Ask HN: Salary Increases Over Time

https://news.ycombinator.com/item?id=4946748

by thingummywut • 14 years ago

102 89 14 years ago

news.ycombinator.com

I'm curious about how pay for particular positions at particular companies trend over time. It seems a little tricky to find the data since glassdoor doesn't seem to offer additional breakdown by year. Other sites don't seem to have sufficient datapoints. What has your experience been with annual raises? And do you find salary-reporting sites to be accurate? Or possibly filled with outdated data?

annon• 14 years ago

Varies wildly from company to company. Some will keep an eye on the market, and make sure they are paying you market rate. If you're great, they'll make sure you're paid more than market so you don't have any reason to even talk.

However, many companies will only open their checkbooks when you're hired, or when you have an offer they need to counter. These are the companies that suck to work for because everyone is talking and interviewing to get their next raise. How can you trust your employees?

jsmeaton• 14 years ago

Yep, happened exactly this way at my last job. I was ridiculously underpaid, and I was attempting to negotiate about a month before pay reviews and was told to wait. My intentions were clear though.

The mandate came down - 3% for everyone more or less. I argued, and was politely shot down. Three weeks later I had a new job offer at a competitor I really wanted to work for. My current employer asked me how much it'd take to stay - "no dollar amount would keep me". I'm actually interested now how much they were willing to offer as a counter though.

New company has been really great with annual rises in the vicinity of about $10k.

antidoh• 14 years ago

Paying an employee enough to keep him from leaving, before he declares that he's leaving, could be seen as a form of early optimization.

We don't like early optimization, for good reasons. "They" probably don't like it either, for similar reasons. No reason to fix the employee machine if it isn't making noise.

huhtenberg• 14 years ago

This will largely depend on the company - its size, its domain, and it will also depend on one's position within the company.

For example, the same senior C/C++/Java dev can have recurrent annual 10% raises in a larger enterprise or government outlet. He may also get irregular 20-30% performance based raises that sometimes double as retainers. While more likely to happen in a small companies, I saw it happen in larger (500+) companies too. Alternatively, he may get a year-end or a project-end bonus. finally, he can also get no increase, which is the kind of bonus favoured by the game development sweatshops.

No wonder there's no unified stats on this. How can there be.

thingummywut• 14 years ago

Someone in an HR role would have familiarity with this.

Also, glassdoor would be able to provide stats on this for decently large companies if they implemented this. I'm just a little hesitant to trust their numbers as is since some tech companies have obviously been around for a while...

Swannie2• 14 years ago

No only the position. Having worked in two multi-nationals, they generally have a band or grade system. For the given band there's a min, max and midpoint. But, this is broken down by country, and in the USA often broken down by Bay Area, NYC, rest of country.

And like the other comments, at these places annual bonuses, project bonuses, and spot bonuses are usually budgeted for. If you don't hear about them, and you're in a big co. ask your manager, and if they don't know then you've got the wrong manager!

chrisbennet• 14 years ago

I've never worked at a company that had raises that kept up with the market. I've been a software developer since 1985.

Swannie2• 14 years ago

Agreed. If you can under pay by an amount that is less than the perceived pain of looking elsewhere, that's sane if you have a short term view.

Other option you'll see in big corps is to use old technologies only. This gives them an excuse to underpay, and makes it harder for their devs to leave to a fair market salary role!

babarock• 14 years ago

I work in the IT department of a major European investment bank. I can assure you that they're willing to pay high salaries to hire experts in said old technologies.

Mainframes are still in use, COBOL devs are in very high demand and finding experts in technologies as young as CORBA is becoming more and more difficult.

Never understimate the cash power of big financial institutions with old legacy systems.

buro9• 14 years ago

Experience to date has been that without promotion, pay-rises within a company have always trailed inflation.

So either you get promoted, and at that point you've negotiated a substantial raise (to offset the real decline in earnings and to protect your actual earnings in the years after the payrise)...

Or...

You go get a job elsewhere.

It's a sad fact that the majority of real pay rises that I've ever seen, and that others I've spoken to have seen, have all come as a result of changing employer.

This is a UK perspective btw.

cfontes• 14 years ago

In Brazil it's the same thing.

tcgv• 14 years ago

I'm from Brazil too and this year the company I work for gave a pay raise of 8.0% for me and my fellow programmers, a little bit above the expected inflation for 2012 of 5.6%

jackbauer• 14 years ago

South African too

instakill• 14 years ago

Can confirm.

jordo37• 14 years ago

This feels true for the US companies I have worked at as well.

cmdkeen• 14 years ago

Doesn't have to be the case. My current employer consistently offers 10% pay rises. But then that's in a non-public company that is financially secure.

