Why Companies Pay 15K to Hire a New Graduate Instead of Giving a 5K Raise to Veteran Engineers

Phenomenon Overview

Many IT companies prefer paying a high recruitment fee for a fresh graduate (≈15 K) rather than granting a modest salary increase (≈5 K) to an existing senior programmer.

Cost Calculation Example

Assume a senior developer earns 25 K per month and requests a 5 K raise (20 % increase). For a 500‑person software firm with an average salary of 20 K, monthly payroll is about 13 M. A uniform 20 % raise would add 2.6 M per month, or 31.2 M annually, illustrating the scale of the decision.

Economic Analogy

Drawing on a classic institutional‑economics story about a group sharing a pot of porridge, the article shows how self‑interest leads to the need for rules that ensure fair distribution. The three attempted solutions—electing a virtuous overseer, rotating distribution, and a supervisory committee—fail until a simple “wait‑for‑others‑to‑finish” rule is adopted, highlighting the importance of制度 (institution) in managing collective resources.

Implications for HR Policy

In software firms, labor cost is the largest expense. Companies often lack a transparent, company‑wide salary‑adjustment mechanism, so raising a single employee’s pay can create perceived unfairness. Threatening to resign for a raise can backfire, leading to immediate termination.

New vs. Old Talent

The article argues that while senior engineers bring deeper experience, hiring fresh graduates can be more cost‑effective if the technical lead monitors their work closely. New hires may lack institutional knowledge but can be trained quickly; senior staff may command higher salaries that exceed the marginal value they add, especially when the company’s revenue per employee does not justify the raise.

Broader Organizational Considerations

Beyond pure economics, the piece notes that company culture, trust, and the balance between moral expectations and rational incentives shape hiring decisions. Over‑reliance on moral pressure without clear制度 can lead to inefficiencies and employee dissatisfaction.

Conclusion

Ultimately, the decision to spend more on recruiting newcomers than on modestly raising veteran salaries reflects a combination of cost calculations, institutional constraints, and strategic preferences for fresh talent, rather than a universal industry rule.