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New Remote-First Formula and Updated Salary Calculator

123 points by polysaturate 9y ago

jatsign 9y ago
I like the idea of transparent salaries, but does a "transparent" formula ever become so convoluted, and open to gaming, that the company may as well just not bother? It can be argued that not disclosing salaries is a way to suppress wages; an asymmetry of information. Is open salary information where "everyone at the same level gets the same salary, but there's some gotchas" another way to do the same thing?
- baby 9y ago
  It certainly goes hand in hand with a good culture, which is also one of the strong point of Buffer. Their transparent webapp thing[1] is really nice to play with btw, it feels like a no bullshit vibe for newcomers as well as current employees. It makes me think that these "formulas" will probably not age well with time. They're already at their version 3, which would probably not be a good formula at the early days of the start up and will probably not be a good formula in 3-5 years. Somehow related, I remember having something like these to rank posts on one of my boards (similar to the weight ranking of HN). I had: * time influence negatively * number of upvotes and downvotes in the comments influence positively * number of heavy posters influence positively * number of upvotes for the post influencing positively It was really tricky to tweak, in the end with the website scaling up I was constantly tweaking the formula. I don't think there is a "always work" formula. [1]: https://buffer.com/salary https://buffer.com/salary
  - jatsign 9y ago
    That helps, thanks.
- rplnt 9y ago
  > We’re looking at other ways to recognize loyalty such as profit sharing, 401K matching, bonuses based on profitability, dividends, and future stock buyback programs. So, yeah, ti doesn't make much sense in practice. But it's nice to have the numbers open.
- jimcsharp 9y ago
  I have to wonder if they've ever run into 'call me when your formula matches my number' (in nicer / more convoluted words). In that case a simple transparent table would save them a lot of time and blog posts.
- SatvikBeri 9y ago
  It's a matter of degree: non-transparent salary "formulas" (to the extent that they are at all formulaic and not just based on random stuff like negotiation) tend to be much, much more convoluted and inconsistent than this.
- conanbatt 9y ago
  I think the formula makes very little sense. If someone comes and says " i want more than that" will Buffer turn away a candidate they like because it doesnt fit? They are unlikely to do it, and they should definitely not do it. What it does do is attract all the people that find those salaries public to be higher than the ones they have now. Im sure they get plenty of applicants on this measure alone.
peshooo 9y ago
Recently there was a discussion about salaries in SF. And the numbers there were much bigger. What gives?
- ontoillogical 9y ago
  If you're talking about the triplebyte data (https://triplebyte.com/software-engineer-salary https://triplebyte.com/software-engineer-salary), Buffer's SF salaries seem comparable.
  - umanwizard 9y ago
    That only reports base salary, making it worse than useless.
    - ontoillogical 9y ago
      If you're applying to non-public companies where the stock isn't liquid, it's very hard to compare different packages across companies. Benefits are another story, and I'd love to see triplebyte release some data about those.
      - vonmoltke 9y ago
        Not to mention all the public companies that don't Grant stock or significant bonuses.
    - RickS 9y ago
      Many people, myself included, find base salary the most meaningful indicator. For every company that uses perks as a cash replacement in a healthy way, there's another that expects you to overlook poor absolute numbers in favor of wishy washy things like illiquid equity and coldbrew kegs. Unless your stock is very liquid, cash is king. Everything else is a distant second.
hajile 9y ago
Why do companies continue to pay out higher salaries to devs in high cost of living areas? In this case, their payscale pays out 30-50K more in high cost living areas vs low cost areas. Rather than blow revenue rewarding bad life choices, offer to move them to an area with lower costs of living. Do that for only 10 employees and you have 300-500K EVERY SINGLE YEAR to re-invest into your company. In practically any other industry, this kind of saving would be obvious.
- pimmen 9y ago
  If your devs are located in a bigger city, you can have an office located in that bigger city. If you have an office in a bigger city, you can recruit easier since there's more devs in a bigger city. If your devs are in a bigger city, there's a good chance they went to the bigger university in that bigger city. If you have devs from a bigger university you can more easily recruit from that bigger university. If your office is in a bigger city, you can have more relevant personell in that bigger city such as sales and marketing. If you have sales and marketing in a bigger city, you can reach the customers in that bigger city. A bigger city has more customers than a smaller city. If you have your devs in a bigger city, you can recruit devs from different industries in that bigger city. Bigger cities have more industries present, meaning you can bring in devs with different skillsets. Basically, discouraging devs from living in big cities can be a very bad idea because. Opportunity costs are real costs.