Less than inflation pay rises are something you should only accept as an alternative to them laying people off.

Ntrails• 14 years ago

The phrasing bandied about where I currently work is:

"You are doing the same job as last year, so your pay should be the same adjusted for inflation. If you want more money, you need to be taking on more responsibility, growing your role."

fmavituna• 14 years ago

Out of curiosity, what happens when you tell them you doing it better this year (assuming you're telling that to them)? If you not doing your job better than last year, is there any other good argument for getting a significant raise?

beaumartinez• 14 years ago

You are doing the same job as last year, except with a whole nother year's worth of experience.

brudgers2• 14 years ago

In so doing you saved the company the cost of finding, hiring and bringing your replacement up to speed. It's a bullshit argument because the speaker doesn't care if you believe them.

powatom2• 14 years ago

My policy is that every year I aim for a substantial pay rise. There is no set percentage that I aim for, I basically just come up with a number that I want, and start negotiating.

The day that the company claims there is no more room in the budget, and I can't see any realistic chance of progression, is the day I start looking for a new job.

Generally speaking, the easiest way to secure a decent pay-rise is to change companies. However, most companies have some kind of appraisal system in place - don't be afraid to ask for a pay-rise. Most companies expect it, and are prepared to negotiate somewhat.

In the past year, I increased my salary by 50%. Know what you're worth, work out the average for your position and skillset, and demand it.

Working for a lower salary than the industry standard is not only bad for you, it's bad for the industry as a whole.

brixon2• 14 years ago

"Working for a lower salary than the industry standard is not only bad for you, it's bad for the industry as a whole."

There is a reason not everyone gets paid the same. Two software engineers with 7 years experience in the same technologies but one has taken on leadership roles in big projects and the other has only done small solo projects. The first person should be above the industry standard, but the second person should be below the industry standard.

powatom2• 14 years ago

Of course, that's where the negotiation comes in to play from both the employer and the employee.

aioprisan3• 14 years ago

From what I've seen with software engineering positions, you can expect roughly a 10-25% year over year salary increase. I also can't stress enough how much negotiating a higher starting salary can have an impact over your long term prospects. It's very important to know what you're worth on the market so that you can make sure that you're compensated fairly for the amount of experience AND potential that you have. Recruiting engineers usually costs about 10-20k, so companies more likely than not will give you at least a 10% increase to keep you from leaving, and more based on how much you were able to deliver and how well you can negotiate.

codegeek3• 14 years ago

"you can expect roughly a 10-25% year over year salary increase"

Which country or states specifically ?

aioprisan3• 14 years ago

US northeast and San Francisco areas

late2part• 14 years ago

Average of your 10-25% is 17.5%. 17.5% raise per year over 20 years is a salary of 25X in 20 years.

I know someone who started at $10k in 1975 and was at $80k in 1996.

Do you expect an entry level sw engineer at $70k to be making as salary of $1.8M in 2032?

I suspect Math doesn't mean what you think it means.

aioprisan3• 14 years ago

That's as ridiculous a statement as expecting someone to make $5+ million after 30 years. I didn't say it will go up forever. This growth won't keep going for more that 5-10 years, after which it will go down to the 5% range. I have software engineer friends who started 8 years ago at 60k and now make around 180-200k as principal engineers, roughly a 15% increase YoY, after which salary stays stagnant unless if you get an MBA and move into management roles.

mbesto• 14 years ago

The best advice I can give is - try to estimate how much you are worth to a company. It can be fairly complicated, but understanding what you bring to the table can not only give you peace of mind but can also increase your salary.

It's your career. Own it. Let your employer know you own it. Any good employer will support you.

codegeek3• 14 years ago

"It's your career. Own it"

This. I am amazed to see how many people don't understand the importance or relevance of this statement.

snooblywoobly• 14 years ago

It's my experience that getting a pay rise in the same job is rather difficult in small/medium sized companies. The only way I have so far accomplished it is to move. Opinions tend to be quite viscous, it takes a lot of energy applied over a long period of time to change a view point. First impressions count. Just like your parents will tend to always see you as a child, your boss will tend to see you as the person you were when you joined. The dynamics of this situation are so stable over time that it can push common sense to breaking point. I was recently underpaid by £10,000 according to the market rate, yet could not negotiate even an inflation matching rise in pay. Like many things this is a battle between competing forces, your desire for enough money to make your life comfortable, the companies drive for more profit, a person's desire to avoid having to think, a person's drive for power and respect, etc. If you find yourself playing a game you cannot win, change the game and move on.

