why don’t more companies try to retain key employees with raises?

by Alison Green on March 19, 2026

A reader writes:

My brother-in-law works for a company of about 600, with branches of 80 or so in several cities across North America. His department had three employees who served their branch in an HR-type capacity. One employee moved, leaving only him and his manager to handle their caseload. This was okay. Then the manager left.

The branch managers called my brother-in-law in and told him that he was now the acting manager but there would be no pay raise “at this time” but they appreciated his work and knew he could handle this opportunity. While the caseload on him went up, he was able to shift work to other branches so there were no late nights or long hours. Still, he was now in charge of a large branch’s department.

He immediately started looking at other employment opportunities and after four months has secured a better position elsewhere.

Had they offered up an initial pay bump of $10,000 or so, I wouldn’t even be writing this letter. But why do companies not think to raise the salaries of employees under these sorts of conditions? (Even good workplaces?)

Now, old company has to:
• Go through a hiring process (cost #1)
• Bring in a temporary manager from another branch (cost #2)
• Train someone who is new to the organization (cost #3)
• There’s likely a hidden cost I haven’t thought of

Meanwhile they lost someone who was considered strong enough to become head of their department with a title bump but not strong enough to get a pay bump.

I continue to be perplexed.

They underestimate people’s willingness to leave. They know people can leave; they just don’t think the person will go through the hassle of doing it.

This is obviously absurd; people leave jobs all the time. But employers often overestimate their own power in these situations.

The other thing that’s often at play is that the employer doesn’t really care that much if the person does leave. They figure if that happens, they’ll hire someone new — which they will. And yes, the costs involved in doing that (all the ones you laid out, plus the opportunity costs there are from having someone new who will take a while to master the job) usually exceed the amount of the raise they’d need to give to retain the person, so from that perspective the math doesn’t add up.

Plus, if they end up having to replace the exiting employee with an external hire, they’re probably going to have to pay the external hire more than they were paying the person who left — because a new hire coming in off the street is far less likely than an internal hire to accept “we’re hiring you for a manager job but paying you for a level below that because the money isn’t there right now.”

For what it’s worth, it’s possible that they didn’t want to hire your brother-in-law into the manager job permanently and just intended for him to be the interim fill-in while they searched for the permanent hire (which is why he was just acting manager). If that’s the case, well, they got the interim job covered at no extra cost to themselves for a while, and they might not care that much that now there’s turnover in his initial role.

Mostly, though, it’s that they figure they can exploit people and so they do.

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{ 227 comments }

{ 227 comments… read them below }

  1. Chairman of the Bored*  

    Nobody is a truly rational “economic actor”. This includes employers.

    I’ve seen pride, ignorance, wishful thinking, or a simple desire not to be inconvenienced drive this behavior much more than any sort of detailed dollars-and-cents analysis.

    I once worked for a place that was willing to pay me a salary of $99,978 dollars but flatly refused to increase it by 22 bucks to put me at the “6 figure” psychological threshold.

    I no longer work there.

    1. Smithy*  

      And sadly this also does apply to employees. Really talented and capable people with amazing resumes, but don’t look for new jobs that would inevitably pay more.

      Some of those reasons ultimately make sense because of other life realities (i.e. taking advantage of good health insurance/parental leave/workplace flexibility when starting a family or managing a complicated illness), but often time they’re rooted in less “rational economic actor” reasons. Just the basics of not wanting to take the time/energy to apply to new jobs, having anxiety around change, etc.

      Not using this as a way to blame employees – but employers often will be able to get away with this behavior because there is a cohort of employees who will be treated like this and not leave.

      1. nanani*  

        It’s not irrational to value the things in your example, like flexibility, more than salary dollars.
        And not just because of preferences. Shorter commutes or better insurance really is worth more dollars!

        1. LifeisaDream*  

          Absolutely, I accpted a job that pays less than my previous one. My commute is now 10 minutes vs 50 minutes. There is no weekend work unless a special event is planned, usually a month in advance. The hours are firm and no one is ambushed with last minute overtime work. Quality of life is intangible and when you find work that hits your sweet spot it’s worthwhile.

        2. Reluctant Mezzo*  

          Oh, yes, I wasn’t paid that well in dollars per hour, but their insurance program covered enough of my husband’s cancer that I wasn’t going to rock the boat. We couldn’t afford a gap and so I was stuck there, but they weren’t abusive about it either.

      2. Analyst*  

        It is not irrational to not want to undertake an enormous effort to get a new job, in a new situation that you don’t know and could be worse than where you are (especially if your work environment is good). If I went somewhere and got a $10k salary bump, but left somewhere with a good work environment where I was comfortable and happy minus pay, that might very well NOT be worth it to me.

        1. Asloan*  

          Plus the market is so confusing, what seems like a clear-cut pay increase of $10K may not be as good as you thought after differences in insurance or different travel expectations kick in. Or PTO/401K plans which are as good as cash for many. So I worry I’m going to do all that work to find a new higher paid job and then end up approximately the same place lifestyle-wise, except also really stressed by having to change jobs and learn a new organization. “Better the devil you know” is a phrase for a reason!

    2. Bathyphysa Conifera*  

      This comes up in economic models. The economists try to predict “Because punishing Sven would cost the experimental subjects marshmallows, they won’t do it, because of logic” and then actual humans are all “Sven screwed me over; I will give you a third of my marshmallows to take the bastard down.”

      2. Labbie*  

        That reminds me of a game of Risk I played with some friends. I had a treaty with one that we wouldn’t attack each other across a certain border. He did. Next turn I wiped him from the board. I lost the game (4 person game and I had to horribly overextend to wipe him out) but I didn’t care. Taking him out of the game for breaking our treaty was more satisfying than winning. He couldn’t believe I was willing to lose just to ensure he lost first.

          2. StephChi*  

            As someone who teaches world history, focusing on the 20th century, I appreciate the reference!

        2. Richard Hershberger*  

          In game theory it matters whether this is a one-off game or one of a series. If you were playing against strangers and if winning was your motivation, your act would be irrational. If playing with people you know and will play with again, your willingness to go mutually assured destruction can be a rational act to warn them in future games, thereby increasing your overall winning percentage.

          Back in college we had a standing monthly Diplomacy game. You bet we knew each others’ habits! This didn’t mean we didn’t break alliances, but we were careful not to do this whimsically.

          1. Lime green Pacer*  

            M husband played a lot of Diplomacy with a regular gaming group. He made it a stated, personal policy that if someone backstabbed him, he would do all he could to make sure that player would not win.

            1. goddessoftransitory*  

              Yep. One thing humanity has a hard time retaining is that “winning” can mean very different things to people in different circumstances.

          2. LoraC*  

            Heh, I was the only “irrational” person in my group of board game friends. And since none of them liked when I played “irrationally” they’d always make it a priority to eliminate me first so they could go back to playing their perfectly logical game.

          3. metadata minion*  

            Are emotions inherently irrational? Plenty of people play games like Risk for the storytelling/roleplaying/social aspect at least as much as to win the game. If the most satisfying endgame becomes “crush that treaty-breaking jerk” instead of “win according to the rulebook”, I don’t see that it’s irrational to do that.

        3. Ally McBeal*  

          Yep, if someone backstabs me in a game, I immediately start caring less about winning the game and more about exacting vengeance.

        5. Slow Gin Lizz*  

          Were you in the same game I played? It was me against 5 guys. They all kept forming alliances and breaking them, whereas I just stayed under the radar until they all weakened each other and then I went in for the kill. It was my crowning Risk achievement. The game lasted five hours and I haven’t played since.

        6. TinLizi*  

          I did this to a friend in the game Citadels. He stole my best building and put it in his city, so I burned it down. I game of Small World, my (at the time) boyfriend kept telling me how to play my hand. So I destroyed his faction. I lost both those games. Worth it.

    3. ArtK*  

      It took me a while, but I finally figured out that in economics, “rational” means “greedy and selfish.” Not my idea of rational at all.

      2. Bathyphysa Conifera*  

        You’ll go astray operating on both “humans act in their self-interest at all times” and “humans will ignore their self interest to help me instead at all times.”

  2. Andrew*  

    That’s kind of a trend with out-of-touch management:

    Employee: “[very reasonable compensation or working condition request] or I’ll quit.”

    Management: [silence, or transparently false excuse, or blatant misdirection]

    Employee: “I quit!” *turns in name tag etc*

    Management: *shockedpikachu.jpg*

    2. EarlGrey*  

      And you can picture this expanding to middle managers going “Employee needs X or I’m afraid they’ll quit” and getting stalling or silence from above, and passing that message along (with more or less candor).

      1. Lab Boss*  

        When I’ve had employees that I know will understand the message I’ve been pretty blunt on a few occasions in explaining “I cannot get you a raise just because we think you deserve one. Meet these three relatively arbitrary standards and then, if you were to tell me you had received another offer I would be VERY WORRIED and have to TELL HIGHER MANAGMENT WE NEEDED A RETENTION RAISE IMMEDIATELY.”

        My teams always seemed to appreciate the honesty about the process and I always enjoy successfully manipulating the system, but I loathe that I have to do such a song and dance.

