🛑 Salary is not a "reward of goodness."..But it's a "strategy game."
🛑 Salary is not a "reward of goodness."..It's a strategy game that companies use to select people.
"When loyalty can be more expensive than resignation, and why new kids overtake seniors' salaries."
Many working people have begun to raise similar questions in recent years.
* Why do some new-finishing children get a higher starting salary than those who have worked for years?
* Why do people who have been with the organization for 8-10 years have to submit their resignations to earn market fees?
* And why do many companies seem not to take their efforts to hold back experienced former employees seriously?
Many view this through feelings such as unfairness, frustration, or the feeling that loyalty is not reciprocated as it should be.
But if you take off your emotional glasses and look at management and human resources at the strategic level, it will find that the point has little to do with love, hate, or disappreciation of the old.
It is a matter of cost structure, competition and manpower design to make businesses survive in the market, in HR and labor economics.
"Salary Inversion, or the condition in which new employee salaries overtake former employees."
That doesn't happen because companies forget to take care of the old ones, but because organizations use "compensation strategies" as a tool to restructure personnel to suit the goals of the business at each moment.
The key question is therefore not "Is the company mean?" but "Do we understand the game being played?"
So this article invites us to decipher what games the organization is playing and how, as workers, we should position ourselves on this board so that we do not become just shifted by others.
📉 Game 1: Buy Fresh and Let the Old Flow Out (The Buy Strategy)
This strategy is very common in fast-changing industries such as technology, digital, media, startups, or businesses that must constantly follow global trends.
"This kind of organization is under tremendous pressure, because if it doesn't catch up with technology, revenue can disappear in a few years."
The way organizations think about it is that organizations need new skills all the time, such as
* AI and Data Analytics
* Digital product development
* A new type of online marketing.
* Platform technology that changes every few years.
So they are willing to pay a high starting salary to draw new Talent models with skills that match the current market, even if they do not have long-lasting work experience. At the same time, the same employees whose salaries increase by 3-5% a year do not catch up with the faster market rate, especially in personnel shortages.
What happened followed.
* New children get a higher salary
* The old one doesn't feel worth staying.
* Experienced people start looking for new places.
And in fact, quite a few organizations "accept this result" because they view circulating people as part of filling the system with new blood.
Some companies even design structures for people to work well for the first three or five years and then let them flow out to open up space for the younger generation, which is "a fact that many people don't want to hear."
For this type of organization,
"Long loyalty can become increasingly expensive if Productivity doesn't increase."
Companies therefore choose to pay expensively to buy new skills, rather than pay expensively to maintain their original familiarity, and in some cases, it may be cheaper to replace a whole team of new people than to try to adapt an old Mindset who is addicted to the original way of working.
🐢 Game 2: Filter with Time to Find the Long One (The Build Strategy)
On the other hand, we will find organizations that use the opposite concept, especially large organizations, traditional businesses, manufacturing businesses, or complex organizations.
"This group of organizations does not compete with speed alone, but competes with stability and reliability."
The way of thinking of this group organization.
* The starting salary may not be very high.
* Early growth was relatively slow.
* But returns and stability increase when staying long.
Organizations need people who deeply understand internal systems, and can take care of long-term business; early employee resignations are therefore not a problem, but a natural screening mechanism.
The results are obvious.
* People who stay can often climb to administrative positions.
* Gain trust and key roles
* Welfare and stability improve with age of work.
"Destination salaries can be very high, but at the expense of early patience."
"The truth that may interrupt the younger generation" in this kind of organization, "an adaptable and long-lasting person, may be worth more to the organization than a talented person who moves jobs often," because understanding of internal systems and trust is unaffordable from the market.
⚠️ So why do many companies look "cold" to the old?
Through the lens of financial statements, the reason is clearer.
1. Statement for new people is often more than the treatment of old people.
* In many organizations, statements for the recruitment of new people are classified as "investments" because they enhance their competitiveness.
* While staff salary increases were originally viewed as "routine costs" that hit long-term costs.
* As a result, the company may be willing to pay expensive to pull in new people, but cannot raise the same salary as much as it should.
2. Comfort Zone makes the company pay no extra.
Many companies know that some employees do not dare to leave because
* There's a family burden.
* Fear of uncertainty
* Don't want to start over
As long as the job can walk, the company has no incentive to pay more. Employees unknowingly become risk-bearing instead of enterprises.
3. Some skills depreciate with time.
* In a world where technology is changing fast, skills that were important ten years ago may not be the skills that the market needs today.
* Experience is therefore not always the answer if not followed by a new skill update.
* Sometimes, new graduates learning the newest tools can create more value than those who have used the same method for a long time.
🛠️ From a mak in the game to a player who knows the game?
When the rules are understood, the question is, how do we play this game to gain an advantage?
1. Read the company game from the beginning
Before taking a job, notice what kind of growth model the organization has.
* If people get in and out quickly, that means picking up the experience and moving when the time comes.
* If a person lasts, it means investing in long-term time.
Understanding the business model helps make career planning clearer.
2. Always know your own market price.
* Do not wait for the company to say how much we are worth, but should regularly explore the labor market for what our skills are worth.
* Because if our salary is much lower than the market, moving jobs may be a reasonable choice.
3. Make yourself an "investment," not a "cost."
There are two large groups of working people.
* People who work according to orders
* People who make money or help reduce costs for the company.
Organizations are always ready to pay the latter, so the skills that should be developed are the skills that companies need to hire from the outside if they don't have the inside.
4. Create skills that move anywhere is valuable.
Don't tie your own values to one organization.
But it should create skills that can be used in many industries, such as
* Data analysis
* The solution is complicated.
* Project administration
* Communications and negotiations
Because these skills always give you bargaining power in the labor market.
✨ So loyalty has to be placed in the right place.
The modern working world no longer measures progress from the amount of time it has been in the organization alone, but values it.
* Adaptive capacity
* Producing results
* And the ability to learn new things.
Companies have the right to choose strategies for business survival. At the same time, working people also have the right to choose the path for life security, because in the end,
"Don't leave the future to the mercy of your employer, but leave it to the potential you develop on your own."
Because in the modern working world, the people who survive are not the ones who stay the longest, but the ones who adapt the fastest.