kingofspain• 14 years ago

Very similar for me. I was doing a job I could easily have got £40k for, for £13.5k (I incredibly stupidly applied labelling myself as 'junior' because I only had 4 years experience back then). I never got a single pay rise, not even for inflation. Eventually I wised up and moved on. Up until I went freelance it was the only way I ever got an increase.

binarymax2• 14 years ago

I'm in a fun (and unique) situation. I work in and am paid from the UK, but am on a US Salary. I get a performance based raise on my US salary, between something like 2.5% and 5%. The fun part is that at the beginning of the year, they also set the exchange rate! It lasts for a whole year, so it can have good or bad consequences. The gods favored me last year, but who knows what the beancounters will come up this year. I could get a 5% raise but a -7% hit on the exchange. Or I could get a 3% raise and a +6.5% boost on the exchange. Oh the gloriousness of being an expat!

edent2• 14 years ago

I'm curious - where do you pay tax? Are there not funny rules about overseas earnings?

Or are you "based" in the Cayman Isles ;-p

binarymax2• 14 years ago

I pay UK, and if I go over the limit I pay US on extras.

edent2• 14 years ago

One of the best things you can do is ask your colleagues and your peers about their salary. That's the best way you can find out whether your pay is in line with "the industry".

Some companies have specific rules against disclosing your salary - try not to work for those people :-)

It may also be worth asking for an equal pay audit[0] - are you being discriminated against because of your sex, race, etc?

Finally, don't just look at salary. Look at the total package - pension provision, holidays, bonus schemes, company car, discount schemes etc.

[0] http://www.equalityhumanrights.com/advice-and-guidance//tool...

sethg• 14 years ago

In the US, your employer can forbid you from revealing your pay to outsiders, but the National Labor Relations Act guarantees that employees have the right to discuss their pay with one another. (I believe this falls under the heading “you have the right to discuss with your co-workers whether or not your job sucks so much that you should try to organize a union.”)

jimwalsh2• 14 years ago

When I was a Sys Admin in USA, your salary never increased unless you left the company and took a job elsewhere. Those were your raises, and it's why SA turnover is so high and how even companies just treat them as a dime a dozen now a days.

brixon2• 14 years ago

That is more the aftermath of the dot com days when there was a severe shortage of SA people. Big companies would train people and get them certified and those people would turn around a leave for double the salary. So companies quit training and did not expect anyone to stay over a year.

jimwalsh2• 14 years ago

They continue to not be training, or doing a bare minimum of it. My current company thinks sending me to a 3-5k class a year is apparently more valuable than increasing my salary 3-5k a year. It's not.

michaelochurch4• 14 years ago

You asked for numbers. I probably shouldn't do this under my real name but... who gives a fuck.

US, 29 years old, 6.5 years in the industry. Salary growth has been about 12-14% per year, and I've made a lot of career mistakes, hence fairly average results. I'd probably have done 18-20% if I had (a) not made those mistakes, while (b) switching employers strategically. Most of the growth, as others have noted, occurs when you switch.

Obviously you can't continue getting 20% improvements every year for 40 years, but if you work hard, you should be able to get 10-15% per year for a while, and then you get to a point where it's easier and more fruitful to push for more time and autonomy than salary increases.

What are called "performance" bonuses actually have a lot to do with macroeconomic conditions. One year, at one job, I got a 60% bonus. I was good, but nowhere near the strongest on the team. Equity allotments have a lot to do with what the board will allow. One of the reasons Facebook has been able to get so many good engineers is that the board doesn't set caps on engineer stock allotments, which is the case for many startups. Consequently, Facebook was free to offer 6- and 7-figure options packages (at valuation; not packages that eventually became worth that much) to engineers and get some really credible people, while many startups can't.

When you get into the game has an effect on what you'll make and what your trajectory will be. If I'd entered the market in 2002, I'd have entered in a time when $50k was a good salary for an entry-level software engineer. (No, I'm not kidding.) In 2006, when I did enter, it was in the $80k range. At peak in early 2012, it was about $105k.

Getting an increase usually involves changing companies unless you're in the top 10% for political success and can have a real career there and keep getting promotions. Why is it this way? Well, there are two things to keep in mind. The first is that salaries are low because the company is taking a risk. A good software engineer is worth $500k easily, but the salary is going to be lower because there's a risk that any specific person is not going to be any good. So what happens after someone has a chance to prove him- or herself? Well, that's the second problem. Now you've worked for cheap for a year, and if you ask for a raise, you're asking your boss to pay more for the same work. If you ask for a promotion or better work, then you're a demanding subordinate and that hurts you as well.

