What % pay rise to make you leave current "comfy" job?

[Mason-]

I've been quite lucky in that my current employer has reacted to the market. We're quite niche, with only 2 or 3 places in the UK where there are hubs of this type of work. We've had 2 spates of losing a lot of people to competition, they gave a ~17% pay rise the first time (outside of annual review cycle). And lately had an 8% bump in December, followed by a 7% at annual review.

I just worked it out. I joined this company 4 and a half years ago, been promoted once and my salary has gone up 73% since I started which is pretty good going I think. Maybe I could have done better jumping ship every 2 years? But I doubt it, also I like my employer. But I think my employer is the exception to the rule.

 

[jon86]

We've had 2 spates of losing a lot of people to competition, they gave a ~17% pay rise the first time (outside of annual review cycle). And lately had an 8% bump in December, followed by a 7% at annual review.

Playing Devil's advocate for a moment, if the company can afford to give you this number and level of pay rises, to me, it means one or more of a couple of things.

1) You've been underpaid all this time and they're just now realising that they have to pay market rate in order to retain talent
2) Their compensation bands were woefully out of date and they were happily paying undermarket rates until people wised up and stopped working for low pay
3) The company is very profitable but the execs had no desire before to share much of that with their employees until attrition forced their hand
4) All of the above

 

[Mason-]

Playing Devil's advocate for a moment, if the company can afford to give you this number and level of pay rises, to me, it means one or more of a couple of things.

1) You've been underpaid all this time and they're just now realising that they have to pay market rate in order to retain talent
2) Their compensation bands were woefully out of date and they were happily paying undermarket rates until people wised up and stopped working for low pay
3) The company is very profitable but the execs had no desire before to share much of that with their employees until attrition forced their hand
4) All of the above

Kind of, like I said it's very niche, basically a few companies that previously only had presences in Silicon Valley/USA opened offices near us and started poaching talent. This happened twice, which caused them to react and pay more.

Whether or not we were underpaid is hard to say because if there is no other companies who hire in your area, and the only other areas are in another part of the country, what metrics are there to gauge whether you're over/underpaid. When you have to move to another part of the country to find another employer it's hard to know what is the going rate.

Anyway it's all by the by, more companies have opened up near us, increased competition, and increased pay/benefits because of that. I can't really complain.

 

[HangTime]

Why do companies do this?

It's sooo true though, and that £5000+ person will end up being useless.

One reason they do it is because they now have evidence that they may need to pay more for a given role. If nobody ever left to take a job paying more, companies would feel they don't need to offer big pay rises. So there is kind of a 'lag' between companies moving in line with hiring trends elsewhere.

Secondly, they 'consider it a win' because the person getting paid £5k more than the old salary is still less than what it would have cost to retain the original employee (remember the OP is talking about moving from a £58k role to a £70k+ role). That could well be a false economy when you consider recruitment and and training costs, tacit knowledge, learning curve or just plain aptitude, but in pure salary terms, they've saved money.

 

[BongoHunter]

I wouldn't leave my current job for less than a 30K rise (assuming normal level of benefits and 2 days a week in the office).

Current place pay for fibre broadband, awesome pension, sharesave, private health and dental for entire family and a load of other stuff plus I can WFH 4 days a week. Currently on just over 70K and get an inflation matching pay rise every year (and a small bonus upto 10% of salary)

I also really like working there as it's really close to my house so it's not a hassle to get into the office (I'm assuming over the next few years we will be uping the amount of time back in the office) and the people I work with are great. Training and development is also pretty decent, and my day to day I get a lot of freedom to implemt whatever I like as long as it meets the brief (feels rare in IT/Tech).

My next move will probably be to go contracting if the day rate is right - not sure I will find a permie role as good as this one.

 

[DB_SamX]

There is also some context to me to me thinking i am underpaid. One of my mentees, a grad +3 who was on 25-27k when she realised she could get 35k elsewhere easily and did get an offer early last year. She was in tears when she realised how undervalued she was. I fought her case with the bosses and she decided to stay when they countered with 32k. Earlier this year, she got approached again with 45k and it was a no brainer for her to move. Even I didn't wanna stop her. She is an excellent engineer. She keeps telling me her new employers pay a lot more generally with similar benefits.

 

[Career Compromise]

It's a difficult one. I would always tell recruiters at least 10% but then I'd tell them I was getting a bit more than I was because I didn't think 10% was enough. I don't know whether I priced myself out of opportunities by doing that, but then I know if I went to a new job that wasn't much of a pay rise I'd resent it from day one.

