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Ask HN: When will a business see the effects of paying below industry standards?

4 points by l2silver ↗ HN
If an organization pays below industry standards, what do you say to the management team that doesn't seem to realize how big a problem this is?

People leave... but no one seems to know if it's more than usual. We hire people, and a lot of them are inexperienced, but that could be explained by bad recruiters, not necessarily compensation.

Is there something else I can point to when trying to prove how big a problem it is? Is it actually a problem?

6 comments

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zaphar
It may not be a problem. Maybe your company only needs a certain quality of worker and aren't interested in paying more for a higher quality. There is a place in the market for that. If you personally you are a higher quality then you'll probably be able to leave for greener pastures.
global6000
As long as the business is having no problem hiring and making profit it's not a problem.
l2silver
I guess it could be that simple...
rdtwo
I mean basically every start up pays below market comp rates some even succeed
sloaken
Depending on industry and professions there are acceptable and unacceptable turn over rates. Fast food, you expect at least 50% a year. Banking (not that I know) 10% would be considered the top acceptable.

In the end you need to know what it is verses the industry you are talking about.

walljm
Turnover is a business issue, and if you want to show it is a problem, then you need to demonstrate the negative affect it is having on business objectives. If you could show that it was costing the business more to rehire/train new people than it would cost to give higher wages or make org changes so that there was higher retention, then those arguments tend to be effective in my experience.