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Saturday, July 16, 2011

How much should you pay developers?

Two days ago I started a discussion in StartUpLokal group, "How much should you pay developers?" Basically I shared a link I found regarding compensation plan in StackOverflow.

Teddie followed up with an interesting question (copied as-is), "As a Founder..how much U willing to Pay Your Programmer (honestly)?" Wenas Agusetiawan replied, "rockstars deserve to be paid well," but Teddie didn't seem satisfied with the answer thus asked again, "how much?"

My answer is: "It depends." Let me elaborate.

I'm a programmer myself. If I were to outsource/delegate programming tasks for any of my startups, it must be because (1) I'm not good enough to do it myself, or (2) The tasks so boring I'd rather do something else, like sleeping.

So, how much?

If I were to pay the programmer for the first reason then I must award him well. He's smarter than me, he deserves at least same salary I'd get if I were to do it myself. If for the second reason, I'll base on industry standard, or, "How much I'm willing to be paid if I don't have better option." (Which is logical—if you're the programmer, would you take the boring/repetitive job if you have better option?)

Of course, being a startup founder, you must squeeze expenses as much as you can. So for the first case, I'll negotiate with him but focus on retainment (I don't want to lose him). For the second case, I'll focus on minimizing expenses (I don't want to lose too much money).

Note: Change "him" to "her" for your convenience.

4 comments:

  1. I myself started my career with Rp 1.5 million as my salary. I choose to work as an instructor at one of the biggest IT training company in Indonesia because I understand that I am too introvert and my communication skill is still very low. I chose to work at somewhere not because of the salary, but because of the skill that I can gain from it.

    Nowadays, a lot of junior (fresh grad with no working experience) has started to ask for Rp 4 million or even Rp 5 million. They are asking for money, not experience. I really don't appreciate this kind of programmer.

    If you are THAT good, karma will work for you. Either the employer will appreciate you and you'd get a really big raise (I got raised 100% at that training company in a really short time) or other employer will hijack you because.. well, you are a rockstar.

    Good things will happen to good programmers. Really!

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  2. @Natali, When did you graduate? Rp 1.5M when you were a fresh graduate maybe worth 4M nowadays. But overall, I do agree with you comment.

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  3. Agreed !

    I'm in the initial stage of building my startup company, and kind of disappointed with what seems to be a very short-sighted mentality of many programmers.

    First, let me make it clear. I really do not mind spending money to hire good developers.

    I know my projects' worth. Eventhough I can most probably hire an overseas freelancer online, as a beginner entrepreneur I feel the need to somehow in control of development stages. That seems to be achievable by having them working in MY office. And to do that, I'm willing to pay good money.

    The problem is, lots of applicants are rather under qualified for the salary they are asking for. Fresh graduate, asking for Rp 4 or 5 mil.

    Even worse, those with 1 year experience, but the experience is gained from working in 5 or 7 different companies.

    I can only imagine, that somehow by continuously job-hopping, these people have increased their salary significantly. And if I hire them, I can also easily imagine, they will jump-ship immediately once there is a better offer.

    Then, their 1 year experience become a minus point instead, and probably result in instant rejection from me.

    To the programmers, if you are good, don't worry. Prove your worth, and things will work out well at the end.

    If you think you are good, and life has not been fair to you, talk to me, and we can probably work out something.

    Cheers

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  4. @Bustanil: I am a Computer Science Graduate from University of Indonesia. It was September 2004. Most of my peer had at least Rp 3-4 mio as their starting salary. The bottom line is, I prefer to collect my skill and knowledge first, above salary.

    In the end, people appreciate my skill, and I don't have to ask too much or too often to have my salary raised.

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