      2. Liane*  

        I can’t find it, but there is a Saga here about that very situation. An OP was promoted over someone who had been promised that position for years. OP now supervised this coworker and was afraid he would leave over the whole thing. OP repeatedly warned their higher ups at StupidCo and practically begged them to okay a raise and other things, but Big Bosses refused. Spurned employee did leave–right after StupidCo’s standard noncompete was ruled unenforceable but before a new one was put in place–for a better job & salary. OP decided to start looking and by the final update Spurned had helped them get a job at Spurned’s new company.

        1. Hlao-roo*  

          This saga is very satisfying! For anyone curious, it’s titled “I now manage the guy who hired me — and I’m afraid he might quit over it” and the first post is from Sept 4, 2019. There were updated Oct. 10, 2019 and June 25, 2020. I’ll link to the first post in a reply to this comment.

          2. Grumpy Elder Millennial*  

            This was a great letter and some very satisfying updates. Although I do love the letters that are full of jaunty banana hats, it was also nice to see a letter from someone who was totally reasonable and trying to do right by someone else.

        2. goddessoftransitory*  

          It’s this same thinking that causes economic bubbles–the all too human decision that a certain factor or part of the economy can and will just keep expanding because it has so far.

          Anybody who puts two minutes of thought into it can clearly see that the housing market or 90s startups or stocks or tulips or whatever is the Hot New Thing is and will collapse eventually. Some people know it and are gambling on getting out at the right time, but it amazes me how many others genuinely seemed to think that this fluke or that one was simply The New Permanent Way Things Are Now.

          1. Lenora Rose*  

            The current “Everyone can see the collapse coming” bubble is definitely AI; the amount invested into it is not remotely matched by any predicted returns. My only disappointment with that fact is that the economic collapse likely won’t actually cause the companies to remove the stuff they forced into their products already, or clean up the way it has inundated social media and so many web sites.

      3. Technically Australien*  

        I had almost exactly that discussion with a manager once:

        Manager: we’re hiring, do you know anyone?
        Me: someone at my level would need $100k if we wanted to keep them
        Manager: {laughs} impossible, the company would never pay that.
        {two months later}
        Me: I found a decent job. Thanks for tiding me over while I was desperate.

        That was also the job that had the best exit interview. One day the CEO got me into his office and say “what’s going on. I had no idea you were thinking of quitting”. Apparently salary expectations were based on my neo-baby manager’s idea of what peons like me should be paid (half what he got!)

    3. spooky*  

      Takes me back to the employer that cut my (already meager) salary by 25% and was subsequently shocked when I turned in my notice. My manager said something like, “oh yeah, I have been thinking we should probably pay you more.”

      1. Grumpy Elder Millennial*  

        It’s so frustrating when the people making so much more than you are incapable of or unwilling to do 2 +2 = 4 type logic.

        1. Bathyphysa Conifera*  

          Family member’s company tried to do “We can’t do significant raises… so let’s explain how the health insurance is actually part of compensation! The employees won’t have realized that before! So it will feel like they’re making way more money!” Family member begged them to understand the tech team would find “no raises” easier to stomach than “no raises and we think you will fall for this.”

          Like a past letter from a lawyer who turned down a bait and switch job offer, and in the update it seemed the company had tried to hire a bunch of contract lawyers while hoping none of them would read the contract.

          1. Warrant Officer Georgiana Breakspear-Goldfinch*  

            The idea of contract lawyers not reading the contract …

          2. goddessoftransitory*  

            To quote an old Garfield cartoon: “His lying to me isn’t half as upsetting as the credit he’s giving my intelligence.”

            1. DJ Abbott*  

              Like my assistant manager, sometimes gets mean or impatient or treats me or others like an idiot. Like she did today. I’ve had this job 4 years, and she assumed I don’t know basic things and lectured me. 2nd time this week.
              I know she’s also very kind and supportive. I know her bad behavior is usually from anxiety and stress, and she’s dealing with more now with our boss on leave.
              But it still hurts.

          3. Grumpy Elder Millennial*  

            Been there! Our return to the office mandate was handled super poorly. The public rationale for it was super flimsy to begin with and somehow got flimsier as time went on. What made it extra galling is that a lot of us in the organization have jobs where we have to be very cognizant of messaging and how to position things. So it was either they thought we weren’t smart enough to see through what they were doing or this actually was their rationale for doing it. Probably both, TBH.

    4. Momma Bear*  

      Or what my company did was do hack and slash layoffs and then get all Shocked Pickachu when people they didn’t count on leaving left. People who have options will exercise those options when pushed.

    5. FD*  

      My really skilled co-worker who said he would leave if he didn’t get the promotion he was promised is leaving. What an unforseeable event!

      1. Bast*  

        Had the same thing happened to me and they were shocked when I found somewhere else that offered me an even higher raise and title bump, then tried to pull “Well, we never promised a promotion.” Yes, you did. In a room of 3 other people that you promised promotions too, 2 of whom you also screwed over.

    6. Georgia*  

      My terrible boss thought trapping me in a non-compete in a poor, rural area with terrible pay and insane hours would keep me from leaving. He really enjoyed coercive control and it did get me too depressed to anything for a couple years until an assistant pointed out how he was gaslighting me and I woke up. I found a new job that pays twice as much as I did before for half the hours.

  3. They knew and they let it happen*  

    You’re perplexed because you’re thinking logically. Companies are often just reacting short term so in your BIL’s case management would rather save the raise $$ for now, even though that is likely to lead to more $$ later

    1. Dog and Dahlia Lover*  

      I dunno if I’d call that illogical… there could be cash flow reasons why the company can’t implement a raise now. Though it’s hard to tell in this case if they’re strapped for cash or not. My gut says no but maybe financially they are a mess, who knows.

      1. Monkeying Around for Money*  

        It could also be that the accountability for the expenses come from different places.

        Retention bonuses? That’s our budget.

        Hiring? Maybe that comes from a more general pot, or as you’ve kind of alluded to, they literally can’t afford it now but might be able to in a quarter or two.

        1. EHS Compliance*  

          Agreed – at least in my field what I’ve seen is that an EHS person is of course part of headcount, but if you pay for an EHS consultant, that’s operations, and so they can squish things around and pay 2-3x the original salary for the consultant BUT can’t do a $10k raise. Completely silly if you look at it holistically but makes sense when you consider who is approving what budget.

      2. Cj*  

        Yes, their finances might be a mess. But they were paying both the previous manager and the OP’s BIL. Now they are just paying the BIL.

        So if they were paying both before, it sure seems like they could have scrounged up another $10,000 for the BIL. (I’m assuming that by saying the manager left, they meant resigned, not laid off, which would change the calculation.)

        Plus, it sounds like after the BIL quit, there was no one at all doing left to do their duties at that branch, let alone a manager. They are probably paying more just to cover those duties, even without adding anything to the salary to cover the management duties.

    2. Befuddled*  

      Also- if they’re underpaying half their workforce (so 300 people) and only 1/10 are willing to leave, they’re probably still saving money.

    3. Allonge*  

      Part of this is also that nobody stays forever – of course it would make sense to try to retain some people, but hiring is not an unexpected thing either.

    4. JustaTech*  

      Several years ago at OldJob we had a senior member of management come to the R&D department and explain how much it cost the company every time someone quit ($70k, as I recall), because it’s not easy to find people with the specific knowledge/skills we needed (and we had A Reputation in the region) and also because it takes a long time to get people up to speed.
      So my co-worker asked if then it would make sense to make sure that people were happy and well compensated to retain them?
      Upper management guy kind of said yes (in full C-suite speak). Our immediate director did not agree. Well, it was 2021 and whoop but a *whole* lot of people quit for jobs that paid way better *and* had reasonable in-office requirements. Director was shocked, confused, and deeply, personally aggrieved.

      My question was: why did the upper management guy even come give us that talk in the first place?

  4. Justin*  

    My last employer made several disastrous policy decisions everyone could tell were awful. A lot of us left. To save a bit of money, but now they’re out a ton of money from the departures.

    People at a certain level of power often (not always) convince themselves they’re successful because their judgment is impeccable.

    1. Lab Boss*  

      In the business world it seems to come with power, but you really see it in every form of success. Some people shilling courses online are just running a scam, but an awful lot are certain that whatever thing they did while losing weight/finding love/learning awesome skateboard tricks is THE secret to success, discovered by THEM, never dreaming it’s just an incidental thing they happened to do.

        2. Anon for now*  

          Totally. The local school district I live in just sent letters to half the paras in the school district and a third of the teachers saying they may or may not have a job in the fall. Any of those teachers and paras who are half way decent and bother to look for another job will find one. Then in the fall the school district will be talking about the teacher and para shortage.

          The idiocy is never limited to one industry. It’s universal.

      2. Bryce*  

        I haven’t tried to sell a course for it, but I definitely have fallen into that evangelism trap where something improved my life so much I think it’s the obvious fix for everybody. I was annoying as heck about my sleep apnea for a few years.

