Reminds me of the whole "I left b/c I asked for a raise to $X and then the company had to hire 3 people at a total cost of $2x to replace me" scenario.
Seen similar discussions of: "Well you have the skills of 4 people but we don't want to pay you 1.5x of what most people here make so we're not going to hire you."
I always wonder if this is just a poor understanding of the value individuals bring or just short shortsightedness on the part of management/the finance team.
People are replaceable cogs, and since people are replaceable cogs, one person can not create as much value as 3 other reasonably competent ones.
Since that is common knowledge shared by all the administrative personal, it's impossible to justify somebody paying 1.5x your salary range. Even if you personally realize some specific person doesn't look replaceable (who am I kidding? You don't. You don't stay in management on places like those and keep that ability, you either move or change), you can't communicate that fact.
> one person can not create as much value as 3 other reasonably competent ones.
That's the key behind that reasoning : If your so skillful, go right ahead and create your own business. Otherwise, it's your place in the hierarchy which dictates your salary.
Except what's missing from that logical train of thought: the current incentives are not there for that to happen. There are often very strong DISincentives.
But then again: very few corporate NPCs can think outside their bureaucratic box. If they could, they wouldn't be NPCs.
Understanding if someone actually is more valuable (or less) than the slot they are filling is hard, and requires actual knowledge and time on the ground working with someone.
Which is expensive and doesn’t scale very well, as it requires you also keep a positive company culture, hire+train and keep good managers, etc.
The reason why corp goes that way eventually is because defining specific slots and requiring people to fulfill the requirements of those slots ‘or else’, and paying them as expected for those slots scales better (for certain definitions of better anyway), requires far less skill to identify if someone is or is not fulfilling those requirements, and allows central negotiation and better leverage for compensation which scales better for the company too.
It tends to not work great for creative areas, but it does work pretty well for boots on the ground crank turning. Since it’s relatively easy to quantify how hard and much the crank was turned, and often to what quality measure.
Which sucks for humans, but works.
At some point, that stops working too, and at that point the blatant ‘cog’ thinking has also made everyone jaded and shitty.
Depending on the level of market capture for the company /organization and competitive pressure then defines if it will implode, or be the next ‘DMV’ or worse ‘Comcast’, where it is somehow ‘functioning’ despite itself.
The US has a ton of these industries right now, but due to various still working market capture elements, we’re still putting up with them. Everything from Banks, Telcos, major ISPs, etc.
Frankly it seems to be to the backbone of the US economy right now.
One big disadvantage those orgs tend to have is they often suck at being adaptable. Most of the org is just fighting internal inertia, and the moment the direction needs to change it can fall apart and become actively counter-productive to itself or delivering value.
And considering how many consolidations and buyouts have been going on with cheap money, it’s about time for the stack of cards to implode a bit. Which would result in mass unemployment unfortunately, as 36% of Americans work for megacorps now, and a great many smaller companies depend on their business.
Which is great for startups and companies that keep a useful workable culture with decent management through this mess. I don’t know of any off the top of my head right now though.
Not exactly, as the second statement does not lead entirely to the first.
It's a cult-dwelling means of solving cognitive dissonance. If you look, you will see it in more contexts than this. The first statement is just an unshakeable premise, and needs no justification.
You are going to get hired at 1.5x, you are going to get hired even at 10x, but only on the top of the hierarchy.
On the bottom of the hierarchy the lowest managers do not not want to hire special cases. If you are that good then the manager will really have no power over you and can't even replace you if it becomes needed.
So you only have 2 options if you are significantly above average. Fight your way up for big money or stay at the bottom and work very little to compensate for the small salary. You should be able do get an average work load done in no time if you really are good.
The highly paids at the top of the hierarchy are not compensated for what they know(that’s a given) but for who they know…the money is for the network and ‘Rolodex’.
> I always wonder if this is just a poor understanding of the value individuals bring or just short shortsightedness on the part of management/the finance team.
I'm thoroughly of the jaded opinion that when it's not a power play (no one's lizard brain wants to admit there's someone smarter than them), it can actually be a sort-of-rational decision: don't be beholden to someone hard to replace. Hence why you see tons of PHP jobs, but few in languages like the Lisps or Haskell.
How are all the young people we churn out of colleges going to find employment if someone has acquired skills or experience to do the job of 3-4 people?
Maybe it’s not a bad thing to employ two or three people at 2x cost. Or we’d end up with unemployment or underemployment.
I didn’t mean it like that. I think it’s more apt for those with more years and experience than aptitude.
Being able to do the work of 2-3 people is over-qualification. They are better utilized in smaller or failing companies that need the advantage of the boost.
Altho it is unlikely that most people will be willing to give up the bargaining power to convert experience to currency. So what do we do?
Who would want to go to a job if you have to struggle and make less than a YouTube influencer. It’s already happening to the youngest adult generation. The struggle is real.
> They are better utilized in smaller or failing companies that need the advantage of the boost.
... And why would they do that? Smaller companies often can't pay the same and failing companies are mental health events waiting to happen. Most people leverage their experience and effectiveness into a better bargaining position.
Also why are you thinking that labor is zero-sum? Most developed countries these days have lots of jobs that are zero-sum, but software is definitely not one of them. There's a voracious demand for software developers all across the skill spectrum.
It’s not about what I think. I am trying to look at it objectively.
I am not saying labour is zero sum. Higher demand doesn’t necessarily translate to higher pays. Low level coding is an easier skill. But it can also be automated.
At higher levels of employment, there isn’t that much demand. The higher up the hierarchy, the number of years of experience and skill and education matter.
By siphoning labour to low level skill jobs, when high level skill ages out, there won’t be proper succession for knowledge transfer.
There will be a lot of casualties and smaller companies will die. So will successful companies that don’t know how to scale. Or don’t have enough money/capital to facilitate scaling.
What is important is stability for any company that has a long term vision. Eventually smaller companies will have to hire more people and if doing that means they can’t meet margins, the company is in trouble.
The only reason to reduce workers after reaching steady state is if the company automates essential key processes.
Seen similar discussions of: "Well you have the skills of 4 people but we don't want to pay you 1.5x of what most people here make so we're not going to hire you."
I always wonder if this is just a poor understanding of the value individuals bring or just short shortsightedness on the part of management/the finance team.