Is your company considering inflation in this year's comp review cycle?

I'm a new manager, having been an SWE IC for 15 yrs. I just did comp planning for the first time. I was given such a small budget for my team, it's not even funny! The system is designed so that most of the staffing budget goes to new hires, not to reward existing employees. Even promotions are fairly small, compared to what you could get by leaving. It's a game of chicken between you and your company: how long are you willing to tolerate small annual raises while more money goes to new hires before you decide to become a new hire at a new company, yourself?

Now that I see it from the manager perspective, I pledge to stay sharp and become a job hopper ... as soon as I find the time to start interviewing. :^)

Not to be dismissive, but why would a company specifically care about some arbitrary number called "inflation" vs overall pressure from the labor market, which presumably must have some encoding of that, considering they seem to clearly paying a person enough not to justify leaving?

P.S. It is especially amusing considering lots of "only if I were to leetcode I could increase by X" coexist with many posts that diss on leetcode and whine that it filtered them out and it is not "relevant to the work they are doing". Perhaps the system is working then?

Really dissatisfied with pay increase this year in February. CEO talked up how everyone was going to be really happy with big bumps to make us more competitive (they have been struggling with high turnover after a couple of acquisitions). I get "exceeds expectations" multiple years in a row and did everything my manager suggested last year to try to get a bigger bump this year. I got 2% base salary increase and 5% bonus target increase. Chances of seeing the full bonus targets this year? Not high.

I'll be looking for a new job this year for sure.

I think the equity/stock performance in the current tech markets is a bigger problem than inflation. Many who received stock grants in the last couple years have had their value cut in half (with some exceptions like GOOG).

Companies were giving equity grants based on inflated, sloshy market values. Why stay at a company where your $1MM (hypothetical) stock grant is now worth $400k when you can go to a new company and get a new $1MM grant at the current cheap market value?

Staff level. Got 3.8%. Seriously considering leaving. There has been super high turnover of other senior leaders and friends.

Could literally double my total comp if I spent some time doing leetcode. Probably 20% raise without leetcode.

Have some silver (bronze?) handcuffs or would probably be gone already.

I’ll chime in as a business owner. We peg our raises to the SSA cost of living adjustments. This means our bump for employees at the end of 2021 was just under 6%. If current trends continue, likely a similar number at the end of this year.

There are a few reasons I encourage other employers to peg annual raises to the same number:

- It’s usually a very fair number; never egregious for increasing costs. - Someone else gets to do the math, and you have a very easy number to tell prospects in interviews for what to expect. - It helps keep social security solvent.

We also use this number as a guideline for increasing our billable rate during contract negotiations. It has most of the same benefits.

> New hires are getting 50% more equity than the total value of my unvested equity. The official line is that inflation is not a factor in assessing annual comp adjustments.

Leave. They either only want you at a discount or you will get a counter offer to consider.

Yes. I (director) normally get (total salary * 3%) to hand out for annual cost of living adjustments, this year it is (total salary * 7%). This is at a ~2000 person US software company you've probably never heard of with so-so pay.

Throwaway for obvious reasons.

Exceeded - 0.0%

Yep

I knew that going in. I helped to secure 10 million in business in 2021. They disbanded our team. To “grow” it. I applied for the “new” role.

They offered less and said it would include 2022 annual raise.

Told by my managers manager they would make me right at the end of 2022 through a bonus. Asked for it in writing, never heard back.

This decrease in total comp plus inflation has seen my real world earned drop by 20% for 2022.

Circa 2015, Micron have a cost of living adjustment separate from merit increases. That always struck me as a very honest way of handling things. I'm assuming they have continued the practice, which would have been helpful considering how rapidly the real estate market shot up since then.

Last year got raise 3%, this year just got raise 5%, but my TC currently ($190k base + $30k bonus) is still lower than people I know. 2 years ago when I joined, my peers got $250k base already and I was getting $180k base.

Exceeded expectations on both 2 years.

Raise for inflation doesn't even take into adjustments knowledge and experience gained.

Looking at TeamBlind astronomical TCs, I feel I'm not valued enough. Especially not when my peers are making $70k more than me.

The company: we sell terminal.

