Why Don't Tech Companies Pay Their Engineers to Stay?

Original Article ↗ Hacker News Discussion ↗

Geographic Pay Disparities (esp. UK/EU/Canada)

  • Strong disagreement over UK compensation: some claim 150–200k GBP TC is attainable at non‑FAANG firms; others say realistic mid‑senior offers are ~90–120k with far worse upside than US roles.
  • Several argue UK tech underpays relative to cost of living, with poor equity culture and risk‑averse VC; advice is often “go to US/FAANG/finance or consult.”
  • Contractors in the UK used to do better, but IR35 and tax changes reduced advantages.
  • Similar complaints from Canada: non‑FAANG dev/SDET roles can be paid far below six figures.

Reasons Engineers Leave: Money vs Management

  • Many say they start looking due to bad management, poor environment, or stagnant work; higher pay is a side‑effect of switching.
  • Others are explicit: repeated job changes for large raises (30–100%+) are the primary path to market pay and financial independence.
  • Some accept lower pay for academia, non‑profits, or good WFH conditions, prioritizing autonomy and low stress.

Retention, Counteroffers, and Pay Inertia

  • Common pattern: long‑tenured engineers paid below market while new hires in same level earn more; seen at big tech and elsewhere.
  • Internal raises are constrained by bands, budgets, and “fairness” across peers; large adjustments are politically hard.
  • Counteroffers are rare or small; once someone resigns they’ve often mentally moved on. Some refuse counteroffers as proof of prior underpayment.
  • RSUs and staggered stock grants act as “golden handcuffs,” especially in US big tech; people often leave at or after the 4‑year cliff.

Institutional Knowledge vs “Fungible” Engineers

  • Several engineers argue that deep system knowledge and business context are irreplaceable or take many years to rebuild; mass layoffs or attrition often lead to rewrites or degraded velocity.
  • Others note companies behave as if most devs are interchangeable and prefer hiring “potential 10x” newcomers over paying proven staff more.

Comp Structures, Transparency, and Impact Metrics

  • Some companies experiment with public salary formulas; people like the fairness for cash, but equity remains opaque and large part of TC.
  • Measuring “impact” is seen as inherently fuzzy, especially for senior engineers whose value is indirect (design, risk reduction, mentoring). Metrics tied to pay can be gamed.

Culture, Perks, and Signals

  • Non‑pay signals (free snacks, soda, small perks) matter: removal is often read as “culture is changing” or “cuts are coming,” and prompts people to leave.
  • Perceived unfairness—pay gaps, broken promises after mergers, bonuses cut while acquisitions continue—drives attrition even when salaries are nominally okay.

Management Mindset and Cost‑Center Framing

  • Many commenters say software in non‑product companies is treated as a cost center; managers and HR optimize averages and budgets, not retention of specific people.
  • Contrast with law firms: partners (practitioners) know exactly who brings in revenue and will aggressively counteroffer; tech leadership often lacks this practitioner focus.

Market Cycles and Strategy

  • The original post is from 2021, when “the market is hot”; multiple commenters stress that 2024 is much colder, making big pay jumps via hopping less reliable.
  • Still, the consensus is that switching every few years remains the main way to escape salary stagnation; staying long term usually means falling behind market rates.