Sometime back in 2016 at BigTechCorp (thousands of employees) the HR team decides to freeze salary band scales, and that makes their yearly budget much nicer for the coming few years. They got kudos from the head honchos and board for slashing costs year on year, driving up those profit margins. They were even paraded on the quarterly all hands for their outstanding contribution to the business. For years, everyone got very modest raises, literally just around inflation. Year on year, a company known for paying top end of market rates and getting the best talent starts to become middle of the road market rates/mid talent and heading toward bottom market rates/bottom of the barrel talent..
The comes covid, the great registration and the explosion in tech salaries. The company was hemorrhaging staff and the new talent coming through the door did not want to work for less than market rates. Those that accepted below market were, understandably, not great. Managers were screaming upwards via all leadership channels to fix the problem. HR though, cannot. It is stuck unless their leader admits they got it very wrong in 2016, and also ask the board for enough money this year to cover 5 years worth of job market increase. They would get it, but the cost would be their head on a plate.
Rather than be honest and solve the problem, HR then did the most audacious corporate gaslighting i have ever been a part of. HR call all leaders to a webex, telling all that the salary data they use is reliable and that the company is paying market rates. That drew immediate laughter from those not on mute. I had flashbacks to the iraqi information minister within seconds.
Next they try to persuade everyone that the offers that new candidates are getting from competitors in the marketplace are not actually happening, it is their view that the candidates are just trying to get us to pay them more money at the job offer stage. Despite plenty of candidates declining without even wanting to negotiate.
And then came the crowing gem – “it is our view that people don't leave the company, they leave the manager. This company is a family. It is your job as a leader to retain staff and we will be taking action against managers who have a high staff turnover. You should promote the benefits of working for us while accepting the money we offer, such as our employee assist program' (that is literally a phone line to a therapist)..
That went down like a cup of cold sick.
So now they are having a mass exodus of managers as well – talent that is 5, 10, 15, 20 years tenured, with deep knowledge of the organisation are just flying out the door. While those left to backfill the managers positions with new candidates have to try to do so, yet when they make an offer they have to have a straight face and make an offer for a tech management position which is significantly less than what a programmer is paid. I was one that left, and i got no regrets.
TLDR: HR freezes salaries to get budget kudos from the top. The job market changes, people mass exodus, new people wont accept the lowball offers, HR is screwed, so they try to put the onus on long tenured managers. managers quit en masse.