I am interviewing hard these days. Leetcoding again. It sucks to interview again, because I like my teammates, my manager. And instead of working with my best effort for my employer, now I have to juggle interviews and Leetcode/system design/behavioral preparation.

And I will not stop interviewing until I get a better job, even if it takes me 365 days or more.

I think you've answered your own question: your discomfort in moving jobs is not worth to you the bump in salary you'd get.

It's already been well established by many even in non inflationary times that dev salary is maximized by switching job every 2-5 years or so, subspecialty dependent.

> The official line is that inflation is not a factor in assessing annual comp adjustments.

Then what is?

Engineer comp has exploded the last few years, well past inflation. So if they're not matching inflation, and they're not matching the market (which would be even higher) then it sounds like they just pay you whatever they feel like and hope you stick around.

In Norway we have employers' organisations[0] and unions[1] that takes care of the overall wage adjustment negotiations, and it usually ends up higher or equal to inflation.

Personally, I'm running a tiny IT-consultant company together with six close friends. Because the market is so volatile for us, everyone is paid based on the company's result, with a definite minimum of $120,000/year (2021. This is then adjusted for inflation every year. Everything else is bonus, except a lot goes into running expenses (of course) and a "war chest" for worse times.

[0] https://en.wikipedia.org/wiki/Category:Employers%27_organisa...

[1] https://en.wikipedia.org/wiki/Category:Norwegian_Confederati...

Don't count on it. First of all, "exceeds expectations" really means "meets expectations". It's pass/fail, and you passed. Programmers are interchangeable cogs, if you stand out it doesn't matter because your excess potential will go to waste. In fact, it can be red flag to management because you're trying too hard, you could start feeling too important or better than the rest of your team, and could leave as a result. (That said, many of us can't help but stand out). Secondly, I think it's well-established that developers will leave after 1.5 years or whatever the average is, and to keep someone you really need to throw a lot of money at them. Smart companies (like MANGA) structure their entire culture and process around this. The best people will move on after a few years. The truly great will get pulled aside and get extra sweeteners added. But that's like 1%.

Elite private high school in SFBay (not tech, but all of our families are tech/VC). Everyone is getting raises of max(8%, $6700), working out to an average per-employee raise of 8.6%. Inflation is the main stated reason.

(FWIW this means that my salary, teaching undergrad-level math classes to high schoolers, is going from $74K to $81K.)

Hijacking this with a related question: I’m an independent contractor, and have not yet renegotiated my prices. I just hate those kinds of conversations, but at some point, it is irresponsible to procrastinate. I’d be interested in hearing from other contractors: how have you approached this?

I was also thinking about the same. I work in Germany, non FAANG, so the salaries are lower. I started one year ago.

With the very high inflation numbers, I can't stop thinking that I learned a lot of things, I'm more effective, yet, I get paid less and less. Due to churn and team growth, I also count as one of the people who have been here "long enough" to have context of different things.

My salary today, adjusted for inflation, is significantly lower than when I started.

The company is okay, I work from home most of the time, I go to the office maybe one a month? The main reason I plan to stay until the end of the year is that I got a 50 day holiday (that I'm not sure I could get anywhere else, most places in Germany offer in the range of 25-30). We also have a 10% time for self improvement (learn anything you want).

Lots of people ask about inflation and salary, and they want a raise. The company is delaying discussions about compensations, but I assume we won't get even inflation rate increase.

This forces me to re-evaluate whether I can afford to stay any longer, as other companies offer a better salary.

My current plan is to use some part of the holidays, and the company's self improvement time this year to upskill and leave at the end of the year if I can't get my salary back to market rate.

Not sure if it helps, but here are my stats as a FAANG senior IC. I received an "exceeds" perf rating, a 6% salary increase and one salary worth of RSUs (vests over 4 years). Others I've asked got a 3% raise (with a worse rating).

My C-Suite (SMB) thinks they’re the smartest guys in the room. They’re giving us 3% and telling us “it’s a bad idea to peg to inflation because we just had a long stretch of low inflation and we wouldn’t have been able to give you a raise.” I’m gonna go on cruise control for a few months and take as much advantage of PTO as I can then GTFO.