  - amyjess 9y ago
    Big city != HCOL The Dallas metro area is larger than the SF metro area (and so are the individual cities), but Dallas's COL is half as much as SF's. Edit: For that matter, just to ward off the (valid) point that the SF metro area doesn't include most of SV, the Dallas metro area is larger than the SF and SJ metro areas combined. San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara have 6,172,302 people combined as of the 2010 Census, while Dallas-Fort Worth-Arlington has 6,426,214 people.
- jjeaff 9y ago
  Most likely, they have found that some really good developers want to live in specific places with really high standards of living and since they are good, they could easily get a job somewhere else and stay in the city they want to. Not everyone is willing to just move for a job if not necessary.
eximius 9y ago
Wow, this is really terrible. This looks like a PR explanation for why they're slashing everyone's salaries. A cursory glance shows everyone either staying the same or dropping. > One of the toughest decisions we made with the new formula was to remove the annual 3% loyalty increase given to teammates for each anniversary from their start date. > We looked at a lot of options and in the end decided to remove it as it created an unsustainable, compounding affect on pay. 3% is at or just above inflation. If you can't afford to give these raises, you will see severe wage stagnation and, hopefully, a mass exodus of employees elsewhere.
- martinald 9y ago
  Yes, but I assume the SF scale is indexed to that annually (ie: the bay SF pay will go up itself probably more than 3% anyway).
  - eximius 9y ago
    That is a very salient point. I don't recall it specifying when the SF prices are recomputed, but maybe we should give them the benefit of the doubt here.
- dyeje 9y ago
  This is delusional. How does someone have the nerve to put a paragraph like this in a blogpost about how they're giving almost every employee a paycut? The question on everyone’s mind was “Can we afford this?” and “is this sustainable?” When we sought input and advice from those outside of Buffer we also were asked, “Why would you pay your team members with more generosity than you need to?” As it turns out, our answers are: Yes, Yes and because we believe it’s the right thing to do.
  - andylei 9y ago
    except the CEO and the director of people. their salaries magically stayed exactly the same
- jamie_ca 9y ago
eterm 9y ago
What's an advocate in this context? It's their biggest department, bigger than marketing?
- simonw 9y ago
  Pretty sure that's their customer support team.
- deleted 9y ago
  [deleted]
wyager 9y ago
I strongly disagree with cost-of-living-adjustments when employees have the choice of where to live. People shouldn’t be punished for living in less expensive places. If your company is willing to pay you more for living somewhere else even if they don’t gain anything from it, it means they’re underpaying you right now.
- duncan-donuts 9y ago
  That's not really realistic though. How could I convince someone to pay me $250k in Minneapolis when the market is supporting 115-150k?
  - hajile 9y ago
    In a world where remote is an option, there really shouldn't be large differences in salary. In negotiations, the party who can most afford to walk away has the advantage. If there were a real dev shortage, devs would be in that position, but they aren't. SV (and other markets) basically refuse to hire remote (and often refuse to relocate employees). This splits the market up into mini-markets where the slight oversaturation of devs allows the local market to dictate prices (under-saturation would boost salaries even in a small market). This is born out with the fact that those who do work remotely seem to have higher salaries for a given experience level (their market is much bigger and more diverse). The obvious answer is unions. Joint negotiations would yield immediate effects. No large company could survive even a day or two of IT strikes without extreme losses. Unlike other jobs, you can't simply replace your staff because most of a company's software IP is held in the heads of its employees and is far too complex to decypher before the losses occur.
  - deong 9y ago
    Well, that sounds more like different employers than a "cost-of-living adjustment". Sure, you probably can't get a local employer to pay what a Bay Area employer pays, but if your employer is a Bay Area employer and they'd be willing to pay you 40% more if you worked remote from NYC than if you worked remote from Minneapolis, then yes, you should have more leverage there. Probably not enough to actually get the raise, but enough to make the conversation more interesting at least.
hardwaresofton 9y ago
