Poll: Would you pay a developer who is 3x as good as average, 3x the salary?
If a single person can accomplish everything that an average team of 3 programmers/designers can, in the same amount of time, would you compensate the single person at the combined pay of the 3 average employees? The single developer will provide the same level of documentation, testing, communication as any average team of 3 would.
Certainly there is a lot of benefit to having a team of 3 (basic redundancy, knowledge transfer, mix of ideas etc.) and just as many headaches (management, HR issues, conflicts, communication problems). However, if the final product (code, presentation, documentation, delivery etc.) from both the single developer and the team-of-three are similar, would you consider hiring the single developer at 3x the salary of others?
And why or why not?
Edit: I should add, this is not a rant/complaint/request-for-job/rockstar-rage but just a question that came up while discussing labor market, economics, startups, and above-average skills with a friend.
56 comments
[ 60.8 ms ] story [ 156 ms ] threadI've done a lot of interviews, and I can tell you, with the exception of a few famous superstar developers, it's practically impossible.
So yeah, the answer is "yes", but the question is equivalent to "Would want to always have perfect health, if you had that option?".
For this experiment, let's say you could compare their past projects (code, product) and they were on equal footing in quality/performance. Or they are consultants you've worked with, have a good measure of their productivity/work-quality, and want to hire 1-super or 3-average of them full-time.
And if all the smart people think like I do (and there's enough dumb managers to keep productivity-linked pay from actually happening), that's an even bigger reason.
Sorry if that's not an encouraging answer.
As an employer, its your goal to get as much done properly as possible for as little as possible
An employee doing 3x the work for 3x the salary is no more effective than 3x workers, as yu explicitly said all else was equal.
Employer snags a 3x for 1x salary and they are winning.
(Why I find self-employment = self-fulfilment)
But you may not notice the issues with only with 3 people. Try comparing 30 vs 10.
[1] http://en.wikipedia.org/wiki/Conway%27s_Law
This poll doesn't really pertain to hiring super-talented people who build JS VMs for Google or rich-UIs for Khan Academy. I'm just talking about productive developers who can do the same thing that usually requires a team of 3-5 average developers.
[1] http://blog.jayfields.com/2009/01/cost-of-net-negative-produ...
[2] http://en.wikipedia.org/wiki/NNPP
1) At a 3x salary you'll need to lose two other employees and sacrifice the redundancy, idea mix etc that you point out. Reducing the HR etc overhead by two employees is far less of a gain.
2) Their higher output is going to be at least partially due to more intensive work habits which may not be sustainable over the long run.
3) If they ever decide to move on you need to hire three replacements and hope they work out and can take over from your superstar without losing too much momentum (all without ever meeting the guy since its unlikely you'll find & hire them within his two week notice period).
I don't know if (2) is necessarily true. Experience, skills, talent, and ability to focus well could easily make this sustainable.
In my experience, (3) happens when they were hired at 1x salary, proved themselves to be 3x as productive, but continue to get just 3% cost-of-living raises. If you compensate them well (and the work-environment remains hospitable), they have very few compensation-related reasons to move. Nevertheless, I agree that they can still leave due to personal reasons.
I think your definition of 3x more value sounds pretty good. There is no single definition of good/value/great/perfect, it's a balance of many characteristics. But for this question, assume they are equal in both.
I do not think that this is how it really works. It is more that that one person understands something that these three others do not. For example, the problem can only be solved with a complex regular expression. This guy understands it. The three others do not. That is why you do not see the difference in 99% of the project. It is in the 1% that truly requires his talent, that the 3 guys get stuck forever, while our guy manages to complete the project. If your project does not require any particular, rare understanding, you will not even see that this guy is so good.
Then again, I go the extra mile because I actually like to, not because there's incentives. When I do something I want to do it for the emotional reward, not for the money. So I'm kind of afraid of the money messing with me psychologically.
I'd rather have something developed in 10 days at a daily rate of $500/day rather than have it take 20 days at $250/day.
However, I wouldn't fire 3 developers to get one "amazing" developer. What happens if he/she gets ill or decides to leave? You're suddenly left with no developers on the team.
That being said, I wouldn't pay them 3x in straight salary. Equity and profit sharing is a better motivator.
Equity is very similar to the lottery... a few will win hugely large while the masses will mostly receive nothing. Thats how the system works. Ive taken equity and cash at different times over the years. Its not a scientific breakdown but through experimentation the decision to take cash over equity has been reinforced over and over again. Additionally despite my one very fortunate friend, everyone else I know in the industry is far from struggling financially but generally agrees from their experiences that equity is very much just a lottery ticket. (And even if your company does end up being 'the one', you still risk getting screwed out of your shares.) I'd rather have cash.
Or, do you believe it is impossible to know, or at least approximate odds of, any company's chance of success?
Let me put it to you yet another way. Which is more likely to go out of business in the next two years, blockbuster or BP? If you say blockbuster, why?
So now in regard to gaging the success of your company and your investment... I think it pretty easy to forecast the coming trends in the technology space. For example I think its pretty easy to foresee that the internet is going to eventually eat traditional cable providers as its great at eliminating the middleman. There are going to be some big winners in this space and there are lots of early stage companies looking to ride this. But who out of them is going to be the big winner or few winners of this space? - your guess is as good as mine. As an employee I have to pick one but as a VC or investor I can invest in the general space knowing that somebody in my portfolio is probably going to win this market.
This is the reason I take cash - its not that I don't want to invest in equities, its that I want to have the freedom to put that cash into diversified equities.
If I were go back and look for an equity heavy gig, and I don't plan to, I would look at the entire process as an early stage investor. No, I can't invest in 10 or 20 different companies, but I can be selective and increase my odds. Actually, anyone with my current skillset could walk into any startup in the valley and start working the next day. That is something few, if any, angels could do.
I only need one skilled person to solve the curly problems, what I really need is people who do what they say they are going to do without screwing things up.
That said that one person will probably be in an elevated position of responsibility and have an elevated wage respectful of that position. So as a senior role he would have more, but not to skill alone, also responsibility.
Risk of the person leaving is probably highest on the list.
You see 2x or 3x the normal rate in consulting. You are paying for a temporary boost in expertise.
Salary wise it usually doesn't happen because you don't want that much risk.
Assuming that leaving could be solved for in some form of contract or golden handcuffs, I would consider it. As much as there are drawbacks there are also benefits. Such as a person with 3X the companies overall technology picture in their head. A flatter knowledge structure. More accountability, so it does cut both ways, I would have no issue paying 3X for the tradeoff, so long as they where not my sole employee. In a sole employee situation I would prefer hiring a 2X and a 1X over a single 3X unless it was a temporary project based effort. The harder issue up front would be how to identify the 3X developer. I have a good process for spotting talent, but there is a gradient within that talent. Some are a good deal for market rate, other are what are refer to as the 10Xers and worth far more than they can command. Both are worth hiring and are above the industry but spotting the 10xer up front proves to be a daunting task.
I think it would be viable to have all programmers like this at a single company. I've heard anecdotally that some financial firms will pay salary in the 500k range in order to (a) attract world class talent and (b) ensure loyalty.[1]
[1] For example: http://en.wikipedia.org/wiki/Sergey_Aleynikov . According to Wikipedia, making $400k before he quit, and he was involved enough in coding to try to take some of it with him. I actually don't know that this is materially more than he would have been making at Google, I tried checking glassdoor.com but what is listed there doesn't match what I've heard.
Senior developers are too arrogant these days...
The way for 3x or 10x developers to earn that multiple in pay is to become consultants or founders.
If you don't have productive environment & plans, even these guys can perform below 3x I guess.