> Past a certain level of seniority it's a big ordeal to change jobs, rebuild your network within a new company, rebuild reputation and social capital, etc.

Doubt this is relevant, seems like a red herring. What do you want? Just get paid more and call it a day, right? What level of collaboration do you really want? Just join another company, and if there are leadership expectations that cannot be met, then just get the normal level of performance review so that when you do become effective you can get the higher evaluation later, compared only to your moderate performance earlier. No need to overachieve.

> "inflation is not a factor in assessing annual comp adjustments"

Jesus, that's a tone-deaf official line. Are they also not updating their prices? What are company's annual statements and financial figures looking like?

> New hires are getting 50% more equity than the total value of my unvested equity

Request an increase in equity to the equivalent that a new hire is getting by default. If not, you may have to decrease your rate of productivity (or working hours) in line with the difference between the raise percentage and the inflation percentage.

Yes, our company considered inflation every year (not just the years where the media talked about it). Ultimately, it was the role of those accountable for the budget to make the claim. It all started with the budget cycle and budget increases in a division would be scrutinized. Actual or projected inflation, along with actual or projected growth and other things could all be argued and as budget rolled up to the executive committees, we would generate consensus bands for what the next year looked like. The budget cycle preceded the merit increase cycle by a full quarter, but the budget cycle is what generated the guidance we needed.

The money to pay employee comes from budgets not from comp review. If your company isn't considering inflation they either don't have a proper budget process to gather the info or the accountable individual isn't doing their job to consider it.

It is also possible your division was not given the money to give raises or your director blew the money on growing the team wide in head count rather than tall with raises. At the level the budgets are made, they dont care if your division has 10 well paid people or 100 poorly paid people - your division is given $X to complete Y work packages, the executives don't give a shit how the director achieves it as long as it gets done.

I’m only 7 years into my career and I’m technical roles but not a dev. I’ve never received a raise without a title bump. Are yearly or same-role raises common in general?

Borderline of being a staff-level machine learning engineer at a large technology company, and despite getting an exceptional review (and completing a major product delivery), I will also be getting a sub-inflation comp adjustment.

Already started interviewing, early indications and offers suggest a 40-60% pay jump is within reach, possibly more with equity. I just don't understand why companies do this to themselves.

Not this year. Expectations were inflation was transitory. You don't budget your wage increases (which would've happened in Q4 last year) based on transitory economic conditions.

This round I expect the usual 3% base plus a small discretionary bonus pool and have been setting that expectation with my staff accordingly. Depending on how this year pans out I expect the 2023 raise pool will factor in persistent inflation.

Inflation is just one factor in your comp, and not the most meaningful. Some companies are thinking about inflation for employee compensation and some aren’t, their revenues are also affected different ways, but this is not really your concern. The main question for you is whether you are underpaid overall and could get more elsewhere in absolute terms. If so then you have leverage, if not you can still bluff but it’s a dangerous game that depends primarily on management’s perception of your value (so don’t overindex on your internal monologue).

The other piece is equity, and the detail you’ve given here is insufficient. Total new hire grants are irrelevant, the question is how much are you vesting annually and where is the stock trending compared to other companies you could work for.

Of course there are other factors like how you much you enjoy the environment and work, but the important thing is to consider the holistic situation and not get hung up on a narrative about inflation which is at best an excuse papering over broader feelings you are experiencing.

Remember. American companies chose this path of violence and turned all their employees into mercenaries. It is your duty to jump ship.

Definitely, salary compression issues cause big problems and the worst part is that they cause the worst retention issues with the most tenured, most valuable employees who have knowledge of your company or codebase that can’t be replaced. Making sure that they’re not taken advantage of is what encourages a lot of people to job hop. That’s worse for employers, but it’s also arguably worse for employees who actually like their jobs, when compared to a situation where their compensation would keep up with the market. If you like your job, switching companies every 1-2 years to keep up with market introduces risk and many people would be happier if their comp just remained competitive. (Shameless plug I work at a company that has a product for creating compensation bands which is a good buffer to salary compression. link if this would be helpful: https://www.aeqium.com/)

Last year's was delayed by half the year, and was 3%. This year is 3%.It is becoming harder and harder to justify staying.

