Comment by conductr

Comment by conductr 17 hours ago

I'm a mid-career executive that has earned more money from perks related to joining new companies (bonuses, stock, etc) than I have in salary & annual bonus programs; which would be my main compensation if I stayed long-term at a company.

I simply don't see an economic incentive to loyalty with a sole exception; I'm currently working through a retention bonus period. I actually just signed it a month ago and will be paid 3 years salary a year from then. The full amount pays out if they terminate me beforehand. So, my short term loyalty has been incentivized but I'll likely move on soon afterwards. (FWIW, the CEO left and the board feared I would follow them or leave due to uncertainty so that is what prodded them to offer this, it kind of fell in my lap - but it's also not the first time this has happened)

nemomarx 17 hours ago

it seems silly to be that companies will budget for new hires more than they budget for retention incentives. I'm sure they have measured which one pays off better but it feels backwards

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conductr 17 hours ago

The best retention incentive is paying good people well to begin with. And, it doesn't have to be huge. Paying people 10% above market when you know they are a strong asset defends you from that person ever wanting to leave. [Aside - but, Budget's should be offensive versus defensive so the whole retention bonus strategy should be an exception (unplanned) in my opinion. Granted that's from an operational view. From a cash flow planning view, the CFO knows it's going to spend money somewhere and probably needs to account for that somehow in their financial plan, but it's best to keep it out functional budget - otherwise department heads will be tempted to spend it, or repurpose it on something else.]
Instead, companies try to hire people 10% below market, end up passing on high quality talent that knows their worth, and obtaining talent that is effectively only delivering 70% or less than the high performer would. A lot of companies rely on HR or recruiters to do the initial 'expectation within budget' screen, so the hiring managers never even see the talent that gets turned away or disinterested by a potentially small budget discrepancy. Also, budgets almost always have exceptions especially for outstanding talent that may come along so really think this is unnecessary sacrifice.

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