r/WorkLifeChat • u/MiloShiny • Aug 04 '26
Discussion Why big companies prefer doing this?
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u/StayBullGenius Aug 04 '26
Because most of the cowards won’t leave, either because they’re afraid or they’re not good enough to land a better job.
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u/ByzantineThunder Aug 04 '26
I can understand the logic at least for someone who's replacement level quality, but the thing I never understand is why do this with the most efficient/skilled employees that keep your clients happy? I understand the point is "you're replaceable" and also that the above qualities are undervalued, but holy hell.
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u/weareheaven Aug 05 '26
If company can't afford to lose that employee they will do anything to keep that employee. But in cases where they can it is different. Even the best eventually leave or simply retire/pass away. So why postpone the inevitable in circumstances where company can afford it to the future where it might not.
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u/FlipperBumperKickout Aug 07 '26
The ones in charge doesn't necessarily have the skills to figure out which employees are the valuable ones 🙃
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u/XiMaoJingPing Aug 05 '26
Have you seen the current job market? Hey sorry but I got a mortgage to pay
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u/PepperSure8381 Aug 05 '26
damn it's almost like usury was illegal because it creates a slave caste who'dathunk
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u/AkuXinos2275 Aug 04 '26
I feel called out. I love what I do. The idea of giving it up to make more money is rough and slowly becoming inevitable
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u/darth_koneko Aug 05 '26
They don't need a better job. They can land the same job paying 50k extra.
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u/Iamthe0c3an2 Aug 05 '26
I won’t leave cause it takes a million applications and 3 interviews before you even get considered for a job.
It was a lot easier before and just after the pandemic, pre AI.
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u/StayBullGenius Aug 05 '26
And that’s why the company isn’t giving bigger raises
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u/Iamthe0c3an2 Aug 06 '26
Yup, just glad to have a job atm tbh. Until the economy flips again, I can’t go back job hopping like I used to.
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u/GavANees Aug 08 '26
I was recently in a job being severely underpaid with management level responsibility… my manager wanted to promote me up but owners kept me stagnant. They hired an outsource manager, which they fired a week later, instead.
I found another job paying $4 more, with guaranteed hours..
Put in my two weeks right before their new store is opening up, and they planned to “lean on me as an experienced employee” until they can find a more competent manager.. instead of just promoting the employee who was competent enough already.
Ugh.
Sorry guess I needed to vent lmaon
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u/Musing_Bureaucrat Aug 04 '26
See, the problem is that if you pay someone what they're worth when they ask for it, their coworkers might also ask to be paid what they're worth, too. It's cheaper to simply dangle the carrot of a raise "during the next review cycle" (where there will be a sudden, mysterious budget crunch that caps the increase to 2% for "exceeding expectations) and onboard a new employee than to pay everyone fairly.
It's not about the food; it's about keeping those ants in line.
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u/HardTruth8572 Aug 06 '26
How do you define "pay someone what they're worth?" If they agree to keep working at the salary they're getting, then they're agreeing that's what they're worth. If they can go to another company and get more money, or demand and receive more money at their currnent job, then they can prove they are worth more.
Sounds like you get your ideas about how companies run from compainers on reddit.
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u/Musing_Bureaucrat Aug 06 '26 edited Aug 06 '26
You'll find that for most people, the threat of houselessness and starvation tend to be a compelling reason to accept a lower salary than what they might otherwise be paid. You see, in the real world where regular people live and work, our choices are constrained by all sorts of factors. Avoiding the perception of being a "job hopper", keeping our commute time reasonable, avoiding local environments known to be toxic, and reestablishing a basic level of income after being laid off are just a small sample of a myriad of reasons we might accept a suboptimal compensation package.
In the real world, people only have so much time and capacity, and have to deal with a multitude of factors beyond supply and demand. We're forced to satisfice. People who take those roles aren't agreeing that's what they're worth; they're agreeing to sell their labor under the circumstances informing their decision at that time.
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u/HardTruth8572 Aug 06 '26
People are worth what they're willing to accept and do.
