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The Impact of Low Salaries At Apple
Posted by
kdawson
on Tue Jun 17, 2008 05:52 PM
from the baby-needs-a-new-pair-of-shoes dept.
from the baby-needs-a-new-pair-of-shoes dept.
orenh writes "Recent data indicate that Apple engineers have significantly lower salaries than their Silicon Valley peers: $89,000 at Apple, versus $105,000 at Yahoo and $112,000 at Google. Paying lower salaries had a major impact on Apple's bottom line when it was struggling in the market up until 2004. But now that Apple is highly profitable, these lower salaries are no longer a factor in Apple's success. Will Apple have to raise salaries to match the market rate, or face defections?"
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Careful how you say that (Score:5, Funny)
On the other hand, why are Yahoo engineers so overpaid...
Google's "talent" is vastly over-rated. (Score:5, Insightful)
What's really terrible is Google operates with a quit long interview process, often with a number of people. These people are all very similar and have huge chips on their shoulder and only look to hire people much like themselves. That is people from academia with not too much real market experience. They are quickly becoming a very self referential mono-culture of people who genuinely believe they are better, but without the actual experience to back it up. A telling sign is their over reliance on logic puzzle interviews, raw information queries and needing to gel solidly with a large number of people. They ask very few "how would you do X" or "how do you deal with Y" questions, instead thinking that the raw intelligence is the best feature to grade an applicant on.
Anyone who has dealt with tech "darlings" knows the danger of this. Sure they may be smart as fuck, but it doesn't mean they know how to finish or deliver. It may be hard for the slashdot poster to believe but people used to dream of working at microsoft (and before that IBM) the way they talk about google now. It's just another cycle.
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Re:Google's "talent" is vastly over-rated. (Score:5, Interesting)
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What? (Score:5, Insightful)
Benefits. I make less then I could, but the benefits of where I work more then make up for it.
So, what are their benefits?
Re:What? (Score:5, Funny)
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Re:What? (Score:5, Insightful)
I worked for a company that went through a profit cycle after a long period of doing nothing. I was expecting the company to do something to compensate the engineers who had been patient through the hard times, but then I realized something. They didn't have to. We all had significant stock options, and now that the stock was worth something we would all think twice about leaving (even though there were no raises or bonuses that year).
On the other hand, when the stock price went back down, people were dropping like flies. Eventually Apple will have to make corrections, but they are probably not there yet.
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Re:What? (Score:5, Insightful)
But I think the greatest thing is working with other extraordinarily talented people passionate about Apple. I don't know how else to explain it. I've told this to countless people, but I think the thing that Apple does the best, bar none, is hire the right people. The process is long and arduous (even for the lowest of the low), and they make you feel very special. It's also something you notice after a while, but almost everyone else at Apple kind of behaves the same. Always upbeat, hip, and very passionate. Most have hardcore hobbies (from playing in bands to mountain climbing, almost to a person it seems), and are very goal driven. But, who wouldn't want to hire people like that? The execution at Apple in this regard is just brilliant.
Lastly, and why this has to be explained, and why nearly no one here has mentioned it is quite strange... money is not everything, not even close. Yes, the stock (not options, actual stock placed in an ETrade account, all set up for you to sell at your convenience, although I wouldn't!), 25% off product is nice, the free shit is also nice, and well, working for a great company means a hell of a lot, but the salary isn't at the top of the list of things most of the employees are wanting as far as compensation, it's all the rest, and being able to be who they are (when you saw a suit, you knew they were from out of town) and being pushed to be passionate... it's not that money, at least to the type of people Apple hires... which is my point.
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Uh, Google has fairly low pay, too. (Score:5, Informative)
They got paid significantly more at Intel, for what was effectively a lower-level job. (Not directly comparable in job function, but in heirarchy.) Google pays on the order of 25% less.