        1. Shipbuilding Techniques*  

          I do this too. I’ve started to think that anything that works for anyone may just be a “stars were aligned” circumstance, based on its non-replicability in others.

          1. DyneinWalking*  

            Eh, I think of it as “bespoke solutions”. Think of problems as ill-fitting clothes – figuring out the exact cause of the issues and and then getting something that actually has the correct measurements for the non-mainstream-proportioned bodyparts works great for EVERYONE. But there’s always someone who concludes that the overall solution really is “this exact measurement on the shoulder part FOR EVERYONE”. People are different, their personal circumstances and priorities are different, and a lot of similar issues have different underlying causes – there’s no single life hack that works FOR EVERYONE, but lots of life hacks that work for part of the population.

  5. Jackie Daytona, Regular Human Bartender*  

    It’s not even just raises. I’ve experienced this with raises, but also with things that cost nothing.

    I remember one time I offered to take on more of a task strongly disliked by most of the team if I could travel less during a specific time of the year (about 2.5 months of the year). I also knew one of my colleagues was keen for more travel because she loved accumulating points toward better status with airlines and hotels so she could enjoy better perks when traveling for fun.

    But… no, my request wouldn’t be “fair” to the rest of the team. (Why? Idk.)

    *insert my manager’s shocked pikachu face when I later put in my notice* + manager scrabbling to revisit my request. Yeah, no.

    1. Georgia*  

      That reminds me of my toxic idiot boss who went to business management classes all the time and talked up numbers but also had a tantrum when two employees wanted to trade on call shifts that were basically identical out of some sense of fairness. He lost half his professional staff in a week eventually and has had serious turnover to the point. former clients mention it when I run into them. He also refused to give raises so…

    2. Lenora Rose*  

      Early in my career I needed to switch from full time to part time due to returning to school.

      I drafted them not one but several options for how to use current staff – that the most impacted co-worker helped me with and wanted and liked – when I told them. I know NOW that I was hugely overstepping my authority and being ridiculously audacious in so doing, not being proactive and helpful as I thought then. And I suspect half the reason they didn’t take any of my options is BECAUSE that uppity order desk clerk dared to make the suggestions.

      … and yet, despite understanding the dynamics I was violating better than I did at the time, and cringing at my gumption, I still think most of mine were better for the actual staff working there than their eventual “solution”.

    3. Van Wilder*  

      Alison – I think we need a roundup post of times that employers cut off their nose to spite their face.

  6. Lab Boss*  

    It’s popular to call this malice on the part of the employers, that they somehow delight in cruelly exploiting their workers. I’ve been a part of enough of this sort of thing that I’ve come to see it more as Hubris in the Greek Tragedy sense. The dominant American corporate mindset seems to be that there’s simply no alternative to success, that things will work simply because they did them.

    When you have to sit across from an HR Rep, eye to blank-staring-eye, as they explain “people will be so happy that the promotions they were promised a year ago finally happened, they won’t even notice there’s no annual raises this year! They’re getting a BIG Raise for a promotion, who cares about a small one for annual?” without showing the slightest sign they think it’s anything but obvious and rational thinking, it starts to feel more like you’re dealing with a particularly willful child than a thinking person or system.

    1. HannahS*  

      I also think that a lot of people making decisions are too far removed from what life is like for people lower in the organization. Sure, a lot of young people struggle to make ends meet, but a lot of management-level (and higher) roles really don’t know what it’s like to still make lower wages in middle-age. The difference that 10K a year makes becomes invisible when that’s not a significant amount of money in your own life.

      1. Dasein9 (he/him)*  

        Yes. Someone who will never be furloughed doesn’t understand why I was unhappy when I was furloughed without any notice. He’s going to be just as unhappy to learn I used the time setting up freelance work and may not be as available to him as I was before.

      2. Chirpy*  

        When corporate tells the store workers “money isn’t everything, just take more pride in your work” but you don’t make a living wage….

      1. Corporate Lawyer*  

        Always bet on stupidity. Also incompetence, inattention, and indifference – but most of all stupidity.

    3. Richard Hershberger*  

      Or simply incapacity for abstract thought, such as this short term benefit causing bigger problems in the future. Who cares about Future Us? What have they done for Current Us?

      1. Parrhesia25*  

        Or just incapable of considering the full consequences of their behavior.

        I was part of a company that ended up in a tailspin because of a lot of departures to a competitor. They pulled out of it because 1) the company was small and closely held, so the owners were directly affected by the departures, 2) several of the departing employees had a good enough relationship with the owners that they were willing to be honest about why they were leaving 3) the owners were willing to swallow their pride, and after some discreet inquiries to confirm what they were told, were willing to take substantive steps to address the issues. And while some of the issue was low pay, most of the issues were things like a flexibility in work schedules and PTO and treating the employees more respectfully – things that cost little to nothing to address.

      2. Zephy*  

        I came across an interview clip the other day with some billionaire or another – don’t know or care who at this point – cheerfully and proudly proclaiming himself to be a philosophical zombie. No internal monologue, thinking about things is stupid and pointless. How the f*** do Impulsive ADHD Poster Children like this end up with more money than God?

        1. Lenora Rose*  

          People with ADHD generally have MULTIPLE interior monologues, not none, and are thinking hard and constantly, just not necessarily about what they should be thinking about.

          Please don’t use real neurodivergence terms with real implications (ADHD) to insult a completely different group with a completely different issue (their head is so far up their ass it’s starved of oxygen)

      3. Jaunty Banana Hat I*  

        What gets me is that in my org, we had a new great grandboss come in, and he visited all departments, and asked us what we need. I know that across the board, we all mentioned work/life balance and being understaffed. He mentioned that he was going to work hard to get us raises. More than once, we literally told him “Money is great, and I’m not going to say no to a raise, but what would make my work better and me more likely to stay is if we could hire more staff”. We were bleeding out our best staff for the last 3 years because of the terrible, terrible decisions made by this guy’s predecessor, who pretty much didn’t allow rehires–in fact, most of us are certain that the predecessor’s goal was to chase off staff so he could allocate that money to his personal pet projects, which were inane and possibly corrupt (ex: he invented a bunch of C-suite level positions and put his buddies in those spots).

        Well, we all basically got a 1-3% raise this year (after getting nothing the last couple of years, including no COLA, which we never get). For me, that amounts to maybe $15 more per paycheck, which honestly feels like an insult at this point. We are not getting more staff. We are not getting more flexibility with our schedules. He is not offloading the glut of unneeded C-suite folks, and is in fact replacing THEM when they leave, but not essential staff further down the chain. A lot of people had held out hope that the new guy would be different, but now, people who I never thought would look to leave are looking. Including me. The job market is crap, but we are going to lose even more people.

        1. Jaunty Banana Hat I*  

          So I guess the point of all that is, if you’re going to go to the trouble of asking people what they want, LISTEN. Because asking the question and then ignoring it is even worse.

    4. goddessoftransitory*  

      It’s like that scene in Gone With the Wind, where Rhett is at some gathering of plantation owners and they are patting each other on the back because they are truly, fully convinced they will win the upcoming war because God is on their side and they have honor as Southern Gentlemen.

      Rhett, of course, went on to invest heavily in the North.

    5. Serin*  

      “The dominant American corporate mindset seems to be that there’s simply no alternative to success, that things will work simply because they did them.”

      Something I’ve seen a time or two in letters to Ask A Manager is a business owner whose mindset boils down to “I/my business will succeed because I don’t deserve to fail.”

      The fact is that businesses fail all the time without doing anything egregious, for all kinds of reasons. Your business model had its time and its time is now over. Your workers suddenly have better-paid options in a new industry. One minor mistake that has disproportionately bad consequences. Simple bad luck. OR ALSO you were careless with something that mattered more to your staff than to you, and you lost a bunch of skill all at once.

      But I’m afraid a lot of business owners (and not just small inexperienced ones, either) are doing a sort of vibes-based business plan where they don’t Feel Like They Are Bad People, and therefore their business is definitely guaranteed to succeed.

      2. Chirpy*  

        I feel like this is what’s behind every industry or business Millennials are accused of “killing”. Just because the marketing tactics worked on our parents, and the business has been chugging along for decades already, doesn’t mean those things will automatically appeal to younger generations. Even great businesses still have to constantly earn their customers.

  7. Town Hall*  

    Note that the (very real and well-documented) costs are definitely valid… From people who continue to preach “let’s be data driven!”

    1. Lab Boss*  

      I work in the sciences and can promise you that with the right motivated reasoning, the data can always be claimed to say what you want it to. Or if it can’t, you just pound on the table and yell about uncertainty.

      2. Labbie*  

        I remember reading a book called “How to lie with statistics” in high school. I was amazed by how misleading statements about data can be without actually being untrue.

    2. Snarkus Aurelius*  

      When I worked for a “data-driven” Republican governor who came from the private sector as a state employee, I heard that phrase all the time.

      I got in a spot of trouble when I said the following in an employee survey: I have no idea why I provide monthly reports and updates with all the voluminous numbers you request. No one ever does anything with the data I give. My office is still in the red, and my vacancies remain unfilled. To date, my data collection has been nothing but busywork.

