> A senior engineer says “I want a 40% raise or I’m leaving,” and the company’s ability to respond depends entirely on what their alternatives look like.
Except where I live there's a glut of people wanting any job they can find—for a variety of reasons ranging from high levels of immigration to layoffs in the last two years—and willing to accept discount rates because the alternative is being unemployed for another 3 months (New Zealand).
Both the employer and employee know this. So the employee is either foolish or risky enough for asking and gets turned down, or they do actually leave and the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do for their new role.
> and the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do
It sounds like what you're saying is actually that the last engineer was being paid above-market, because the price that employers are paying new employees is literally the market rate, seeing as it's the rate in the literal market.
> the price that employers are paying new employees is literally the market rate, seeing as it's the rate in the literal market.
I want to drill this into anyone that throws the word "below market" or "above market" around.
If a company pays below-market, it won't be able to hire anyone. Either the role will remain unfilled, or the employer will have to compromise on experience.
If someone is claiming to be paid below-market but the company can hire their replacement, then they're not being truthful.
Hiring the replacement ≠ finding the same or better replacement.
Will you be able to find someone in this economy? Sure
Could you fill the shoes? Much harder. Especially in the age of bootcamps, AI to complete exercises, and what have you where people went into IT for the money and not for the love of the craft, tinkering and learning.
So this is not an oxymoron: you can have 200 applicants and not a single good one to replace someone with them.
Only in a market with perfect information. With imperfect information, the market rate is an estimate of the expected or typical rate for a similar good. Because everyone has access to a different subset of the information, everyone's estimate is different, and companies often end up paying above or below the consensus rate.
> If a company pays below-market, it won't be able to hire anyone. Either the role will remain unfilled, or the employer will have to compromise on experience.
No, we are not talking about a commodity market with a clear exchange.
If an employee is bad at a negotiation or doesn't look around then they may accept a lower salary than another market participant would have offered and if neither side looks around, and is willing to pay some costs of a change then they are making a salary that is different than the current market rate.
I'm not an economist but that implies the market maintains some kind of optimal equilibrium price. The reality probably is very noisy like with everything else. Plus there's asymmetric information on both sides meaning people don't get what they think they do.
That depends on the country. In the US where everything is tied to stock options and employees will jump ship if they get 50 cents an hour more next door, that may be the case. In Aus/NZ you don't have that kill-yourself-for-your-stock-options-and-then-leave culture, if you're not on a barely-subsistence wage where you don't have any choice then people will look at job satisfaction, ease of travel to/from work, and so on alongside what they get paid. I know several guys who have turned down jobs that paid five-figure amounts (this may be a two-figure amount in the US) more than they were currently earning because they were quite happy with their current work environment. Good work environment, laid-back management, the company looked after you (rec room, pool table, beer fridge, after-work gaming, being able to tell the mgt that something wouldn't work and they'd listen to you, etc), not because they saw it as a leash but because they believed in looking after their employees. Some of those guys, and their coworkers, have been at the same company for 20-30 years.
In AUS/NZ you're not going to earn even close to the same amount as you would in the US. Every time I've changed jobs, it was for an extra 100k+ per year. The rec room/pool table can't compete with that.
My current manager has been with the company for almost 20 years. He doesn't feel the need to leave because his stock options have made him a multimillionaire. The company doesn't care about him or me, but we're both happy to stay because we don't need them to. We just need them to pay us.
This is pretty much what's occurring in New Zealand right now, yes. 2020–2023 had pretty much zero international movement due to closed borders with COVID-19, with a low official cash rate which caused business to be in desperate need of development resource; so salaries were high.
Market rate for developers has either stagnated generally or depending on the role dropped as hundreds of applicants are willing to undercut each other on what constitutes an acceptable pay check.
But most employers don't go around reducing previously-hired people's salaries for a variety of reasons.
The main reason is that employees will quit. It's not illegal in the US, but it still almost never happens. Companies would rather lay off than risk alienating employees like that.
> the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do for their new role.
Money doesn't cleanly convert into time.
Having juniors and mid-levels is about being able to promote an existing mid-level that knows the team and the system, with zero downtime. It's much easier to replace a junior than a senior because of the lower expectations and risk.
Furthermore, a lot of companies are struggling to hire right now because the market conditions creates a flood of applications and its quite hard to discern who's a waste of time or not which leads to hiring processes taking longer.
> Having juniors and mid-levels is about being able to promote an existing mid-level that knows the team and the system, with zero downtime. It's much easier to replace a junior than a senior.
Yeah but the point of this post is that it makes an assumption that your company doesn't have mid-levels or juniors.
as knowledge is commoditized the bar for junior raises, what was advanced math research a century ago is now undergrads' homework. I don't see why code is so special in that regard that cannot progress beyond artisanship.
