I think what the article failed to address when encouraging people to change jobs frequently for higher pay is that job hoping only works when you are currently underpaid and you have the necessary skills and experience to justify that pay jump. Most people do the same thing everyday in their job without investing in themselves, hoping to get higher pay by changing job is really hoping the hirer is a greater fool or just day dreaming. Although it may work at the beginning, as salary gets higher, company expects value for their bucks and not pay for someone who only knows how to talk their way through. Being able to sell yourself is well and good but smoking your way into a position that's beyond your capabilities is pure fraud.
I migrated to Australia so I'm immersed in a different corporate environment. I'm surprised that this practice is so commonplace back home - as you point out, there are numerous disadvantages. It seems the only advantage is that it "directly" answers the question of, how much would it take to make a person leave their current stable job? No one leaves their current job for a less than 20% increment, and if 20% is tempting enough, why offer more?
I've hired about 10 people to work in my team / adjacent teams in the not so recent past and I have to say that not once was a person's prior salary ever a factor in the offer. There's one additional point I'd like to add to the list of disadvantages - if you hire everyone at a 20% increment to their last job, their absolute salaries aren't going to be similar, and this inequality has a corrosive and toxic effect on company morale and culture - I can't imagine something more demoralizing than two people doing the same job yet one being paid significantly less for no real reason!
Generally we approach things the same way a marketing professional would position their product in the marketplace. If the focus is on salary - fixating on the 20% increment number, or offering a higher salary just to attract the talent you want - then that's just like a product being marketed based on price, that's a battle you don't want to engage in, because even if you win, you lose. You feel like you won by hiring an employee for cheap, or snatching a top performer from another company, but then any competitor can steal your best employee by simply throwing 20% more at them.
We mainly sell the non-monetary aspects of the job - professional development of soft and hard skills, satisfaction / prestige of working on market leading products, enjoyable company culture, work life balance, work from home flexibility, well maintained and comfortable corporate offices. Salary isn't even a discussion point - everyone in a grade level gets similar pay. Perform well and you get fast tracked on a development plan to bring you to a higher grade with more responsibility and pay. If your employees are with you because of these aspects, they actually become really "sticky" because it's extremely hard to for them to compare these aspects with another company - the other company can promise them the same things, but they have no idea whether they're just making it up.
'We mainly sell the non-monetary aspects of the job - professional development of soft and hard skills, satisfaction / prestige of working on market leading products, enjoyable company culture, work life balance, work from home flexibility, well maintained and comfortable corporate offices. Salary isn't even a discussion point '
So... you are the type of company that sells 'culture' rather than salary to employees. You know what, your employees can't pay their bills with culture. They need money (yes, like...real world money' to pay their bills.
I think it really depends on the industry and economic ecosystem you're operating in.
As alluded to in the next post about globalization, to stay ahead of the curve companies need to outsource low value-add jobs so they can focus on doing high value-add jobs. The most junior / lowest paid team member we hire (analyst) earns over A$100k pa and has 32 days annual leave, company car for personal use, and is allowed to fully work from home if they like or come to the office. This is the average package for these sorts of analyst positions that our competitors are also offering. The pay obviously goes higher for senior analysts, then managers and senior managers.
So when you're looking to hire from this pool of candidates, the actual salary amount is not the main consideration as long as it falls within the average expectation, people are really looking for the non-monetary aspects to attract them to the role. Certainly I have never seen salary being a pivotal point for someone looking to be hired, or someone looking to leave.
Are there specific examples of this behavior you have experienced that you would like to share?
I feel an important element of why companies do this is being missed. Granted my experience has primarily been from banking but in all the banks am employed at, we also look at the salary market data. This is not a random survey but actual data points compiled and paid for by the bank which looks external market data based on the competitors as well as internal equity. This is then used as the key factor in determining how much comp can be paid for the role. However, often in conversation with the candidates, it is easier for them to appreciate offer by explaining what the upside is (hence the 20% pay increase conversation)
Once again, not claiming all organisations do this but it’s commonly practiced by large MNCs.