    3. Bathyphysa Conifera*  

      A notable theme of this century has been the conviction that more data means you know more, and so your decisions will be better, because more knowledge must be better. Questions like whether the more data is even true, whether it’s complete, whether it’s relevant, whether it makes monetary or time management sense to collect and analyze and apply it: It’s like you’re doubting that more must be better.

      2. Bird names*  

        Thank you and full agreement to all of this. Reports and spreadsheets are just busywork, as Snarkus Aurelius stated above, if no one actually bothers to do anything with them.

  8. A Single Piece of Feral Rice*  

    The thing is, a lot of employees wouldn’t leave (or wouldn’t be able to find another job quickly). So from the employer’s perspective, they are taking a gamble, but there’s decent odds they won’t ever incur the costs of having to replace the original employee.

    1. salty*  

      Exactly. The math here is comparing the cost of giving a single employee a raise to the cost of hiring that single employee’s replacement. Understandable math, from the employee’s perspective.

      But consider the math from the employer’s perspective: it’s actually the cost of giving five employees raises versus the cost of hiring a replacement for the one of those five who will actually quit over it.

      Maybe it’s not one in five, but competent HR departments at large organizations will keep track of this ratio and will adjust the math for specific high performing employees.

      1. Jaunty Banana Hat I*  

        Yeah, I get why a company might not want to give everyone a raise, but it’s still in their best interest to retain their best employees, because those are the ones who are most likely to leave, and most likely to be the hardest to replace.

        A good company is going listen to the high-performing employees. Maybe they won’t proactively offer them raises, but they should at least seriously consider it when those employees ask for them, or when they decide to ask more of those employees.

  9. Ann O'Nemity*  

    “Plus, if they end up having to replace the exiting employee with an external hire, they’re probably going to have to pay the external hire more than they were paying the person who left….”

    That’s often true, but I’m also seeing companies take the opposite approach by downgrading roles when rehiring. A Director becomes an Assistant Director, with essentially the same responsibilities but lower pay.

    1. Sara without an H*  

      In academia, they turn tenured/tenure-track positions into adjunct positions. The sad part is that there are still enough underemployed Ph.D.’s to make this strategy successful.

      1. Forager*  

        And who is responsible for the overproduction of PhDs? Why, it’s the universities that are now hiring adjuncts! Funny how that works.

        1. Sara without an H*  

          Bingo! Almost everyone in higher ed recognizes that their graduate students aren’t going to have meaningful careers, but the universities need them for sweated labor.

    2. FedUp*  

      Yep, that’s happening in my office. We’ve lost a bunch of “Teapot Engineers” (largely due to lack of raises/promotions), and management jus gave us the “exciting” news that they’re posting jobs for… “Teapot Technicians”. With a 40k(!) lower starting salary that the engineers would start with, and their salary band stops below the start of the salary band for engineers. And they’ve been wishy-washy on what exactly their job duties will be, but eventually let it slip that the plan is to train the technicians to do the engineers work.

      Yeah, I’m not the only one job searching, because ain’t no way that’s gonna work out…

    3. Mentally Spicy*  

      I left one particular company in 2007. The hours were long and the pay was low, but I loved the people I worked with. I recently checked out their website and they were hiring for my former position….at the exact same salary I was earning when I left! That’s way below minimum wage now based on the hours I was working, so I have to assume that the hours are lower. But still, almost 20 years later, same salary.

      1. Nica*  

        LOL – some folks are delusional with salaries. Years ago, I applied for a Marketing Director position for a smallish local family company. They were basically looking for someone to do ALL their marketing – print advertising, online advertising, radio advertising as well as their catalog, sales materials, etc. It would have been a great step up from my current position. So, as I was talking to the recruiter, the job sounded great. As we were finishing, she said, “Listen, I have to tell you one more thing. The salary being offered is around $70k.” Now, that was a complete and utter joke given the scope of the job. At that time, a realistic salary would have probably been $120k. I said to her, “Is there ANY room for negotation with that salary?” She said, “Sorry, no, I’ve already talked to the company owner several times about how this is an unrealistic salary and he won’t get any good candidates. He insists that if I look hard enough I will find someone.” I said, “Well, I appreciate you talking to me, but that’s actually less than what I’m making in a manager role. I’m going to pass.” She said, “I understand” and that was that.

        I saw that job advertised consistently for THREE YEARS up until the company was bought out by a larger company who, hopefully, understood about competitive salaries.

    4. sofar*  

      Or … someone quits and they don’t backfill at ALL and instead shift the work onto remaining employees and present it as a “growth opportunity.”

      1. Zephy*  

        Right, and eventually the company is getting six jobs done for the price of one, by the time the last surviving team member finally wakes up and moves on. It’s a hell of a deal on the company’s side, what incentive do they have to take action?

    5. Pay no attention...*  

      I’m currently watching this play out in my org. Almost the entire Llama department has quit, found a new job within the org, or has been fired in the last several months, and all of the job postings going up for the positions have dropped a level or 2. EVP is now just VP, AsocVP is now Director, Director is now manager, etc. The thing was, most of those people had hit the highest level they could go without leaving anyway unless the org started making up new titles. There is only 1 EVP position and as long as it’s occupied, there’s no more real promotions to be had.

  10. Been there done that*  

    This falls into the same category as “never time to do it right, but always time to do it over.”

    It sounds like the company is big enough that everyone has to get permission from someone else. So getting a raise approved involves a lot of Process™, with justifications, etc. to people who don’t know what’s going on, and tend to say “No” unless you have a compelling argument that you can make in 3 bullet points.

    But if you have no one to fill a role that clearly needs to be filled, then you can open the req without much hassle unless there’s a hiring freeze.

    1. Do these bananapants make my butt look big?*  

      This is a chilling and brilliant observation. Backfilling an open position is much less paperwork than getting someone a raise.

  11. spillz*  

    Usually, it’s just organizational politics. I used to manage an entry level job that, when trained, quickly became a skillset valued at about 30-50% more. I’d hire some relatively new graduate, train them, and they’d leave and make more money before I got a chance to promote them and give them a raise. And, anyway, the raise was never going to be large enough to beat the market. I asked for more money for the role to start with and it eventually got approved to some extent — but I had a boss I could only ask for so much for. And she had a boss.

  12. The_artist_formerly_known_as_Anon-2*  

    “They underestimate people’s willingness to leave. They know people can leave; they just don’t think the person will go through the hassle of doing it.”

    And since most SOLVENT companies have a slush fund to handle raises-that-shoulda-been-but-now-we-hafta …. they’ll gamble. “Let’s bet AGAINST this guy leaving, we’ll counter if he quits”…only problem is, the guy/gal leaving may not accept a counter-offer.

    1. Liane*  

      Especially if the employee giving notice has read AAM and taken to heart the counter offer posts.

    2. Another One*  

      I’m in university admin. We assume people will leave- typically when they finish their masters. Typically when they finish their masters at our school.

      It makes sense- one of our benefits is a discounted masters course. You aren’t going to make bank here. The benefits are essentially decent healthcare, vacation time, and discounted education. If you can make the pay work (or you have kids so you want to stick it out to help cover their education), you may stay long term.

      But otherwise, most will finish their masters and move on. (The head of one group in my office is expecting two people to go thru this process in the next 2 years.)

      We’re a small office and there is a real limit to upward movement. Without upward movement, there is a limit to pay increases. We’re open with people about that from day 1 so no one is surprised by it. (When I was interviewing to back fill my old position, I made it very clear that I was essentially in that position for 10 years. We just don’t have much up.)

  13. Viv*  

    I’ve seen a philosophy in play at my own employer, that might be employed in hiring as well. “We don’t know what’s going to happen and we have a bad track record at trying to predict events, so rather than try to predict things we are simply going to assume that the status quo will stay the same and any variation from it is a surprise and unavoidable expense.

  14. No Longer a Bookkeeper*  

    In some ways, I wonder if it’s generational – I remember trying to explain to my nightmare boss why I didn’t eat, sleep, and breathe the industry at the job I’d been in for >6 months after being laid off after 7+ years in a completely different industry. I might as well have been speaking Klingon. She had worked for the same company almost her whole career, so of course she was more invested.

    So assuming most upper management is a little older, has worked for the same company for years, and buys into the “if you stick around long enough you’ll make it up the ladder” idea, it makes sense that they would think that having a job is enough to inspire loyalty. But if you’ve seen recessions, mass layoffs, and housing crises and then your company starts underpaying you on top of that? You’re going to start looking elsewhere.

    1. The Unspeakable Queen Lisa*  

      That generation is 2-3 generations ago. It hasn’t been a thing to stay at a company for decades since the 80s.

    2. Cj*  

      that doesn’t really apply to this letter. making it up the letter mean to become management, with a corresponding raise. this guy was promoted to manager, but with no raise.

    3. Fluff*  

      Remember the Klingon path to promotion. You do not speak to the Klingon boss, you kill them in honor and advance to their position.