> Furthermore, a lot of companies are struggling to hire right now because the market conditions creates a flood of applications and its quite hard to discern who's a waste of time or not which leads to hiring processes taking longer.
Hiring is the most important function in any company, full stop.
If they aren't good at hiring, well then they shouldn't be running a company. There are no excuses. If HR aren't up to the task, then they should be replaced, and so on up to the level of the CEO, until whatever incompetence has been flushed out. Shareholders have to demand this.
A company not being able to hire is just as ridiculous as a restaurant not being able to serve food.
If they are receiving a flood of applications which is hard to sift through, they are already doing everything wrong. Shareholders have to nuke these kind of people.
> If they are receiving a flood of applications which is hard to sift through, they are already doing everything wrong. Shareholders have to nuke these kind of people.
That's why some companies will contract with temp agencies for relief.
By the same logic, most CEOs are interchangeable. After all, not all of them are creating new markets, shepherding new and exciting business ventures or changing the way we do X.
I was wondering if there's anything behind the idea that people who learned how to code before AI will become the human capital version of low-background steel.
Everyone who starts to code after AI has a problem: it's hard to believe you went through the pain and frustration that people often think is required to become a senior engineer. Even if you did, you are in a lemon market with quite a few people who took the shortcut in college. Much better to hire a guy who learned before they could cheat, and then give him the tools to replace the juniors.
I partially agree with this idea, but there will always be the Jeff Dean and Fabrice Bellard of the world... but 99% of companies won't ever get the chance to hire the top 1% of programmers. Therein is the problem. Maybe a better way to look at it is the statistical likelihood of producing good engineers and scientists goes down with AI because of poor fundamentals.
In SW this is perhaps the easiest domain to counterpunch. Get young folks learning computer history and understanding how the hardware works down to a register level. We write most software with some mental abstraction of what the hardware is actually doing. That's the crux, I believe, and if we lose widespread hardware understanding then we truly do become lost at sea, practicing the mystic art of non deterministic incantations
> How do you value people who learnt to code in the 80's, 90's or 2000's today?
Personally I rate them really really highly. They are always fascinating to talk to. But they also compete with newer cohorts who mature.
> Will new developers know/understand what they don't know, or will the new state of things simply become normalized?
Yes because a 32 year old guy with 10 years of experience who got given AI recently is going to be around for an awful long time reminding everyone that he has something the younger ones don't have.
> You pay the 40%, or you lose the person and spend six months (and a recruiter’s fee) trying to find a replacement at market rate, which is probably even higher.
Senior engineers have always owned the application (by knowledge not by law). And that has never been a problem. The real problem is, that without new Juniors there will never be new Seniors, and your company will collapse when your Seniors retire.
From another perspective, the problem is people entering the workforce without sufficient skills to be valuable to employers anymore. The solution would be to spend more time in training so you can reach senior level when you start. Software has been an anomaly among high-paying professions in the low bar for entry. Maybe that's ending.
The hypothesis is completely wrong. With AI, juniors can catch up with the codebase / domain must faster and deeper than before. It's just a matter of putting time.
I have seen this happen in some companies already. A slightly different scenario, the CEO actually wants to hire new juniors but seniors refuse to train them .
I say that we should fully support all AI initiatives and stop giving advice. Tell them AI will make them rich and that they won't have to care about anybody, and just wait to see what happens.
This article touches on an extreme case "what if all your Sr. Engineers are financially independent?" but I think could do more to explore real world examples and address the elephant in the room, compensation through vested shares. I'm not personally experienced about that kind of thing, but I can imagine it helps maintain a healthier balance of power.
Certainly from a raw game theory kind of analysis, an engineer who can monopolize information and has gained authoritative understanding of the design can be crazy powerful, for better or for worse. If this agent optimizes for good salary, lowish effort and high stability... yes I can imagine a senior engineer who fits the name in rate of technical output, not only pecking order order.
The senior engineers, who built the main product that pays the bills have all been there for 25+ years. They held shares in the company back when it was worthless, and now they are all very wealthy. At this point, they literally show up to work just for fun and they aren’t shy about making this known.
The result is that the company has massive insurance policies on these guys in case they die. They also call the shots; they have outsized influence over a range of functions they know absolutely nothing about, ranging from HR to finance to security.
1. This is already the situation if you don't have technical knowledge in-house and outsource all development.
2. Yes, if you only have few people who know how to use a powerful tool, they might have leverage.
3. The supply-demand mechanism is certainly there, but the time scale is never mentioned. It'll take time to remove the unemployed juniors from the pool (maybe they get sucked up into other jobs.) It'll take time for seniors to realize they have leverage. And, of course, the company must not have rehired junior engineers for other reasons (e.g. because the coding tools become so good that seniors are not needed.)
