Employers should prioritize retention over hiring, study suggests

https://www.hrdive.com/news/employers-may-need-to-prioritize-retention-over-hiring-study-suggests/632540/

by tchalla • 4 years ago

380 229 4 years ago

Too many times in my career have I seen an employer lose an employee, who has a ton of institutional knowledge and performs adequately or even excellently, only to replace them them with someone that ends up costing much more money, and then takes a lot of time to get up to speed (which also slows the folks who help get them up to speed).

It is like they haven't taken the time to even make a rudimentary calculation on the costs involved in keeping the employee versus replacing them.

panny• 4 years ago

But accounting and HR will time your bathroom breaks. I guess the watchers don't like being watched, which is why retention isn't a bother for them.

gsibble11• 4 years ago

Ha. I had the CFO once call me angrily asking where I was......I was in the bathroom. She told me to get back to my desk. I took my time.

toast0• 4 years ago

But accounting and HR will time your bathroom breaks. I guess the watchers don't like being watched, which is why retention isn't a bother for them.

Maybe they should tune the company food to reduce bathroom occupancy. :P

gsibble11• 4 years ago

Oh, I've quit 3 companies where I was the CTO/lead engineer where they had to replace me with 5-10 people (backend and frontend devs, QA, devops, plus a manager or two, etc.) costing them enormous amounts of money.

Many times they've hired me as a consultant where I make 5-10x my hourly rate for several months after bringing the new hires up to speed.

Companies place very little emphasis on retention and retaining institutional knowledge. They don't seem to understand that employees who have worked at a company for years developing systems and architecture know where all of the secrets are.

ok_computer• 4 years ago

Though it may cost more, spreading functional knowledge across a greater base of people would be more resilient. Even if a company needs to pay an individual 10x salary consulting for a year, it would be in their long term best interest to spread a fraction of that knowledge across a larger employee base and document what is tangible. There is a limit (different for different people) across which an individual cannot cognitively support an operation. With years more growth every person would eventually reach their personal limit or lose interest. It helps to have teams of people that are smart enough to work through new problems and document procedures, playbooks, current states and retrospective reports and rely on institutional processes to maintain a coherent operation. Sometimes money isn’t the singular factor at work.

ryan_lane3• 4 years ago

In most companies, it's good to let you leave, if they need 5-10 people to replace you. You take this as a point of pride, but I see folks like this as organizational bottlenecks.

When I leave an organization, my goal is for them to either directly replace me, or for them to not need to replace me at all. I do this by ensuring that I don't silo my work (by ensuring others are working with me, or under me), documenting everything I work on, and occasionally changing roles.

My specific goal is to help a company grow, not to make them depend on me.

returningfory2• 4 years ago

This is a common response to this issue, but I think there is a logical flaw in it.

Employers don't know ahead of time which employees will leave and which will stay. In order to improve their employee retention, employers have to pay _all_ of their employees more, not just the ones that eventually will leave. This changes the math entirely.

For example, suppose it costs 50% extra to replace someone who leaves. In retrospect, sure, giving the sole employee who leaves a 10% raise each year to retain them makes sense. But if you have to give all of your employees a 10% raise per year, just to retain that one person, it doesn't make financial sense anymore.

To be clear I'm not endorsing this system at all! But from a pure financial perspective it makes sense to me and is why, I suspect, it persists.

peteradio• 4 years ago

Presumably not everyone is as valuable or risky.

andrewflnr2• 4 years ago

It's almost like you need to identify which employees are key contributors and pay them appropriately. Imagine that.

eftychis2• 4 years ago

I disagree related to the SF Bay Area and the Tech world specifically. It is usually written in the wall who is going to leave if things do not change. Now you could say the upper management can't read the wall, and the middle management might not want to share what has been stated -- or they kid themselves.

foobiekr• 4 years ago

I would agree, but employers actually usually do know who is a flight risk.

duped2• 4 years ago

Good managers and HR leaders will recognize when people are teetering on leaving. Not always, but I've known a few who have given raises to keep people around and knew that others were planning on leaving before they announced it. In a healthy organization you can have frank conversations. Or even ambiguous ones. It's just rare.

datavirtue• 4 years ago

"Employers don't know ahead of time which employees will leave and which will stay."

That is their fault. I used to work in a well managed company. It was never a surprise when someone left as career progression was always an open topic between colleagues and supervisors.

You don't know when people are going to disappear if they are crouching and ducking around every corner to avoid management.

raducu3• 4 years ago

For example, suppose it costs 50% extra to replace someone who leaves. In retrospect, sure, giving the sole employee who leaves a 10% raise each year to retain them makes sense. But if you have to give all of your employees a 10% raise per year, just to retain that one person, it doesn't make financial sense anymore.

Yeah, so basically this argument is realpolitik, machiavellianism, game theory -- things that work 9/10 years, bring in profits but have enormous hidden costs that ravage companies/economies/countries in that 1/10, 1/50, 1/100 years.

The argument is "be a dick as much as you can get away with, because people are sheep and being a dick is a virtue actually". Until a lot of people start being dicks, then we cry about the long lost art of not being dicks to eachother.

phpisthebest2• 4 years ago

Employers don't know ahead of time which employees will leave and which will stay

I may be a bad example, but I can assure you every employer I have ever left new I was unhappy in my role before I left.

I always have frank and open conversations with my managers about my expectations for growth, wages, etc. These are not Ultimatums, but more "In 5 years I would like to be" type conversations.

Now as a manager I have gotten similar feedback from people that work from me, sometimes you have to listen closely to understand what they are saying in reality as many are not as direct as I am, but the feedback is there

I think managers just simply ignore it in most cases

justsocrateasin• 4 years ago

Yes but sometimes they do - at my last job at a large corporation I was paid 80% below the median rate for an engineer in my area/YoE/etc. - I threatened I would quit and showed them a counter offer that was 30% more than what I was currently making and they said "sorry nothing we can do" so I quit and found a better job.

r930• 4 years ago

Not to mention the social load on integrating a new person to a team. Depending on the depth, breadth and number of interactions with other individuals, this causes others to have to also get up to speed on the new person's strengths, weakness, quirks, etc.

lloydatkinson• 4 years ago

I am seeing this recently. Imagine a place that hired dozens of really good developers in 2020. Now imagine that instead of focussing on retention and paying well, they focussed on ignoring the waves of developers leaving and instead on exclusively hiring graduate developers. Now imagine all that domain knowledge that left months ago... compounded by the fact there is only five developers left from 2020...