At the very least, you should interview to get a BATNA in hand with which you can try to negotiate a more significant raise.

My company did a 5% across the board raise late last year to make-up for inflation, since before then raises were ~2%, roughly keeping up with inflation from previous years(in Canada). This raise was on-top of the additional raise we will be getting this year in March, so it does seem like my company currently cares about ensuring we at least keep up with inflation. The expectation from talking with some coworkers is that they will continue this trend and at least give us a raise that's keeping up with inflation, although I have no proof of this. I do think you're getting screwed over here, getting a sub-inflation raise when you're exceeding expectations sounds awful. Maybe compensation works differently when you're higher up (maybe because you have far more equity/bonuses), but it couldn't hurt entertaining other offers to see what's out there.

What company are you at?

Amazon is increasing pay for many technical jobs, although specifics haven’t been communicated. They’re selling it as a large bump for everyone, although I already understand it’s mainly to retain talent or at least match inflation. We’ve underpaid our talent in the past compared to competitor companies.

Got 9% bump in base, and RSU top ups - wasn't expecting any RSU, given our stock performance (yes, even with the market turmoil, it's up a lot since I joined).

Biggest effective raise I have gotten without leaving for another company, and I considered myself obscenely compensated to start with. Pretty content.

Unless you have a key position in a competitive FAANG company, the answer is always the same. If you want a real raise, change jobs. Historically, US companies have set this precedent and it hasn’t changed for anyone but people working in either FAANG or certain fintech or finance companies.

This micro-behavior is what accelerates inflation. Will be interesting what the next few years bring.

If you're happy with your role and your life around it, why not just not care about the money?

What does "total value of my unvested equity" mean? If you are 3 years vested in a 4 year grant, then it sorta makes sense that new employees' 4 year grants would be worth more than 1 year of your grant.

With the 5.5% increase, is your compensation competitive with similar roles at other companies? Are you making enough salary to live a comfortable, satisfying lifestyle? Is the equity you have increasing in value over time better than, say, a mutual fund or ETF? Are you concerned you're not being paid your worth, or are you experiencing FOMO and anxiety because it feels like the economy is failing?

What about bonus? Your manager should be able to get you a bonus aside from a raise. The latters's supposed to be based on market rate, the former is a catch-all which can be performance, inflation, whatever. It'd probably only be another 3-5% though.

There's usually only two choices once you get top seniority in your position: move to a different role with a higher salary cap, or find another employer. Personally, if I was happy in my role, I wouldn't leave just for money. It's hard to find an actually enjoyable place to work. You might be really lucky and just have GIG syndrome.

I was getting constant praise, and was ranked #1 in my group. This of course did not translate to raises, for which I was getting in the low %2 range. Even when business was doing well before the pandemic, raises were meager. Promotions were always "3 years" away. I eventually had to quit and move to another job to get paid market rate. It's strange that companies think that they can pay new-hires market rate and give up on the employees that made their business.

Airbnb, no

Not to single them out or anything. Previous companies have never taken into account inflation for perf review.

The only salary bumps I've gotten that are worth mentioning are from changing companies and negotiating a better offer.

Similar for me. I also work in a non FAANG but big, well-known company. This year's average salary increase was set to 2.7%, despite having a "record year" and despite last year only getting 1.2% "because of Corona".

I decided to leave and I am already in contact with some headhunters that were already nagging me on Linkedin etc. Good thing it's so easy to find a new job these days. Companies should try harder to hold their trained employees.

In the long run (maybe after my next job) I might turn to freelancing.

If tech employers don’t consider inflation when considering compensation increases, they’re encouraging their employees to start looking elsewhere. Employees will then realize if they’re not being paid market value. Either this is myopic on the part of employers or they want a reduction in staff or churn in staff.

After too many years working in corporate white collar factories, I finally realized how much I was getting screwed. Job hopping worked for me. But the best thing I ever did was to move into the consulting world. Almost doubled my salary!

Are you me? Exactly same.. no, perfectly exact thing (to the same 5.5% and every detail there) happening to me.