Another company that does open salary calculations is Gitlab: https://about.gitlab.com/jobs/developer/#compensation https://about.gitlab.com/jobs/developer/#compensation (this is a random developer job, you can check out other positions @ https://about.gitlab.com/jobs/ https://about.gitlab.com/jobs/) Here's the feature ticket: https://gitlab.com/gitlab-com/www-gitlab-com/issues/831 https://gitlab.com/gitlab-com/www-gitlab-com/issues/831 Disclaimer: I don't work for Gitlab, but I am a pretty biased rabid fan.
- celim307 9y ago
  This is ~30% under market.
  - noitsnot 9y ago
    Yes, that's what I get also. The calculator is way off. I can't imagine them holding employees for more than a few months or year.
- pc86 9y ago
  I'd love to work for Gitlab but it's a shame their salary ranges are insultingly below market. I'm a lead/senior developer right now. I could go to Gitlab with a promotion to manager and even at the top of the advertised range (my locale, manager, and "above average" experience which is generous) I'd be looking at a pay cut in the high teens as far as percentage. Senior developer with everything else the same is upwards of a 40% cut. That's just ridiculous and I have a feeling it's pushing away a lot of otherwise talented technical folks. I'm not even in an expensive locale (still eastern US though), I can't imagine they have anyone working from San Francisco using this formula. Edit: It seems the COL is pegged to NYC but averaged for the entire state if you're not in one of a few select major metros. Someone who lives in Atlanta will make the exact same as someone living in rural Georgia? Come on.
- 52-6F-62 9y ago
  Not directly about GitLab, but concerning their calculator Comparing Toronto (and much of Canada) in that tool to elsewhere was kind of depressing. Especially as the average salaries I've been shown ritually start higher than most places are willing to offer. I find companies who build out those calculators usually work with the most conservative data. A big marker in their calculation was a rent price index given as a comparison to New York average prices as a benchmark. Some external data points to Toronto rents sitting around $1300 for a 900 sqft unit[0]. Local city data puts an average 1 bed unit at ~ $1800 - $1920 (~ 700 - 900 sqft) — this spans to areas outside of the downtown region.[1a,b] You can also easily pay much higher than average in Toronto, depending on which part of the city you're living in.[1c] Gitlab's NYC has a baseline index of 1 and Toronto with a rent index of 0.426. Brooklynn apartments come in around the same[2a,b] as /just slightly higher than Toronto. Am I missing something? The interpretation seems grossly flawed, and it's used as justification all over the map for lowering salaries, or keeping them low. Has anybody worked on the provability of this kind of data being used, and how? Taking an average rent across a metropolis seems to make all kinds of assumptions that aren't even close to real-world. Maybe it would be more honest to perform regular price-scrapes of apartment listing websites, putting together a custom index. Couple that with a model that looks at keywords, locations, and even photos for applying quality of life metric that could influence the outcome of the learning. I wouldn't expect every company running this program to put together something like that, but employing such a service would likely yield very different results, no? Can somebody with more experience in this area weigh in? --- [0] https://www.torontorentals.com/blog/wp-content/uploads/block_1-3.png https://www.torontorentals.com/blog/wp-content/uploads/block... [1a] http://www.cbc.ca/news/canada/toronto/rent-toronto-canada-1.4002899 http://www.cbc.ca/news/canada/toronto/rent-toronto-canada-1.... [1b] https://blog.padmapper.com/canadian-rent-trends https://blog.padmapper.com/canadian-rent-trends [1c] https://condos.ca/toronto/yorkville https://condos.ca/toronto/yorkville [2a] https://www.timeout.com/newyork/blog/map-of-average-rent-by-nyc-neighborhood-is-as-depressing-as-youd-expect-082115 https://www.timeout.com/newyork/blog/map-of-average-rent-by-... [2b] http://blog.nakedapartments.com.s3.amazonaws.com/blog/wp-content/misc/nyc-rents.gif http://blog.nakedapartments.com.s3.amazonaws.com/blog/wp-con...
aantix 9y ago
Open salaries are only great if you’re some introverted, beta developer that can’t speak up for themselves. “Everyone’s the same. Hooray Marxism!” If you’re good and you have any sort of gumption, negotiate hard and take the money the feeble leave on the table.
- mlevental 9y ago
  r/thatHappened
- maxxxxx 9y ago
  I have seen plenty of times that people who thought they were the tough negotiators turned out to be on the low range of pay when we discussed salaries. Information is always good.
- oletos7 9y ago
  Open salaries = communism? wat. The article provides zero reference suggesting their employees did not negotiate for a higher salary.
- stillhere 9y ago
  Their salaries are not the same though, if you look at the table. I do agree it is a silly idea though because I'd rather keep my salary secret, for privacy reasons.
- yalph 9y ago
  Probably the worst comment I have seen on HN. Almost feels like r/TD.
- SolaceQuantum 9y ago