Comparing one single job isn't the way to go. Apple may pay less than Google or Yahoo, but, really, what job position at Apple are they referring to? TFA just say "engineers". Well, what kind? If you're comparing, say, the guy who designs the box that the iPod comes in to the guy who designs Google's customized Linux kernel, then it's not even close to comparable.
Re:Uh, Google has fairly low pay, too. (Score:5, Insightful)
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Re:Uh, Google has fairly low pay, too. (Score:5, Funny)
The interior of my iPod box was completely dry.
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Don't think it's a problem (Score:5, Insightful)
Work/Life (Score:5, Insightful)
People like working for Yahoo, but my friends there tell me they work 60+ hrs/week.
People tell me they love working for Apple, because they only work 50hrs/week.
Maybe the salaries reflect that? Maybe the salary difference between Yahoo/Apple reflects the relative financial positions of the company? Maybe the salary differences have to do with Cupertino vs Mountain View cost of living? Maybe Apple employees have made buttloads of stock and HR doesn't need to pay them $20k more because they're making $50k each year in restricted stock that's vesting? Maybe Apple gives 30% bonuses and the others don't?
I don't know, you tell me. I know Salary vs Salary is normally a weak comparison.
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You only work 70 hours if you want a pay raise (Score:5, Interesting)
The only people working 70+ hours/week at Google are the folks nearing a deadline, putting out a fire, or dealing with some other emergency. Some other folks do get close to that, however. The fresh out of college, in-a-new-town sort of folks have no life and so they work all week. Google gives them dinner (though I suspect dinner service will be stopping soon; shortly before I left, they were sending out surveys to see how they could "serve you better"), there are showers, and if you're young and energetic you can hook up with another geek. You get a few years before you burn out, so these guys are fine; they'll learn.
The other ones working insane hours are the people that want a pay raise. You have to get promoted to get a raise at Google. And since promotions are essentially popularity contests, you need to Be Seen (and be seen as a go-getter). Since I'm getting up in years, and I have a family life I enjoy, I never bothered to nominate myself for a promotion. It meant a few years without a raise, but the stock did well so it was a wash in my mind. The bonuses were fairly generous anyway.
The final group working long hours are those who are doing a 20% project. These are few and far between, the 20% project being primarily a myth to entice people into applying for a job. (I did a lot of interviewing, and about half the interviewees would ask about 20% projects, what mine was, etc. I could never quite bring myself to lie to them and say that there was ever the slightest chance they'd get to choose and work on a 20% project). There's been a real severe crackdown on 20% time. There's just less need for a "throw everything at a wall, see what sticks" mentality. They have a core set of products, so what you'll see from here on out is acquisitions as a way to get into offering new products/services, and add-ons to existing products (new features in Google maps, etc). There's actually a little room for 20% time in the latter areas, but the barrier to entry is non-trivial. Long gone are the days when you could host some new whizz-bang idea on your workstation or a borrowed machine in a coloc. If you want to integrate with existing services, you have to speak borg, borgmon, etc.
Anyway, there are a lot of people who put in a normal working week at Google an dare perfectly happy. They won't get promoted as often (or ever), and they won't get involved with the internal Google hip-crowd, but they can have happy, productive careers there. It's actually a pretty non-stressful place to work, once the golden handcuffs come off. I don't know that I'd work there again, but it's a fun place to be, with a lot of energy about the place.
As far as Apple, the stuff I was hearing is that there's a lot of fear for one's job, everyone needs to swear allegiance to the Cult of Steve, etc. I gather it's not a very fun place to work, and I gather that long work weeks are all but mandatory. That could just be sour grapes from overworked engineers, though.
-B
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It's not all about salary (Score:5, Insightful)
Additionally, and more to the point, the environment has a huge impact on the salary I'll require.
In the words of a friend of mine: My ability to tolerate bullshit is commensurate with my salary.
Look at the stock (Score:5, Interesting)
That's why you don't hear me complaining about salaries.