As much as I'd like to help people here, having come from a country where for a long-time inflation was so expected that it was baked into everything, I can say, we don't want to assume that much inflation into salary increases. That's a spiral that can quickly go out of control.

I don't think I've ever worked for a company in Germany that had the inflation as a part of any compensation review, actually getting more at all every year was kinda rare. As this is only like 5 companies in 20 years I wouldn't want to claim authority though :P

I live in a country with crónica inflation (argentina) and the fact is the norm is if tour employer doesnt give a raise ay least that cover the inflation the market forces Will intercede and You are going to start interviewing in others companies.

Do you like your job, your boss and your team? That's worth something. Are you still growing in your position? What's the name of that book? "Be So Good They Can't Ignore You."

bold of you to assume we have a comp review cycle.

i haven’t gotten a raise since 2019.

The only way to get the best salary for your current skill set is to change jobs every 3 years. There is no working around this unless you want to become manager and get away from coding as your primary job.

Yup - more than beat inflation, too. They gave me equity after performance review. I said it'd be nice to get more salary because of inflation. Got +14%.

The economy appears to be in trouble. Your company could be afraid of that and trying to reduce costs. If this is industry wide that may become a trend.

i had a baby just as the pandemic hit and my wfh productivity went down the drain. they just gave me a 9% raise… thanks inflation…

They're effectively giving you a pay-cut.

Wow lucky you got 5.5%. My bank employer gave me 0% raise and the best guy who worked for me got 3%

I got 3%, it's clearly time for me to leave. Lots of other people already have.

Sounds like Snap. Just leave.

Next time you have a 1-1 with your manager, point out the equity issue.

My company didn't, then raised everyone's salary by 3%.

How do you know how much equity new hires are given?

Got a 4% raise here.

AFAIK, none of the big tech companies are doing comp adjustments based on inflation. They never did, they never purported to, and they never will. From my observations, employees are particularly antsy about this comp cycle because most stocks are down anywhere from 25 to 75% from recent highs and people want to see some sort of "silver lining" to compensate.

For my company, equity refresh grants were priced to the stock price average for February, meaning a higher number of actual stocks than if the stock had been higher (though to be fair, there were additional drops in most stock prices in March)

The "exceed expectations" stuff is mostly fluff. You know how you don't want to be an asshole to your close coworkers? That sums up performance appraisal forms. Your manager isn't the one setting raise budgets and because of the current high attrition in the industry, they don't want to piss anyone off, so dividing their pot equally among reports is the "safe" option. I'm willing to bet most bay area tech people here at L5/L6 levels got somewhere around $7k-10k raises regardless of previous comp.

There is however an extra "secret" compensation pot that not many people are privy to: performance bonuses. That one can be a 6 digit number equity grant on top of regular TC, and are given to people that a company really doesn't want to lose. My personal impression is that the heuristics for whether you get this bonus are not related to perf appraisal at all, but rather they're related to having made significant contributions to your boss' boss' boss' OKRs.

IMHO, if you're staff level (~500k TC) or above and you didn't know about what I just said, moving is kinda risky. To put it in context, according to levels.fyi, less than 10% of the engineering workforce at big tech is at that level or above. When interviewing, you're typically competing to be better than 50% of the people at that level, according most companies' hiring criteria. This means you realistically need to have a high degree of confidence that you're top ~5% material and that your not getting a perf bonus was in fact unfair due to an objective reason (rather than "I think I'm awesome because my boss said so in perf appraisal").

For L5 (~400k TC), the odds are a bit more forgiving, though not that much (you need to be top ~15%, give or take some). I have conducted a few hundred interviews for Senior SWE positions and the stats for job offer acceptance rate hovers around 1 in 10, which more or less corroborates. FWIW.

Lol, no.

Peanuts, always peanuts.

Is there anywhere that is tracking latest salary trends? It is hard to know what the market is for given levels - do people find that levels.fyi is accurate?

No.

My company is considering whether we can keep doing what we've been doing for 35+ years for another year. Your point? I haven't seen a raise like that since the '90s (44%) (different company) (maybe you're special).

I didn't see many engineers the last two years demanding pay decreases because of the money they save by not having to commute to work...