Most companies have a "real player" track that involves a promotion (and a ~20% raise, with more potential for bonuses) every 2 years, and an "everyone else" track where a promotion might happen every 6-8. If you end up on the latter track, you need to change jobs and build your own real-player track. I think the optimal leaving point (if you're on the loser track) is around 2 years of employment, because at 2 years you are likely to get a real promotion in your next job (you have to create the impression, though, that you're about to get promoted where you are, even if it's not true) whereas bolting after 6 months will just get you a lateral move and too much of that is damaging.

Salary reporting sites tend to be accurate regarding base salaries, but data on performance-based bonuses and equity grants seem to be dodgy. There's also a hell of a lot of false signaling that goes on there, especially in finance where employers ask about bonus history and everyone claims to have had top bonus.

codegeek3• 14 years ago

Don't mean to undermine your point but where in US is 12-14% raise average ? From what I know, most full time employers go for the usual inflation crap of 3-4%. Unless you change jobs or are in contracting, 12-14% seems high to me in the US.

wheaties• 14 years ago

It's quite spot on for the past few years wherein we saw the stratospheric growth of software salaries. Remember, 2002 was right after the dot com bust and 2012 is at the peak of "angel" investing. Supply/demand can really change things.

bradfa• 14 years ago

If you're just out of school, I think that kind of average is possible in certain parts of the country.

For note, I graduated in 2005, and have averaged about 8% increase per year since then. First 6 years with a Fortune 500 then changed employers, but the average applies even before my employer change.

At the Fortune 500, yearly inflation raises were averaging 2 to 3% but when you're fresh from school you get promoted on a 1 or 2 year cadence for the first few years and each promotion comes with a 5% raise. Promotions don't have to mean your job changes, just your paid grade goes up.

michaelochurch4• 14 years ago

12-14% is better than average. I was using it as a euphemism for "mediocre", which it is for a person who lives in a high-COL city (one of the main reasons rents are so high is that career progress is faster out here) and in lucrative industries. When people not 1/10 as talented or capable as I am are, at the same age, making MD in investment banks, being acquired for millions, or making 500+ in private equity, I think it's fair to say that a 12-14% trajectory is pretty damn uninspiring. Money isn't an issue, but I'd be calling way more shots at my age if I hadn't taken so many bad risks (read: shitty startups).

I'm 0 for 2 in picking startups. The first just didn't have legs (our CEO had no idea what people actually wanted and would pay for) but my mistake was to spend almost 3 years trying to make it work. The second had unethical management who (a) tried to use my engineering credibility to justify dodgy personnel moves, attempting to force me to sign affidavits claiming my colleagues were incompetent (they weren't, but they had "too much" equity) and (b) after I resigned, did all sorts of disgusting stuff to try to fuck with my career.

You're right that if you don't change employer or get a promotion, you're unlikely to get a substantial raise. I assume that anyone who isn't promoted after 2 years is, unless they have essentially full autonomy to direct their work, going to start looking elsewhere. You'd be insane not to. Your future is your real boss, because the future is what actually pays us.

PeterisP2• 14 years ago

12-14% sustainable raises for the same position aren't likely - but after x years of experience you should be holding a different, more complicated, and much higher paid position.

EliRivers• 14 years ago

As many others have said, the best way to get a pay rise is to get a new job. This becomes especially true if you work for BigCorp (or at least, big enough to have internal policies on pay rises).

I used to work with an embedded engineer who got a pay rise of 40% by quitting and getting another (very similar) job. Her manager knew that he needed to pay her a lot more but global company policy tied his hands and limited what pay rises he could hand out. I think he watched this happen over and over and over again.

JeffJenkins• 14 years ago

I've been doing a broad job search for the last month, and my general impression is that the numbers are too low on those sites (in NYC, with 7-8 years of experience). It basically meant that I was in for a pleasant surprise!

I don't actually know what normal raises look like since I was in a startup and the raises tended to be huge followed by nothing for a while.

geori• 14 years ago

In order to credibly get a raise and get paid what you're worth, you need a BATNA - http://en.wikipedia.org/wiki/Best_alternative_to_a_negotiate...

Otherwise your employer has no reason to give you a raise. If they don't think you're a risk of taking another job why would they voluntarily give you a large raise and cut into their margins?

kenjagi• 14 years ago

First post - yeah!

Federal contractor in Washington DC.

