from Hacker News

Employees who stay in companies longer than two years get paid 50% less (2014)

by AlgoRitmo on 6/5/24, 6:36 PM with 324 comments

by ukoki on 6/5/24, 7:23 PM
Employers don't reward long-term employees because they don't need to. Even though everyone knows you make more by job-hopping, companies are following a rational strategy because too few people "walk the walk" despite wanting more salary. Arguably unethical, but rational.
At the cost of losing a minority of job-hoppers they retain the cheap majority that:
```
    - finds job interviews exhausting, or is anxious about being rejected

    - dislikes conflict or negotiation

    - has good relationships with colleagues they don't want to lose

    - has a comfortable commute or WFH arrangement they don't want to change

    - is proud of becoming an expert / go-to-person in some part of the business and doesn't want to lose that source of social capital

    - is proud of product or service they have made a big contribution to and wants to "see it through to the end"

    - believes leaving would place an unfair burden on other team-members or would be disloyal to a manager they consider a friend

    - (US only) cannot risk losing healthcare
```
It's possible that in the future the ratio of job-hoppers to lifers changes and companies find they need to switch strategies. But until that happens the job-hoppers will have the upperhand compared to the lifers.
It's the same reason why your phone/insurance/whatever provider puts up the prices year-after-year: although some people leave, enough people simply put up with it that they make more money this way. "Do nothing" is an easy choice and companies are banking on enough people making that choice.
by HEmanZ on 6/5/24, 7:36 PM
This seems very generally true to a point, so on average it works out. But I think there is a big caveat. My thoughts are centered around software development, but I know there are many analogous career paths.
I really believe if your career goal is to peak a lot higher than just middle-management or senior software engineer, and earn the pay that comes with those higher positions, you need to stay on the same company and even same project for much longer periods of time (I would say 5 year absolute minimums). If I look around at the careers of Distinguished Engineers and senior principal engineers, or VPs of Engineering at FAANGs, etc., these people always have massive chunks of time at the same company, often many years on the same product even. If they have changed companies a few times in their careers, it’s after a string of promotions and delivering big things. It is really hard to build a portfolio of high-level impact with 2 year stints.
by s0kr8s on 6/5/24, 7:23 PM
Caution: you might get paid 50% more to work at a company that is 500% worse managed, and therefore is hemorrhaging employees so fast that the only way they can maintain staffing levels is to offer a hefty premium above normal market wages to get new suckers to take a chance on them.
If you're nihilistic and believe all employers are rotten, then jumping ship every 2 years might be a decent game strategy, but I tend to believe that good employers do exist and are just somewhat rare. So if you find a unicorn, I would recommend holding onto it.
by tombert on 6/5/24, 7:44 PM
I'm not sure that this is sustainable anymore. I've definitely done the job hopping game, and it generally led to a substantial increase in salary each time, but eventually that comes back to bite you.
I got laid off three times last year, and that already looks pretty bad on a resume, but then seeing a bunch of jobs beforehand where I was only there for two years makes a lot of employers really hesitant to move forward, especially in 2024 (ten years after this was written).
At this point I'm happy enough to just sit my ass down and stay at my current place; I didn't realize how much I valued stability over anything else until 2023 came along and became the worst year of my life.
by spauldo on 6/5/24, 7:10 PM
Yep, I see this in industrial automation. My company is particularly bad about it, since the corporate office is in Houston where you can hire people for the duration of a project fairly easily.
Problem is, my part of the company isn't in Houston, so qualified employees are hard to find. So we need to hold on to people, which is hard when we rarely hand out raises. I do my best to train up my guys, but I know that they're probably going to move on in a couple of years. My goal is to make an enjoyable environment so that they'll come back eventually at a higher pay rate.
My best worker - the one I'm training up to be a lead - is the lowest paid member of the team, and I can't do anything about it. It sucks.
by ApolloFortyNine on 6/5/24, 7:00 PM
Odd to see skepticism here, I thought this was well known. I've seen it first hand just a couple years ago where a large company was offering new hires a 20% bump, and yet when I told them I was leaving the counter offer was only a 3~% bump.
by andrewmutz on 6/5/24, 8:05 PM
The headline sounds like it's stating a fact, but if you read the article it wasn't supported anywhere other than the author stating it. There is no data presented or study that was done. The author seems to believe that the salary jumps that accompany 2-year job changes can be sustained over time.
From my experience, I don't think this is the case. In your twenties it's definitely true, but when I look at the highest paid people (in their later career) it is not true that they did this.
I think the reason is that as you progress up a leadership structure, stability becomes increasingly important and candidates who have exhibited short tenures in roles are passed over because it is assumed this behavior will continue. It's highly damaging to have a VP leave an org leave after only 2 years in the role.
by pocketsand on 6/5/24, 8:08 PM
A family member is paid very highly. He has switched jobs almost ever year for over a decade, including at top tier tech firms. I'm not sure why he does this but I have my suspicions. What I do know is that he is never seems happy with his work. And I also doubt how much impact he can be having with such short stints.