Any objections about "this thesis isn't true; look around you" needs to take this into account. The argument is not that we're there now, but that there's a mechanism to lead there.
The missing ending to this article is when companies whine for more immigration because they didn’t invest in the future to make sure a talent pipeline still existed locally.
> A senior engineer says “I want a 40% raise or I’m leaving,” and the company’s ability to respond depends entirely on what their alternatives look like.
Right... the alternative is to let the senior engineer go, some work gets reshuffled a bit between other senior engineers, and lowest-priority work is delayed until they hire a new senior engineer.
It's not that the company is held hostage by the senior engineer, sheesh.
> you don’t have options. You pay the 40%, or you lose the person and spend six months (and a recruiter’s fee) trying to find a replacement at market rate, which is probably even higher.
Huh? A replacement engineer is "probably" even more than 140% of what you're currently paying? Then your company has a whole other problem which is that it is criminally underpaying its engineers.
Nothing about this post makes any sense. It's not how companies, employees, or the labor market work.
It’s not how companies work today, but it could be how companies operate in the future. Imagine a situation where single engineers manage a fleet of agents and own entire systems. This is already happening. If that engineer leaves then it’s game over for that system.
It's a basic part of management that you never let any individual employee become irreplaceable. Remember, people get sick and go on vacation too. Managers are always supposed to make sure that tasks and responsibilities can be picked up by someone else.
And the AI that is making it easier for engineers to handle so much more engineering, also makes it easier for a new engineer to take over. They literally just sit down and prompt the AI to start explaining how the current system is set up.
Making sure that no employee is irreplaceable doesn't really have much to do with cost savings.
It's just about how you assign work, rotate what people work on, code reviews are a part of it, etc.
None of this has anything to do with AI. If anything, the way that best practices around AI involve lots of design documents, tests, markdown, etc. can actually make it much easier for a new employee to continue where a previous employee left off.
If you have people on your team that are valuable enough to demand a 40% compensation increase, then you should have been paying them 40% more without them having to demand it.
It never ceases to amaze me that the owner class is so continually shocked that the people who build the value that the owners leverage into growing their fortune might suddenly realize their value.
The entitlement is baked deep into the mindset that there are people who work and people who profit.
Often enough they don't care or realize it. I've seen all the data analysts that were eiter (1) senior or (2) also had data engineering skills leave.
They all got 25% more after leaving. And this is in the Netherlands, where pay is already kind of low. What was even weirder was that this company is a F500 company and the people that left, they left for all kinds of organizations (small and large) and still got paid more.
That includes me by the way. I was doing 4 roles (data analyst, pentester, software engineer through web development, AI stuff + data engineering and project manager). It was a lot of fun though. But it paid decisively mediocre.
Currently going to a fun job that pays way better.
It gets worse. I've seen some managers hold back strong developers because they want everyone to be a replaceable cog. They push for average work across the team so no one becomes irreplaceable--even if it means the product ends up weaker than it could be.
"Value" is not this objective measure that can be deduced from someone's output. It depends on many variables like cost of living, the job market, tech trends, and industry competition. Could very easily fluctuate 50% or more in a short period of time.
You're making the wrong comparison. If your plumber increases his rate by 40%, will you "fire" him and get another plumber which will also be 40% more expensive, or a plumber which costs the old price but isn't good, or accept his price increase?
The employer and the employee have different goals and metrics for "success". This mismatch comes up all the time whenever "interviewing is broken" threads come up. Many interviewees think the goal is to find the best person for the job. It isn't. It is to find someone suffciently good to do the job for the least money possible. This mean that if you filter out "better" candidates, it's not a failure if the position gets filled anyway.
So the mistakes being made here are:
1. You think you're irreplaceable. You're not. "But--". "--Nope";
2. You think it's more expensive to replace you. Possibly but irrelvant. You see, if they give you a 40% raise, there now might be 10 or 100 other people who will demand a 40% raise. It's cheaper overall not to give you that raise.
This comes up all the time when landlords lose good tenants by raising rents $100-200/month. Tenants will rightly point out that they'll lose more with the vacancy period than they'll get from $100-200/month. Also irrelevant. The landlord will often have 10 or 100 or 1000 or 10,000 units. They give a $200 increase to all of them and not all of them are moving. The increased income from those who don't will exceed the losses from those who move.
Plus, the $200/month extra increases the property value. Someone may lend against that increased value to buy even more units;
3. Ultimately any enterprise can only increase profits by raising prices or lowering costs, particularly wages. Suppressing wages becomes the entire business of the company. That's what permanent layoffs culture is for (to get more unpaid work on those that remain and to stop them asking for raises). That's what AI is for. Supressing wages is THE product for AI.