OBjoke (Score:5, Funny)
Problem with the article: Apple retail staff (Score:5, Insightful)
It takes Apples R&D budget and spreads it over the total number of employees from Apple. It then gets to the conclusion that Apple has underpaid its software engineers especially in the last few years as the R&D budget was not nearly as big as it should have been for the number of employees Apple has.
The problem with this conclusion is found in this article [daringfireball.net], which estimates that half of Apples employees are now working in retail i.e. in an Apple Store. Since Google and the likes do not have a brick and mortar business, so most employees are actually engineers, the simple calculation from the article might work there, but with Apple, it is a bit more complicated than that, especially since the retail store business has just been built in the last couple years
Dont understand me wrong, Apple could still by all means underpay its engineers, but the conclusion of the article is too simple, I think.
Small sample size, self-selecting, etc (Score:5, Insightful)
In addition, they don't verify the information they're given (how could they, anyway?), nor do they have any idea who is actually posting those salaries. Interesting idea, but very suspect methodology.
Pathetic (Score:5, Insightful)
I turned down job offers easily 30k more than what I make now. They weren't where I wanted to be for one. Also, while at my current employ I had to have some major surgery on my ankle. I spent 3 weeks "working" from home, which was really little more than keep up on what was going on and help with what I could through the fog of pain killers. No vacation or sick time used. Then when I did take some vacation time they had to get a hold of me for a few things, on those days they didn't charge me vacation time. I enjoy the people I work with, my boss is great about letting me just get things done (I have worked for micromanaging cockmasters before so this is GOLD in my book), and generally enjoy doing my work even on the shitty days.
Re:Free iPhones! (Score:5, Insightful)
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Re:Free iPhones! (Score:5, Insightful)
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Re:Free iPhones! (Score:5, Interesting)
iTunes Store #1 music retailer, relies on QuickTime
iPod #1 MP3 player, relies on iTunes and QuickTime
The iPhone is quickly rising, so it may, in a few years, become the #1 smartphone, with heavy reliance on Safari Mobile, OS X Mobile, and of course, iTunes and QuickTime.
So to put your post in perspective: If you want to be in consumer electronics, web services, online stores, consumer applications, or media players, you want to work at Apple.
I mean, you have heard of the iPod, iTunes, and iPhone, right? Nearly everyone who uses an iPod uses QuickTime, and there over 170m sold, plus 6m iPhones, that suggests nearly 1/6 of the US population is using iTunes and therefore QuickTime
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Re:Free iPhones! (Score:5, Funny)
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Pedestal (Score:5, Funny)
Now you're just putting them on a pedestal!
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Re:Calling all fanbois! (Score:5, Insightful)
How about "non-monetary benefits"?
Not everyone will jump at a job that pays more - I suspect for a growing number of people, there are certain non-monetary benefits that are worth way more than dollars. Things like flex time, telecommuting, vacation are often things that people may value more than their equivalent dollar value.
Maybe Apple offers a no-nonsense environment where they can work on their stuff until "it's done right" rather than "we must ship, fix it later" mentality. Maybe they like Apple. Maybe Apple as an employer treats them fairly. Who knows (I don't work for Apple). Or maybe the work environment is such that it's a healthy one, or stimulating, or something people can feel happy about and look forward to going to everyday. Or maybe they're working on a pet project (after all, Apple has hired a number of people from the open-source community, like FreeBSD developers), and they're getting paid for what would otherwise be volunteer work.
Money isn't everything to a job. For some, it's the most important thing, but for others, once they have enough to satisfy their material needs and current wants, excess money just goes to taxes. Sure other jobs can pay more, but they may make demands that are incompatible with how one wishes to spend their time. In fact, I might say if all that keeps one to a job is money, then there's something wrong.
Or, to answer the original quote - maybe the reality distortion field works great.
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Re:Calling all fanbois! (Score:5, Interesting)
True, but those salaries don't meet their material needs.
Median cost of a home in Cupertino: $649,000.