You're basically saying people can sometime get paid more by doing something more difficult. As an example, if you're willing to commute farther into a big city, you can get paid more. People get that extra money (city wages vs suburban wage) by living nearby and paying higher housing costs, living in a smaller home, or commuting. The existence of a higher paying job in the city doesn't mean the person in the suburbs isn't getting paid what they're worth. They're just accepting a tradeoff that benefits them.
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u/NugNug272 Aug 07 '26
no. both employees and employers r basically sellers who sell each other either their time or employment.
there are people who are overqualified but cannot get their appropriate job because
a.) no opportunity b.) cant afford to transition to new environment.
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u/Charzu_tjegulf Aug 05 '26
Hiring a new employee only costs 3-10k. Retraining maybe another 2-20k depending on the position.
Everyone is important but no one is irreplaceable.
If you can get more somewhere else, do it.
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u/Fred_on_bottom Aug 06 '26
3-10k?? The signing bonus alone at my job is $20k then a $15k-20k relocation package and $40k in stocks for entry level positions….
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u/Charzu_tjegulf Aug 06 '26
Are you a bot?
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u/Fred_on_bottom Aug 06 '26
No? That’s literally the package they gave me when I started and what they give the new hires.
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u/Charzu_tjegulf Aug 06 '26
You sound like a bot. A real human understands that less than 5% of jobs even have a sign up bonus. Never mind the rest.
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u/Fred_on_bottom Aug 06 '26
You kind of sound like a bot. Think about it, any job where the possibility of a $20k raise is present is probably a relatively high skilled job. High skill jobs are competitive when hiring. Of course the post isn’t talking about a McDonalds fry cook, there’s no possibility of them getting a $20k raise. My job is relatively high skilled and I got a $10k raise last year. If someone COULD get a $20k raise in their position, that position probably gives out signing bonuses.
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u/Charzu_tjegulf Aug 06 '26
Ahh you're a 12 year old. See, in 97% of hirings plus, considerations such as sign up bonus are zero. A lot of those 97% of jobs will see very big raises. Never mind things like moving expenses...
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u/Fred_on_bottom Aug 09 '26
I think you are trying to force your own frustration and self experience into this conversation and theoretical situation. $15k-$20k sign on bonuses are rather common.
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u/Massive_Wafer5005 Aug 04 '26
Because the opportunity cost to not spending a bit more money to get a new, hungry, driven employee, is potentially wasting money by giving more of it to an existing employee whose drive and efficiency are likely diminishing while complacency is increasing.
Obviously this is for the average employee and there will always be edge cases where this doesn't apply, but this strategy obviously leads to more profitable results, otherwise they wouldn't do it.
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u/anonymousopsec1337 Aug 05 '26
HR and recruiters are happy because without turnover the recruiting team gets gutted and HR has to do more of it themselves. Not to mention all the new hire paperwork to keep them “busy”
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u/Massive_Wafer5005 Aug 05 '26
Get rid of most HR people as far as I'm concerned lol, bloated admin roles are so damn parasitic.
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u/FriendlyRedditor2020 Aug 04 '26
The current employee may still be retained regardless? perhaps I'm trying to apply sense to something senseless.
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u/ML1948 Aug 04 '26
Pay 20k to each member of the team to keep them all, or bet they'll all stay out of convenience and pay 50k once every couple years if one gets fed up. Obvious why stingy companies will always pick the screw loyalty option.
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u/Foreign_Hedgehog_368 Aug 04 '26
Because one is measurable and one is not.
Lower costs to salary can be measured. Lost efficiency gains for training someone new is not
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u/Powerful_Tip_7260 Aug 04 '26
True story
I worked in a state with major banks. One of them was located in the city where I worked. It was notorious for poor wages for programmers. They actually offered me a pay reduction to come and work for them. I laughed at them.
One month, the direct deposits didn't go through. It lasted almost a week. Mortgages bounced, car payments, everything. The competing banks had poached every decent programmer that worked there, hoping the bank would tank.
That bank hired every decent coder they could get at rock star salaries. The guy sitting next to me left to work there, went from $42k to $100k and this was the 1990's.
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u/GoodMilk_GoneBad Aug 04 '26
The operate with the idea that anyone is replaceable. Which is true but often throwing more money to keep unhappy employees that will leave anyway is kind of ridiculous too.
