Overpaying People Isn’t a Mistake. It’s Strategy!

The Hot Take: Stop Nickel-and-Diming Talent

Every founder, CEO, and HR leader loves to say, “People are our greatest asset.”
But when it comes time to cut checks, suddenly it’s:

• “We need to stay within budget.”

• “We pay at market.”

• “Let’s revisit after their annual review.”

Translation: We’ll underpay you and hope you don’t notice.

Here’s my hot take: stop underpaying. Stop “benchmarking.” Stop pretending you’re clever because you shaved $10K off an offer.

I overpay my people. And it works.

Not because I’m a saint. Not because I’m running a charity.
Because I like winning.

The Real Cost of Underpaying: You’re Already Paying for It

Every time you lose a good employee, it costs you 1–2x their annual salary to replace them. Let’s do the math:

• Lose a $120K engineer? It’ll cost you $120K–$240K to backfill.

• Lose a $70K recruiter? That’s $70K–$140K down the drain.

Recruiting fees, ramp time, mistakes while the seat is empty, the brainpower that walked out the door, all of it bleeds your bottom line.

So congratulations. Your “cost-savings” from lowballing just bought you the most expensive revolving door in corporate history.

Golden Handcuffs or Just Common Sense?

When you pay above market, people stop flirting with other jobs.
Because leaving you doesn’t just mean leaving the culture or the projects, it means taking a pay cut.

That’s not a trap. That’s not manipulative. That’s smart business.

Golden handcuffs? Please.
I call it: making yourself unpoachable.

Why Loyalty is Cheaper Than Turnover

Everyone wants to talk about “employee engagement” like it’s a scavenger hunt of perks: free snacks, yoga Thursdays, team offsites.

Cute. But do you know what really buys focus? Money that makes people comfortable enough to stop stressing about money.

When someone feels well-compensated, they’re not:

• Secretly scrolling job boards on lunch breaks.

• Daydreaming about recruiters sliding into their DMs.

• Strategizing an exit plan.

They’re building your business. They’re bringing you ideas. They’re sticking around.

And that retention? Priceless.

The Culture Myth That’s Costing You Millions

I’ll say it: culture is overrated when it comes to retention.

Yes, culture matters. Toxic workplaces drive people out, no matter what you pay them. But here’s the reality:

When your competitor offers $30K more, your ping-pong tables, kombucha fridge, and “we’re a family” speeches won’t keep people.

Culture without comp = turnover.
Culture with comp = magic.

But if you think hugs, hashtags, and “fun committees” will save you from being outbid? Good luck.

The Offensive Play: Outpay and Outlast

Most companies play defense:

• “We’ll give them a 3% raise if they ask.”

• “Let’s do a retention bonus after they announce they’re leaving.”

• “We’ll counter-offer to keep them.”

It’s pathetic. You’re reacting instead of leading.

The offensive play?
Outpay. From the start. Before your competitors even get a chance.

Top talent is like the NBA draft. If you want LeBron, you don’t haggle. You pay the max, secure the contract, and then watch them win you championships.

Paying top-tier doesn’t cost you more in the long run. It saves you millions in lost productivity, lost momentum, and constant rehiring cycles.

TL;DR: Overpay or Get Outplayed

Stop treating “overpaying” like it’s reckless.
It’s not reckless. It’s ruthless.

Overpay your people:

• Because loyalty is cheaper than turnover.

• Because culture without comp is a meme, not a retention strategy.

• Because the companies with the best people win — and the companies with the best comp get the best people.

Call it golden handcuffs if you want.
I call it common sense capitalism.