> There's no new incentive for companies to reward older employees
Is this just plainly not true. But the reason you may be led to believe that is simply a matter of inefficiencies. If a company loses a senior team member, they’ll need to replace them with one of equivalent competency. Putting aside the fact that recruiting and on boarding costs quite a lot of money, there’s a few basic economic reasons why they may have lost that team member to begin with.
1. They hadn’t adequately assessed the competency of that team member, and that person was able to find a better paying job elsewhere.
2. The company might not hire people for that position very often. If they don’t know how much money it takes to secure a candidate of that caliber, then they might not know they’re not paying them adequately.
Both of those scenarios involve employers not understanding the market properly, and if that results in them losing skilled staff, then that is very costly for them. So there’s a very clear incentive for companies to invest in retaining staff. However the truth is that the world is full of poorly run companies, this is a problem that’s actually quite hard to get right, and there’s a very slow feedback loop when it comes to measuring how good you’re doing at it. For those reasons, that’s why it’s often better for people to seek new opportunities rather than seeking raises or promotions, because that’s the best way to make sure you’re getting a fair market rate, and will allow you to bypass any inefficiencies in the way your current employer may be doing things.
There’s also another possibility, where the people on the payroll are simply developing their skills faster than the company can provider more advanced opportunities for them. In this case the employer doesn’t need to replace you with somebody of equal competency, they just need to find a replacement for a role that you outgrew.
Is this just plainly not true. But the reason you may be led to believe that is simply a matter of inefficiencies. If a company loses a senior team member, they’ll need to replace them with one of equivalent competency. Putting aside the fact that recruiting and on boarding costs quite a lot of money, there’s a few basic economic reasons why they may have lost that team member to begin with.
1. They hadn’t adequately assessed the competency of that team member, and that person was able to find a better paying job elsewhere.
2. The company might not hire people for that position very often. If they don’t know how much money it takes to secure a candidate of that caliber, then they might not know they’re not paying them adequately.
Both of those scenarios involve employers not understanding the market properly, and if that results in them losing skilled staff, then that is very costly for them. So there’s a very clear incentive for companies to invest in retaining staff. However the truth is that the world is full of poorly run companies, this is a problem that’s actually quite hard to get right, and there’s a very slow feedback loop when it comes to measuring how good you’re doing at it. For those reasons, that’s why it’s often better for people to seek new opportunities rather than seeking raises or promotions, because that’s the best way to make sure you’re getting a fair market rate, and will allow you to bypass any inefficiencies in the way your current employer may be doing things.
There’s also another possibility, where the people on the payroll are simply developing their skills faster than the company can provider more advanced opportunities for them. In this case the employer doesn’t need to replace you with somebody of equal competency, they just need to find a replacement for a role that you outgrew.