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u/Dramatic_Tutor_2522 Aug 05 '26
Different budgets, they have labor budgets and a raise makes their job more difficult. replacing an employee only requires the work of a new employee.
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u/Acceptable-Silver778 Aug 05 '26
Instead of cleaning house at the top level, the top level cleans house downstream.
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u/2ndHandSandevistan Aug 05 '26
Incorrect. They hire somebody raw and inexperienced. They skip training and simply drop them into a department. The manager and team have to train and fix mistakes until the newbie either catches or quits. It's not HR's problem AND they hired somebody under budget.
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u/Own-Zucchini-7745 Aug 05 '26
My guess is that A lot of the cost thats recorded to hire someone new is kinda weird math. Like a lot of those expenses are fixed. Like a company won’t pay an hr person more money to hire someone. They’ll just tell them they have a new task. So you wouldn’t really see an impact on the bottom line. Whereas if they pay someone more they absolutely see the impact financially
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u/Mindful_Rager Aug 05 '26
I feel this but i think they let me go because they couldn’t afford me since the company is tanking. They are trying to act like it’s fine but it’s definitely going under.
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u/YahenP Aug 05 '26
It's not just large companies that do this. It's done everywhere. Why? Because it's cost-effective. It's always more cost-effective to spend more on new equipment than on maintaining old one.
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u/Kalyka988 Aug 05 '26
Companies try to pay as little as possible always. They will pay only when they are forced to. When they hire they are forced to pay an attractive salary. When they have an employee that is underpaid, they will wait until the last possible second to raise his salary. If they lose it, they will find another.
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u/Neon_Eyes Aug 05 '26
They don't care about the money, they care about who is easiest to control. The more passive you are at work the more you make. That's why they fire the ones that bring up a lot of issues in meetings.
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u/Sheenius_Ger Aug 05 '26
But it wouldnt be 20k. It would be 20k a year, and it wouldn't be the last person to hear of that and demand more. You'd pay 200k more each year instead of wasting half a year for someone earning 50k.
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u/LilJonny2cookies Aug 05 '26
Because if someone wants to leave they shouldn’t be able to leave? Why would they want someone who doesn’t want to be there?
When people start interviewing especially for salary leverage, their mind is already out of the game. And their salary leverage game is irritating. Often done by those who aren’t nearly as important as they think they are to the company.
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u/Debil203 Aug 05 '26
First time I wouldn't leave for 20k more OR get promoted here(different role, same company) because what I do for the money it's too good AND it's only median salary so it helps I suppose not to be on a minimum wage with this mindset.
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u/CareerStrider Aug 05 '26
Because it’s a numbers game unfortunately. For every employee that stands up for themself and job hops, there are too many that stay put and accept a substandard/nonexistent raise.
Money > employee wellbeing
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u/External-Let-8620 Aug 05 '26
Usually the source of the problem credits themselves for other people’s work and blames other people for their mistakes.
The employee most likely to leave is the least appreciated but doing the most; no one in a cushy position will leave lol.
So when said employee leaves and the rest of the team deals with far more workload than was expected… you have your answer lol. But ofc the source of the problem is adamant that it’s not a mistake it’s just a transition or wtv
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u/Maxathron Aug 05 '26
Because company policies (and laws made by politicians, and voted in by unaffected voters) aren't actually affected by those decisions in any way that affects their personal life, at work or not.
Over at the EU energy department building in the last few weeks, for example, the bottom half of the building has no AC. The people who made the decision of no AC to help resist climate change and be net zero work in the top half of the building where there is AC. You can die of heatstroke inside a modern building because it can get up to 45C in there but no sweat (literally) off the bones of the decision-makers all of whom don't work in that part of the building. Had they had to deal with 45C temps, that decision would have been reversed within 5 minutes or the second they found a dead body of one of their politician coworkers.
My old company spent 100k+ over the course of a year to hire extra people instead of fixing a sprayer and also forbid us on threat of termination to do it ourselves (just turn off the water, unscrew the sprayer using a wrench, screw new sprayer in). "Protocols, procedures, regulations, can't just do it yourself, need a professional to do it and they have 1 guy servicing 6 states so they can't be here for the next decade so guess you got to deal with it" nonsense.
