a job? Probably not today.
Times are good for employment of engineers, and thanks in part to our
incredible foresight in creating the Year 2K bug, anyone who can program is
being desperately sought. Newspapers are full of ads for people in the information
technology area, and engineering graduates this past spring had multiple job
offers from which to choose.
course, as a profession we've been there, done that. It isn't that long ago when the stories about out-of-work
engineers opening hot dog stands got a lot of publicity.
The bad times will undoubtedly come again, but for now let's enjoy the
demand for our talents. What I worry about, though, is the job churn quandary.
the demand for engineers escalates, people are churning -- milling about between
companies, as it were. I have mixed
emotions about this churn, both from the standpoint of the individual and that
of the corporation. Wherever I go
these days in the information technology business I hear executives moaning
about their attrition rate. Then
they pause, smile, and say that, nevertheless, they're doing great at
recruiting. They don't seem to
realize that these things are not unrelated.
My attrition is your recruiting success, and vice versa.
What we have here is an arms race. How
you view it depends on whether you're a warring country or an arms dealer.
a corporation the churn of people increases the cost of business, both in the
real cost of hiring new employees and in the hidden costs of training and
integrating these employees. Of
course, it also leads to escalation of salary expense.
Managers see their key employees courted by outside offers.
The details of these offers have a way of spreading quickly throughout
the company. Other people shake
their heads in amazement and are secretly jealous.
"Why not me?" they think.
They look with new suspicion on their own management, and wonder why
their own company doesn't get with the times and start rewarding its own
employees in a like manner.
there is an issue here that is seldom discussed. Throughout my career, wherever I have been or wherever I have
heard about, there is always a salary compression between new employees and
existing employees. Years of
experience within a company seem devalued with respect to the high starting
levels of new employees. I always
hear people say that this should be fixed, but it will never happen. The idea that every existing employee should get a big raise
because salaries for new hires have increased is a non-starter.
The market doesn't work that way.
are two separate market levels for people -- the level that it takes to retain
an employee and the level that it takes to attract someone from another company.
I think of it like the work function in physics -- there is a certain
quantum of salary required to dislodge a person in the ground state.
Corporations take advantage of the fact that a body at rest tends to
remain at rest. Other things being
approximately equal, most of would prefer not to have to uproot our families and
go through the stress of changing jobs.
scheme on how to retain their key employees.
What they would like is something akin to frequent flyer miles to build
loyalty for employees with longevity in the company. They come up with so-called golden handcuffs in the form of
vesting bonuses, options, or stock, with the idea that this will lock in their
critical people. Simultaneously,
these same managers are dickering with key people from outside companies,
arranging how to buy out the packages that have been given to them by these
other companies. All that has been
accomplished is to escalate the arms race to a new level of expense.
only do the golden handcuffs not work as intended, they create unrest and churn
in themselves. Nothing stays secret
within a corporation, and the existence of any special deals becomes quickly
known. This creates two classes of
people -- disgruntled employees who have been left out, and gruntled employees
who have had their market worth affirmed. The
latter class is newly attuned to the possibilities of leveraging their value on
loyal employee is sometimes forced to consider playing a tricky game of
blackmail. The basic idea is
simple: threaten to leave, and get your salary raised without actually having to
leave. However, there is a fine
edge here. First, the threat must
be real. "I was thinking about
leaving" doesn't do it. Best
to have an explicit offer in hand. But
there is a risk. "Gee, that's
a good offer, Joe," says your boss. "I'd
really recommend that you take it." Oops!
Your bluff has been called, and something irreparable may have happened
between you and your manager.
study exit interviews to understand why people are leaving.
These data always say that people are not leaving for higher salaries.
People never leave for higher salary; they leave for what they say is the
challenge of the new job. "Challenge"
is a good word. It sounds
high-minded and principled. It is
often used in industry, and it is always a euphemism for something else.
What it means in this case is, "Hey, I went for the bucks."
However, there seems to be a secret pact where everyone involved pretends
that this is not the case -- it's just too demeaning to all concerned.
job churn seems bad for the corporation, at least past a certain point.
Some level of job churn is, of course, necessary for corporate vitality
-- say about 10% annual attrition. On
the other hand, churn seems good for the individual.
Opportunities abound, and the general level of compensation increases.
The question for the individual, though, is this: Why do we have to leave
our jobs, homes, and friends to prosper? Why
not, in a perfect world, stay where we are, yet see compensation increased to
market levels? How could this be
could imagine a world in which salaries were keyed to some market index, a sort
of Dow-Jones of engineering salaries, where compensation for everyone would
float at market level. Or perhaps
in the new world of telecommuting, we would be traded like commodities.
One morning you would come in and be told that you've been sold to, e.g.,
Microsoft, but you needn't move. Just
print up some new business cards, and stay where you are.
I'm only dreaming about this churn, and affirm that nothing in this column
resembles the behavior of any real company, living or dead.