Why do companies offer less to an internal promote? (1 Viewer)

[KCitons]

They know exactly what they are paying for. If they have to hire from outside, it usually costs more.

 

[heckmanm]

Because they can?

 

[msommer]

Because they feel they have you by the balls

 

[Dan Lambskin]

Because they can?

 

[IvanKaramazov]

Because they can?

/thread

 

[James Daulton]

penny wise pound foolish.

 

[lod01]

Because 'you are lucky you have a job'. <-- my favorite.

 

[Arizona Ron]

Because they can?

/thread

 

[SacramentoBob]

Because they can?

/thread

It's always nice when post #2 gives you all the information you need in a single sentence.

 

[parasaurolophus]

Because they can?

/thread

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

 

[spreagle]

Because internal hires have already been ruined by the funk of the company and new hires are fresh and exciting and full of hope and promise. Its like the difference between a 15 year old kid hoping to be adopted and a brand new baby.

 

[spOOfy]

I applied for an internal promotion to manager and got it. Then they told me the salary, which was about a 4% raise. It also meant I'd have to be in the office more, which meant I'd have to pay for additional transportation costs, city wage taxes (because I work in the city, but am remote 40% of the time) and additional child care for after school on the days I used to be home. When you added it all up, it was more like a 2% raise to work more, commute more and be home less.

I asked to keep my same work from home setup or to give me more money to make up the difference and they said no.

I turned it down.

 

[TLEF316]

As someone who just switched jobs for more money, I totally get why companies do this now.

Switching companies and learning how to do stuff all over again sucks. I wish I had stayed for less money

 

[jfranco77]

Because the C-level geniuses would never sign off on a 30% "raise"

 

[NutterButter]

As someone who just switched jobs for more money, I totally get why companies do this now.

Switching companies and learning how to do stuff all over again sucks. I wish I had stayed for less money

Plus learning what you can and can't get away with.

 

[bcdjr1]

Because they can?

/thread

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

The point is that there are many companies that actually have a cap on how much of a raise you can get when you get a promotion. As such someone from outside your company can get offered a much higher salary for the same job (I've heard of differences of 50% before). This is hurtful to those companies because it doesn't promote loyalty. Why would I want to stay with my company if I can get the same job at another company for a higher wage, especially knowing that my company can afford to offer me more money? I'm being penalized by the fact that I already work there, so there's no reason to stay.

 

[AAABatteries]

Greed

 

[James Daulton]

The fact is, it's a mistake that many/most companies make. Hiring an internal candidate saves on hiring and training cost, plus you don't have the uncertainty of the unknown you do with outside folks, plus you build a positive environment of promoting within.

The bottom line is that most companies only see that Mr. X wants a 30% raise and we don't give 30% raises to internal candidates.

Dumb.

 

[eoMMan]

Internal promotion.....sounds dirty.

"I just gave her an internal promotion."

 

[Sinn Fein]

Because they can?

[/thread]

 

[Slapdash]

penny wise pound foolish.

Nailed it

 

[Ramsay Hunt Experience]

Because they can?

/thread

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

The point is that there are many companies that actually have a cap on how much of a raise you can get when you get a promotion. As such someone from outside your company can get offered a much higher salary for the same job (I've heard of differences of 50% before). This is hurtful to those companies because it doesn't promote loyalty. Why would I want to stay with my company if I can get the same job at another company for a higher wage, especially knowing that my company can afford to offer me more money? I'm being penalized by the fact that I already work there, so there's no reason to stay.

There are any number of reasons to stay. You know the environment. You know your job. There's less uncertainty. Which is generally why laterals require a premium to move. When you interview a lateral, he or she is already on the market, so market competition drives the rates of qualified candidates higher.

It may or may not be rational for a company to limit internal compensation raises as a policy. In my experience, when a great internal candidate is known to be looking, companies find a way to keep that candidate. But even if that weren't true there are always employees who will be risk averse. Companies could be expected to know how competitive their retention policies keep them.

 

[SacramentoBob]

I applied for an internal promotion to manager and got it. Then they told me the salary, which was about a 4% raise. It also meant I'd have to be in the office more, which meant I'd have to pay for additional transportation costs, city wage taxes (because I work in the city, but am remote 40% of the time) and additional child care for after school on the days I used to be home. When you added it all up, it was more like a 2% raise to work more, commute more and be home less.

I asked to keep my same work from home setup or to give me more money to make up the difference and they said no.

I turned it down.

They probably heard you were a terrible volleyball coach.

 

[FUBAR]

Because internal hires have already been ruined by the funk of the company and new hires are fresh and exciting and full of hope and promise. Its like the difference between a 15 year old kid hoping to be adopted wife and a brand new baby mistress.

 

[spOOfy]

I applied for an internal promotion to manager and got it. Then they told me the salary, which was about a 4% raise. It also meant I'd have to be in the office more, which meant I'd have to pay for additional transportation costs, city wage taxes (because I work in the city, but am remote 40% of the time) and additional child care for after school on the days I used to be home. When you added it all up, it was more like a 2% raise to work more, commute more and be home less.

I asked to keep my same work from home setup or to give me more money to make up the difference and they said no.

I turned it down.