Totally not a real story at all...

nuancebydefault• 4 years ago

The weird thing is, if you, as an employee start to show feint signs of wanting to leave, e.g. by complaining a lot to colleagues, or having an upset look on one's face, usually it is not acted upon, or even not picked up by any manager. If on the other hand you make it very clear that you are unhappy or that you might want to leave, it is understood as you are going to leave anyway, so they don't bother fixing any of the things that you have a problem with. At least that is what I experienced a few times. Instead they start to act as if you don't belong to the team anymore or give you boring or strictly defined tasks. So no wonder, you leave and they find some other employee, in which co-workers need to invest time and effort during a period of about half a year to get them up to speed. Rinse and repeat.

gsibble11• 4 years ago

You didn't break up with me, I broke up with you!

rjsw• 4 years ago

I watched one PHB manage out one of the best junior engineers just because they expected young people to switch jobs often.

vecter2• 4 years ago

At my last startup, one of our employees approached this well. This is a very summarized version, but he came to me and said: "I'd like to be paid $X. I think I deserve it and I believe I can get that salary on the open market. I don't want to negotiate on this."

It was a very significant raise but after a short discussion with my cofounders, we agreed and gave him what he asked for. That he was a top performer made it an easy decision.

dbish4• 4 years ago

Doesn’t tend to work at big tech as they have rigid very slow moving (and ill informed) HR processes that only react after they see a bunch of people leaving.

YeBanKo• 4 years ago

What would be your work dynamic if you thought otherwise, i.e. they are not worth it or you can’t afford?

mindvirus• 4 years ago

When I was at a FAANG, it felt like they had this down to a science. Promotions every 2-3 years. Raises once a year, a few spot bonuses throughout the year, ad hoc equity grants. People still quit of course, but looking back it felt very retention focused and scientific.

roflyear• 4 years ago

Bonuses at all, nevermind a few a year, sound great. Time to send out resumes.

What's the workload at the typical FAANG?

jamra• 4 years ago

So far there is a pretty serious tempo at my FAANG but the complexity is not very high so it’s really simple work in terms of stretching the brain.

Lots of working with other teams (XFN) so collaboration is almost as important as execution. Pay is good.

gsibble11• 4 years ago

From what I've heard, depends upon the FAANG. Google apparently has good work/life balance. All of them are all about making it through the interview process, which is a nightmare.

yodsanklai2• 4 years ago

Mine is heavy. Working hard and barely meet the expectations. Lot of competition and colleagues are good. Passing the interview is one thing, but staying there is also challenging as they get rid of low performers. (at least my experience).

gsibble11• 4 years ago

They do seem to have it down. Startups on the other hand absolutely do not.

google2341232• 4 years ago

You sure? Seems like starts are the place where you find engineers with just a few years of experience getting management roles

neilv3• 4 years ago

I prefer to think of it like flowers from an SO, just because.

"Hey, my valued employee, just thinking about you, and I wanted to send you these additional United States Dollars."

eschneider• 4 years ago

SO's (usually) like flowers. I advocate this approach, mostly because it works. Nothing says 'valued employee' more than periodic raises. And yeah, in the absence of money, additional stock grants have the same flavor.

unicornmama• 4 years ago

Having worked both sides I agree.

The Google Moloch seemed to have a fairest system, of course circumstances could be unfair but the process was fair. Most people who wanted promos and fed their soul to the machine would eventually get promos.

Meanwhile in the startup zoo, it’s all about earning favor and avoiding disfavor with a small group of lords.

paxys2• 4 years ago

Yeah, big tech has had it all figured out for a while now. At my company departments would get a target retention number. Going too much under or over that was a problem. If a certain % of employees outside of the top performance buckets weren't unsatisfied with their salaries and leaving, that meant you were paying everyone too much.

It's crazy how much science you can apply to HR once you are working at a scale of tens of thousands of employees. At that point people aren't people anymore, just nameless resources to be plugged into an equation. Kinda like the "a single death is a tragedy, a million deaths is a statistic" analogy. Stack ranking follows the same principle.

outworlder• 4 years ago

Not FAANG but at a large Fortune company you have heard of.

Had plenty of promotions, multiple spot bonuses and equity. Not Netflix or Google level comp, but not too far off either. It is a bit manager-dependent(good managers have to stick their hand in the cookie jar whenever it is close by), but I believe that most IT companies have this sort of structure setup.

It works too - if you don't know if you are going to get spot bonuses (or equity) at the new place, it becomes far more of a gamble.

jreese• 4 years ago

And yet it can also be haphazard and misguided too. My experience has mostly been that the general comp level is high enough across the board, but discretionary/additional equity is almost exclusively thrown at high visibility/pet projects of the moment rather than the most important/impactful work that supports all of those fancy projects. Ie, working on infra has some of largest/widest impact in the company, but rarely merits AE/DE because everything is too incremental, difficult to explain the benefits to non-technical partners, or otherwise invisible to leadership at the levels necessary to grant equity. Losing a core, senior engineer from the database or network team can have a much larger technical impact than a random frontend engineer, and yet the bulk of AE/DE goes to flashy frontend product launches.

JohnJamesRambo• 4 years ago

I wonder if that was sustainable and the past year of the economy says it wasn't.

discordance• 4 years ago

Anecdotal, but I’m FAANG and in the process of switching, leveling up and getting paid a lot more elsewhere.

There was a counteroffer when I told my present company about the new offer but it was too little too late.

