT) to come in to make sure any employee taking a monitor home doesn't mess up anyone else's setup.
So you're risking exposing at least two lower-paid employees to COVID19 for the convenience of one higher-paid employee who could just buy his own goddamn monitor for £80 if he cares about the screen real estate that much.
And the "£1.6m a month" view is the problem -- if you are spending £5k a month, or 40p a minute, on the costs of keeping an employee (probably more with the cost of office space), an extra £10 a month is neither here nor there. If it costs just 1 minute extra a day, you're losing.
Also, your units are wrong. 1.6M is the total amount being risked. There is no realistic risk of losing that much every month unless you think that every employee is going to lose their monitor every month.