They probably heard you were a terrible volleyball coach.

 

[bcdjr1]

Because they can?

/thread

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

The point is that there are many companies that actually have a cap on how much of a raise you can get when you get a promotion. As such someone from outside your company can get offered a much higher salary for the same job (I've heard of differences of 50% before). This is hurtful to those companies because it doesn't promote loyalty. Why would I want to stay with my company if I can get the same job at another company for a higher wage, especially knowing that my company can afford to offer me more money? I'm being penalized by the fact that I already work there, so there's no reason to stay.

There are any number of reasons to stay. You know the environment. You know your job. There's less uncertainty. Which is generally why laterals require a premium to move. When you interview a lateral, he or she is already on the market, so market competition drives the rates of qualified candidates higher.

It may or may not be rational for a company to limit internal compensation raises as a policy. In my experience, when a great internal candidate is known to be looking, companies find a way to keep that candidate. But even if that weren't true there are always employees who will be risk averse. Companies could be expected to know how competitive their retention policies keep them.

Maybe it's just my company, but there's a lot of instability here. They show little reward for company loyalty - people who've been around for years make less than people who are new hires and they are constantly looking to replace long-term employees, who care about the company and the work they do for it, with contractors that they can have come in and do some work (usually at a much lower quality level) and then leave.

 

[jonessed]

The interview process, no matter how extensive, is a snippet compared to an internal candidate.

It's easy to project onto something new and exciting. A good interview candidate isn't going to show the same cracks as someone with a more readily available work product.

 

[parasaurolophus]

They know exactly what they are paying for. If they have to hire from outside, it usually costs more.

They will have to hire from the oustide either way, unless of course they are/were overstaffed.

 

[Slapdash]

Because they can?

/thread

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

The point is that there are many companies that actually have a cap on how much of a raise you can get when you get a promotion. As such someone from outside your company can get offered a much higher salary for the same job (I've heard of differences of 50% before). This is hurtful to those companies because it doesn't promote loyalty. Why would I want to stay with my company if I can get the same job at another company for a higher wage, especially knowing that my company can afford to offer me more money? I'm being penalized by the fact that I already work there, so there's no reason to stay.

There are any number of reasons to stay. You know the environment. You know your job. There's less uncertainty. Which is generally why laterals require a premium to move. When you interview a lateral, he or she is already on the market, so market competition drives the rates of qualified candidates higher.

It may or may not be rational for a company to limit internal compensation raises as a policy. In my experience, when a great internal candidate is known to be looking, companies find a way to keep that candidate. But even if that weren't true there are always employees who will be risk averse. Companies could be expected to know how competitive their retention policies keep them.

Maybe it's just my company, but there's a lot of instability here. They show little reward for company loyalty - people who've been around for years make less than people who are new hires and they are constantly looking to replace long-term employees, who care about the company and the work they do for it, with contractors that they can have come in and do some work (usually at a much lower quality level) and then leave.

Not to mention how much more these contractors make...

 

[Leroy Hoard]

Same reason companies give better deals for newbies over loyal customers that have been padding their wallets for decades.

Because they are d-bags.

 

[AAABatteries]

Same reason companies give better deals for newbies over loyal customers that have been padding their wallets for decades.

Because they are d-bags.

Like I said - it's greed.

 

[Funkley]

Kinda, sorta depends on the job and the industry. How tough has it been to find a good candidate? Am I worried about losing this person when I low ball them? Is the salary structure already below market? But in general, Franco above is spot on. Good luck getting approval for appropriate in house increases.

 

[parasaurolophus]

I dont really understand the point of this topic.

There is no absolute rule for this but by and large this is a very simple process. You have a position open. You want to fill it. People apply for it. You evaluate what is needed to have them accept the job. You offer, they accept or reject.

Whats the issue here?

The point is that there are many companies that actually have a cap on how much of a raise you can get when you get a promotion. As such someone from outside your company can get offered a much higher salary for the same job (I've heard of differences of 50% before). This is hurtful to those companies because it doesn't promote loyalty. Why would I want to stay with my company if I can get the same job at another company for a higher wage, especially knowing that my company can afford to offer me more money? I'm being penalized by the fact that I already work there, so there's no reason to stay.

There are any number of reasons to stay. You know the environment. You know your job. There's less uncertainty. Which is generally why laterals require a premium to move. When you interview a lateral, he or she is already on the market, so market competition drives the rates of qualified candidates higher.

It may or may not be rational for a company to limit internal compensation raises as a policy. In my experience, when a great internal candidate is known to be looking, companies find a way to keep that candidate. But even if that weren't true there are always employees who will be risk averse. Companies could be expected to know how competitive their retention policies keep them.

Maybe it's just my company, but there's a lot of instability here. They show little reward for company loyalty - people who've been around for years make less than people who are new hires and they are constantly looking to replace long-term employees, who care about the company and the work they do for it, with contractors that they can have come in and do some work (usually at a much lower quality level) and then leave.

Not to mention how much more these contractors make...

This is not usually my experience. Maybe if you compare only their pay and do not take into account benefits and risks, then I could see it.

We contract out tons of stuff that at first glance looks pricier, but in the long run is absolutely cheaper.