Remember there's a fundamental imbalance here. If a company loses a particular employee, most likely they either won't notice (at least for awhile) or they'll simply be temporarily inconvenienced.
What happens if you don't have a job? You might lose your house, your car, your health insurance, your childrens' school and so on.
The stakes for you are so much higher so in any difficult hiring market, you will be squeezed.
I don't know if you simply haven't worked with people who are unreplaceable or what, but I assure you with genuine confidence that there are people who cannot be replaced without massive disruption and undesirable risk.
In all seriousness even though deep down I know there’s no replacement for experience, I’ve seen a bunch of new people get impressively far with just hacking stuff together. And in the end if you’re making money with that for a long time, isn’t that all that matters to the companies?
IMHO, What is likely to happen is that eventually businesses will just "hire" agents from a handful of AI providers directly, trained by... guess who..., each time you prompt Codex, Claude or whatever, you are also training these services while paying for them... If Seniors think that their jobs are safe, lmao...
If the knowledge work of Seniors is fully automated, wont pretty much all knowledge work be fully automated?
Furthermore, if the source of your value and wealth is that you have an app, what does it mean when anyone can easily build an app?
One day we might see a UI toolkit (so many of our modern problems are because our UI toolkits suck; my hot take) with deep AI integration and then apps will just be some microservices on the backend and the AI UI on the front that responds to natural speech and can adjust its display however the user requests.
> so many of our modern problems are because our UI toolkits suck
The remainder of the problems are caused by overly complex deployment/hosting setups. Compiling a binary from source looks like a breeze by comparison.
This article is written from the perspective of a corporations's best interests.
Large companies have made it abundantly clear that they are sociopathic entities that consider nothing but profit. They will put on a mask and smile and do the absolute minimum to appear to care about you and retain valuable employees but it's all a show.
It is within the best interests of individual engineers to do the same.
They don’t even care about profit! It’s well documented that having long-tenured employees saves you money in a ton of ways (the tangibles are: recruiter fees, ramp-up time, higher pay for new hires… and the intangibles are all the hidden work or keep things running smoothly, building relationships between teams or departments, and innovation). But individuals have to quit to get a market-rate job, and the company ends up paying out the nose for someone new.
They in fact care about control more than they care about profit. I mean control over non-shareholders, including employees and customers, as part of an implied goal of any organisation, control over non-members.
I saw an article on HN a while back that showed the math for "senior" employees was affected by the amount of profit generated off them.
I think that it was pitched at sales, but maybe could be applied to ENG.
The thinking was - if you have X sized market, you price in Y for your staff and you take Z for the profit - as the price of your staff increase, if the size of the market, or your share of it, does not increase, your profit decreases.
So it makes sense (the article argued) to drop the senior staff, and bring in the lower paid, but almost as good, intermediates - the profit stays the same.
As someone with 20 years in the industry, it seems absolutely plausible. Stupid, but entirely within the realm of possibility. The people making these calls have no loyalty to their company; they have loyalty to their own career. And if doing this is something that gives them a win and they can be gone by the time the consequences some around... it'll happen.
> A senior engineer says “I want a 40% raise or I’m leaving,” and the company’s ability to respond depends entirely on what their alternatives look like.
Except where I live there's a glut of people wanting any job they can find—for a variety of reasons ranging from high levels of immigration to layoffs in the last two years—and willing to accept discount rates because the alternative is being unemployed for another 3 months (New Zealand).
Both the employer and employee know this. So the employee is either foolish or risky enough for asking and gets turned down, or they do actually leave and the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do for their new role.
End of story.
> and the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do
It sounds like what you're saying is actually that the last engineer was being paid above-market, because the price that employers are paying new employees is literally the market rate, seeing as it's the rate in the literal market.
> the price that employers are paying new employees is literally the market rate, seeing as it's the rate in the literal market.
I want to drill this into anyone that throws the word "below market" or "above market" around.
If a company pays below-market, it won't be able to hire anyone. Either the role will remain unfilled, or the employer will have to compromise on experience.
If someone is claiming to be paid below-market but the company can hire their replacement, then they're not being truthful.
Hiring the replacement ≠ finding the same or better replacement.
Will you be able to find someone in this economy? Sure
Could you fill the shoes? Much harder. Especially in the age of bootcamps, AI to complete exercises, and what have you where people went into IT for the money and not for the love of the craft, tinkering and learning.
So this is not an oxymoron: you can have 200 applicants and not a single good one to replace someone with them.
Only in a market with perfect information. With imperfect information, the market rate is an estimate of the expected or typical rate for a similar good. Because everyone has access to a different subset of the information, everyone's estimate is different, and companies often end up paying above or below the consensus rate.
Yes, this is how markets work. You don't need perfect information to have a market. The price of risk is factored in.