I have never quit a job without a major life event forcing me to (spouse getting a job, moving, etc.). I've had great experiences everywhere and I'm probably underpaid for it. I have no regrets. I'd prefer my lifestyle and job satisfaction to money.
by laweijfmvo on 6/5/24, 7:43 PM
I've experienced this to varying degrees over my 15 year career, but can safely say that my current job at a FAANG probably pays more than any job I could get today (including another FAANG). Stock appreciation and more importantly, extra stock awards, are difficult to match.
Or I could be a sucker and 100% wrong.
by JohnFen on 6/5/24, 9:11 PM
Excluding cost of living increases, the only time that I've received a pay increase is when I've switched jobs. Every time I change jobs, I increase my minimum acceptable salary by 20%.
I don't change every two years, though. I usually go about 5. Even then, I don't change jobs for the purpose of getting a pay increase (that's just a nice side-effect), but more typically because I've learned everything that I'm going to learn from a the job and need to move to a different one in order to learn new skills (or sometimes just to work on something fresh).
by austin-cheney on 6/5/24, 7:34 PM
I remember seeing numbers several years ago that the average retention at Uber was around 18 months.
My big learning from employer hoping as a JavaScript developer is that it’s risky. There is a universal assumption that the people who do that work fall below an accepted baseline of delivery and maturity compared with other developers as qualified by the amount of tooling and hand holding they require. That said many employers will not invest much in these employees and thus expect them to jump ship.
The other side of that coin is that employees see this too. Those who tend to be more competent and have a really good situation with their employer tend to be the people that stick around knowing they are missing out on pay raises by moving around. For example if I get to spend half my office day watching movies and working on side projects in a stable company with no stress that potential raise from the next employer might not be worth it.
by hehdhdjehehegwv on 6/5/24, 7:07 PM
And it’s getting worse. Somebody told me their team at Big Tech used to have a mini cupcake party when people hit a tenure milestone like 5 year, 10, etc.
Along with layoffs the company killed the cupcake budget. (Mind you the stock is sky high and they’re raking in cash.)
If a company doesn’t think your decade of commitment to making them money merits a fucking cupcake, it goes without saying you’ll get screwed on comp.
by elintknower on 6/5/24, 7:34 PM
Job hopping works if you're already in the top 10% of engineers and really talented when it comes to... interviewing.
I suck at leetcode so maybe that's why I'm just not cut out for this. As long as I'm making $150k+ and can WFH I'm not exactly confident I could go out and interview and get something better.
My work history isn't great because I tried job hopping and was a co-founder at a few startups. I quickly found a few 6-8 months stints really made me look radioactive even with around 5yrs of experience.
I'm open to advice here, but I don't blame people who are optimizing for consistency and a stability.
by kilroy123 on 6/5/24, 7:17 PM
I really wish this would change. I'm sick of constantly moving around every few years.
Too be fair the last 3 startups I worked at failed financially but still.
I would love to go work somewhere for 5-10 years. It's just hard to find these days.
by shinryuu on 6/5/24, 6:50 PM
Though at some point it feels like you reach a ceiling even if you change jobs.
by asaph on 6/5/24, 6:51 PM
This article is nearly 10 years old. Is this still true?
by fsckboy on 6/5/24, 6:58 PM
this whole thing is sus.
why isn't this a better explanation: High performing, "desirable" or "skilled" employees get enticed (i.e. rewarded) for jumping to a new employer. Average schlubs do not.
explanation from TFA:
Why are people who jump ship rewarded, when loyal employees are punished for their dedication? The answer is simple. Recessions allow businesses to freeze their payroll and decrease salaries of the newly hired based on “market trends.” These reactions to the recession are understandable, but the problem is that these reactions were meant to be “temporary.”
by sct202 on 6/5/24, 8:09 PM
Just want to point out that this is just an Excel thought experiment and not a study of peoples lives of any kind. The comparison is just 3% raise vs jumping every 2 years for 10%. I've seen too many people take this as some gospel of a career strategy when it's more of something to keep in mind when you get stagnant at a job.
by jholdn on 6/5/24, 7:58 PM
One hypothesis I don't see mentioned is that time limited roles pay more. For example, a person brought into to oversee an acquisition or transition is going to be paid phenomenally well (and, I think, rightly so). But part of that job is making your own position redundant. If you're still there after a few years, you aren't doing your job. I expect there are many other examples, roles that are project based and become redundant when the project is completed. And, I expect, many of these pay more than operational jobs, taking care of some day to day tasks of the business. Probably rightly so; if the projects successful, I would think building something new would create more value as it should produce something that continues producing value into the future - higher risk, higher reward.
by dasil003 on 6/5/24, 8:52 PM
It's probably true on average job hopping pays off when you're young, it also has some real upside risks as more senior positions generally require you to think longer term, and that's very hard if you don't see how your actions and decisions play out.
As a hiring manager, three 2-year stints would be perfectly reasonable for an L5 candidate, but five 2-year stints I would be very concerned about hiring an L6 expected to drive long-term architectural directions.
