On 2: Ok all, why do diagonal promotions occur? I understand the issues around promoting when there is no room in the org chart, but I don't understand the issues with pay. Employees will shop the resume around, that is expected these days. And as the article points out, there are massive costs to a firm when those good employees up and leave. So why not just give a raise? Maybe you don't have the budget, I get that, but you certainly aren't going to have the budget when those key employees up and leave either. You will be forced to pay the market rates for good engineers upon hire and then also suffer the downtime and on-boarding time. What am I missing here?
HR is a fucked up profession with lots of weird thought processes.
Raises are subjective judgements, which are scary things. Word gets out that raises were given and everyone is looking for something. Also, HR often doesn't trust the managers. Is the manager rewarding good work? Or building an empire?
Incentives are always aligned with short term goals. If you give someone a raise, you're fucking up some KPI the HR guys cares about. If an employee quits and the company spends more, its either the former employee or the manager fault.
Well put. Not to mention the disconnect between market rate ("the average of salaries for similar positions in Market X") and individual rate ("the amount you can get in Market X given your skills and experience").
Fundamentally, you are worth whatever someone will pay you. If you can negotiate an offer for 20% over market rate, congrats, that's your personal market value. Conversely, if you're currently paid 20% under market value and can't find another job, the same applies.
I've noticed that many companies fail to recognize this, and hire two types of employees 1. Good ones who take the job for some reason, realize there are better options and leave shortly and 2. Bad ones that stay
Rinse and repeat, and the cycle gets shorter, and the problems get bigger
I call it the burn and churn model. Game studios and IT MSP's both engage in it habitually. The firm I work for has a 200% yearly rate of churn for IT managers. They expect 24/7/365 on call and pay below market. Really its just a place where people go until they find a new job.
I was hoping that the article would get into this kind of business model. There are also a lot of low-end jobs where a good employee is simply wasted because their business model relies on cheap workers who quit after a few months. There is a sub-economy where these people travel on a carousel of new jobs, never having to deal with boredom setting in. So there's always plenty more of them, and you never have to match their 401(k).
I wonder how AI will affect those business models? If you can on-board and find employees so quickly that you can sustain the burn-n-churn, then I think an AI would do it better and faster and not be fired either.
I do see that a lot. I see it on the other side too, however. Employees that jump ship without doing the right research, and finding out the raise wasn't really worth it, for various reasons.