  Unhelpful if you're a female: PDF https://www.cfa.harvard.edu/cfawis/bowles.pdf https://www.cfa.harvard.edu/cfawis/bowles.pdf Even trying to put yourself in a position to negotiate doesn't work: PDF https://pubsonline.informs.org/doi/pdf/10.1287/orsc.1110.0691 https://pubsonline.informs.org/doi/pdf/10.1287/orsc.1110.069...
  - 9y ago
cf 9y ago
I'm not sure I agree with some of these figures. Vancouver and Nashville are somehow considered to have similar cost of living. https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Canada&city1=Vancouver&country2=United+States&city2=Nashville%2C+TN https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
eagletusk 9y ago
Whoa $121k in Spain that's a superstar salary for a programmer there. Average for programmer according to glassdoor is 35,000 euro = ~42,000 usd.
- kayoone 9y ago
  yeah thought the same. 100k USD is next to impossible for a web developer in Berlin for example, and salaries for devs in Barcelona are considerably lower than here, maybe a max of 80k USD. That guy is living like a king.
  - tychver 9y ago
    Berlin is a bit odd because of the huge changes in the last few years in companies starting offices here and the influx of VC funding. SoundCloud for example, had a bunch of engineers earning around that. Probably all laid off now, though. There are companies on StackOverflow jobs openly advertising €80-90k for senior developers now, and occasionally over 100k for specialist roles like ML or performance sensitive development in C++.
    - kayoone 9y ago
      yes i am sure those salaries are possible for certain specialties in high demand, but in this case we are talking about Senior Web Developers. I think for pure devs without a lead or other management role, it's hard to get more than 75k EUR or 90k USD, and in BCN i have the feeling it is at least 10k less.
      - tychver 9y ago
        Did you check stack overflow jobs? What people are currently earning and what people are openly offering now has diverged quite a bit just in 18 months or so. It’s hurting the smaller companies with less budget and it’ll only get worse when Google opens their big office.
        9y ago
danvoell 9y ago
There is a lot of typical HN negative analysis in this discussion. Let's step back and applaud the fact that this is open. Who else does that? People don't do it because they are afraid of this type of negative analysis. This is a very cool comparison for those who don't have concrete numbers to take into HR. Thanks for sharing Buffer!
- romanovcode 9y ago
  I would not applaud if my company would decide to make my salary open.
  - clp16 9y ago
    Why?
    - ryanwaggoner 9y ago
      Not everyone wants their family and friends to be able to look up their salary. Or to know that they're the lowest (or highest) paid person in their department, etc.
      - carlmcqueen 9y ago
        STLtoday keeps a database of how much the teachers make in the Missouri school systems, while its not entirely accurate when you talk to teachers (sometimes the data is super stale, sometimes they have other 'responsibilities/commmities' that offer more money) I always felt wrong being able to look at it when they could not look at mine.
        ryanwaggoner 9y ago
        Agree. I get the need for public accountability for government salaries, but I feel like having the data be anonymized would be better. The public needs to know the salary distribution, but not what Susan Baker made last year.
beberlei 9y ago
Initially when I saw this open salary approach and especially the calculator I was intrigued. But you cannot make salaries into a formula and get 100% good results. The approach Basecamp (37signals) has with picking a location, then paying people based on 95% percentile (top 5%) market rate regardless of where they live is just much easier to explain to employees than some arbitrary multiplier thing that just leads to endless discussions. https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d04f4f194b https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d...
- pc86 9y ago
  I think a multiplier is fine as long as it's for where the person actually lives, and is based on the actual overall COL as opposed to "well this isn't SF or NYC we we're automatically chopping 15-25% off your salary lolol"
  - beberlei 9y ago
    i find cross country comparisons that lead to multipliers very hard and often arbitrary, because of differences in taxes, social security, health insurance and of course the exchange rate.
ronreiter 9y ago
So if I'm worth 500k a year to Buffer they will not be able to pay that to me. So stupid.
- seattle_spring 9y ago
  So if I'm worth 100 million a year to Google they will not be able to pay that to me. So stupid. Spoiler alert: There's a very large chance that you're not worth $500k to Buffer.
awareBrah 9y ago
This is interesting. One implication is that if I was in the dating market, I’d be worried my date would google me, find that I work for buffer, and instantly know how much I make. While that information isn’t exactly super important or secretive, I just think I’d rather reveal that kind of info on my own terms.
- chatmasta 9y ago
  They could just check Glassdoor. You should assume average salary for your position is public info.
ryanwaggoner 9y ago