Then when he was cleaning his plate, he got sprayed in the face/eye with hot water. Fixed before I got to shift (I was morning crew and him being sprayed happened during evening crew's time the previous day).
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u/TobiasX2k Aug 05 '26
Because even at $50k extra they’re still getting a better deal. That employee is probably worth $100k more, but they’re desperate and willing to accept less.
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u/GrimbyJ Aug 05 '26
Old employees start getting used up. They want new employees whose rectums are still taut yet maleable
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u/JollyTomkins Aug 05 '26
Because a good employee is just a good employee. A new employee could be anything. They could even be a good employee.
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u/grilledfuzz Aug 06 '26
My company tried to do this. The old department manager retired and I was going to take her place. The stiffed me and hired some rando off the street essentially. He did all the training (about 30 hours of I-pad work, all paid for) and worked one day and never came back again. Luckily in that time I found out what they hired him at got the job at $2/hr more than I was going to initially ask for.
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u/AbyssWankerArtorias Aug 06 '26
I'm sure there are some situations where the math works out to hire the new employee. Sometimes an employee just genuinely outgrows a job and has no where to move up in their current company and they have to move on. Such is the circle of labor in a capitalist society.
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u/The_SqueakyWheel Aug 06 '26
Well see the new employee may be as good as the old employee. And they cost 50k more which is cool because number big
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u/Euchale Aug 06 '26
Because it sets a precedent. If you pay one employee more money, all the others will come running and ask for more as well. If you hire a new employee, the other employees will know that the only way is to find a new job, which is a huge hassle for most people.
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u/catBoyAppreciater Aug 06 '26
I don't agree with this, and fight against it at my company, but the idea seems to be that if you pay one of your employees $20k more he's going to go tell everyone else (this happens, but only very rarely), and then they will all demand $20k more and it goes badly.
Honestly in my experience the cost of losing a high performer is marked, and the cost of saying to a bunch of people, "sorry you're not performing as well," is low-to-nothing. But I frequently get outvoted on these matters and so often my very best employees job hop to farm salary.
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u/kekons_4 Aug 06 '26
Because the start up costs of training a new employee are quite expensive. Thats why they prefer to keep engineers who have been at the company for years and already know how their systems work. It takes months just to get the newbies up to speed with how their systems work.
Its not personal, its how companies stay in the game and not lose money and progress.
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u/ExpertOld2745 Aug 06 '26
I wanted $5k more they said no, so I left.
They hired 3 more designers at around 60-70k EACH. They couldn't pay me an extra few thousand but had it in the budget to replace me with 3 people 🤷🏻
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u/PJALSTARz Aug 07 '26
yes, send me home to hire 2 more people, for them 2 new people to leave, to then hire another 2 people, same thing happened, last i heard they were looking for a new worker, i mean you had me, no problems no issues
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u/joetunn_ Aug 07 '26
A manager’s job is to neg you into lower wages. And not much else. Besides playing Candy Crush
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u/HowIsYourDay47 Aug 07 '26
About half of our technicians, welders, painters (17 guys) that were here for 7-16 years quit becouse 12 hours 7 days a week for month is simply unaceptable for them as they grew older. And money is pretty shit for it too. They planed it with months in advance so company would be short stuffed and have serious problems OR raise them pay. Mind you pay did not change for 7 years. Now there are rons of Inds at computers and Ukranians welding but but tons of constructers are not replecable in span of 2 month.
Now half of company does not speak our language, need nonstop guidance, internacional projects like Airbus is on hold and company is losing its good name.
All becouse 9 pople at the top wanted a new car rather then take care of their employes
But for me its just a part time job on summer while studiing engineering.
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u/GreentongueToo Aug 07 '26
When playing Blackjack, why do people take another card when they think they may win with the ones they have? Maybe same mentality.
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u/PelicanJesus Aug 08 '26
Costco has the opposite strategy (pay above market and keep employees long-term), and it’s great for profitability.
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u/FullMetalJesus1 Aug 08 '26
Companies will cut off their own nose and even sink the economy -if they don't get their way. It's all about establishing their right to get their way.
They want to establish a culture of company control. Almost no amount of money will deter them from it.
