First I'd like to write that I am a total believer in Applied's business model and am certain the company will continue to enjoy massive success. I am critical of the company because I want it to be healthy and perform as well as possible.
Low compensation causes almost all of the problems in the engineering department at Applied. It also causes almost all the good things in terms of what Applied offers a new graduate, so I suppose it's a mixed bag.
Because Applied pays poorly and has benefits which are not in line with industry averages (expect total compensation to be ~15-20k low for a new graduate), very few good engineers stay after 3 years. This means that new graduates have the opportunity to be involved in high-level projects, but technical leadership is quite poor. Most of the talented/motivated engineers who work at Applied see that they are not being compensated competitively and leave behind throngs of low motivation, low talent engineers who are happy to punch in their 8 hours a day and take minimal wage with minimal performance expectations.
In an effort to retain employees without increasing pay within each title, Applied rapidly promotes new engineers from Engineer I to Engineer II - usually within the first 18 months. This strategy is meant to encourage decent engineers who would otherwise look elsewhere to stick around, list their new title on LinkedIn, and enjoy a substantial (~10%) raise relative to the Engineer I wage. The issue with this plan is that Applied's Engineer II wage is lower than most other local med device Engineer I wages, and with much poorer benefits. After ~3 years at other local med device companies, that Engineer I will be promoted to an Engineer II role and make ~20% more than the Applied Engineer II. By promoting the engineer to Engineer II quickly, Applied has exhausted their options to retain that employee and moved them into a pay band that they will not exceed until they become a Manager or an Engineer III. Title inflation is obvious and other companies will give you a position based on your years of experience and accomplishments, not the title given at your last company.
Applied has a very 1990's cubicle-movie culture. Most managers had their first jobs at Applied and don't understand how modern engineering groups operate, and therefore follow the same corporate culture they were taught when they started - usually only 3-4 years ago (see previous paragraph). Next to zero flexibility exists for engineers and there is an obsession with the clock akin to that of 1800's factory workers, despite the fact that the engineers are all full time exempt professionals who should be allowed some autonomy in terms of their schedule. This is once again due to the fact that very few experienced engineering managers work at Applied (low compensation) and the young managers don't know how to manage based on performance. Instead, they scrutinize the times that their team members stand up and sit down in order to gauge performance and engagement.
Loss of tribal knowledge slows down projects massively, and most large projects are worked on by several engineers as each one leaves for better compensation elsewhere. For example, a 3 year project typically takes about 5 years because 3 different engineers will cycle through the project before finishing it. Lots of time is spent training new hires and bringing them up to speed, and engineers are not usually retained more than 18 months after their up-to-speed date. If the project takes more than 2 years to complete, it's almost guaranteed to be handed off to at least one additional engineer. 6 months of a low wage will be spent getting a new hire up to speed when only 2 months worth of additional wage would be required to retain the original engineer and finish the project. Not to mention the amount of time taken by Director-level employees to search for new hires that don't totally suck. Very few good applicants come up on Applied's radar, and almost none of them accept the job offer due to low salary. Spoiler alert, folks, the really good new grads look at Applied's Glassdoor and don't even bother applying.
It is absolute lunacy to waste so much capital on such an easy fix. This is the kind of personnel problem that most companies wish for. You don't need new equipment, you don't need new facilities, all you need to do is pay your engineers a little bit more and expect more out of them. Engineers with experience at other med device companies will start to rotate in, people will stay longer, and the average technical ability of the group will increase.
Senior management has the attitude that engineers should accept the low wage in exchange for "the dream". Perhaps this would have worked back when Applied was starting their current boom, but as of right now the company:
A. Is privately held and does not have stock options for employees. Growth for the company doesn't mean anything for the individual.
B. Is focused on building commodity devices that are already built better by other companies. Applied hopes to take a bit of their market share with inferior but lower-priced devices. Nothing wrong with this, but there is not a lot of true innovation going on as the R&D teams are not trying to solve next-generation of surgical device challenges.
C. Has poor technical leadership everywhere below the senior management group.
The question comes down to this: What part of Applied is supposed to attract the kinds of high performers that otherwise go to work in the Bay or other companies locally? Every company has big budgets. Every company is expanding. Other companies have experienced mentors, stock options, better benefits and pay, etc. Applied's main allure to new grads is the low average age of engineers. That's not going to attract the best engineers, just the single ones.