It’s well known among my peers that to level up or get paid more, you go elsewhere and maybe even boomerang back later.

tomrod2• 4 years ago

Pay people well.

gsibble11• 4 years ago

Most companies will pay people the absolute bare minimum to get them to work there while barely being angry enough not to quit.

tomrod2• 4 years ago

Correct. If your optimization horizon is two weeks to a quarter, this short termism makes sense. But if your horizon is further, pay people well.

gsibble11• 4 years ago

This is definitely the opposite of what most of my employers have done. Gotten denied raises countless times which has forced me to find new employment to advance my career while they are 100% focused on hiring new talent. Lots of turnover which cost the companies a tremendous amount of time constantly bringing new hires up to speed.

woeirua3• 4 years ago

When people say they want career progression, and opportunities, what they mostly mean is they want more money. Unfortunately, most companies have fallen into the trap where if someone has a title of X they can only make up to Y, regardless of how good they are at their job or how long they've done it. When that happens then the name of the game is getting a promotion in order to keep making more money. That creates a perverse incentive, and the result is political bullshit that is typically misaligned with the company's interests which further drives away your high performers.

End the perverse incentives. Pay your people well if they're doing a good job, regardless of how long they've been doing the same job or what their title is. Reward seniority and loyalty. Suddenly, you'll find that employee retention goes through the roof, and you don't have to worry about hiring new people all the time.

afarrell• 4 years ago

Or at least raise the salary cap alongside seniority for roles beyond a certain level.

aperson_hello2• 4 years ago

Or just have HR actually do their jobs and understand who is and isn't creating value instead of setting arbitrary salary caps...

gsibble11• 4 years ago

Almost all of the companies I worked at hired senior positions from outside the company instead of promoting from within.

The other issue I ran into was being so good at the position I was in that I was "unpromotable". Got told that a lot as an IC. Was then told even though I was fully qualified for the promotion, I would not get it nor the accompanying salary.

pixl972• 4 years ago

That's when you know it's time to leave.

candiddevmike• 4 years ago

Also known as sociopaths ensuring there are losers to do the work

raducu3• 4 years ago

Almost all of the companies I worked at hired senior positions from outside the company instead of promoting from within.

It's one of those things that goes by "Yeah, yeah, we know the studies, doesn't work that way in real life, it's cheaper to just fuck over your employees, pay new employees more, most of the old dumb fucks are to stupid/lazy to ask for a raise/go to an interview", just like work from home used to be. Until reality kicks in, some tectonic shifts happen and they start screaming they can't find good employees.

errantmind• 4 years ago

While I broadly agree with your point, rewarding seniority is at odds with rewarding people based on how good they are at their jobs, from the perspective of incentives. The two are not always correlated and this is often why some companies hire externally instead of promoting from within.

That said, companies are often wrong to hire externally as they misattribute their problems to their employees instead of to their own leadership. It is easier for them to blame others instead of themselves.

dbcurtis2• 4 years ago

Paying for equal performance on the measurable aspects of the job is easier to do than putting a value on institutional knowledge. As an old bird that has had time to internalize the tech stack, I can make one comment along the line of “Don’t do that, and here is why...” — getting that kind of contribution noticed and valued is harder.

Parent comment is really saying to find a way to put a value on institutional knowledge.

vasco• 4 years ago

Leadership are mostly also employees by the way.

muzani2• 4 years ago

Seniority has a very real value in tech, though. It probably doesn't have much value if you're say, a doctor, working with different systems each time that look similar.

But in programming, you deal with systems, you know the undocumented gotchas of the system, and understand the flow of it better than someone who's completely new to it. You know when Chesterton's fence applies and when it doesn't. I often tell startups to promote the juniors instead of replacing them with seniors, because the junior who built the system would be able to modify it better.

Even in sales and product, there's some value to understanding what the customer wants and aligning that to the features or a specific pitch and such.

Archelaos• 4 years ago

The two are not always correlated

Not always, but still I would assume that people with complex tasks generally become more experienced and accumulate specific knowledge over time that makes them better at what they do. Therefore, it should be the default for employees to get a raise every now and then, unless there are clear signs that someone is not performing and the employer is not interested in keeping the person.

larrymyers• 4 years ago

Rewarding seniority works if you have a fair system of performance management in place. Assuming your tenure at a single company is directly correlated with your ability to perform well, and grow and improve your value to the company over time, it would make sense.

That being said, when somebody finds that fair system sustainably in place at a company, let me know. Fair and accurate measurement of an employees performance, free from bias and favoritism ... I'm just not sure that's how people work.

xkcd-sucks• 4 years ago

as they misattribute their problems to their employees instead of to their own leadership

In my own very limited experience of mid-size companies, it seems like senior leadership is first on the chopping block when dissatisfaction becomes real. However, the expected value of those positions is much larger due to compensation (i.e. $2e6 x 1 year = $2e5 x 10 years, better assuming execs can find jobs within a few years)

spaetzleesser• 4 years ago

“ That said, companies are often wrong to hire externally as they misattribute their problems to their employees instead of to their own leadership. It is easier for them to blame others instead of themselves.”

After talking to a lot of managers it really seems that a lot of them are deeply skeptical of the people they themselves have hired.

rizzom5000• 4 years ago

they misattribute their problems to their employees instead of to their own leadership

It seems to be the case that effective and competent leadership is the exception. Even in the military, where enormous amounts of money are spent on attracting, training and retaining leadership; they're simply aren't very many that are very effective. Mediocre leaders get promoted and that's just what everyone else gets to deal with. Other examples include professional sports, academia and politics. The tech industry is hardly an exception here.

wisnoskij• 4 years ago

"Reward seniority and loyalty regardless of job title"

Well janitor retention would surely go through the roof, but I think you might lose a lot of upper management and software engineers.

dhiggdyjkb• 4 years ago

Good

woeirua3• 4 years ago

Why? Because they would prefer to keep running on the neverending promotion treadmill? I think a LOT of engineers would rather stay engineers if they could keep getting reasonable raises. The problem is that almost all companies make it impossible to keep getting raises past a certain point _without_ getting promoted.

mr_toad2• 4 years ago

Pay your people well if they're doing a good job

Comparing peoples performance objectively in a large organisation is essentially impossible. Only the people working closely with someone really have any idea, and even then they only see part of the picture.

jonny_eh• 4 years ago

Only the people working closely with someone really have any idea

And are accused of bias when trying to get raises for their team.

flashgordon• 4 years ago

Mostly true but these days we have the case where regardless of capability it is sadly necessary to put a Ln person to do an Ln's job not Ln+k's job (for political reasons). This has the perverse effect of someone at Ln being punished for doing a job above their level if they are not also doing their own job. What this means is you can only get promoted if you are doing the equivalent of two levels of work at a given time but if you were hired from elsewhere you only need to do the target level job.

kodah3• 4 years ago

From my perspective this is the way things used to work, then we had the pay equality movement which was largely misinterpreted by corporations to mean "Same title == same pay". The problem is that being a Junior on Team A may have the same cognitive load as being a Senior on Team B. I once led a team that was exactly like that.