> If a company pays below-market, it won't be able to hire anyone. Either the role will remain unfilled, or the employer will have to compromise on experience.
Or they lobby the government for slaves
No, we are not talking about a commodity market with a clear exchange. If an employee is bad at a negotiation or doesn't look around then they may accept a lower salary than another market participant would have offered and if neither side looks around, and is willing to pay some costs of a change then they are making a salary that is different than the current market rate.
I'm not an economist but that implies the market maintains some kind of optimal equilibrium price. The reality probably is very noisy like with everything else. Plus there's asymmetric information on both sides meaning people don't get what they think they do.
Poeple are not fungible, who’s to say that the individual replacing them is of equal value.
People are not fungible but the role frequently is.
You could be an AI infra genius, but if you're in a cookie-cutter consultancy role, that's the salary you're getting.
The role is only ostensively fungible because the org acts like it is, to its detriment. Staff turnover is crazy expensive.
It’s a lemon market with a power play dynamic, one of the main reasons I’m self employed.
That depends on the country. In the US where everything is tied to stock options and employees will jump ship if they get 50 cents an hour more next door, that may be the case. In Aus/NZ you don't have that kill-yourself-for-your-stock-options-and-then-leave culture, if you're not on a barely-subsistence wage where you don't have any choice then people will look at job satisfaction, ease of travel to/from work, and so on alongside what they get paid. I know several guys who have turned down jobs that paid five-figure amounts (this may be a two-figure amount in the US) more than they were currently earning because they were quite happy with their current work environment. Good work environment, laid-back management, the company looked after you (rec room, pool table, beer fridge, after-work gaming, being able to tell the mgt that something wouldn't work and they'd listen to you, etc), not because they saw it as a leash but because they believed in looking after their employees. Some of those guys, and their coworkers, have been at the same company for 20-30 years.
In AUS/NZ you're not going to earn even close to the same amount as you would in the US. Every time I've changed jobs, it was for an extra 100k+ per year. The rec room/pool table can't compete with that.
My current manager has been with the company for almost 20 years. He doesn't feel the need to leave because his stock options have made him a multimillionaire. The company doesn't care about him or me, but we're both happy to stay because we don't need them to. We just need them to pay us.
This is pretty much what's occurring in New Zealand right now, yes. 2020–2023 had pretty much zero international movement due to closed borders with COVID-19, with a low official cash rate which caused business to be in desperate need of development resource; so salaries were high.
Market rate for developers has either stagnated generally or depending on the role dropped as hundreds of applicants are willing to undercut each other on what constitutes an acceptable pay check.
But most employers don't go around reducing previously-hired people's salaries for a variety of reasons.
> But most employers don't go around reducing previously-hired people's salaries for a variety of reasons.
The main reason being that it's illegal in NZ. The employee would have to agree.
The main reason is that employees will quit. It's not illegal in the US, but it still almost never happens. Companies would rather lay off than risk alienating employees like that.
> the employer can hire a new senior engineer at below market rates to accommodate the specific learning they have to do for their new role.
Money doesn't cleanly convert into time.
Having juniors and mid-levels is about being able to promote an existing mid-level that knows the team and the system, with zero downtime. It's much easier to replace a junior than a senior because of the lower expectations and risk.
Furthermore, a lot of companies are struggling to hire right now because the market conditions creates a flood of applications and its quite hard to discern who's a waste of time or not which leads to hiring processes taking longer.
> Having juniors and mid-levels is about being able to promote an existing mid-level that knows the team and the system, with zero downtime. It's much easier to replace a junior than a senior.
Yeah but the point of this post is that it makes an assumption that your company doesn't have mid-levels or juniors.
Aye, its assuming the org tossed them away when LLMs turned up or stopped recruiting at that level.
as knowledge is commoditized the bar for junior raises, what was advanced math research a century ago is now undergrads' homework. I don't see why code is so special in that regard that cannot progress beyond artisanship.
> Furthermore, a lot of companies are struggling to hire right now because the market conditions creates a flood of applications and its quite hard to discern who's a waste of time or not which leads to hiring processes taking longer.
Hiring is the most important function in any company, full stop.
If they aren't good at hiring, well then they shouldn't be running a company. There are no excuses. If HR aren't up to the task, then they should be replaced, and so on up to the level of the CEO, until whatever incompetence has been flushed out. Shareholders have to demand this.
A company not being able to hire is just as ridiculous as a restaurant not being able to serve food.
If they are receiving a flood of applications which is hard to sift through, they are already doing everything wrong. Shareholders have to nuke these kind of people.
> If they are receiving a flood of applications which is hard to sift through, they are already doing everything wrong. Shareholders have to nuke these kind of people.
That's why some companies will contract with temp agencies for relief.
Seems like you’re only imagining interchangeable people who dont have bargaining power?