  15. anonynon*  

    The people turning down the raise might not have to deal with the pain of replacing the person who leaves. I want to give a senior engineer a payrise, my boss’s boss says no, the engineer leaves. My boss’s boss doesn’t have to hire and train their replacement or stress out about meeting deadlines during the training period. I do. They get the decision, I get the consequences.

    1. Lab Boss*  

      You also probably get slapped around for how much money you’re wasting when you inevitably have to make a new hire at market rate instead of whatever market-lagging wage your old employee had been accepting due to inertia.

      1. anonynon*  

        Yeah, or have to replace the senior engineer with a new grad, meaning a much longer training period and less skill in the team as a whole. Which is also not a problem for boss’s boss.y

    2. Ama*  

      This is very true and it’s also why, when I could tell my warnings that a particular new policy around PTO/WFH use was going to result in my direct report leaving were being brushed off by my boss, I started making my own plans to get out. It would have been the fourth time I had to hire in three years and I had no desire to go through it again, especially when that policy could have easily been adjusted without any problem.

      We gave notice on the same day.

  16. aunt janet*  

    I feel like this is a similar vibe to when a business has to leave a storefront because the landlord raised the rent and then the landlord can’t find a new tenant and they lose more money than they would have gained by keeping the original tenant. I left a job because I did not get a promised promotion or raise and I have heard through the grapevine that they haven’t been able to hire a good replacement.

    Fart around and find out. (keepin’ it PC for the comments)

    1. The cat is on my lap now*  

      This landlord/storefront dynamic is happening all over my neighbourhood now, a dozen places within walking distance. It’s sad to see the changes.

    2. Gumby*  

      I cannot tell you how many times I was quietly satisfied when driving past our former offices and noticing that it was still empty years after we moved due to the landlord not being at all willing to budge on a largeish rent increase. It took 3.5 years to get another tenant in. Surely, surely signing another 4 year lease with my company would have been more profitable. (We have labs; moving offices is a pain in the patootie. Our current rent is ~$20k less each month than we were willing to pay that old landlord so that worked out well for us in the end.)

      1. Jaunty Banana Hat I*  

        Yep. There’s a favorite cafe of mine that had to close after the landlords demanded essentially triple the rent, and it makes me so happy to see, 4 years later, that space is STILL unoccupied. They could’ve had 4 years of perfectly reasonable rent and community goodwill instead of the nothing they’ve been getting since that cafe closed.

        Still pisses me off on behalf of the cafe owner. They made it through fucking COVID and then had to close because of that rent BS.

    3. DJ Abbott*  

      I lived in the same place for 21 years and watched the area gentrify. There was a strip of cool little boutiques and other independent stores. I heard from the merchants that the landlords raised their rent and they would move a block or two away. The storefronts stayed empty for 3 to 4 years. I could never fathom how the landlords could afford to have them sit empty like that. My theory was they were getting a tax break or something.
      I did not feel sorry for them. Their greed brought it on themselves.

    4. Do these bananapants make my butt look big?*  

      I work with a lot of commercial landlords and honestly? It’s even worse than you think. They’re all running their wee little empires. I once encountered one who literally has nicknamed himself the “Baron of [redacted neighborhood that starts with B].” He was a CHARMER.

      I do have one client that doesn’t do this and in fact often bends over backwards for tenants and I’d estimate that, surprise surprise, their vacancy rate is much lower than average.

  17. Busy Middle Manager*  

    We’re in a period of high inflation. PPI just came out and it shows SERVICES inflation is the main driver at this point (though that may change due to, you know). Also, health insurance inflation has been insane. Some companies may be lucky just to still be able to keep the same number of employees!

    As someone trying to exist as a self-employed person, I’m looking in at employees with good salaries and healthcare plans and 401Ks and often some perks to the job, and it’s invisible to them. All they see is that their raise was small. I am not in a position to preach to people about gratitude, but I do wish that some people did math long term to figure out what their LONG TERM financial situation is even if they get low raises.

    Of course, I come from corporate environments where people earned decent salaries so this comment applies to a few tens of millions of people but certainly not everyone.

    1. Lab Boss*  

      I think “gratitude” is the wrong lens to look at this. Sure, I’m “grateful” in a broad sense of “I am happy with my life and opportunities including having a job that supports my lifestyle” but that’s a more broad gratitude- to God, luck, the universe, what have you. The kind of thing families share around the Thanksgiving dinner table.

      I am not at all “grateful” to my company for my compensation, any more than the company is “grateful” to me for doing the work. They’re happy I do it, I’m happy they pay me, but it’s a business trade. They’re not being generous, they’re giving my coworkers and me the least they believe they can get away with while attracting and retaining the talent they need. And I’m not even mad about it, because I’m certainly not doing extra work just to be nice either.

      1. Busy Middle Manager*  

        Right but I’ve seen so many disgruntled people in my time who say this but they want MORE and they don’t mentally register their bills are paid, they have cash in the bank, they are saving for retirement, they don’t have to spend $1500 a month for private market insurance etc. Its like, yes you deserve nice things but you don’t register that you already have nice things.

        1. jmmallon*  

          The nice things are not a gift given through generosity – they are compensation for labor. When labor increases, compensation should increase accordingly.

          Creating a context of “gratitude” for employment moves all of the power in the relationship to the employer. That’s a recipe for exploitation.

          1. Ally McBeal*  

            Amen. Thank you. This country was at least somewhat founded on the Puritan idea that “if you don’t work, you don’t eat.” I work so I can eat. I am not grateful for this system.

            1. Amateur Linguist*  

              To be fair, all human societies, in fact especially socialist societies, have been built around that mindset because in many cases it was true.

              We’re somewhat better at protecting the people who can’t work, but that’s just the basis of how we built what we have now anywhere in the world at any point in history.

          2. Busy Middle Manager*  

            people are missing the point of my comment. The point of a raise is to get to X amount and X lifestyle. But many people are already there.

            1. Lab Boss*  

              That CAN be the point. But I, as someone who is currently living a lifestyle I’m happy with and have no NEED for a raise, will still advocate for my compensation to keep up with market rates- not because I need more or even have a specific goal to reach, but because that’s the fair rate for the value I provide.

              It feels like you’re treating employers as “the givers” rather than the partners. The employees get compensation from the givers and it’s selfish or ungrateful to ask for more, because don’t we get enough? But the employers are players in the game too. One might just as well ask, why aren’t they grateful for the profits they have? Why not give more raises, or ask less of employees- the point of getting X amount of work from an employee is to accomplish Y goal, so why ask the employee to do a minute more?

            2. Claire*  

              If people never got a raise, their lifestyle would not stay consistent; it would decline because of inflation.

            3. metadata minion*  

              I agree that it can become toxic to constantly pursue more money when you have enough to live a comfortable lifestyle, but if you’re being paid below market value, why shouldn’t you ask for a raise? You can save up for that really special trip that was once only a daydream, or give the whole raise to your local cat rescue. From an employer’s perspective, once you’re paying a living wage you should only care about whether the employee’s labor is worth what they’re asking for, not whether they “need” it by some measure that may not match the employee’s.

          3. pandop*  

            Exactly. I have just voted for strike action because I am not in the least bit grateful that the senior management get substantial raises every year, and yet they go into the national pay negotiations with the attitude that we shouldn’t even get a raise in line with inflation.

        2. Great Frogs of Literature*  

          I’m grateful that I have a job that supports the standard of living I currently enjoy, but that doesn’t mean I’m not going to make a fuss if I learn that John down the hall makes more money than I do even though we have comparable experience and I have a more senior title.

          (Do I feel weird sometimes, making a fuss about money I don’t *need* need, when there are plenty of folks making less than me? Yes, but me not arguing to be paid what I’m worth doesn’t mean that money will get spent on them, and pay equity is a DEIB issue.)

          1. Lab Boss*  

            I’m right there with you- and I’ve helped solve the weirdness by aggressively increasing my charitable giving and other “good stuff” I do with my money. Not to get pats on the back from internet strangers, but I try to genuinely keep the mindset of “what the company pays me is between me and the company and the market. But if it’s more than I need, I should be using it for others.” That’s fair to me and my coworkers while also not making me feel miserly.

          2. Another One*  

            Also, you might be able to have a lifestyle for reasons that are outside your pay. I can afford my lifestyle because my family still helps with some bills, I’m in affordable housing, stuff like that.

            Those aren’t forever guarantees and aren’t things another person in the same job with the same pay would have.

            Now they may have other things. Like they may have a spouse whose income adds to their ability to live a lifestyle. But they may also have kids.

            And none of those things should be taken into account of how much employees are paid. EmployeeA is always worth $A, regardless of external factors.

            1. Bird names*  

              You also never know whether you might need to retire early for some reason or what kind of unexpected expenses live throws at you. Best case, you can share excess comfortably like Lab Boss above, and otherwise you have a cushion for emergencies.

      2. Bathyphysa Conifera*  

        Humans pretty much never do gratitude, and instead compare themselves to the people around them.

        It’s a genuine problem with bringing about positive change, that it immediately becomes the standard expected background.

