[_delirium]

I agree somewhat, but retention is a fairly major problem. The shift away from career-length employment means that neither employers nor employees assume there will necessarily be much loyalty or longevity in the relationship. I think the decline in on-the-job training is directly related. Engineering firms used to be able to assume that it's okay to lose money on the first five years or so of an employee's work, if they built up skills that will make the company lots of money over the next 30-40 years of the employee's career. But if the company invests five years of significant training in a junior employee, and then the employee jumps ship to do freelance consulting or work for a competitor, the training never ends up paying for itself.

[ohyes]

That's definitely true, but I think that a part of on the job training is building loyalty. If you like the people you work with and the salary and benefits are pretty decent, you are not likely to want to go looking for another job.

For my last job (at a really big company), the only time that substantially increasing my salary came up was when I was already on my way out the door, and they realized 'oh shit, we really depend on this guy' and tried to counter offer.

I would get glowing reviews but the maximum my salary could possibly ever increase in a year was 5%. Changing companies it could increase by as much as 50-60%. So we can say that it is a 'bad relationship' but mostly it is simple math. Of course you are going to have to pay the highly skilled person a salary that is commensurate to their skills. Additionally, you should work to keep them at the salary the market will bear rather than waiting for them to get a better offer from someone else. It will cut into your profit margin, but it is a lot better than being on the defensive and having to counter offer against a company that the employee has already talked herself into wanting to be at.

[sliverstorm]

The whole thing seems to be a problem created by the volatility and rapid growth/movement of the tech industry. Job loyalty originally started to decline in part because companies didn't last, and began a downward spiral as logical "next steps" were taken, such as cutting on the job training.

As for salaries, I think the gradual increase was historically normal, but the potentials for dramatic growth in skill and effectiveness is new and enabled by the tech sector. We haven't figured out how to cope with it yet. (No, you can't just give everyone 50% raises YOY).

[mr-ron]

What prevented employees from jumping ship before? Was there better long term benefits associated with staying with a company?

[_delirium]

Yes, on the latter point: vacation time and pensions typically increased based on length of service with the company. You ended up with a much worse pension if you had 10 years' service with each of four companies, than if you had 40 years' service with one company, under the traditional defined-benefit pension schemes.

There are probably a lot of cultural changes influencing it though, perhaps more; changing jobs frequently as a salaried professional just wasn't something many people in my dad's generation actively considered. One of many factors might be the change in how promotions are done; it used to much more often be "within the ranks". You worked your way up to FooBar VP or even FooBar CEO by starting in a regular job and getting promoted up the ladder, which required staying at the company for a long time. Now it's more common to hire external people right into senior posts.

[easp]

Yeah, one of the long term benefits was that you could work there your whole career, if you wanted to. By the mid-80s though, it was clear that layoffs were to become a regular fixture of corporate life.