After working at my old company for 2 years I had an interview at a company I really didn't want to work for, but it was paying 30% more. I didn't get that job, but around 18 months and a couple of pay rises later I was getting slightly more than that other job would have paid and I thought it was just as well I stayed.

Then after nearly 6 years I pulled out of the interview process for another job which paid 15% more. A year later my salary was exactly the same as that job so I thought right decision.

The problem was this comfy job was now starting to do me more harm than good. Towards the end I'd become so desperate to leave that I didn't really care how much more money I would get. I was willing to move for no financial gain.

 

[HACO]

Generally a job becoming too comfy is a red flag, it means you've stopped challenging yourself and learning new skills. In the long run, this doesn't work to your benefit.

That being said, when I move jobs I always target at least a 30% increase in TC.

 

[DB_SamX]

Generally a job becoming too comfy is a red flag, it means you've stopped challenging yourself and learning new skills. In the long run, this doesn't work to your benefit.

This has been part of my thinking as well over the last year.

I've got first interview lined up for Wednesdaym

 

[D.P.]

one of the difficulties i see is how you take into account benefits when estimating salary requirements. E.g, in theory i get a 15% bonus but there are performance factors, last year my bonus was nearly 40%. Then there sre things like RSUs, how you incorporate the 50k here, 75k there all on different vesting scheduled and all fluctuating with share prices.

Recruiters rarely mention average bonuses and RSUs, so if you include such things in a base pay to ensure at least the same take-home, then i would have to double my salary.

And then from a personal valustion, tine is far more important than money. i wokld probably want about £100 an hour for commuting given the work hours and small amount of time left in a day for family, daily chores, exercise. I mostly WFH but office is 2 miles away if i want to pop in. I am constantly head hunted for jobs about 1hr-1h15m away, but these would have to pay £50-65k more per annum for me to accept.

 

[dowie]

one of the difficulties i see is how you take into account benefits when estimating salary requirements. E.g, in theory i get a 15% bonus but there are performance factors, last year my bonus was nearly 40%. Then there sre things like RSUs, how you incorporate the 50k here, 75k there all on different vesting scheduled and all fluctuating with share prices.

Recruiters rarely mention average bonuses and RSUs, so if you include such things in a base pay to ensure at least the same take-home, then i would have to double my salary.

Yeah this can get complicated... other issue is stock price having risen since the RSUs were allocated... guy has been at a company for 3 years he still has 1 year left of his initial allocation of RSUs to vest, stock price has doubled or tripled since then... does he get to point at that last bunch of RSUs due to vest and claim that is his regular comp... he knows full well that if he stays at the current firm after year 4 his total comp will drop off a cliff, the new firm ought to be aware of that too.

Obvs they get regular top-ups but its totally possible for comp to drop off a cliff after the initial allocation of RSUs has vested following strong growth in the share price.

Works both ways too, a company's stock price has plummetted, tech employee won't be happy with someone pointing at his current (not worth as much) RSUs and saying he doesn't actually get that much in variable comp... he did get more variable comp when he started 3 years ago but it's taken a dive since then!

 

[HACO]

Works both ways too, a company's stock price has plummetted, tech employee won't be happy with someone pointing at his current (not worth as much) RSUs and saying he doesn't actually get that much in variable comp... he did get more variable comp when he started 3 years ago but it's taken a dive since then!

Happened to me Too. Stock plummeted after I joined (maybe my fault ) but I (and most other tech employees) received top-ups every three months, at original vesting schedule, to bring the total amount back to the agreed TC level and then some. I would have left if they hadn't done this.

 

[jon86]

Yeah this can get complicated... other issue is stock price having risen since the RSUs were allocated... guy has been at a company for 3 years he still has 1 year left of his initial allocation of RSUs to vest, stock price has doubled or tripled since then... does he get to point at that last bunch of RSUs due to vest and claim that is his regular comp... he knows full well that if he stays at the current firm after year 4 his total comp will drop off a cliff, the new firm ought to be aware of that too.

Obvs they get regular top-ups but its totally possible for comp to drop off a cliff after the initial allocation of RSUs has vested following strong growth in the share price.

Works both ways too, a company's stock price has plummetted, tech employee won't be happy with someone pointing at his current (not worth as much) RSUs and saying he doesn't actually get that much in variable comp... he did get more variable comp when he started 3 years ago but it's taken a dive since then!

Generally, you negotiate the compensation package that you want in order to move. Once that has been laid out, one might use what that person is "going to lose" (if they jump ship now and don't wait X months) as some extra leverage at the end in order to get a sweetener added on top.

"I've got X shares at Y valuation vesting in 3 months, and I'll need to either stay for these shares, or be additionally compensated for them."