    2. Not Tom, Just Petty*  

      I would never be self-employed, for a lot of reasons. Like you rock on with that. I will always try to work for a large company. With that said, the grass isn’t that much greener.
      My long term financial situation is going to be affected when my raise that doesn’t cover my increased medical insurance or when the company decreases what it matches in the 401k, when it increases the amount of time until an employee is vested.
      I’m grateful that I found a job that I like, with people who are cool to work with and that pays me.
      But grateful to the company? Maybe grateful that I don’t have the paperwork nightmares that self-employment has, and maybe I pay a little less over all for medical (let’s save deductibles for a Friday conversation) but we made a deal, not traded favors.

    3. Parrhesia25*  

      Have a good long term situation is only a limited benefit when your rent is going up NOW and groceries are going up NOW and gas is going way up NOW and your take home pay is at most staying the same. My landlord doesn’t take my health insurance card in lieu of rent and the grocery story doesn’t care that my 403(b) will be six or seven digits in ten or twenty years.

      Even if your pay is good seeing its value decrease over time is demoralizing, even if it does not threaten your lifestyle or life.

    4. Anon for now*  

      For many employees their annual raise (should they even get one) doesn’t even cover the increase in things like health insurance premiums. Year-over-year it can mean that an employee essentially gets a paycut when you adjust that persons salary for inflation.

      However, beyond that an employees salary is reflection of how much that employer values the work that employee is doing. It’s not a gift to the employee. And the benefits offered are part of that compensation package. It’s often why contractors make more than W2 employees, because they have a higher tax load to cover, and they have to cover things like retirement and health insurance.

    5. I Have RBF*  

      Wait, you think I should be grateful for losing ground economically?

      I mean if:
      * my utilities go up 5%,
      * my groceries go up 10%,
      * fuel goes up 25%,
      * the cut health insurance takes goes up 5%,
      you think I should be grateful for a 3% annual raise?

      The math doesn’t math.

      If there’s high inflation and the company doesn’t take it into account when they do raises, it means they don’t give a shit about the economic reality their employees face.

      I’m never going to be grateful about that. Ever.

      Wipe the brown off your nosze.

    6. FD*  

      It’s perfectly fine to wish that you were in a different kind of job, but it is not a good habit to criticize people for correctly recognizing the problems in their own.

      That’s how we end up reinforcing systems instead of questioning them.

    7. Mystery Man Unmasked*  

      Why should employees be satisfied with what they have when corporations never are? Have you ever seen a corporation be satisfied with the their current profit?

  18. Girasol*  

    Just last week a major corporation CEO expressed surprise when a large layoff was followed by a drop in productivity. The level of cluelessness at the top can be pretty high.

    2. BellStell*  

      Yeah. Astounding. The Peter Principle and all that.

      In my last job the senior managers were genuinely surprised when a particular government ‘took a chainsaw’ to it and similar orgs’ budgets in 2025 – after stating in many news articles and on gov websites they would do this! Repeatedly!

      The incompetence and lack of ability to think strategically and reflect on gaming out scenarios seems lost on these kinds of CEOs and it is almost like they all become even more shortsighted the longer they are in cushy senior management jobs.

      1. Grumpy Elder Millennial*  

        Saw the same thing repeatedly with people who voted for that particular government. Before the election, when they were confronted with the things that candidates actually said about what they would do, they chose to dismiss it as “rhetoric.” They had to talk tough to be elected, don’t you know, but wouldn’t actually do stuff like cut Medicare.

        I figure that in that kind of job, the vast majority of the time, they get what they want because staff scramble to make it so. Reality becomes what they want it to be.

  19. Insufficiently Festive Cheap-ass Rolls*  

    they’re probably going to have to pay the external hire more than they were paying the person who left

    Oh, that hit home! A long time ago, I was being split between several departments (complete with running up and down stairs to sit at different desks part of each day).

    I asked for a raise. They said no. I asked for more time off instead. They said no. I quit.

    Not only did they have to offer that higher salary to get people to even consider applying, they eventually had to split the job back up. While it’s an ego boost to know it took 3 people to replace me, I’m also annoyed that the company that couldn’t find money or extra leave for me could suddenly find three times of both in the budget.

    1. Absolute Blueberry*  

      I had a similar situation that was not only about doing the work of multiple jobs, but also about being senior enough to push back. I was able to keep my department from being saddled with a specific huge task that Marketing was DESPERATE to dump on us. When I got fed up and quit, the three juniors who replaced me had no authority, so marketing was able to shove that task onto them. Handling that one task necessitated a fourth new hire. (Marketing was the golden child of that company, so they got away with tons of wasteful spending and extra staffing with minimal workload.)

    2. Busy Middle Manager*  

      Depends on timing and type of role. I am job hunting down and salaries are 100% coming down in anything corporate. I am sure there are exceptions, but overall. And when the salary appears the same, they added a bunch of requirements into the job, which essentially means they are different jobs. The job market has gone negative, -92K jobs “created” last month. Companies aren’t chasing employees at this point

      1. Another One*  

        What’s crazy is that I’d swear I was just part of a conversation at my employer about where else we could see about posting jobs because our sense is we should have more applicants but (I guess) it’s not what we’re experiencing.

        We don’t know if it’s because university admin, people are like what job is that, or what it is. But historically our getting 20 applicants has been a lot. I got 100 for a position that- for reasons- was open for months last spring-summer and we never had so many applicants.

  20. Cat Lady in the Mountains*  

    There are somewhat defensible reasons and less defensible reasons that I’ve seen. The less defensible ones have already been named.

    Somewhat defensible reasons:
    – They want to restructure the role and see the person leaving as an opening to do so
    – The person was actually more of an average performer and the company thinks they can bring in a superstar, even if it costs a little more.
    – The person has been in the role a long time and the company sees value in having turnover in the position, even if it costs a little more.
    – Short term cash flow issues where the immediate cost of a raise is actually a problem (don’t usually see this at healthy companies though)
    – The person who oversees raises is not the boss and doesn’t directly experience the consequences of leaving.
    – Pay equity barriers where giving one person a raise would require an assessment of an entire class of salaries, or giving a lot more people raises. (Like if the person you’re trying to retain is already at the top of their salary band.)

    in cases like the interim team lead role, I’ve often seen that handled through a one-time bonus rather than a raise. if they end up in the lead role long-term, that’s when the salary is adjusted. But assuming your brother-in-law was performing at least reasonably well, it sounds pretty short-sighted of the company to not at least offer him that.

    1. A. Noni Mouse*  

      I think this is helpful to see. There often can be malice or incompetence that lead to situations like this, but there can also often be somewhat defensible reasons. My company has gone through “restructure” (i.e., layoffs) before and in one situation I had a team that had too many employees (from previously having a heavier workload than they did currently) and they ended up losing 1/3 of their team. Some of the remaining team members complained that they wanted raises because they were now doing more work than they had been previously. Despite numerous conversations, it was never able to be understood that they previously were getting paid for 100% of time, but only needing to work 50%. Yes, they were doing more work now (not maxed out, but certainly more than before), but that just meant that they had in a way been getting overpaid before. Eventually, some of the team left because they felt like it was unfair. I could sympathize with their position, but I also couldn’t in good faith give them raises just for that. I’m not saying that’s the same as BIL in the letter, but it sounds like he was able to share the workload around with other buildings. To the bosses, they probably are feeling like they’d been overstaffed if the current smaller staff is able to share the workload without overtime. Obviously, that doesn’t address BIL doing a higher level managerial role now and the compensation for that, but there are parts of situations like that which can be defensible.

    2. KitKat*  

      Pay equity jumped out to me as an issue as well. Especially if they knew they didnt want him permanently in the more senior role, a raise locks them into that salary structure for him.

      Bonus would make more sense if they care about retention, but given that they seem to have plenty of coverage from other branches it could be a calculated risk.

  21. Coverage Associate*  

    I wonder if this would have been different in a smaller company. I was in a similar position to the BIL in 2023. A lot of people in several offices left my firm in short succession, and I was suddenly the senior person in my practice area in my office. It was weeks before I even heard from my new boss. (Formerly my grand boss or great grand boss) He was definitely thinking about finding someone to replace my former boss, and I honestly wasn’t ready for the management role. They also only did raises and bonuses annually. Could my department head have gotten an exception to the compensation review timeline? Yes. With all the people leaving, did he seriously consider it? He seemed too overwhelmed to consider any strategy, except bringing in a friend to replace my boss, which he did a few months after I left.

  22. RedinSC*  

    There are calculators out there that help you figure out the hidden costs of having to replace an employee. Addecco (a temporary staffing agency) has one. It factors in the salary of not only the person they’re replacing, but of the hiring time line, the training time line, the time of the people on the hiring committees, etc. I’ve used this calculator to factor out the actual cost of replacing an employee, to argue that we need to provide raises, training and solid working environments so that we can retain employees. Replacing them costs tens of thousands of dollars, but often hidden from an organization, so I typically spell that out in my arguments.

    1. RedinSC*  

      Oh, also about the fact that maybe they wanted the person to just step in while they hire in a new person, that’s when you provide a bonus. We’re not going to redo your salary right now, but here’s a $Xk bonus per month of you doing this work. That way they acknowledge that there’s extra work happening, and while you’re doing it, you get compensated for that work. I’ve done that in every job I’ve been at.