Saying "end perverse incentives" makes this seem like some moral oversight driven call-to-action but I think it's more complicated than that.

giantg22• 4 years ago

"most companies have fallen into the trap where if someone has a title of X they can only make up to Y,"

Eh, most of the people in the established pay range tend to be at the low or mid range, so the company likely has the ability to pay more. Once they're at the top of rhe range, that shouldn't be much of a problem either... but that assumes the range was created using good industry data. If so, then there shouldn't be a better deal somewhere else (or at least very hard to find).

mind-blight• 4 years ago

I think there's often better pay elsewhere because companies generally reactive towards employees rather than proactive. This is also reflected by the data showing lagging indicators.

When you factor in how much it costs to have a roll unfilled, hired a new person, then train them, then productively paying to retain your talent becomes a no-brainer

maxerickson• 4 years ago

A lot of problems seem like they go away if you assume that you've solved them correctly.

paxys2• 4 years ago

The worst part is that after a point in your career there's no path to promotion just for doing your job really well. You are expected to always take on new roles and responsibilities, some of which may not be suited for your personality or interests, and the net result often is that you get promoted and make more money but your overall useful output decreases. I know so many amazing engineers who had to essentially give up writing code, prototyping and tinkering – stuff they were really passionate about – to advance to staff+ levels. Now their time is spent in an endless stream of meetings, and the entire organization is worse off because of it.

warbler73• 4 years ago

Being promoted until you are no longer competent (or happy) is a long recognized corporate antipattern dynamic:

https://en.wikipedia.org/wiki/Peter_principle

pixl972• 4 years ago

You have the choice of managers knowing what the job is or managers that have never done the job. In general managers that know what the job is are better managers.

hamburglar2• 4 years ago

Some companies have a concept of “terminal levels”, which means if you get to this level and keep doing a good job and have no desire to keep chasing promos, that’s totally fine and they’ll keep increasing your comp according to your value, which does increase as you stay and accumulate institutional knowledge, experience, and reputation (and owed favors, political connections, friends in senior places, accomplishments under your belt, etc etc).

mattgreenrocks• 4 years ago

It's dysfunctional on the part of the org.

But it's also a Faustian bargain that many engineers knowingly enter into. They are trading their professional coding passion in for more money and status. For some, this isn't much of a loss. For others, it is. It really depends.

akomtu• 4 years ago

Someone is ought to make a game like factorio out of this: you manage workers with semi-predictable output, and have to pay them out of your semi-predictable profit. You can never lower anyone's salary, only fire someone, and that costs a fee (severance). There is outside pressure that forces workers to need more money - inflation - it's also semi-predictable, but it never goes down. My suspicion is that in a well modeled game like this, there's no steady-growth mode when everyone is happy, and the organisation always collapses, even under perfect management.

AstralStorm2• 4 years ago

Why there is an external inflation force?

These things do not happen out of nowhere. Someone is greedy and has market forcing powers.

twawaaay3• 4 years ago

When people say they want career progression, and opportunities, what they mostly mean is they want more money.

Nah, that has been proven to not be true (at least in most cases).

What usually happens is a combination of various factors, money being one of them. And when money is part of it it usually psychologically functions as a proxy for whether your company/boss cares for you.

Most people want confirmation of their own beliefs about themselves -- they want the company/boss/coworkers to be showing respect and show that they value your work. People want to see that their work is accomplishing something and a lot of people can go to great lengths to lie to themselves that this is the case. And a lot of people also want progress, they want to see themselves doing new things, getting more responsibility, advancing their careers.

I hired and said goodbye to A LOT of software developers. And I do understand that it is difficult to get an honest, unbiased response when you ask them for the reasons for their decisions to leave.

But at the same time you get to experience trying to get people to stay and seeing what works and what does not. Giving raises works relatively rarely -- it only seems to delay. They are already discontent with their job and the higher salary only functions as a sort of gold handcuffs. After quarter century of doing this I literally am still to see a situation when a developer is offered a higher salary and suddenly becomes enthusiastic about their job to have a long fruitful career.

So what does work? Trying to find what causes them to be discontent in the first place and trying to address it. Do they feel they worked for too long in one project? Are they bored intellectually? Are they not getting along with their current boss? Changing the project without any raise is in my experience one of highest success rate things you can do in this situation. That success rate may not be very high (people tend to leave anyway) but at least I have a lot of good stories of people who changed teams and things clicked for them and they liked their new team. The only things that worked better in the past are changing the project WITH upgrade to the salary to reflect the market, and, for the ultimate highest employee-keeping potential - promotion to manager.

If people really did care mostly only about money, upping their salary should have greater success rate than moving them to another team and yet it is the opposite.

Now... this all assumes software developers and we know software developers are not exactly starving. If you are earning very little compared to your needs or when those needs grow suddenly people tend to really start paying way more attention to just monetary compensation.

woeirua3• 4 years ago

We're talking about two different classes of workers here. The article specifically discusses call center workers.

sahila• 4 years ago

This depends entirely on your raises. This year I left a unicorn startup to join a faang and got 100%+ increase in pay. I would’ve been happy to stay if the company could beat it, but they wouldn’t budge past 20%. In fact, I went down in level/titles so arguably, I don't care about the respect nearly as much as I do about the pay difference.

jokethrowaway2• 4 years ago

Nah, what you say is valid only for people doing menial tasks.