Median mortgage payment: $2,145
The rule is, you take your annual salary ($89,000), you take 28% of that, and divide by twelve, and that is your upper bound for mortgage payment ($2,076).
Want to work for Apple? Odds are you'll be renting.
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What a crock (Score:5, Insightful)
"This isn't like Wal-Mart dragging down the wages of an entire town"
Everywhere Wal Mart has gone, its had beneficial effects for the area as a whole. Mom and Pop dime store go out of business because of big bad Wal Mart? So what? Small food stores and delis go under because of chain grocery stores too. General stores and hardware stores went under when Sears and JC Penney were dominant.
Wherever a chain store like Wal Mart or Target or Costco opens, a whole ecosystem of small stores spring up around it. You not only get cheaper prices with chains, you also get a much better selection of goods. The tax base always... always increases in that area, not decreases. And last I checked, Wal Mart isn't the only chain that doesn't pay big bucks to their employees. Are you bitching about Best Buy, Circuit City, and Food Lion as well? Do you shop at those stores anyway, or do you voluntarily pay higher prices at places like Whole Foods? Do you seriously expect anyone to pay good money for slinging stock at a department store? Had Wal Mart never come to these small towns, how is it that you figure their income or the town's tax base would have increased otherwise?
You people act like Wal Mart conquers and forces entire populations to shopping enslavement. This is a market economy, and businesses succeed because they give customers what they want, or someone else comes and takes their business away. If there's money, there's going to be competition for it. Mom and Pop stores, cute and quaint Americana that they were, weren't getting it done. Someone else built a better mousetrap. For that matter, why don't you bemoan the loss of small bookstores, neighborhood gas stations, and Five and Dimes while you're at it? They've all been swept away too, and Wal Mart had nothing to do with their death.
While you're at it, would you like to curse the web? Amazon and their like are also doing what Wal Mart did, only on a wider scale, and you don't get the benefit of any local brick and mortar presence... or the tax funds they bring. But would you argue that Amazon has been a bad thing? If you feel that strongly about small businesses, you patronize them, by all means. But don't expect to be able to force myself and other customers to shop at such places when there's a better alternative.
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Re:But !? Apple is 'cool' ?!? (Score:5, Funny)
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Re:It's not always salaries... (Score:5, Interesting)
At Apple, you're expected to be available from 6.00 am to 9.00 pm or later some times. There is no idea whatsoever of a work-life balance. You get great discounts on hardware, but corporate clients of Apple get an Apple staff discount too - my current employer fits in that category.
I wouldn't go back in a fit - they'd have to offer me a lot more money if they wanted that.
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Re:It's not always salaries... (Score:5, Funny)
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Re:It's not always salaries... (Score:5, Insightful)
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Re:I know you're sarcastic, but... (Score:5, Informative)
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Re:I know you're sarcastic, but... (Score:5, Interesting)
Steve Jobs trots out a half-dozen people, remarks how this person worked on this and that person lead this great team who did that, and generally gives credit to lots of other people, including people who aren't even directly part of Apple. He's done this at EVERY keynote speech pretty much since he's been giving them.
Honestly Steve Jobs hasn't been one to toot his own horn. Sure there isn't a lack of OTHER people doing it but you'd be hard-pressed to find many places where he says that he was the only one who did X, Y, and Z for Apple.
If you want to see some good history about all the old Macintosh crew, go take a look at Folklore.org [folklore.org]. There's a lot there about Steve Jobs for sure, but also a lot about all the other people who worked on the first Macintoshes. Steve Jobs is hardly the only one who is recognized for his work at Apple.
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Re:I know you're sarcastic, but... (Score:5, Interesting)
But yes, much of what Apple was originally and is again now, is due to Jobs' marketing savvy and seemingly magical ability to know when a device is ready (as opposed to needing another 3 months of work) and how people can be doing something in the future without worrying so much about the limitations the rest of us are aware of. There are lots of people who are great long-term visionaries, and lots of folks who are great engineers capable of building most anything you can imagine, but there are very few short-term visionaries capable of really knowing what needs to be built 12-24 months from now.