"Okay. We can give you an extra Y dollars of RSUs to offset that."
Or
"Okay. We'll give you an extra A dollars of sign-on bonus to offset that."

Happened to me Too. Stock plummeted after I joined (maybe my fault ) but I (and most other tech employees) received top-ups every three months, at original vesting schedule, to bring the total amount back to the agreed TC level and then some. I would have left if they hadn't done this.

I've not heard of stock topups every three months. That's pretty decent!

When I lived in the UK, I used I have to pay >50% tax on my vesting RSUs. In the USA, they are just taxed at my normal tax rate (via additional withholding + refund).

 

[HACO]

When I lived in the UK, I used I have to pay >50% tax on my vesting RSUs. In the USA, they are just taxed at my normal tax rate (via additional withholding + refund).

It even gets more brutal when the increased value of the RSUs put you into pension allowance tapering territory, especially if you've already salary sacrificed more than your now-reduced allowance.

 

[dowie]

Generally, you negotiate the compensation package that you want in order to move. Once that has been laid out, one might use what that person is "going to lose" (if they jump ship now and don't wait X months) as some extra leverage at the end in order to get a sweetener added on top.

"I've got X shares at Y valuation vesting in 3 months, and I'll need to either stay for these shares, or be additionally compensated for them."

"Okay. We can give you an extra Y dollars of RSUs to offset that."
Or
"Okay. We'll give you an extra A dollars of sign-on bonus to offset that."

Yeah, that's what is being referred to, point was that share prices can fluctuate so some allocation of RSUs that hasn't yet vested might be artificially high and not really reflective or the person's normal comp... a one-off payment if you really need someone with that skillset now, as you've given in your example, might work but the comment was a more general one re: pointing at that aspect of comp when negotiating in general - it can be artificially high (or indeed low) and so complicates things a bit.

 

[DB_SamX]

After all, it was a bit of a disappointment. The guy who interviewed me only told me he hadn't read my CV until an hour into the chat! He wasn't really selling the position, or really challenging me, despite me coming prepared for it. More importantly, it wasn't for a higher position the agent sold me. And the salary was only 10-15% pay rise. So overall, huge disappointment which I relayed to the agent. He seemed equally disappointed they didn't try to sell it although the feedback is that "I could do a job for them" or up for a second conversation.

I'm not going to take it forward as it would onky be for a sideways move with not enough return for the risk; my company also just announced we will get a bonus in July as we ended 2021-22 well so will see how much that amounts to. 10pc salary would be nice.

 

[Demon]

After all, it was a bit of a disappointment. The guy who interviewed me only told me he hadn't read my CV until an hour into the chat! He wasn't really selling the position, or really challenging me, despite me coming prepared for it. More importantly, it wasn't for a higher position the agent sold me. And the salary was only 10-15% pay rise. So overall, huge disappointment which I relayed to the agent. He seemed equally disappointed they didn't try to sell it although the feedback is that "I could do a job for them" or up for a second conversation.

I'm not going to take it forward as it would onky be for a sideways move with not enough return for the risk; my company also just announced we will get a bonus in July as we ended 2021-22 well so will see how much that amounts to. 10pc salary would be nice.

Shame, but I'd always go with my gut feeling.. I'd have done the same.

I went to one interview for a technical manager role and the guy interviewing me (the director of that department) was terrible, seemed bored, disinterested and kept trying to validate his 'vision' which was quite amateurish.. When he asked where I'd like to be in 5 years (the most cliche'd of interview questions), I said "I'd like your job"..

Amazingly I got a job offer, but I whilst I liked the company, I literally could not work under someone that was out of his depth to that extent and would have no doubt led to a load of dysfunctional behaviour.

No surprise that he had left that org 12 months later, and they did get back in touch to see if I was interested! However, the phrase "We are going through a period of consolidation and cost engineering exercises" sounded as interesting as watching paint dry.. Not my bag at all.

 

[Ev0]

However, the phrase "We are going through a period of consolidation and cost engineering exercises" sounded as interesting as watching paint dry.. Not my bag at all.

hm yeah that’s not exactly a phrase you want to hear to sell a position to you.

‘We’re downsizing and cutting costs’ isn’t an attractive proposition.

 

[Lopéz]

The last time I moved companies it was for a 45% uplift, but that was also a change of job role, a change of industry and a change from a large multinational to an organisation of 20 people, so it's a different situation to yours.

If I were to change company but effectively do a similar role/same industry I'd not consider anything below a 30% uplift unless I was actively unhappy.

 

[blairw]

Minimum 30% TC, I'd also want a heft sign on bonus (likely in stock) to account for giving up shares that are still vesting