Thanks! But I feel like you’ve said nothing new and have just summarised things (there’s value in that too)
A hot take would be why and how labour markets (e.g. US, UK, China) have certain practices and how it changes (e.g. government and union intervention or lack thereof)
For example, I think a minister (Josephine Teo?) said a year or two ago that companies should not ask for last drawn or that people don’t need to share it. But companies now still practice that. So how do we meaningfully transfer power from companies to employees (collective action by people to not apply for companies that have “bad hiring practices”? Labour laws/union? Or is the take that we “live in a capitalistic society” and should accept that we are at the mercy of global capital and should always be)
I agree with the central argument of the article that we should take responsibility and ensure we have power so we are in a good negotiating position. But I feel like this topic is more complex than “get good, get recognised”
Well, while we do have some occasional hot takes, we don't exclusively strive do to hot takes. Also, what might be common knowledge for some, might not be for others.
As for your point about how different markets have different practices, well, making it illegal to ask for last drawn salary would definitely help. So is being legally required to put out clear budgets for roles on hiring platforms.
That being said, I think we also often forget that companies are run by people too! If more people can understand why this practice is ultimately detrimental to companies and talent retention, the less likely this practice will continue in the future.
(That's what we're trying to do with this article.)
Thanks for your thoughtful response, and the opportunity to reply.
Thanks for replying Ruiming! I really appreciate it
I definitely agree with your first point! Many apologies that my first comment came across as not appreciating TWS. I hope you and the team know that TWS has changed many lives and that you’re already doing a huge service by bringing these topics into discourse and providing a platform for people to discuss and learn.
I see! Thank you for clarifying the main point of the article. I eagerly await the next article that expands on HR practices (e.g. why some companies don’t put a salary band, what are some practices that appear exploitative but have a different side/more human side to it)
One individual can try but will be unable to change the whole prevailing system. It must come from the top and change in culture there requires a miracle but it's not impossible.
Alex, the debate that you are suggesting is a waste of time, i.e., trying to discuss why Singapore or the far east Asian countries are not implementing the system that is prevailing in the West, imho.
What has been proposed here is know the rules and how to play better than the rest to get a desired outcome, i.e., being paid for what you are worth for.
Now, it's up to you to have the guts to follow the solutions proposed, which will give you the reward that you deserve.
I think what the article failed to address when encouraging people to change jobs frequently for higher pay is that job hoping only works when you are currently underpaid and you have the necessary skills and experience to justify that pay jump. Most people do the same thing everyday in their job without investing in themselves, hoping to get higher pay by changing job is really hoping the hirer is a greater fool or just day dreaming. Although it may work at the beginning, as salary gets higher, company expects value for their bucks and not pay for someone who only knows how to talk their way through. Being able to sell yourself is well and good but smoking your way into a position that's beyond your capabilities is pure fraud.
I migrated to Australia so I'm immersed in a different corporate environment. I'm surprised that this practice is so commonplace back home - as you point out, there are numerous disadvantages. It seems the only advantage is that it "directly" answers the question of, how much would it take to make a person leave their current stable job? No one leaves their current job for a less than 20% increment, and if 20% is tempting enough, why offer more?
I've hired about 10 people to work in my team / adjacent teams in the not so recent past and I have to say that not once was a person's prior salary ever a factor in the offer. There's one additional point I'd like to add to the list of disadvantages - if you hire everyone at a 20% increment to their last job, their absolute salaries aren't going to be similar, and this inequality has a corrosive and toxic effect on company morale and culture - I can't imagine something more demoralizing than two people doing the same job yet one being paid significantly less for no real reason!
Generally we approach things the same way a marketing professional would position their product in the marketplace. If the focus is on salary - fixating on the 20% increment number, or offering a higher salary just to attract the talent you want - then that's just like a product being marketed based on price, that's a battle you don't want to engage in, because even if you win, you lose. You feel like you won by hiring an employee for cheap, or snatching a top performer from another company, but then any competitor can steal your best employee by simply throwing 20% more at them.
We mainly sell the non-monetary aspects of the job - professional development of soft and hard skills, satisfaction / prestige of working on market leading products, enjoyable company culture, work life balance, work from home flexibility, well maintained and comfortable corporate offices. Salary isn't even a discussion point - everyone in a grade level gets similar pay. Perform well and you get fast tracked on a development plan to bring you to a higher grade with more responsibility and pay. If your employees are with you because of these aspects, they actually become really "sticky" because it's extremely hard to for them to compare these aspects with another company - the other company can promise them the same things, but they have no idea whether they're just making it up.