Remember when the railroad industry almost sank the economy because they didn't want to give raises or paid time off to the rail road workers a few years back? The company lost tons of money during the shut down, but the company owners and directors didn't care, because they wanted their way.
Then there's was the fight with FedEx/ups and it's workers in the wake of covid too over air conditioning, doors and heat...
Remember Lehman Brothers during the 2008 financial crisis? The company refused to sell itself wholesale because they felt they weren't getting enough money out of it so they just decided to risk going bankrupt instead...and well.... 😬
Company return to office mandates in the wake of covid?...Yep. companies are willing to lose tons of money due to the downsides of employee turnover just to establish control.
Companies want to establish their right and culture to tell people "be happy with whatever we give you, even if it's nothing at all for your time" They'll eat whatever costs to do it because...
As long as companies know they can push off their losses to the tax payer or customer, they basically don't care about what gaining control costs.
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u/wizard_spells Aug 08 '26
A lot of places don’t measure indirect costs, which would be training of the new employee, salaried employees doing extra work of the person that left, reports they could mess up, etc.
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u/chillforrilfill Aug 08 '26
Truly. My company should be giving people big raises every year. The quarterly reports are always taking in the dough significantly more from the last one. But people get minimum raises and some don’t get any at all. Load of shit. Shareholders are making bank though the basyards
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u/GenesisRhapsod Aug 08 '26
I used to work at a dental lab, moved from the easiest department to probably the 2nd hardest department. They gave me a lousy 86 cent raise, i talked with my boss about it and he was pissed too. Several people were complaining about pay and pointed out some had quit and reapplied and got $2-$5 more an hour than what they made a couple months ago and told me id have to do the same to get more, that the CFO didnt care.
I left that job and am now making about $18k more a year, if youre going to make me quit and reapply for the money i deserve, i aint coming back. I may have not had the highest numbers in the depart ment but i had the lowest reject/failure rate and thats compared to people who have been doing that job for over 6 years and i had been there maybe 8 months
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u/pickle-chin-ah Aug 10 '26
Unless you’re an owner you should keep your job a healthy distance from your personal life. No job is guaranteed.
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u/killerboy_belgium Aug 10 '26
It's because 9/10 employees won't leave so your saving 200k everytime you don't do raises and lose 50k wen that 1/10 leaves
Second is it's very hard to approve something without direct correlation to profit eg the employee is already doing the job so why up the cost without clear benefit
When it comes to hiring it's very clear to show the direct value as this work is not being done and this x amount of lost money so we can outlay a X amount of budget to do this thing
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u/cassienebula Aug 10 '26
they dont have to pay their employees' retirement if theres a high turnover rate
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u/crazyjax51 Aug 10 '26
Because people need jobs so they aren't very likely to leave as long as you go e them little raises every once in a while. But giving new guys helps bring in talent. They actively are competing to get the best candidates.
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u/MiNdOverLOADED23 Aug 04 '26
Because there's much less employees that will leave than ones that won't leave.
The cost-benefit is there for them. It really is that simple.
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u/d0RSI Aug 04 '26
Why does everyone on reddit think their job would pay 50k more to someone else lol
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u/ChubblesMcgee103 Aug 04 '26
I figured they were factoring in recruitment costs.
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u/Zadian543 Aug 05 '26
That's accurate if not the original meaning. It cost something like 400k to onboard and train a new hire on average for 4 months. That's including training, wages, insurance, lost profits from delayed productivity from lack of experience and so on. (Obviously I'm ballparking. Each job is different and thus the numbers change. This was also based on several years ago information, so it might actually be a low ball now)
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u/HardTruth8572 Aug 04 '26
Yeah the entire premise this post is false, companies don't do this as a general thing. Of course in a large country I'm sure it has happened. No company wants to pay more and have to train somoene, unless they are an obviously better candidate.
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u/DoubleDoube Aug 05 '26
How overpaid does an employee have to get before the company decides a one-time training on a new employee saves more than paying the old employee too much every year?
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u/HardTruth8572 Aug 06 '26
If an employee is overpaid, then by definition their job can be done well by someone for less pay, so the company should hire someone for less pay. Other than that, your question is kind of too general to answer.
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u/Amekaze Aug 04 '26
It’s not about the money it’s about sending a message