Average increase in salary changing company: 17% (Low 2.5% increase, High 42% increase)

Average increase in salary through raise: 3.2% (Low 2% increase, High 4% increase)

I've generally found that salary reporting sites are inaccurate as the salaries listed are double what the reality is.

djb_hackernews2• 14 years ago

I'll give you some real world numbers:

* 2006 entered the job market as a new CS grad in Boston area. 39k salary.

* 2007 was given a 7% raise

* 2008 I asked for and got a raise to 50k (roughly 19% increase)

* 2009 I quit and travelled

* 2010 Moved to DC and found a job at 65k (roughly 30% increase)

* 2011 I asked for and got a raise to 85k (roughly 30% increase)

* 2012-first half I switched jobs in DC to 100k (roughly 17% increase)

* 2012-second half I left that job to travel and start my own thing

* 2013 Hopefully I won't be talking about salaries.

Two things:

* I definitely dug a hole for myself a few times, but I can say every job was a great place to work and I was surrounded by people I learned from every day.

* I never negotiated. Anytime I asked for a raise I was honest with them and I told them up front I wasn't negotiating. I gave them a number and told them that's what it'd take to make me happy. Both times they came back with a counter offer and both times I repeated I wasn't negotiating and thanked them for taking the time to see what they could do. In both cases I ended up getting what I asked for.

michaelochurch4• 14 years ago

I never negotiated. Anytime I asked for a raise I was honest with them and I told them up front I wasn't negotiating.

Who says negotiation is dishonest?

djb_hackernews2• 14 years ago

Not what I was implying at all.

I was honest in that I told them I was happy with the job and my work but not happy with my salary. I just tried to be as direct as possible.

moocow01• 14 years ago

The thing that Ive found is that once you get into the upper-tier range (I define this as 125-150k and on average seems to include people with 5 to 10 years experience) it gets harder than before.

My first 5 years on average I had great raises - 15-20% on average (all mostly from job changes). Now it seems a little bit harder - I most likely can go out and convince someone to pay me 5 or 10k more but I feel my head starting to skim that glass ceiling. There are things I could do to change - I could go find a job doing financial transactions or blindly go work for the highest bidder with no care work conditions and other things, etc.

The point being is that developer salaries in the first part of the career can go up relatively fast but in my opinion top out relatively quickly (not such a bad thing necessarily). I think from there you need to go out on your own if you want to really make more.

mathattack• 14 years ago

IMHO the big breaks (40+%) happen at major transition points: Promotion, post-grad-degree & new job. Everything should be aimed at those big 3 for long term compensation increases.

It's very hard to generalize on specifics. If you're freelancing, contracting or consulting, it's largely a function of how much your billing rate increases. If you're in software it's more a function of how the firm is doing, and how much credit you get for it. (If it's a weak link to how you get the credit, it's hard to point to)

One other note - there tend to be caps at levels within firms, so you can catch up if you're underpaid, but it's hard to break above without one of the big discontinuous jumps I mentioned above.

ok - one last note... You get paid best if you succeed in "line" jobs where you are contributing directly to money coming in, rather than "staff" jobs. This means that good Sales people always do well, and they'll get better comped than someone purchasing advertising from outside vendors. Likewise, a developer on a core product with get paid better than someone with the same degree and experience working in internal IT.

Salary reporting sites frequently get their data from H1-B applications, so the #s are reliable, but you have to be careful about timing. Someone working in banking technology in 2007 will get paid much more than the same job today.

llamabroth2• 14 years ago

I don't really like switching jobs often, and I'm very happy with my current position in the Boston area but here are my hard numbers: Generalist Programmer out of College, fell into C# as first position.

Age 25: Paid Internship at 45k/year

4 Months Later: Brought on at 55k/year

6 Months Later: Asked for raise, bumped up to 60k/year

6 Months Later: New position, (Owner of 5 employee company was dying of cancer), bumped up to 70k/year + 3% Bonus/extra week vacation

1 Year Later: Merit based raise, bumped to 73k/year (asked for promotion and mentioned possible departure)

3 Months Later: Promotion, bumped to 78k/year (4% bonus on new salary)

This isn't the norm, I started at a much lower starting rate than I should have because even though I was qualified, I didn't have any personal projects to show off my skills and just needed to get my foot in the door.

In the end my point is that Salary increases should not (and generally aren't) based on a % of your current salary, but on what you've shown your true worth to be. Once you hit that true worth, it's adjusted for inflation and commitment.

aravan• 14 years ago

In India, salary hike when jumping the job is about 30% to 50% during first 5 years of experience.

Within the company, the high will be about 8% to 20%. There are always exceptions.

Ask HN: Salary Increases Over Time

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