That's probably the bulk of senior developers. We're not all inverting custom proprietary binary trees.
By the same logic, most CEOs are interchangeable. After all, not all of them are creating new markets, shepherding new and exciting business ventures or changing the way we do X.
Knowledge and tacit knowledge of the system and company around it makes a huge difference.
I was wondering if there's anything behind the idea that people who learned how to code before AI will become the human capital version of low-background steel.
Everyone who starts to code after AI has a problem: it's hard to believe you went through the pain and frustration that people often think is required to become a senior engineer. Even if you did, you are in a lemon market with quite a few people who took the shortcut in college. Much better to hire a guy who learned before they could cheat, and then give him the tools to replace the juniors.
I partially agree with this idea, but there will always be the Jeff Dean and Fabrice Bellard of the world... but 99% of companies won't ever get the chance to hire the top 1% of programmers. Therein is the problem. Maybe a better way to look at it is the statistical likelihood of producing good engineers and scientists goes down with AI because of poor fundamentals.
In SW this is perhaps the easiest domain to counterpunch. Get young folks learning computer history and understanding how the hardware works down to a register level. We write most software with some mental abstraction of what the hardware is actually doing. That's the crux, I believe, and if we lose widespread hardware understanding then we truly do become lost at sea, practicing the mystic art of non deterministic incantations
How do you value people who learnt to code in the 80's, 90's or 2000's today?
Will new developers know/understand what they don't know, or will the new state of things simply become normalized?
> How do you value people who learnt to code in the 80's, 90's or 2000's today?
Personally I rate them really really highly. They are always fascinating to talk to. But they also compete with newer cohorts who mature.
> Will new developers know/understand what they don't know, or will the new state of things simply become normalized?
Yes because a 32 year old guy with 10 years of experience who got given AI recently is going to be around for an awful long time reminding everyone that he has something the younger ones don't have.
> You pay the 40%, or you lose the person and spend six months (and a recruiter’s fee) trying to find a replacement at market rate, which is probably even higher.
I think I see the problem here.
Senior engineers have always owned the application (by knowledge not by law). And that has never been a problem. The real problem is, that without new Juniors there will never be new Seniors, and your company will collapse when your Seniors retire.
If this was a "your company" problem, it would sort itself out soon enough. The real concern is that it might a "your industry" problem.
From another perspective, the problem is people entering the workforce without sufficient skills to be valuable to employers anymore. The solution would be to spend more time in training so you can reach senior level when you start. Software has been an anomaly among high-paying professions in the low bar for entry. Maybe that's ending.
The hypothesis is completely wrong. With AI, juniors can catch up with the codebase / domain must faster and deeper than before. It's just a matter of putting time.
I have seen this happen in some companies already. A slightly different scenario, the CEO actually wants to hire new juniors but seniors refuse to train them .
It happens cyclically. Sun Microsystems was a good example, Cerner was another (ironically both acquired by Oracle).
I say that we should fully support all AI initiatives and stop giving advice. Tell them AI will make them rich and that they won't have to care about anybody, and just wait to see what happens.
And remove all warning labels.
This article touches on an extreme case "what if all your Sr. Engineers are financially independent?" but I think could do more to explore real world examples and address the elephant in the room, compensation through vested shares. I'm not personally experienced about that kind of thing, but I can imagine it helps maintain a healthier balance of power.
Certainly from a raw game theory kind of analysis, an engineer who can monopolize information and has gained authoritative understanding of the design can be crazy powerful, for better or for worse. If this agent optimizes for good salary, lowish effort and high stability... yes I can imagine a senior engineer who fits the name in rate of technical output, not only pecking order order.
I worked in a company like this.
The senior engineers, who built the main product that pays the bills have all been there for 25+ years. They held shares in the company back when it was worthless, and now they are all very wealthy. At this point, they literally show up to work just for fun and they aren’t shy about making this known.
The result is that the company has massive insurance policies on these guys in case they die. They also call the shots; they have outsized influence over a range of functions they know absolutely nothing about, ranging from HR to finance to security.
1. This is already the situation if you don't have technical knowledge in-house and outsource all development.
2. Yes, if you only have few people who know how to use a powerful tool, they might have leverage.
3. The supply-demand mechanism is certainly there, but the time scale is never mentioned. It'll take time to remove the unemployed juniors from the pool (maybe they get sucked up into other jobs.) It'll take time for seniors to realize they have leverage. And, of course, the company must not have rehired junior engineers for other reasons (e.g. because the coding tools become so good that seniors are not needed.)
Any objections about "this thesis isn't true; look around you" needs to take this into account. The argument is not that we're there now, but that there's a mechanism to lead there.
The missing ending to this article is when companies whine for more immigration because they didn’t invest in the future to make sure a talent pipeline still existed locally.