    2. Grumpy Elder Millennial*  

      I wonder if part of the rationale is that the cost of the raise is obvious and a lot of the costs of replacing the person are hidden / the actual dollar cost is less obvious / tangible.

      1. Another One*  

        What’s interesting is you will periodically see this brought up by management, but I wonder if that’s typically with smaller companies. (Which someone else mentioned.)

        Cuz I can remember reading articles about it.

      2. RedinSC*  

        Oh, I think that’s a huge part of it. So often spelling out what that hidden cost is can be an eye opener for people.

  23. LACPA*  

    The company also loses the institutional knowledge that can’t be taught or gleaned from an employee handbook. It’s just so short-sighted all around.

    1. BellStell*  

      This is part of what I was thinking too. This aspect plus, if the firm is dysfunctional a new person brought in will take a while to figure it out so… win win

  24. Marie*  

    I think a lot of companies can only see the immediate expense – a raise – but don’t bother to take into account things like institutional knowledge, someone’s specific experience, very good customer relations, etc. They could let someone leave over a $10K raise, but then also lose customers who really like the departed employee.

  25. Somehow I Manage*  

    On the one hand, the business can see a specific cost – $10,000 in this case – and all of those other things don’t have a specific number attached to them, so it is easier I guess to not consider that the same way. The frustrating part is that there are plenty of other times that

    It is illogical how often logic eludes people.

  26. Nica*  

    The flip side is sometimes the employee thinks they’re worth more than they actually are (I’m not saying that’s the case in LW’s letter though). My SO works in manufacturing and runs into this pretty frequently, so much so that employee turnover is pretty much worked into their cost structure and planning.

    Just recently, he had an employee who came in and demanded what would have been about a 60% increase in his hourly wage, which was, honestly, absurd, as it would have brought him to the pay level of leads/managers and their most skilled technicians. This was an employee who’d been with the company 3 years, had received yearly (8-10% raises) during that time.

    He was a good employee, not on a leadership track and didn’t have any special skills that would be hard to find in another employee. My SO asked this employee why he thought he deserved such a large raise and he had only very vague answers – “I add value to the company” (no examples offered) and “I do more than other employees” (again, no examples offered) and “It will bring me closer to market rates” (a complete fabrication, as we live in an area with low unemployment and the company works hard to be sure their pay is competitive with other companies in the area).

    So, my SO said he would discuss it with the plant manager and the HR manager just to give this person what he wanted. He did so and both of them literally laughed out loud. He went back and told this employee he was being compensated at a rate that was fair and in line with other employers in the area. The employee didn’t like that answer and quit. May he find what he’s looking for with his new employer. A new hire was brought in to take his place about 2 days later.

    1. Winter*  

      This is my experience as a senior manager who is also responsible for hiring. My industry is quite tightly regulated in terms of salary bands and criteria for increases. Wages are linked closely to funding available and although there is some room for discretionary raises, there is not a lot of flexibility. It is also a sector with serious staff shortages that gets reported on a lot in the media, so staff sometimes get unrealistic impressions about how much they are worth.

      My organisation pays fairly and we have good conditions compared to many similar organisations. I sometimes have people asking for a much higher rate than their band or work level would justify. I have never approved a raise like that, I let them know transparently what is possible and then leave it up to them to decide if it makes sense to stay/come aboard.

      No-one is irreplaceable. I recently had someone leave due to salary and I replaced them the next day. I actually did offer the replacement person more as it was someone I had wanted to hire previously and it hadn’t worked out. The leaving staff member is very good but I don’t think offering retention raises usually works out once someone has decided to go.

      Employees probably overestimate “shocked picachu”. My leaving staff member let me know last year she was looking for more money, I let her know it wasn’t possible and knew it was very possible she’d leave. That’s fine, that’s her right. It wasn’t unexpected and best that she move on, because my industry requires a lot of enthusiasm to be successful and if your heart’s not in it anymore, it’s time to go.

  27. MassMatt*  

    Echoing the form somone said above, some of the reasons they don’t do this make at least some sense. and some are dumb.

    One reason they don’t like doing it is the same reason employees WANT raises instead of title changes, 1-time bonuses, etc. Raises are more valuable to the employee in the long run and thus more expensive in the long run for the employer (barring having to replace an employee who leaves).

    Reasons that are dumb are the fact that management often believes their own hype about their place being “a great place to work” with “high standards” and “competitive salaries” and “great benefits” and cannot fathom someone seeing the emperor wears no clothes because they are too high from smelling their own farts.

    Likewise, when the heady fart aroma clears, they are confronted with the harsh slap of reality that few qualified people are interested in the job at the rate they were paying, and the fact that someone who built up skills over years (without getting paid for them) left might mean it takes hiring multiple people to do that job.

  28. thatoneoverthere*  

    The boomer generation has taught many of us to stay and stick it out. Deal with what the company gives you bc you are lucky to have a job. I am happy to see that many of us millennials and Gen Z are often not abiding by that anymore.

    That said I know so many people that stick with jobs they shouldn’t bc they are too scared to leave. I have a friend in her 40s that makes less than $40k a year. She gets crap benefits. Many other jobs like hers could make up to $80k a year. But she never even looks for something else. She constantly complains about being broke. I won’t lie I am honestly not sure how she is supporting herself in this economy.

    1. I Have RBF*  

      Heh. A lot of Boomers/Gen X/Generation Jones don’t believe that crap either. The “job for life” thing pretty much ended with Reagan in the 80s.

      I had a layoff a year between 1982 and 1986. It sucked. I have now lost count of how many times I’ve been laid off, or was contract and my contract wasn’t renewed when the company got rid of all contractors.

    2. Shipbuilding Techniques*  

      I am Gen X and one of those people who accepted the golden handcuff and have been at the same company for 20+ years. My salary now is top-notch, so I am one of the lucky ones. Things have changed A LOT over time; it’s pretty interesting to see the evolution from the inside. The rise of virtual collaboration has its pluses and minuses.

  29. Space Cadet*  

    I worked at a place (for far too long) where you had to take on the work of the promotion while in your current role, and then — if you proved yourself worthy — you just might receive the promotion at some point down the road. =/

    1. RedinSC*  

      Oh, a previous boss I had was on that track. He would say, make them do the work and prove they can… I hated that. I argued against that so many times. If we believe the person deserves a promotion, give it to them. If they don’t perform, well, we have options for that, too.

  30. OP - Illogical Spock*  

    Original Poster Here – To add insult to injury on the last day BIL came in to work. Did a few required tasks, dropped off computer and left. There was no goodbye or farewell lunch. Other managers were angry that there was no acknowledgment of a job well done.
    Good news update is he’s fully remote at his new position and enjoying the job as much as one can enjoy employment.

  31. Msd*  

    It’s often about the math. As one commenter said earlier…..the $10,000 is an in your face number that hits a particular budget. All of the other costs are spread around to other departments and/or you don’t get an”bill” for them so people only look at the one cost. People really are bad at adding. :)
    And to Alison’s point, businesses will exploit their employees.

  32. Dekarios*  

    People often look at companies like a solid entity that makes equal choices across the board.

    I was an interim manager and they gave the job to someone else after I covered it with no pay raise for 8 months. And the next person was so bad at the job that many people ended up quitting. Then they dissolve my job and demoted me to an off shift work.

    It is easy to get mad at the company as a whole when in reality it is a couple horrible people who let power go to their heads. They literally don’t care if it’s more uncomfortable for them in the long run.

  33. Morgan*  

    I’ve arrived at the conclusion that a key factor is – capital has a psychological block against actually recognizing the value of labour. It’s not just that bosses think they can get away with screwing over their employees, or are gambling on an overall positive expectation on the cost of raises versus the likelihood that someone will actually quit and need to be replaced. It’s that recognizing that employees are also economic agents entering into a transaction for something of value – something that can become more or less valuable based on a range of factors – runs up against the feudal hierarchical monkeybrain that says, I am the Big Man and these are my minions; we’re not trading, I own them and they owe me allegiance.

    1. FD*  

      Yeah, I have seen almost no evidence that the people in power make any kind of rational calculation and more that it’s all about power and personal ego.

  34. mpe1*  

    Companies aren’t people. They don’t think.
    Actual *people* think:-
    I’m not promoting someone else to my level. They’ll imagine they’re just as good as me.
    I’m not giving in to blackmail. If you want to leave, then leave.
    I could get someone twice as good for half the money.
    I could get someone ten times as good for twice the money.
    Not my problem.
    Not my money.
    and so on…

  35. Anon for now*  

    I think the key part to this question is the term “key employee” and what the employees definition and what the employers definition of that term happens to be. And, sometimes the employer truly does not have any sense of the contribution a specific employee (usually a rock star or close to it) may make, which is why you end up with some companies having to hire three people to replace one of them. I find this to be particularly prevalent in smaller companies, where often the company grows and an employee takes on more and more work without any sort of meaningful adjustment in their compensation. Then finally they ask for a raise get told no and they walk. And, typically those are the employees that do find it relatively easy to find another job in all but the worst economies. Because, they have a wide range of experience and can do many things.