Sure, cheap developers implementing the same endpoint over and over for 20 years for a paycheck are like that, but a good chunk of them actually cares about solving a problem and get recognition in the form of life changing money.

throwaway675309• 4 years ago

I don't know that I necessarily agree with this, I find that a lot of developers particularly younger millennials and generation Z put very little emotional investment in their jobs and treat it as a means to a financial end and nothing more, and honestly I think this is a healthy approach.

So that regard they would prefer more money and couldn't care less care about arbitrary internal recognition, it's a job nothing more, unless you're actually working in a genuinely meaningful field like advancing medical science for example.

Every time I've ever switched jobs (particularly anything revolving around e-commerce) or other meaningless drivel it's been about the money pure and simple.

FredPret2• 4 years ago

100%. One counterexample (unfortunately the only one that comes to mind) is sales, where performance has an immediate positive cash & profit impact that is trivial to measure. Top salespeople can earn more than the CEO's of their companies.

In the backend of the org, this is harder to do, because the impact is hard to measure and comes to fruition later in the game.

One solution is to have small teams of engineers that own their companies - ie, millions of tiny startups. That way, brilliant contributions lead to large profits for the contributor.

But how engineers can be fairly compensated in large orgs, I'm not sure. This is a fundamentally hard problem. Removing the salary ranges might help.

Beldin• 4 years ago

millions of tiny startups.

Sounds a bit like what Google does internally for promotions. Except their execution is failing so badly it is starting to affect the company. And also that I have no faith in this concept any more.

kqr2• 4 years ago

One counterexample (unfortunately the only one that comes to mind) is sales, where performance has an immediate positive cash & profit impact that is trivial to measure.

Nope!

Two salespeople closing the same total value over a year can have vastly different impacts on the business.

Say Alice cares about how well the customers she brought in are doing. She follows up on their experience every six months. She talks to the people in the organisation who fulfills the customer desires. She makes sure there's a good customer--product fit, and her customers are just at that edge where they challenge the organisation to do better without demanding of them the impossible.

On the other hand, Bob doesn't care about how customers do. He just wants to close deals. He finds bad customer--product fits but convinces them anyway by promising rainbows and daisies. The customer is unhappy from day 1, because they never get what they were lead to expect. The organisation is stressed out trying to fulfill unreasonable demands.

Alice is a net positive contributor, Bob is at best neutral -- both close the same value, remember!

That sales performance measures are easy and instantaneous is one of the most damaging myths governing my current workplace. It's really bad.

phpisthebest2• 4 years ago

Over the years i've had debates with co-workers when someone changes roles with less responsibly, or goes from managing people to not but increases their salary on if that is a "promotion"

My Position has always been "More Money, with less responsibility, is the best promotion one could ever get"

gmane• 4 years ago

I think you're generally right (I just took a demotion in title with a promotion in pay), but with the edge cases to avoid:

1. Cul-du-sac promotions where once you're there you don't have a progression beyond 2. Promotions where you end up hating the work

chadlavi• 4 years ago

and you'll also have an easier time hiring new people when you need to!

mrbonner• 4 years ago

Well said. But my counter argument is: why does Netflix do a revert course and introduce titles back to their job lines? At the beginning, Netflix used to just have senior SDE title. Now, they are starting to introduce more SDE titles into the company. If focusing on retention has been working great for Netflix, what made them change their mind?

iancmceachern• 4 years ago

Give the people what they want, and they'll give you what you want.

BLKNSLVR• 4 years ago

Perverse incentives are borne from cookie-cutter, one-size-fits-all rules thought up in rush for a due-dated result requested by a manager who's in a rush for a due-dated result (continue as per stack of turtles).

Reward seniority and loyalty

Aware this isn't a whitepaper that deeply explores what's better and worse for a company's workforce retention, but "Reward seniority and loyalty" is dangerously simplistic.

From my limited experience with payroll systems, and having groups of employees doing the same role, all on different rates based on how long they've worked for us, is a maintenance nightmare due to the inability to automate things. Salary bands and levels etc. alleviate this, but there are necessarily fairly tight limits where a 10-year veteran's expectations are just unrealistic. There's a point where "everyone doing this role" should be paid more, rather than this individual should get a higher percentage than their peers if their total remuneration would breach some ad-hoc level of acceptability.

I think a simple description of a wickedly-complex strategy is "know your people". This requires managers that have the time and space to get to know their reports, all the way up the chain.

Just two days ago I was discussing an ex-colleague, who had a bad reputation with our previous management (I was actually explicitly told by management not to bring him into my project). He eventually moved to a new company, and is an absolute star worker there. If he was managed better at the previous place he could have been a star there as well.

Immediate thought-analogy: If Managers treated their reports as Customers; if Managers acted as Sales Reps for the company in their dealings with reports, then retention would be less of a problem (also need to know which "Customers" are worth the effort).

But it all depends on what you're optimising for, and every workplace is different. Know which roles are "soldier out, soldier in", and which require 6 months of knowledge absorption to become remotely productive.

A single rule is as efficient as it gets, but it'll rub a majority of the people the wrong way. A rule for every individual will keep everyone somewhat more happy, but it'll be murder on administrative maintenance. Find your balance point on that scale and re-evaluate based on changing macro-economic situations.

leetcrew• 4 years ago

Unfortunately, most companies have fallen into the trap where if someone has a title of X they can only make up to Y, regardless of how good they are at their job or how long they've done it.

I don't agree that this is a trap. sure, leveling systems aren't perfect. but they're based on a key insight: there is usually a limit to the impact an engineer can have for a given scope. if I own a single service/component in a larger ecosystem, there comes a point where it doesn't make sense to keep paying me more money to make it even better if my clients/dependencies aren't keeping up. the only way I can continue increasing my contribution to organizational goals is to broaden my scope and start influencing the design of other services/components I interact with. it's not by coincidence that is a major part of how leveling guidelines are written at most tech companies.

lambdasquirrel• 4 years ago

People can broaden the scope without leveling. The purpose of leveling is very frequently to give people hoops to jump through, especially at larger companies. Its purpose is another form of retention.

namelessoracle• 4 years ago

While its usually pay, sometimes other perks are part of it too. Higher rank = get away with more at most places. If the Staff needs to disappear for a couple of days due to personal reasons everybody wishes them the best. The Junior/Mid will get a lot of questions asked. Thats my professional experience from observation.

