What’s more, the costs of raising salaries to attract new staff are often large because in order to be fair, you may also need to raise salaries for existing staff. For instance, if you have 10 equally-paid staff, and raise salaries 10% to attract one extra person, that final staff member effectively costs double the average previous salary.
This also seems to have an impact on other orgs. I have lost count of the number of times I have heard people refer to “starting salaries at [large EA org with a >$1,000,000 annual budget]” as a baseline for salary expectations. This clearly has a disproportionately negative effect on smaller EA orgs or those trying to run more cheaply.
That’s a good point. We have worried about this in setting our own salary policy, but I forgot to mention it in the post. I’ve added to the original version. (Edit: Although we worried about this consideration, we didn’t end up using it in setting our policy, and don’t recommend that other orgs do. I’ve also removed the new sentence from the original version.)
Although orgs tacitly colluding with one another to pay their staff less than they otherwise would may also have an adverse effect on recruitment and retention...
Also agree, though presumably some fraction is zero-sum.