I know this is cynical, but this really just reinforces my suspicion: the open salary thing is actually an attempt to underpay through a formula that's presented as objectively fair. Over time, it ends up gravitating your workforce towards average or below-average performers. There's no room for top talent here, because there's no subjectivity in this formula. If you're a fantastic dev (or whatever), why would you work here when other companies will pay you a lot more?
- kowdermeister 9y ago
  As worker in Eastern-Europe, their salaries look totally awesome to me. You'd be surprised for this money how many good people you could find.
  - ryanwaggoner 9y ago
    Let me be clear: from one perspective, I get paid a ridiculous amount of money for what I do. I push buttons and think for a living. I spend a few hours per day doing it, I really enjoy it, and I can do it anywhere in the world from my laptop. It's crazy that someone is willing to pay me $100k / year, and I'm super grateful for that. Really. However, that doesn't mean that $100k / year (or whatever the minimum I'd be excited about) is the market rate. If ten other companies would pay me $300k, then I should go work there, right? There's no speed limit. Just because someone is willing to pay you way more than you ever dreamed doesn't mean you should shun any more than that. Do your best and go to where you're valued the most.
    - kowdermeister 9y ago
      I get that, my point is that with their "lower" salary I could get the best of both worlds like staying in my current city (Budapest) and earning as much as a good CEO here. I get offers from companies, but if the job/product is boring, a higher salary does not justify the switch for me. I don't disagree with you, I tend to gravitate towards a high pay :) We will soon have a salary formula refactor too, but I think the raise might be a rounding error compared to remote pays.
Perignon 9y ago
I love how the CEO's salary stays the same. Well done! Also fuck COL adjustments just because someone decides to live somewhere else, thats not fair in the least.
boxingdog 9y ago
This is bullshit, employees should be paid based on how much they help the company regardless on where they live.
allandubey 9y ago
Why??? Openess in work culture is great! Telling the whole world about how much each individual earn is a slap on their privacy... Just because you can, you shouldn’t. Be ready to welcome attrition.... Let me post the link of this page on each employee’s linkedin fb accounts...lol.. anything in the name of innovation.
philipps 9y ago
I am a fan of open salary models inside the organisation, but don’t see the value in sharing it publicly. It’s something we implemented at the non-profit I co-founded and it has increased the sense of ownership and buy-in from everyone on the team. One reason for not sharing the actual amounts is that non profits generally pay less than for profit companies and I don’t want our team to be pegged to their non profit salary when they decide to move on.
seattle_spring 9y ago
If I worked somewhere that tried to rationalize why they were cutting all of the employees salaries but leaving the executive salaries in-tact, I would leave immediately.
nsxwolf 9y ago
Salary transparency leading to lower salaries... I had been led to believe to expect the opposite.
sidlls 9y ago
The transparency is great. Here's a question: why doesn't Buffer pay the "low CoL" developers more? It doesn't seem right that "low CoL" workers get paid so little compared to their peers.
- anonacct37 9y ago
  I agree. The first step to fixing or avoiding a problem is knowing it's there. It's great to be able to have a little more understanding of what companies are thinking when they try to judge an employees value based on location rather than... value provided to the company. I think the dynamics are pretty interesting. Forgive me if this seems like a not so humble brag, but I'm remote and paid way more than anyone at buffer. I also have a pretty decent network of remote friends at my company and at other good companies. With that in mind I can tell you that the practical effect of Buffer's policies is that they have decided to self-select for developers who are currently underpaid and historically have not had their pick of good jobs. Because otherwise they'd be taking a pretty big paycut to work at buffer and, while possible, it seems unlikely that social media management is a dream job for many developers. So the entire open policy, no matter it's surface intent, is basically a policy to grab sub-par talent. Especially insecure talent who is willing to buy into "radical transparency". Meanwhile, my base is pretty close to their CEO's compensation, but I live in a low COL area. It turns out that the marketplace is competitive enough right now that it's a viable bargaining technique to say "pay me X, where X < Value provided" and some companies will, without arguing (as if the argument made any sense at all) that many people in your zip code make < X. I guess that was a really long winded way of saying that buffer has implemented policies that self-screen out the best developers, which is fine. You probably don't need the best developers to send tweets on a schedule.