When you become low level manager this resets btw, Senior Managers and Directors will want to know where you are, nobody asks why the Director wasn't feeling it for 2 days though.

Other part of it is control. Higher rank means you get to decide which technology and how the problem gets solved and get to play empire building games. Which is fulfilling to some people. Some people want to feel like they are making the decisions, other people like to feel like they have influence on others for self worth. Other people enjoy high level strategic work over doing actual implementation of the work. You pretty much have to get promoted to do strategic style work in tech. My analogy is you enjoy playing a starcraft style RTS where you get joy out of sending the exact right amount of marines to beat that enemy in the most efficient manner, but hate having to do an FPS where you play that marine and have to fight that enemy yourself.

mbrochh• 4 years ago

This can only work if you also reduce people's pay if they start stumbling and doing a shitty job.

jdaw0• 4 years ago

Here is the MIT Technology Review report the article is referencing but doesn't bother to actually link to:

https://www.technologyreview.com/2022/09/15/1059470/customer...

gausswho• 4 years ago

Even that is a summary, and if you request the full report you're bounced to a third party Genesys that demands your contact information, while popping up an unsolicited chat bot window. I killed that chat, made some fake info and was sent to a page that was functionally broken... except for the chat bot which had another go at me.

MIT Technology Review should be ashamed of themselves.

hayst4ck• 4 years ago

The hazard of retention is creating dependency. Dependency means, not just high bus factor, but opening yourself (the business) up to being vulnerable to another person's superior negotiation position. Then CEOs/boardmembers would have to spread their wealth rather than hoarding it all for themselves. Without a way to force CEO/boardmembers to spread their wealth (unions), I think we can expect companies to do what is in their best interest, maintaining a monopoly on power by ensuring no dependencies.

maerF0x0• 4 years ago

This behavior is a self serving behavior that is in contradiction with maximizing shareholder value. Reliance upon a reliable person is can be very profitable for all involved.

Of course humans are apes in suits and will actually maximize their own personal interests regardless of what the laws or their job description says.

hot_gril2• 4 years ago

As a rank and file employee, I'd not want to work with others at my same level who've made the company depend on them disproportionately to their level. Those exist, and they tend to obstruct progress.

mytailorisrich2• 4 years ago

Margaret Thatcher (in)famously said that there was no such thing as society. By that she meant that, actually the only thing out there is individuals looking after their own self-interests.

Well, it is the same with companies.

In both case this leads to suboptimal results at 'system level' (a well-known problem in system optimisation).

kazen44• 4 years ago

Thatcherism has little basis in actual sociology in my opinion.

Societies do exist, and humans are not purely selfish rational beings either.

mytailorisrich2• 4 years ago

Humans are not rational but you can bet that they will act in their perceived self-interest more often than not. They will always do in the workplace, which is the point here.

unity10012• 4 years ago

Thatcherism has little basis in actual sociology in my opinion.

The entire basis of Thatcherism is dodging tax on riches made by selling the entire society.

chris_wot• 4 years ago

A Thatcherite view of the world and humanity is unsustainable over the long term. It causes a hideous, selfish and cruel society.

wwweston• 4 years ago

Thatcher's advancement an individual self-interest oriented worldview is certainly advantageous/correct for her to say politically.

But the name for the 'system level' of a collection of interacting individual humans would be ... society.

Her statement is also deeply incorrect that individuals are solely interest-driven -- they're also value driven (though I suspect like many effective politicians she damn well knew that regardless of what she said). Of course, with companies, her statement is significantly more apt.

turtlebits• 4 years ago

Agreed - new hires always get the current market rate, which always higher than what existing employees are paid.

Also on the flip side, if you've been in a role longer than say, 4 years, you should interview at other companies. You're probably getting underpaid. (Even if you've gotten a promotion). You don't have to jump ship, just see what's available.

waboremo• 4 years ago

Yes there are also additional studies on "boomerang workers" that fit this new(er) class of people. Ones who despite even liking their job and eventually coming back, seek employment elsewhere because they aren't getting what they should be or aren't fulfilling the role they see themselves fulfilling properly.

That's how intensely underrated retention is for a lot of companies, and how costly it can be when retention isn't seriously looked into.

fuzzzerd• 4 years ago

I'm one of those boomerang employees. It was the best thing I ever did. Left on good terms, learned a ton of new stuff at a few other companies, and ultimately came back a much improved employee, despite being a high performing worker to begin with.

Didn't realize there was a name/term for it, but it makes a lot of sense.

victor9000• 4 years ago

That's the problem though, there are zero incentives in place for managers or recruiters to retain talent. No one gets a bonus when employees stick around, so no one optimizes for it.

I recently interviewed with Stripe for a leadership position and was asked about some of my most impactful contributions with my previous employer. I described several anti patterns that I identified with the development process that would lead to burnout and turnover, then I described the changes I put in place to prevent this outcome. Things like sprint retrospectives, tracking technical debt, prioritizing automation, clearly defining tasks before starting development, validating progress with the various stakeholders, upskilling and managing the career development of engineers, and a host of other QoL improvements to smooth out the development process for everyone involved.

It was immediately obvious that this was a dud in the eyes of my interviewers. Eyes glazed over almost instantly once I started talking about preventing burnout. And I can read a room, so I could have easily switched topics until I found something that received a positive response, but I was so shocked at the response that I doubled down. Needless to say that I did not make it to the next round. But in my view that's a true negative for both of us, because I can't work at a place that doesn't value their employees enough to design a healthy workplace for them to operate in.

replyifuagree• 4 years ago

This goes x1000 for knowledge work. Great knowledge workers build this amazing model of what is going in in the product they work on in their head that walks out the door with them. We can't prevent people from progressing their career by going elsewhere, but we sure as hell can focus on not giving them a reason to leave.

unity10012• 4 years ago

Losing institutional knowledge is a b*tch. It costs more to get new people up to speed in terms of time and productivity lost, than to just retain people who already have the institutional knowledge.

bonestamp23• 4 years ago

Yes. We used to work in silos. Dave was responsible for x, Cathy for y. When Cathy left, we were screwed because nobody knew much about y.