Many good points, Ice Fox! I love that you think that way, and we hope more business owners do see things this way. ◡̈
'We mainly sell the non-monetary aspects of the job - professional development of soft and hard skills, satisfaction / prestige of working on market leading products, enjoyable company culture, work life balance, work from home flexibility, well maintained and comfortable corporate offices. Salary isn't even a discussion point '
So... you are the type of company that sells 'culture' rather than salary to employees. You know what, your employees can't pay their bills with culture. They need money (yes, like...real world money' to pay their bills.
I think it really depends on the industry and economic ecosystem you're operating in.
As alluded to in the next post about globalization, to stay ahead of the curve companies need to outsource low value-add jobs so they can focus on doing high value-add jobs. The most junior / lowest paid team member we hire (analyst) earns over A$100k pa and has 32 days annual leave, company car for personal use, and is allowed to fully work from home if they like or come to the office. This is the average package for these sorts of analyst positions that our competitors are also offering. The pay obviously goes higher for senior analysts, then managers and senior managers.
So when you're looking to hire from this pool of candidates, the actual salary amount is not the main consideration as long as it falls within the average expectation, people are really looking for the non-monetary aspects to attract them to the role. Certainly I have never seen salary being a pivotal point for someone looking to be hired, or someone looking to leave.
Are there specific examples of this behavior you have experienced that you would like to share?
I feel an important element of why companies do this is being missed. Granted my experience has primarily been from banking but in all the banks am employed at, we also look at the salary market data. This is not a random survey but actual data points compiled and paid for by the bank which looks external market data based on the competitors as well as internal equity. This is then used as the key factor in determining how much comp can be paid for the role. However, often in conversation with the candidates, it is easier for them to appreciate offer by explaining what the upside is (hence the 20% pay increase conversation)
Once again, not claiming all organisations do this but it’s commonly practiced by large MNCs.
Thanks Anon! Would what you describe fall under employers managing their risk so they don't overpay their staff?
Thanks! But I feel like you’ve said nothing new and have just summarised things (there’s value in that too)
A hot take would be why and how labour markets (e.g. US, UK, China) have certain practices and how it changes (e.g. government and union intervention or lack thereof)
For example, I think a minister (Josephine Teo?) said a year or two ago that companies should not ask for last drawn or that people don’t need to share it. But companies now still practice that. So how do we meaningfully transfer power from companies to employees (collective action by people to not apply for companies that have “bad hiring practices”? Labour laws/union? Or is the take that we “live in a capitalistic society” and should accept that we are at the mercy of global capital and should always be)
I agree with the central argument of the article that we should take responsibility and ensure we have power so we are in a good negotiating position. But I feel like this topic is more complex than “get good, get recognised”
Thanks for your comment, Alex!
Well, while we do have some occasional hot takes, we don't exclusively strive do to hot takes. Also, what might be common knowledge for some, might not be for others.
As for your point about how different markets have different practices, well, making it illegal to ask for last drawn salary would definitely help. So is being legally required to put out clear budgets for roles on hiring platforms.
That being said, I think we also often forget that companies are run by people too! If more people can understand why this practice is ultimately detrimental to companies and talent retention, the less likely this practice will continue in the future.
(That's what we're trying to do with this article.)
Thanks for your thoughtful response, and the opportunity to reply.
Ruiming
Thanks for replying Ruiming! I really appreciate it
I definitely agree with your first point! Many apologies that my first comment came across as not appreciating TWS. I hope you and the team know that TWS has changed many lives and that you’re already doing a huge service by bringing these topics into discourse and providing a platform for people to discuss and learn.
I see! Thank you for clarifying the main point of the article. I eagerly await the next article that expands on HR practices (e.g. why some companies don’t put a salary band, what are some practices that appear exploitative but have a different side/more human side to it)
One individual can try but will be unable to change the whole prevailing system. It must come from the top and change in culture there requires a miracle but it's not impossible.
Alex, the debate that you are suggesting is a waste of time, i.e., trying to discuss why Singapore or the far east Asian countries are not implementing the system that is prevailing in the West, imho.
What has been proposed here is know the rules and how to play better than the rest to get a desired outcome, i.e., being paid for what you are worth for.
Now, it's up to you to have the guts to follow the solutions proposed, which will give you the reward that you deserve.