Ultimately I think the "learning or earning" advice is better. When you are young you should chase your interests and prioritize personal growth and finding out what you are good at. The primary heuristic should be whether you are learning quickly, and are you surrounded by people and structure that help you with that. Later on in your career when you have more personal responsibilities you should prioritize earning, and hopefully you have built a foundation of strong and deep expertise that qualifies you for more senior positions. Of course if you can get both, that's great, but you also need to be careful because a lot of things you learn at the best paying companies have limited applicability outside that bubble.
by PeterCorless on 6/5/24, 7:11 PM
This is a hideous truth: loyalty is punished under modern corporate feudalism.
by softwaredoug on 6/5/24, 8:10 PM
Do yourself a favor and try to spend some time as a freelancer. Constantly have to sell yourself. Constantly managing stakeholders, etc.
This will translate to always thinking about your place in the market and gives you a lot of skills to avoid being taken advantage of.
by jonfw on 6/5/24, 7:15 PM
This would highly depend on the strength of the market, right? Seems like a weaker market now
by ChrisMarshallNY on 6/5/24, 8:14 PM
I totally believe that.
Nevertheless, after job-hopping a bit, in my twenties, I stayed at my last job for almost 27 years.
I have found that money isn't everything. I know that's basically heresy, around here, but it's been my truth.
by TJSomething on 6/5/24, 7:52 PM
If you love in the USA, I don't know how you job hop if you have more than two specialist doctors. Everytime I have to figure out how an insurance plan works is suffering.
by dang on 6/5/24, 8:37 PM
Related:
Employees Who Stay in Companies Longer Than Two Years Get Paid 50% Less - https://news.ycombinator.com/item?id=14784900 - July 2017 (535 comments)
Employees That Stay In Companies Longer Get Paid Less - https://news.ycombinator.com/item?id=7928008 - June 2014 (198 comments)
by Waterluvian on 6/5/24, 9:25 PM
I’m sure HR would hate this but I make this abundantly clear to the engineers I manage. The best raise you’ll ever get is by switching companies.
by prakhar897 on 6/5/24, 7:17 PM
Do employees suffer from having too many jumps in their Resume? After some time, companies would be less inclined to hire these people right?
by up2isomorphism on 6/5/24, 8:39 PM
The conclusion is somewhat biased: The employees who jump a lot often implies he hit the salary increase ceiling quicker than other who don't.
In fact, what I observed is that people are constantly looking for place with better pay, regardless if he/she ACTUALLY finds one.
by stevofolife on 6/5/24, 8:22 PM
Sure you get paid more, but it comes attached with a whole baggage of other things.
A better research should provide insight on the total compensation over the entire career, work-life balance, impact, satisfaction and so on.
Now let's see what is better.
by BhavdeepSethi on 6/5/24, 7:00 PM
Tell this to NVDA employees.
by tnel77 on 6/5/24, 6:55 PM
I wonder how stock options play into this. Assuming you have generous stock options in a thriving company, wouldn’t it be worth it to stick out 3-4 years for a majority of that equity?
by jxramos on 6/5/24, 7:16 PM
Isn’t this an equilibrium of sorts, those who trade stability and familiarity for slow growth? Those who can jump ship can and do and those who aren’t don’t.
by b212 on 6/6/24, 1:00 AM
Not in this market. Got a job paying x almost 2 years ago. Now we’re hiring at 0.5x and actually find good and very good candidates…
by 1970-01-01 on 6/5/24, 8:19 PM
Generic career advice is to apply for a different job every month. After 24 months, you will at minimum know your market value.
by skizm on 6/5/24, 9:14 PM
This seems like a borderline tautology or at least very obvious? People rarely switch jobs for less money.
by kristopolous on 6/5/24, 8:59 PM
Your can flip this: people who hop jobs care about pay more.
by smrtinsert on 6/5/24, 9:42 PM
This is my curse. I need to move currently
by rc_kas on 6/5/24, 7:43 PM
I'm applying to every job under the sun and no call backs this year. Either the job market sucks right now or my resume sucks right now.
by uldos on 6/5/24, 7:20 PM
It is better to leave the job and get hired again, than be loyal to the same company.
by sed3 on 6/5/24, 6:58 PM
Quitting just because you are not paid enough is so 2014. I will gladly take 50% less, if you keep me!
by mondomondo on 6/5/24, 7:15 PM
Not in communist countries though.
by ldjkfkdsjnv on 6/5/24, 7:13 PM
The highest paid people are often the ones with the highest tenure. Have seen many people at a company over ten years, making 1-2M a year, head and shoulders above their levels comp bands. If you cant get promoted, then you have to job hop. But at some point, its really that you just arent that valuable.
by hiAndrewQuinn on 6/5/24, 7:19 PM
Such is the nature of life. FTEs who invest the considerable amount of time to continually do a job search are investing a lot more of themselves into their work than guys who stay in the same SWE II role for 10 years straight. They also, pretty much by definition, have more bargaining power even if they stay in their current roles - because they have other jobs on the table to credibly bargain with.