So now that I'm the project manager, after Steve builds the new feature then I alternate assigning the bug fixes between two other people who did not build it. That way, at least two other people become familiar with that part of the application while Steve is still around to answer questions and provide guidance.

clnq4• 4 years ago

I work for a tech company that promotes internally quite well in recent years. But they also only want to hire senior, principal and lead level engineers to develop a mature workforce. Unfortunately, they fail to attract enough talent to replace attrition, which is high due to increasingly paltry employee numbers. And all in all, while the promotion-to-hiring ratio is good, there is too little hiring to keep employees from working 70-100 hour weeks. I am leaving, too, even if I was promised a promotion within months. I suppose the moral of the story is that balance is good, but hiring also must happen to replace attrition.

mr_toad2• 4 years ago

increasingly poultry employee numbers

I think you mean paltry. Although I have seen employees who flap about, squawk a lot and shit all over everything, so perhaps poultry is apt.

clnq4• 4 years ago

Oops! Thanks for the correction and a good laugh.

neilv3• 4 years ago

70 hrs/wk is for a rare work emergency.

100 hrs/wk will send someone to the Emergency Room.

clnq4• 4 years ago

Yes, it does generally lead to ER (particularly for stress symptoms being confused for something serious) now and then.

brnt• 4 years ago

It seems to me employers don't see employees as a (good!) target for investment anymore, the idea that you can build your workforce, but rather are obsessed with transactional labour: I have X currency, I want Y FTE of credential Z for it.

Transactional attitudes begets itself.

helf2• 4 years ago

"No Shit".

dbish4• 4 years ago

The confusing thing happening over the last 1-2 years (and in previous cycles) is that many current employees are also down significantly on their stock grants in public big tech. Employers seem to see this as ok, and that’s the risk they take when taking stock, yet they are willing to go and pay a new hire with an updated price that means they make far more than you. It incentivizes leaving and wouldn’t cost the employer anything to just re-up your pay to the original goal since they’ll have to pay it anyway to a new person and lose the ramp up time

duped2• 4 years ago

In terms of number of shares or dollar amounts? Because tech has taken a massive slam in the last year in the markets.

Employees should see that like a lot of investors do, which is a discount on blue chips. It changes the calculus a bit if you don't plan on executing on vest or holding after you do for tax reasons, which makes a lot of sense. But if you're considering a role at a big tech right now and plan to last a few years it's not necessarily a hit.

dbish4• 4 years ago

Dollar amount. It’s a hit comparatively because anyone joining today would make 100s of thousands more for some roles and someone who took the hit over the last year can just go reset their stock elsewhere. Holding for tax reasons makes no sense for public companies. Vested shares count as standard income.

dalyons• 4 years ago

I’ve been wondering about this myself. If you work in publicco tech, all their grants are priced in dollar equiv. So as you say, bouncing jobs right now should give you a ~50% equity boost, if you’re on a 4 year today at your current co. Surely though this is obvious & companies are doing top ups? Or, since they’re all entering hiring freezes / layoffs maybe they don’t can and want the attrition

duxup• 4 years ago

Customer service/ even technical support seems to be a very little respected area in most companies.

Trying to retain people they don’t respect already seems unlikely.

leducw• 4 years ago

It makes me quite sad to see how undervalued customer service and support is in a lot of the IT/tech world in general.

endisneigh2• 4 years ago

I agree with the title and point of article but it’s not really possible. No company can consistently identify those who are good, pay them well, fend against competitors despite their rising expenses (remember paying people more?) and do all of these things while people leave anyway for reasons outside of their control (moving, bored etc), which results in you having to hire more anyway, stresses the before mentioned process (inevitably you will notice people who are paid less can perform as good or better than more paid employees).

If I were in a position to implement things I’d simply get rid of raises all together and simple give people only stock and/or profit share. If they’re doing well the raise will come to them automatically. Of course this has perverse incentives in itself too.

dbish4• 4 years ago

They can’t do it perfectly but they can try. My pov having been at a few big techs is they aren’t even trying.

mberning• 4 years ago

This is a microcosm of poor performance management. You need an effective way to get rid of bad hires, clear out dead wood, and retain your top contributors.

localhost2• 4 years ago

When a senior person walks out the door, they also take their network with them. Whoever the company replaces that person with, they are not going to have the same (or if external any) network. A lot of interesting and important work at large companies gets discovered by ICs (Individual Contributors) with solid networks talking to other ICs in other teams. That work won't happen without ICs who know a lot of people throughout the company.

dilyevsky4• 4 years ago

That’s WAI - lots of managers would rather call all the shots.

localhost2• 4 years ago

I don't know what WAI means, but note that I said discovered above. There's a separate conversation to get that work funded and that's where the managers come into the picture. Managers don't discover the work - they decide whether to fund the work.

animitronix• 4 years ago

We needed a study to tell us this?? Anyone who's tried to hire should understand this implicitly.

xiaodai• 4 years ago

duh

whatever1• 4 years ago

Why? Information spreading across companies with talent poaching sounds beneficial for the society

helf2• 4 years ago

Ok, to actually add to this instead of just a one liner…

My current employer is a prime example of this stupid mentality causing issues.

They’ve gotten better about it but since I started little over two years ago they’ve had probably 60% turn over of full time team leader and higher staffers. Our poor VP spent the last 3 years arguing with our Japanese President and others about the need for retention policies as we have such a high staff turn over that it was/is costing us money in overtime etc. we were in a bit of a death spiral last year that we’ve luckily pulled out of but we lost so many people due to COVID and similar that we were working people mandatory 12 hour shifts with mandatory OT and kept having /more people/ quit. For obvious reasons. And then new hires wouldn’t last through their first paycheck.

They had to up base pays and bite the bullet and hire a ton of people all at once to try and get shift times lower.