There's an easy solution for this:
1. Declare AI "the future" and mandate its use by all employees.
2. Hire college grads who have no idea how to code without AI.
3. Start PIPing problem seniors for not being "AI-first" enough. Great way to mask the ageism you are doubtless committing.
> A senior engineer says “I want a 40% raise or I’m leaving,” and the company’s ability to respond depends entirely on what their alternatives look like.
Right... the alternative is to let the senior engineer go, some work gets reshuffled a bit between other senior engineers, and lowest-priority work is delayed until they hire a new senior engineer.
It's not that the company is held hostage by the senior engineer, sheesh.
> you don’t have options. You pay the 40%, or you lose the person and spend six months (and a recruiter’s fee) trying to find a replacement at market rate, which is probably even higher.
Huh? A replacement engineer is "probably" even more than 140% of what you're currently paying? Then your company has a whole other problem which is that it is criminally underpaying its engineers.
Nothing about this post makes any sense. It's not how companies, employees, or the labor market work.
It’s not how companies work today, but it could be how companies operate in the future. Imagine a situation where single engineers manage a fleet of agents and own entire systems. This is already happening. If that engineer leaves then it’s game over for that system.
It's a basic part of management that you never let any individual employee become irreplaceable. Remember, people get sick and go on vacation too. Managers are always supposed to make sure that tasks and responsibilities can be picked up by someone else.
And the AI that is making it easier for engineers to handle so much more engineering, also makes it easier for a new engineer to take over. They literally just sit down and prompt the AI to start explaining how the current system is set up.
You would hope so, but yet… a lot of people are getting their teams to reap cost savings.
Making sure that no employee is irreplaceable doesn't really have much to do with cost savings.
It's just about how you assign work, rotate what people work on, code reviews are a part of it, etc.
None of this has anything to do with AI. If anything, the way that best practices around AI involve lots of design documents, tests, markdown, etc. can actually make it much easier for a new employee to continue where a previous employee left off.
If you have people on your team that are valuable enough to demand a 40% compensation increase, then you should have been paying them 40% more without them having to demand it.
It never ceases to amaze me that the owner class is so continually shocked that the people who build the value that the owners leverage into growing their fortune might suddenly realize their value.
The entitlement is baked deep into the mindset that there are people who work and people who profit.
Often enough they don't care or realize it. I've seen all the data analysts that were eiter (1) senior or (2) also had data engineering skills leave.
They all got 25% more after leaving. And this is in the Netherlands, where pay is already kind of low. What was even weirder was that this company is a F500 company and the people that left, they left for all kinds of organizations (small and large) and still got paid more.
That includes me by the way. I was doing 4 roles (data analyst, pentester, software engineer through web development, AI stuff + data engineering and project manager). It was a lot of fun though. But it paid decisively mediocre.
Currently going to a fun job that pays way better.
It gets worse. I've seen some managers hold back strong developers because they want everyone to be a replaceable cog. They push for average work across the team so no one becomes irreplaceable--even if it means the product ends up weaker than it could be.
"Value" is not this objective measure that can be deduced from someone's output. It depends on many variables like cost of living, the job market, tech trends, and industry competition. Could very easily fluctuate 50% or more in a short period of time.
This is such a childish mindset. How much did you pay your plumber to fix your toilet last time? Why didn't you pay 40% more than that?
If your plumber was doing regular work for you that brought you significant, expensive-to-replace value then you _should_ pay him more.
How is it childish? Not all plumbers cost the same or do the same work. If you wanna hire a good plumber, you'll have to pay them more.
Likewise, if people on your team get better at their jobs and you don't want them to leave, you also have to pay them more.
Correct but not the point. The reason you pay your plumber 1x and not 2x is because someone else can do the same job equally well for you for 1x.
You don't pay 2x untill you are forced to (eg plumber is the only game on town) not because you are so enlightened.
Do y’all not tip your plumbers?
I did, because private equity took over the plumbing company and raised the prices.
When you pay someone to do sensitive work like plumbing or electrical work in your house do you go for the cheapest guy? Why or why not?
Because there is no intellectual property in the toilet?
You're making the wrong comparison. If your plumber increases his rate by 40%, will you "fire" him and get another plumber which will also be 40% more expensive, or a plumber which costs the old price but isn't good, or accept his price increase?
The employer and the employee have different goals and metrics for "success". This mismatch comes up all the time whenever "interviewing is broken" threads come up. Many interviewees think the goal is to find the best person for the job. It isn't. It is to find someone suffciently good to do the job for the least money possible. This mean that if you filter out "better" candidates, it's not a failure if the position gets filled anyway.
