> An engineer that has been at a largish company for 1 year is worth 20-30% more than the year they were hired because they have specific knowledge of the tech stack. Yet that engineer will likely be offered a 3-5% raise.
Although I agree with your overall point, I disagree with this line of reasoning. I think the pay offered to an engineer already takes into account that they will understand the tech stack after six months to a year. The situation is essentially the reverse of what you said: they're being overpaid initially compared to their productivity (but, quite rightly, that's the company's problem). Then their productivity catches up with their salary.
But I agree with your point in the years after that.
Although I agree with your overall point, I disagree with this line of reasoning. I think the pay offered to an engineer already takes into account that they will understand the tech stack after six months to a year. The situation is essentially the reverse of what you said: they're being overpaid initially compared to their productivity (but, quite rightly, that's the company's problem). Then their productivity catches up with their salary.
But I agree with your point in the years after that.