If you've never worked with a fantastically inspirational and inspired boss, it's hard to understand. Sure, over the long term it can be tiring, and after the twentieth time you go back to the drawing board because his inspiration just doesn't match up with the laws of physics, you want to set his house on fire. But when every talented engineer in the room says something is impossible, and the boss insists you do it anyway, and 6 months later you're all amazed because you managed to make it work -- that's a great feeling.
Most programmers, designers, and engineers I know complain that projects get rushed out the door before they're done, that they never get a chance to really use iterative design techniques to create a better widget, because once it is "good enough", they have to put it in a box and move on to the next project. Being able to work at a company where "good enough" is NOT good enough, is what many people dream about -- knowing that you can create the whole project, then throw it out and do it RIGHT, is a blessing. Yeah, if you just want a job with direct deposit where you don't have to do much other than punch the clock, it isn't the best company to work for. But if you want to create products people will use every day -- and LOVE USING -- while keeping enough time for family and a normal life, it's a pretty great company.
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Steve Jobs style (Score:5, Informative)
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Re:Steve Jobs style (Score:5, Informative)
He returned to his previous job at Atari and was given the task of creating a circuit board for the game Breakout. According to Atari Founder Nolan Bushnell, Atari had offered US$100 for each chip that was reduced in the machine. Jobs had little interest or knowledge in circuit board design and made a deal with Wozniak to split the bonus evenly between them if Wozniak could minimize the number of chips. Much to the amazement of Atari, Wozniak reduced the number of chips by 50, a design so tight that it was impossible to reproduce on an assembly line. At the time, Jobs told Wozniak that Atari had only given them US$600 (instead of the actual US$5000) and that Wozniak's share was thus US$300
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Re:I know you're sarcastic, but... (Score:5, Funny)
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Re:Will Apple have to raise salaries? (Score:5, Informative)
I live in the area, and let me tell you, people would rather KNOW they are going to have a paycheck, at least in theory because of seniority if nothing else, than NOT because they jumped ship to get a 20K a year raise.
Not when you paid nearly a million dollars for your 3 bedroom house.
There ARE people within a few miles of my house paying 25 thousand dollars a month in RENT.... My neighborhood is in the 2 to 3K a month range, and if I KNEW I could pay my bills with the economy going to the toilet, there is NO good reason for me to jump ship for a raise.
Three years ago, they ALL would have jumped ship. It's a different type of world now, since foreclosures, etc. are looming everywhere. Local trash mags have foreclosure sales listed, as do newspapers.
Apple should pony up some of those profits, but a smart board and CFO would realize, they might need a bit of cheese to get them through the thin period we can all see coming.
--Toll_Free
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Re:Will Apple have to raise salaries? (Score:5, Interesting)
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Re:Will Apple have to raise salaries? (Score:5, Insightful)
Anyone who pays that amount of money just to rent, needs to have their head examined.
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Re:Will Apple have to raise salaries? (Score:5, Insightful)
Yes!
Pride in what you do and a sense of corporate individuality is a huge factor in determinining the loyalty of employees.
Look at Games Workshop as an example. They borderline brainwash staff to love their job, and then they pay them so little that they generally have to share accomodation with fellow staff. And yet the staff turnover is surprisingly low for such a relatively crappy and intensive job.
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Re:Will Apple have to raise salaries? (Score:5, Interesting)
I agree, but I think you overestimate this effect. In Apple, with Ive and Jobs generally being the public faces, it's rare for the guys in the trenches to get noticed. Not everybody's ego is pleased with a pat on the back. They need public accolades, more money, or a mix of both.
Also, as sexy as Apple's products are, they don't have a very large lineup. There's no dearth of sexy products in the rest of the tech. world, and people do often move -- we'd probably be surprised at the number of people who have worked for at least 2 companies out of Apple, Google, and MS.