123 points by polysaturate 9y ago

I like the idea of transparent salaries, but does a "transparent" formula ever become so convoluted, and open to gaming, that the company may as well just not bother? It can be argued that not disclosing salaries is a way to suppress wages; an asymmetry of information. Is open salary information where "everyone at the same level gets the same salary, but there's some gotchas" another way to do the same thing?

baby 9y ago
It certainly goes hand in hand with a good culture, which is also one of the strong point of Buffer. Their transparent webapp thing[1] is really nice to play with btw, it feels like a no bullshit vibe for newcomers as well as current employees. It makes me think that these "formulas" will probably not age well with time. They're already at their version 3, which would probably not be a good formula at the early days of the start up and will probably not be a good formula in 3-5 years. Somehow related, I remember having something like these to rank posts on one of my boards (similar to the weight ranking of HN). I had: * time influence negatively * number of upvotes and downvotes in the comments influence positively * number of heavy posters influence positively * number of upvotes for the post influencing positively It was really tricky to tweak, in the end with the website scaling up I was constantly tweaking the formula. I don't think there is a "always work" formula. [1]: https://buffer.com/salary https://buffer.com/salary
- jatsign 9y ago
  That helps, thanks.
rplnt 9y ago
> We’re looking at other ways to recognize loyalty such as profit sharing, 401K matching, bonuses based on profitability, dividends, and future stock buyback programs. So, yeah, ti doesn't make much sense in practice. But it's nice to have the numbers open.
jimcsharp 9y ago
I have to wonder if they've ever run into 'call me when your formula matches my number' (in nicer / more convoluted words). In that case a simple transparent table would save them a lot of time and blog posts.
SatvikBeri 9y ago
It's a matter of degree: non-transparent salary "formulas" (to the extent that they are at all formulaic and not just based on random stuff like negotiation) tend to be much, much more convoluted and inconsistent than this.
conanbatt 9y ago
I think the formula makes very little sense. If someone comes and says " i want more than that" will Buffer turn away a candidate they like because it doesnt fit? They are unlikely to do it, and they should definitely not do it. What it does do is attract all the people that find those salaries public to be higher than the ones they have now. Im sure they get plenty of applicants on this measure alone.

peshooo 9y ago

Recently there was a discussion about salaries in SF. And the numbers there were much bigger. What gives?

ontoillogical 9y ago
If you're talking about the triplebyte data (https://triplebyte.com/software-engineer-salary https://triplebyte.com/software-engineer-salary), Buffer's SF salaries seem comparable.
- umanwizard 9y ago
  That only reports base salary, making it worse than useless.
  - ontoillogical 9y ago
    If you're applying to non-public companies where the stock isn't liquid, it's very hard to compare different packages across companies. Benefits are another story, and I'd love to see triplebyte release some data about those.
    - vonmoltke 9y ago
      Not to mention all the public companies that don't Grant stock or significant bonuses.
  - RickS 9y ago
    Many people, myself included, find base salary the most meaningful indicator. For every company that uses perks as a cash replacement in a healthy way, there's another that expects you to overlook poor absolute numbers in favor of wishy washy things like illiquid equity and coldbrew kegs. Unless your stock is very liquid, cash is king. Everything else is a distant second.

hajile 9y ago

Why do companies continue to pay out higher salaries to devs in high cost of living areas? In this case, their payscale pays out 30-50K more in high cost living areas vs low cost areas. Rather than blow revenue rewarding bad life choices, offer to move them to an area with lower costs of living. Do that for only 10 employees and you have 300-500K EVERY SINGLE YEAR to re-invest into your company. In practically any other industry, this kind of saving would be obvious.

pimmen 9y ago
If your devs are located in a bigger city, you can have an office located in that bigger city. If you have an office in a bigger city, you can recruit easier since there's more devs in a bigger city. If your devs are in a bigger city, there's a good chance they went to the bigger university in that bigger city. If you have devs from a bigger university you can more easily recruit from that bigger university. If your office is in a bigger city, you can have more relevant personell in that bigger city such as sales and marketing. If you have sales and marketing in a bigger city, you can reach the customers in that bigger city. A bigger city has more customers than a smaller city. If you have your devs in a bigger city, you can recruit devs from different industries in that bigger city. Bigger cities have more industries present, meaning you can bring in devs with different skillsets. Basically, discouraging devs from living in big cities can be a very bad idea because. Opportunity costs are real costs.
- amyjess 9y ago
  Big city != HCOL The Dallas metro area is larger than the SF metro area (and so are the individual cities), but Dallas's COL is half as much as SF's. Edit: For that matter, just to ward off the (valid) point that the SF metro area doesn't include most of SV, the Dallas metro area is larger than the SF and SJ metro areas combined. San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara have 6,172,302 people combined as of the 2010 Census, while Dallas-Fort Worth-Arlington has 6,426,214 people.
jjeaff 9y ago
Most likely, they have found that some really good developers want to live in specific places with really high standards of living and since they are good, they could easily get a job somewhere else and stay in the city they want to. Not everyone is willing to just move for a job if not necessary.