It’s one of those things that makes me glad I’m IT. I’m a critical employee and they bend over backwards to accommodate me when I need it. I try to not abuse that though :)

We are a tier 1 parts supplier for Honda and we operate damn near 24/7/365

deathanatos• 4 years ago

I really don't get these decisions. I presume they'd need to pay time and a half there; you might as well just hire more people and bump base pay 12.5%. Everyone is happier due to not being stressed out, and it's the same cost.

zac23or• 4 years ago

Prioritizing hiring over retention is the least bad thing a company does. Companies do terrible things, like:

- Dissolve good teams.

- Losing great employees for nothing

- Prohibition of documenting procedures (Yes, I've worked on one of these)

- Encouraging bullying behavior.

- 50% of time lost in meetings.

The explanation of all this is that... 99% of the companies where I worked the objective was not profit, they existed only for someone to demonstrate control over other people. Meetings is showing the power of "request a meeting". An employee asks for a raise? We don't give in to employees, etc.

If you understand this, all the weird stuff makes sense.

lamontcg• 4 years ago

They should also stop building open office plans, as numerous studies have shown.

I'd like to see a study which analyzed corporate management as a cult and looked at the irrational non-profit-motive based behaviors that you have to 'signal' in order to work up the ladder. Where decisions were more about peer approval than actually making the company better.

TheRealPomax• 4 years ago

Study? Just one? Come back when you have hundreds. Oh wait, you have hundreds? Well, come back when it costs less to retain than to turn over - Industry, probably

civilized• 4 years ago

One weird trick for retention: pay your valued employees the market rate for their talent level... even if they have made the mistake of staying at your company for more than two years.

eftychis2• 4 years ago

I think an article trending earlier yesterday is a big point to strengthen this.

Forgetting the Asbestos – how we lose knowledge and technologies [https://news.ycombinator.com/item?id=33320294]

Especially in startups losing knowledge is a huge problem -- I claim -- and a fundamental management issue as productivity models and other resource management models (theories) do not account for memory.

Who had someone left or themselves left only for X system to start dying in production? Or for a lot of info to have been lost because it existed on slack or on the conversation participants heads?

Startups can simply not afford to lose some/most people. Best case that knowledge is at the hands of competition.

jrm4• 4 years ago

They needed a study over this?

Duh. Most people learn the job on the job.

cardy31• 4 years ago

I’m waiting for recruitment departments for big companies to learn about moneyball.

Currently the approach is “well we lost someone with 10 years of experience _at our company_ I guess we’ll replace them with some with 10 years of experience elsewhere. Problem solved!”

But really, to bring the moneyball analogy, the guy who left was hitting .380, while the guy you brought in will maybe be a .300 hitter a few years from now once he ramps up closer to the level of the .380 hitter.

So what recruitment should be doing is figuring out how many individual people they actually need to bring in to replace their .380 hitter. That calculation should also inform how much they’re will to incentivize the .380 hitter to stay.

Thank you for bearing with my drawn-out analogy!

dilyevsky4• 4 years ago

Bill James’ stuff works in baseball because there is a very detailed kpi record for every player. Not so much for most devs who’s not super involved in open source

pts_• 4 years ago

This will make employees uncompetitive and shift more power to employers.

Animats• 4 years ago

Amazon hit this in a big way in their warehouse operations.[1] Their turnover is so high that they ran out of suckers willing to work at Amazon.

[1]https://www.vox.com/recode/23170900/leaked-amazon-memo-wareh...

hot_gril2• 4 years ago

The article talks about employees in general. A lot of us are SWEs or adjacent. Software has a very short development cycle compared to other fields.

danwee• 4 years ago

I don't think it's realistic (but I wish it were). An example from a Western European country of what retention should look like from my point of view:

Senior software engineer (10 years of exp.) joins company X. Year salary: 80K EUR. This salary is not exclusive of "tier-1 top companies"(but let's not start a discussion about how low or high this number is, please)

- After 1 year. Good performance, everyone is happy. Raise of 15%. New salary = 92K EUR

- After 2 years. Great performance, everyone is happy. Raise of 15%. New salary = 105800 EUR... now this salary is starting to look unrealistic

- After 3 years. Great performance, he's the de-facto tech lead of the team. Raise of 15%. New salary = 121670 EUR. Now this is salary is rare for for non-tier 1 companies

At this point the senior engineer considers leaving because in year 4, it's impossible he'll get a 15% raise again (that would make around 140K EUR, and company X is not Google/FB/Amazon/Microsoft). So, he switches companies. Company hires a new senior software engineer for 90K EUR. The cycle starts again.

AstralStorm2• 4 years ago

Except at some point you run out of skilled software devs, and suddenly some poor soul is running a 3 man project single handed.

INTPenis• 4 years ago

Yes they should. They should also prioritize ops over sales, and yet they don't.

After 11 years in Enterprise IT it's been my impression that we are very short sighted. We give everything to our sales and they sell everything between heaven and earth without a thought on how we can deliver it. And once the contract is signed, no effort is made to deliver or manage, just move on to the next big contract signing.

So just as they prioritize hiring and ignore retention, they also prioritize contract signing and ignore lifecycle management. It's the same short sighted thinking in another area.

chiefalchemist• 4 years ago

Whom you retain (or might want to retain) is a function of whom you hire. Having just finished a job search it's amazing how bad many outfits are at hiring, most it seems can't read CVs. And I'm the one who needs to have attention to details?

I have a phrase that sums up the process:

How you hire is whom you hire.

Put another way, if recruiting / hiring is off target, that's only going to magnify going forward.

a_c• 4 years ago

There is a saying that in any organization, there are people doing the job, and there are people keeping the organization (admin). In the long run, the organization is left with the admin. [0]

In terms of compensation and hiring, commonly the package is defined by HR while the performance is reviewed by your team manager. There are even places where the criteria of evaluation is defined by HR.

That's also why I'm very optimistic about start-ups. Company can never dominate a market forever. And the end of the day, all companies implode

[0] https://news.ycombinator.com/item?id=33298158

viridian• 4 years ago

This article is incredibly barebones, there's almost zero actual content here, just some handwaving about studies and surveys that aren't even linked to.

Employers should prioritize retention over hiring, study suggests

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