The numbers in TFA (Glassdoor) are based on a sample set that's way too small to be a statistically "representative sample". So we don't even know if Apple engineers really are paid less than the average silicon valley employee.
The one effect the article seems to miss: Apple's stock has been on fire for some time now. So if Apple employees are getting stock awards and have a decent employee stock purchase plan, the raw salary numbers aren't telling us the whole story.
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Re:Will Apple have to raise salaries? (Score:5, Funny)
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Re:Will Apple have to raise salaries? (Score:5, Informative)
$89K/year won't get you a house even with today's market. Maybe an OK condo, assuming a bank will give you a loan. But if you don't mind driving 100+ miles each way, then you could get a decent structure, though the neighborhood might be in the middle of nowhere. Rents are going back up, but if you don't mind living in small apartments to be able to have some play money, then sure, $89K is enough.
For those who just see the numbers and have no idea about cost of living, $700 for an apartment is awesome in the midwest, but $1400-1600 in the Valley will at least keep you out of the bad neighborhoods. After gas, food, and utilities, you'd be lucky to have anything left over to go out and socialize. In the midwest, you'd live like royalty.
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Re:Will Apple have to raise salaries? (Score:5, Informative)
Wow....I mean, I figure if you've got a few years experience under your belt...$89K/yr is really NOT that great?!?! And I mean not great in areas that aren't nearly as expensive as out there in Silicon Valley.
As the parent said...people paid over a million dollars a pop for homes out there that aren't that palatial. How they hell does anyone make a house payment like that on $89K/yr? Hell...how do you pay for what a condo or apt must cost out there on that salary? I'm not even talking having wife and kids to support....
$89K is not a high salary in this day in age...it is middle class...medium-low end of it really.
This is what bothers me in the presidential rederick that is going on wanting to raise taxes on the rich. Use to..the rich was $250K and up....today...well, apparently it is $75K and up from what I've seen. Notice where the tax rebates started declining in full value recently? Yep....$75K and you start getting rich and don't deserve a full rebate.
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Re:Will Apple have to raise salaries? (Score:5, Informative)
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Re:Will Apple have to raise salaries? (Score:5, Funny)
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Re:Will Apple have to raise salaries? (Score:5, Informative)
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Re:Will Apple have to raise salaries? (Score:5, Funny)
if (! $existing_device_features->$feature) {
$whining_on_slashdot = kINSIGHTFUL;
} else {
$whining_on_slashdot = kREDUNDANT;
}
}
Seriously, we get that one of the two things he complained about is a problem. But it's valid to point out that ONLY one of the two things is a problem, and the other is either a troll, or honest misunderstanding, and there's some value in calling out either one (entertainment or learning respectively).
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Re:They won't have to. (Score:5, Insightful)
Um, most people do expect that there will be layoffs and cutbacks when a company is losing money. It's certainly not uncommon. Getting let go with 10 minutes notice is a pretty steep pay cut by any standard.
I'm glad you're not my boss, though. Not only do you seem to be completely clueless about the value of experience and qualifications (no, interns or Indians really can't replace most skilled labor, no matter what your consultants try to sell you for $600/hour), you seem to be downright contemptuous of anyone who isn't sufficiently grateful that they aren't homeless and starving.
Of course, given your words here, I suspect all your qualified people have already quit, so hiring a bunch of Indians probably WOULD be just as good as whomever has such lack of career options as to stick around and take your attitude.
It makes me think of all the ads I see on craigslist where companies want to pay $10/hour for someone to do some technical job, inevitably they get several replies telling them what cheapskates they are and that nobody qualified would apply. The beauty is, they'll get all sorts of unqualified people applying, and then when the project fails, they'll pat themselves on the back for being so smart as not to pay more than $10/hour, because after all, if the cheap ones couldn't do the job, the more expensive ones would have just wasted even more money!
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