I’ve worked in a fair bucket of different organisations ranging from small, efficient IT shops and startups to Federal Government and large Multi-Nationals in a number of varying industries. And one thing that has always fascinated me has been the quality and productivity of the staff versus the salaries they were all being paid.

You have to keep in mind that salaries and hourly rates are all about demand as opposed to skill level or capability. E.g. Company X can pay Mr Smith $1,000 per hour if they decide they *really really* need him. And he might be a complete monkey. You can have a man in a fluorescent yellow shirt operating a shovel in Western Australia mining for gold earning $120,000/year while a rocket scientist in Newcastle is earning $40,000 because that’s what their respective geographical markets are paying.

One thing is for certain. The highest paid do not necessarily equate to the best performing or the most productive. Now from an employee/contractor perspective, if you have been around the traps and are good at what you do, there is nothing stopping you from going out there in today’s market and being up there with the highest paid - in Canberra that’s anywhere from $130,000 to $270,000 for a single individual contractor.

From an employer’s perspective, where is the value? They are paying this for general software development, DBA work and general consulting. Canberra is an IT gold mine and the skill levels still aren’t all that high. Gone are the old days where managers always earned more than their staff. Now its common in Canberra for the staff that they are managing to be earning more than double that of the manager. These standard IT skill sets are beginning to be classed as specialised and seen as rare experts. The companies and government departments are throwing money at them in the form of lucrative contracts while those managing them are often stuck in permanent positions attracting much lower paying salaries. Its like a whole hidden layer of the IT industry that doesn’t show up in the Hayes salary survey.

What they are paying for is experience and confidence - The people who walk into job interviews confidently saying “Yeah I can do that no problems, yeah I’ve done that before no problems, yeah I’ve seen it all before, yeah I’m a techo but I’m also a people person: take your pick”. But what does saying that in an interview really equate to? It equates to someone who knows how the whole system works, someone usually quite intelligent and confident, however not necessarily motivated any more. You see, when you need to throw a lot of money at someone to get them to come into work, its usually the money that’s the motivating factor - not a passion for the subject matter or type of work.

More and more lately I am always finding myself looking at everyone I come across within IT, thinking:

Would I employ them in my new startup company?

For most of the highest paid ones, I think “what an utter waste of money”. I frequently walk into big companies and think I could halve or third the salaries of all these contractors by replacing them with uni graduates who would be twice as keen.

There’s a definite sweet spot within the bell curve describing employee remuneration. Here are the various stages I am seeing repeatedly:

The base of the curve

As they say: “Pay peanuts and you get monkeys”. This always holds true. Paying the bottom salaries you will either get the extremely inexperienced such as kids fresh out of uni, or those who are so incapable that they aren’t confident in asking for any more money. But if you have a large stream of basic to moderate difficulty tasks, this can be ideal - everyone loves cheap uni graduates, until they get highly experienced and expensive. Uni kids can end up some of the smartest employees you will ever have. But they are not the only smart ones.

The curve comes on boost

In any bell-curve, not long after the base of the curve, the curve takes a sharp upturn and heads for the sky.

This is where my recruitment recommendations lay. These people still have that ultra keenness and excitement to learn. They have done their time as underpaid rookies, probably also with decent degrees. But worked their absolute ring off trying to get a pay rise. And if they worked for a small company, they would have the highest skills levels - small companies need to be smart to survive and usually don’t have a lot of money. So here is where the future employer can cash in. Offer them a bit more cash to continue their climb upwards while they still have the excitement and are still learning. They will come in, grinning about their new pay packet, ultra keen to show off their skills to their new colleagues and just as ultra keen to push on and keep learning. For those next 2 or so years the employer will get a tremendous amount of productivity out of this employee. And I stress it only lasts for 2-3 years in most cases.

The curve peaks

The former star employee now begins to know they are hot stuff. They have been demanding more money for the past couple of years and before long they are dissatisfied. They move between companies a couple of times trying to find either the perfect pay packet or something paying the same that is less stressful - by now someone has thrown a lot of money at them for their experience and confidence. The big danger is in them not learning any more - if you’re not learning, its hard to be completely interested.

This employee is already past their peak, losing interest, but still demanding the big money because of the confidence. This is where they start to run around demanding whatever companies are prepared to pay. They know what to say and how to pull off a successful interview every single time - interviews are all the same.

There is a particular risk if this employee is intelligent (no, not all highly paid people are intelligent) and has intentions of their own to get into something else or start their own business, that they will skate along saying the right things at the right time to hold the high paying position without doing much at all. And its ultra easy for intelligent people to fill the gaps and make themselves appear busy and important.

The curve drops off

Here, the employee is way past their prime and beginning to go downhill. They are visibly less motivated. They are probably aware of this and are usually prepared to accept a slightly lower paying salary just to keep some strong money coming in before they fizzle downwards and secure a more secure, can’t-be-sacked type position. By this stage, if they were ever going to, the employee should have gone off and done their own thing by now i.e. started their own business or become a landscape architect for the passion of it. If they wanted to, but just haven’t by this stage, it can mean a lower quality worker that the business is stuck with who never quite made it. If they were always happy working as an employee, then you might have found yourself the perfect company woman or man - someone dedicated to your company no matter what.

Usually, only big companies and government departments can afford to pay people like this. If they settle into their happy roles, they can be partially productive, but may be hesitant in learning new things.

Its an interesting topic area. And you can waffle on for hours about it. But I think the summary of this post for large employers would be to consider paying those approaching the steep uphill ascent of the salary bell curve instead of those already at the peak walking in like legends - you will save money and get keener performers. Its not simply a matter of holding up the most money and automatically expecting to get the best person for the job.

Last time I needed a new phone for home, I purchased a 3-in-1 cordless home telephone system from Telstra Shop. It was a cool DORO model with all of the super mega functionality. I walked in there, the price was slashed and it was a very good deal with a 12 month warranty etc. It looked like a great phone all wrapped up in a nice box, so what did I have to lose.

Unfortunately like a lot of modern day appliances, my phones experienced some technical problems about a month after I’d bought them. For some reason, the message recorder would no longer play back any of the messages and was making unusual noises. It is really like pin the tail on the donkey a lot of the time when you buy a complex piece of modern technology. A lot of the time the smallest thing goes wrong, causing the whole system to behave unpredictably - electronic gadgets are very complex and usually irreparable.

Without going expanding on the countless phone calls and in-store confrontations, the result was a 6 month turn around for Telstra Shop to present me a full refund. They had originally sent it away for repair lending me some terrible basic wall phone as a replacement. But after 6 months of sequential stuff-ups, I was successful in convincing them to refund my money - which wasn’t part of their original policy and had been constantly refused to me up until that point.

When I have had similar problems with modern appliances purchased from Kmart, I take the item back as well packed as I can and am always refunded the full purchase amount - no questions asked. Even if you no longer have the original packaging, they still don’t care. This kind of awesome attitude realises that modern goods don’t work every single time, and that you may be unlucky and purchase a bad egg or lemon. They don’t make you wait a month while they send it away for repair, severely inconveniencing like Telstra Shop do, they give you back every cent there and then. You can walk back in and try your luck on another item if you have the courage and/or time.

That’s why I will never purchase another appliance from Telstra Shop and will stick to places who adopt the Kmart approach. Customer service gets my business every single time, even if the price is marginally higher.