    However, I do think you get some employees who believe they are a key employee when really they are not. They may be an average or even slightly above average performer, but they are not a rock star (or they are not perceived by the people who matter to be one), so the employer isn’t going to go out of their way to keep them. These are the people who will find other jobs it just may take time and it may not pay them what they thought they’d get.

  36. VoPo*  

    I would like to happily report that my company is generally pretty good about this. For example, our Marketing Director left last year, and one of the people on the Marketing led the team while we hired to backfill (she was not interested in the Director role long term but was willing to help for a few months). We gave her a temporary raise to reflect the increased responsibilities.

    A manager in a different department is leaving in a few weeks, and we’re using the opportunity to restructure that department a bit. We’re giving some of the responsibilities from the manager leaving to a different manager in the department and in doing so giving him a promotion (title and raise).

    It’s insane to me that this isn’t the norm. I’m so lucky to have landed where I did.

    1. BellStell*  

      I am glad your firm is so good as it is sadly not the norm to be good like yours. Your leadership and culture I bet overall are positive too. I wish more places were good too.

  37. CW*  

    This reminds me of a job I heard of not too long ago. One company had an IT support position, but only paid $30K a year. Not surprisingly, they went through 5 different employees in 2 years at that position. Nobody would stay at that position because of such low pay.

    Did they learn their lesson? No. After the fifth person quit, they came to a false conclusion that nobody was qualified to do that job anymore and eliminated that role, and then dumped the responsibilities onto another IT person who wasn’t hired to do support. Without a raise, of course.

    Had they paid higher, they wouldn’t have wasted all that time replacing employees again and again, and then spending money hiring new employees that many times. It’s really sad.

  38. H.Regalis*  

    I live where some blizzards came through this week. Where my best friend is, they got 26″ of snow on Monday. Even today, Thursday, the city is still digging out from the snow; but that didn’t stop her job from texting everyone Monday night saying they better all be at work Tuesday morning or else.

    There is no “or else.” It’s a daycare that is perpetually struggling to meet minimum staffing levels in order to stay open. They can’t afford to fire anyone, and the employees all know that, but the managers still try to front like they have some kind of leverage.

    1. Dawn*  

      In their defense, if the daycare is unable to retain sufficient staffing, they’ll soon be unable to retain sufficient clients, and then the “or else” is that everyone is out of a job when they’re forced to shut down.

      1. H.Regalis*  

        It wouldn’t matter because there’s such a massive shortage of daycare workers that any of the employees could walk into any other daycare in the city and get hired the same day. My friend’s current daycare has hired people who walked in off the street.

        For the parents, trying to get their kids into daycare is extremely difficult right now due to the worker shortage, so if one kid leaves, there’s a dozen more to take their place. The place my friend works at serves primarily working class families, and for a lot them it’s either daycare, the parents work opposite shifts to cover childcare, or one parent, usually the mother, quits their job and is a full-time stay-at-home parent.

  39. Befuddled*  

    On the micro level, the math absolutely does not math- the cost of replacing this employee will be multiples higher than the cost of the raise.

    On the macro level for a bigger company (600 people in this case) the math gets a little murkier. If they’re underpaying half the workforce (300 people) and only 1 out of 10 (so ~30 people) shake off the inertia/empty promises and leave, numbers wise the company is still probably saving money.

    Long term I still think shortsighted and morally crappy, but on the balance sheet it probably makes some level of sense.

    1. Retired Vulcan Raises 1 Grey Eyebrow*  

      Yes, companies look at the overall financial picture, whereas an employee / their family only considers their particular case, as with the OP here.

  40. Ialwaysforgetmyname*  

    The company I work for estimates (using SHRM’s standard turnover cost calculation) that turnover costs us $4 million per year yet is unwilling to give raises to get us closer to market standard, even if those raises would cost us less than $2 million.

  41. BellStell*  

    I wonder too if these companies look at ‘good attrition’ and ‘bad attrition’ rates and figure meh it is worth the cost as they perceive the leavers as ‘good attrition’?

  42. Raida*  

    A lot of it is also a lack of understanding of what the jobs actually are.

    “Oh you can just go to that weekly meeting, and run the monthly team meetings.” So, no need to a payrise for *that*, right? puh, it’s barely anything, do they really want more than a thanks for doing the bare minimum here??

    Actually, it’s an extra twenty hours per week of work, without support or training, that I’m not qualified for!? And everyone is asking me questions now as the most experienced person that it turns out the manager was fielding… Oh why don’t I have my financial delegations sorted? Uh, what is a financial delegation and does it include training…? I haven’t logged into the Manager portal and signed off everyone’s timesheets? Is that my job? Do I have access to that? Where is it? How often is this done? What is our Cost Centre, I was using 2560 but Jo said it’s 2450… Oh we have *three* cost centres…

  43. Dawn*  

    I think there’s also frequently a disconnect between the line managers – who generally understand this concept – and upper management, who are looking at a big whiteboard labeled SHAREHOLDER PROFITS and they refuse to put any minuses on it even when it’s explained to them that doing so is good and/or necessary.

  44. Crencestre*  

    It’s very, very common for people to see and go for immediate rewards (we’ll get more work out of our current employee for less money) rather than recognize that “If I pay X now then I’ll get a loyal employee who knows our company’s business AND I won’t have to hire someone new, train THAT person and wind up spending a whole lot more as a result.” This happens all the time in all sorts of situations – from politics to the arts to business. It’s extremely shortsighted, of course, but unfortunately it’s also extremely common.

  45. Saucy Flamingo*  

    Companies are so multi-layered that they lose the big picture when it comes to costs. The layer that has the authority to approve such a raise isn’t the one that sees the value of the day to day work. The department that has to absorb the cost of recruitment isn’t the same department that absorbs the training costs.

    On top of that, some companies are okay with taking some risk and having turnover. There is a level of turnover that is considered “healthy” for a company to keep ideas new and fresh.

  46. Xennial*  

    Have three suggestions for consideration:

    #1: ‘Ownership effect’. That the seniors/owners are (even after stripping out evilness, tightwaddery and simple stupidity) pre-disposed to think that Their Company is ‘better’ to work for than the horrible That Company simply because ‘it’s theirs’. Therefore, they are going to be confused by folks quitting because ‘the culture etc is so great here!’.

    #2: Dunning-Kruger. The bosses are too ignorant to realise how ignorant they are. Some bosses have been in-post for so long they don’t realise ‘the norm’ in their industry has changed (like starting pay grades or flexibility) and/or have ‘gone native’ by absorbing poor practices as normal everywhere (like having ‘acting manager’ stand-ins for years with zero pay bumps). Therefore, they get thrown when a competitor offers ‘way above market rates’ (ie the actual market rate) and their worker walks.

    #3: ‘Unemployment fears’. Some bosses have rather warped views on the size and nature of the numbers of unemployed in their locality. If you think there’s a huge ‘reserve army’ lurking in the wings ‘gagging for work’ not only do you think your current staff are ‘easily replaced’ but also get thrown when one quits (why are They paying more for X when they don’t need to? etc). I’ve actually seen bosses do bait/switch on folks and respond with shocked Pikachu faces when they declined to do the minimum-wage grunt work.

  47. Bella*  

    I feel as though the article heading doesn’t match what is actually being asked.

    What is actually being asked- why isn’t the company paying me what I’m worth for my current workload.

    Why don’t more companies try to retain key employees with raises is a separate issue.

  48. Ladycrim*  

    Employers really don’t expect their employees to leave. We were in contract bargaining with our employer and were well overdue for a raise. We asked to have our salaries made commensurate with a sibling company in the area. They refused and more or less told us they would never give us proper raises. I discovered that sibling company was hiring for my position (and their lowest salary band for it was about equal to my current company’s highest). I applied, got the job, and stunned management by giving notice. I wasn’t the only one to quit, either.

  49. Yeah, this happened*  

    I just had an excellent – above expectations performance review and at the end was told I am not eligible for a merit raise because I am at the top of the pay band for my position. I am having a hard time trying to figure out why I shouldn’t start phoning it in a little bit (beyond the fact doing that isn’t in my DNA) and am starting to look around. I want to move projects and no one in leadership wants me to because they such I am doing too good of a job where I am. I’m in an industry hit very hard by the events of the last 14 months and feel lucky to have my well-paying job. So many of my friends are still out of work. But these things are cyclical and I suspect when the pendulum swings back my company is going to lose a lot of people like me.

  50. Esther*  

    The more I read, the more I realize how mostly-reasonable my previous company was. According to the official system, new hires weren’t able to be considered for raises until at least a year after they were hired, and then each team got considered for raises at a specific time. Shortly after I joined, they were having difficulty retaining new developers, and so they gave a few of us very nice raises during the first review period after we were hired (about 6 months in). And gave pretty nice raises the next year too. I left because I moved (and probably would’ve been looking to leave because of working hours, commute, and lack of flexibility), but the salary was absolutely not a factor. Here’s hoping they realize that more flexible working locations/hours would probably have retained a bunch of the people who left.

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