eximius 9y ago

Wow, this is really terrible. This looks like a PR explanation for why they're slashing everyone's salaries. A cursory glance shows everyone either staying the same or dropping. > One of the toughest decisions we made with the new formula was to remove the annual 3% loyalty increase given to teammates for each anniversary from their start date. > We looked at a lot of options and in the end decided to remove it as it created an unsustainable, compounding affect on pay. 3% is at or just above inflation. If you can't afford to give these raises, you will see severe wage stagnation and, hopefully, a mass exodus of employees elsewhere.

martinald 9y ago
Yes, but I assume the SF scale is indexed to that annually (ie: the bay SF pay will go up itself probably more than 3% anyway).
- eximius 9y ago
  That is a very salient point. I don't recall it specifying when the SF prices are recomputed, but maybe we should give them the benefit of the doubt here.
dyeje 9y ago
This is delusional. How does someone have the nerve to put a paragraph like this in a blogpost about how they're giving almost every employee a paycut? The question on everyone’s mind was “Can we afford this?” and “is this sustainable?” When we sought input and advice from those outside of Buffer we also were asked, “Why would you pay your team members with more generosity than you need to?” As it turns out, our answers are: Yes, Yes and because we believe it’s the right thing to do.
- andylei 9y ago
  except the CEO and the director of people. their salaries magically stayed exactly the same
jamie_ca 9y ago

eterm 9y ago

What's an advocate in this context? It's their biggest department, bigger than marketing?

simonw 9y ago
Pretty sure that's their customer support team.
deleted 9y ago
[deleted]

wyager 9y ago

I strongly disagree with cost-of-living-adjustments when employees have the choice of where to live. People shouldn’t be punished for living in less expensive places. If your company is willing to pay you more for living somewhere else even if they don’t gain anything from it, it means they’re underpaying you right now.

duncan-donuts 9y ago
That's not really realistic though. How could I convince someone to pay me $250k in Minneapolis when the market is supporting 115-150k?
- hajile 9y ago
  In a world where remote is an option, there really shouldn't be large differences in salary. In negotiations, the party who can most afford to walk away has the advantage. If there were a real dev shortage, devs would be in that position, but they aren't. SV (and other markets) basically refuse to hire remote (and often refuse to relocate employees). This splits the market up into mini-markets where the slight oversaturation of devs allows the local market to dictate prices (under-saturation would boost salaries even in a small market). This is born out with the fact that those who do work remotely seem to have higher salaries for a given experience level (their market is much bigger and more diverse). The obvious answer is unions. Joint negotiations would yield immediate effects. No large company could survive even a day or two of IT strikes without extreme losses. Unlike other jobs, you can't simply replace your staff because most of a company's software IP is held in the heads of its employees and is far too complex to decypher before the losses occur.
- deong 9y ago
  Well, that sounds more like different employers than a "cost-of-living adjustment". Sure, you probably can't get a local employer to pay what a Bay Area employer pays, but if your employer is a Bay Area employer and they'd be willing to pay you 40% more if you worked remote from NYC than if you worked remote from Minneapolis, then yes, you should have more leverage there. Probably not enough to actually get the raise, but enough to make the conversation more interesting at least.

hardwaresofton 9y ago

Another company that does open salary calculations is Gitlab: https://about.gitlab.com/jobs/developer/#compensation https://about.gitlab.com/jobs/developer/#compensation (this is a random developer job, you can check out other positions @ https://about.gitlab.com/jobs/ https://about.gitlab.com/jobs/) Here's the feature ticket: https://gitlab.com/gitlab-com/www-gitlab-com/issues/831 https://gitlab.com/gitlab-com/www-gitlab-com/issues/831 Disclaimer: I don't work for Gitlab, but I am a pretty biased rabid fan.