So the mistakes being made here are:
1. You think you're irreplaceable. You're not. "But--". "--Nope";
2. You think it's more expensive to replace you. Possibly but irrelvant. You see, if they give you a 40% raise, there now might be 10 or 100 other people who will demand a 40% raise. It's cheaper overall not to give you that raise.
This comes up all the time when landlords lose good tenants by raising rents $100-200/month. Tenants will rightly point out that they'll lose more with the vacancy period than they'll get from $100-200/month. Also irrelevant. The landlord will often have 10 or 100 or 1000 or 10,000 units. They give a $200 increase to all of them and not all of them are moving. The increased income from those who don't will exceed the losses from those who move.
Plus, the $200/month extra increases the property value. Someone may lend against that increased value to buy even more units;
3. Ultimately any enterprise can only increase profits by raising prices or lowering costs, particularly wages. Suppressing wages becomes the entire business of the company. That's what permanent layoffs culture is for (to get more unpaid work on those that remain and to stop them asking for raises). That's what AI is for. Supressing wages is THE product for AI.
Remember there's a fundamental imbalance here. If a company loses a particular employee, most likely they either won't notice (at least for awhile) or they'll simply be temporarily inconvenienced.
What happens if you don't have a job? You might lose your house, your car, your health insurance, your childrens' school and so on.
The stakes for you are so much higher so in any difficult hiring market, you will be squeezed.
Your assertions are confounded by the existence and necessity for key-person insurance.
https://www.legalandgeneral.com/insurance/business-protectio...
I don't know if you simply haven't worked with people who are unreplaceable or what, but I assure you with genuine confidence that there are people who cannot be replaced without massive disruption and undesirable risk.
There's always been a reluctance by business to hire juniors, AI is just the latest excuse.
I’d love to go work at one of this small and medium shuttering businesses. How does one do that?
except Juniors with Claude are now “seniors”.
In all seriousness even though deep down I know there’s no replacement for experience, I’ve seen a bunch of new people get impressively far with just hacking stuff together. And in the end if you’re making money with that for a long time, isn’t that all that matters to the companies?
They aren't. They act like seniors. But that is all the business needs.
IMHO, What is likely to happen is that eventually businesses will just "hire" agents from a handful of AI providers directly, trained by... guess who..., each time you prompt Codex, Claude or whatever, you are also training these services while paying for them... If Seniors think that their jobs are safe, lmao...
If the knowledge work of Seniors is fully automated, wont pretty much all knowledge work be fully automated?
Furthermore, if the source of your value and wealth is that you have an app, what does it mean when anyone can easily build an app?
One day we might see a UI toolkit (so many of our modern problems are because our UI toolkits suck; my hot take) with deep AI integration and then apps will just be some microservices on the backend and the AI UI on the front that responds to natural speech and can adjust its display however the user requests.
> so many of our modern problems are because our UI toolkits suck
The remainder of the problems are caused by overly complex deployment/hosting setups. Compiling a binary from source looks like a breeze by comparison.
This article is written from the perspective of a corporations's best interests.
Large companies have made it abundantly clear that they are sociopathic entities that consider nothing but profit. They will put on a mask and smile and do the absolute minimum to appear to care about you and retain valuable employees but it's all a show.
It is within the best interests of individual engineers to do the same.
They don’t even care about profit! It’s well documented that having long-tenured employees saves you money in a ton of ways (the tangibles are: recruiter fees, ramp-up time, higher pay for new hires… and the intangibles are all the hidden work or keep things running smoothly, building relationships between teams or departments, and innovation). But individuals have to quit to get a market-rate job, and the company ends up paying out the nose for someone new.
They in fact care about control more than they care about profit. I mean control over non-shareholders, including employees and customers, as part of an implied goal of any organisation, control over non-members.
I would say it’s more short term profit. They are happy to cut off the nose and put the rest in the backlog
It's all just a sado maso power game.
I saw an article on HN a while back that showed the math for "senior" employees was affected by the amount of profit generated off them.
I think that it was pitched at sales, but maybe could be applied to ENG.
The thinking was - if you have X sized market, you price in Y for your staff and you take Z for the profit - as the price of your staff increase, if the size of the market, or your share of it, does not increase, your profit decreases.
So it makes sense (the article argued) to drop the senior staff, and bring in the lower paid, but almost as good, intermediates - the profit stays the same.
...good!
> Eventually this turns into a comp conversation. A senior engineer says “I want a 40% raise or I’m leaving,”...
...and the company says "fine, we'll replace you with AI / wanted a layoff anyway".
Whats your background in the industry, where this seems plausible?
As someone with 20 years in the industry, it seems absolutely plausible. Stupid, but entirely within the realm of possibility. The people making these calls have no loyalty to their company; they have loyalty to their own career. And if doing this is something that gives them a win and they can be gone by the time the consequences some around... it'll happen.