What Market Comp Means

I've been pretty active on both sides of the hiring/interviewing gauntlet for the last few months, and just wanted to share the following thoughts on what I believe are some huge misconceptions around compensation (that candidates, recruiters, companies, and other have).

1. Engineers are not commodities. We are non-fungible and there are HUGE differences in the amount of value we can bring, even when you try to classify us into strata like junior, middle, senior, staff, etc. Engineers are more like real estate. There can be huge differences in pricing for a 1500 sqft abode, depending on factors like location, build, amenities, etc.

2. Not every company can make the same use of a talented engineer. Just because you are worth $500k at Citadel does not mean Walgreens can realistically get as much value out of you.

These 2 realities result in interesting dynamics, where one company may pay their junior engineers more than another company on the same street pays their principal engineers. Both may be acting rationally. It also results in some interesting dynamics where a junior engineer may thumb their nose at opportunities that may be a huge step up in title and responsibilities, and they are acting rationally too.

3. The above should make you question the concept of "market pay". It is not a meaningful measure. However, if you want to use it, do not use job posting data to figure out "market pay". A job posting is an *unfilled* role. There are 2 good sources of "market pay". 1. Current pay employed engineers in a similar role and setting. and 2. Recent offers that are accepted by engineers for a similar role and setting. The latter is a better/more effective measure for evaluating a new role as a candidate / determining how to budget for a role you are trying to hire for.