celim307 9y ago
This is ~30% under market.
- noitsnot 9y ago
  Yes, that's what I get also. The calculator is way off. I can't imagine them holding employees for more than a few months or year.
pc86 9y ago
I'd love to work for Gitlab but it's a shame their salary ranges are insultingly below market. I'm a lead/senior developer right now. I could go to Gitlab with a promotion to manager and even at the top of the advertised range (my locale, manager, and "above average" experience which is generous) I'd be looking at a pay cut in the high teens as far as percentage. Senior developer with everything else the same is upwards of a 40% cut. That's just ridiculous and I have a feeling it's pushing away a lot of otherwise talented technical folks. I'm not even in an expensive locale (still eastern US though), I can't imagine they have anyone working from San Francisco using this formula. Edit: It seems the COL is pegged to NYC but averaged for the entire state if you're not in one of a few select major metros. Someone who lives in Atlanta will make the exact same as someone living in rural Georgia? Come on.
52-6F-62 9y ago
Not directly about GitLab, but concerning their calculator Comparing Toronto (and much of Canada) in that tool to elsewhere was kind of depressing. Especially as the average salaries I've been shown ritually start higher than most places are willing to offer. I find companies who build out those calculators usually work with the most conservative data. A big marker in their calculation was a rent price index given as a comparison to New York average prices as a benchmark. Some external data points to Toronto rents sitting around $1300 for a 900 sqft unit[0]. Local city data puts an average 1 bed unit at ~ $1800 - $1920 (~ 700 - 900 sqft) — this spans to areas outside of the downtown region.[1a,b] You can also easily pay much higher than average in Toronto, depending on which part of the city you're living in.[1c] Gitlab's NYC has a baseline index of 1 and Toronto with a rent index of 0.426. Brooklynn apartments come in around the same[2a,b] as /just slightly higher than Toronto. Am I missing something? The interpretation seems grossly flawed, and it's used as justification all over the map for lowering salaries, or keeping them low. Has anybody worked on the provability of this kind of data being used, and how? Taking an average rent across a metropolis seems to make all kinds of assumptions that aren't even close to real-world. Maybe it would be more honest to perform regular price-scrapes of apartment listing websites, putting together a custom index. Couple that with a model that looks at keywords, locations, and even photos for applying quality of life metric that could influence the outcome of the learning. I wouldn't expect every company running this program to put together something like that, but employing such a service would likely yield very different results, no? Can somebody with more experience in this area weigh in? --- [0] https://www.torontorentals.com/blog/wp-content/uploads/block_1-3.png https://www.torontorentals.com/blog/wp-content/uploads/block... [1a] http://www.cbc.ca/news/canada/toronto/rent-toronto-canada-1.4002899 http://www.cbc.ca/news/canada/toronto/rent-toronto-canada-1.... [1b] https://blog.padmapper.com/canadian-rent-trends https://blog.padmapper.com/canadian-rent-trends [1c] https://condos.ca/toronto/yorkville https://condos.ca/toronto/yorkville [2a] https://www.timeout.com/newyork/blog/map-of-average-rent-by-nyc-neighborhood-is-as-depressing-as-youd-expect-082115 https://www.timeout.com/newyork/blog/map-of-average-rent-by-... [2b] http://blog.nakedapartments.com.s3.amazonaws.com/blog/wp-content/misc/nyc-rents.gif http://blog.nakedapartments.com.s3.amazonaws.com/blog/wp-con...

aantix 9y ago

Open salaries are only great if you’re some introverted, beta developer that can’t speak up for themselves. “Everyone’s the same. Hooray Marxism!” If you’re good and you have any sort of gumption, negotiate hard and take the money the feeble leave on the table.

mlevental 9y ago
r/thatHappened
maxxxxx 9y ago
I have seen plenty of times that people who thought they were the tough negotiators turned out to be on the low range of pay when we discussed salaries. Information is always good.
oletos7 9y ago
Open salaries = communism? wat. The article provides zero reference suggesting their employees did not negotiate for a higher salary.
stillhere 9y ago
Their salaries are not the same though, if you look at the table. I do agree it is a silly idea though because I'd rather keep my salary secret, for privacy reasons.
yalph 9y ago
Probably the worst comment I have seen on HN. Almost feels like r/TD.
SolaceQuantum 9y ago
Unhelpful if you're a female: PDF https://www.cfa.harvard.edu/cfawis/bowles.pdf https://www.cfa.harvard.edu/cfawis/bowles.pdf Even trying to put yourself in a position to negotiate doesn't work: PDF https://pubsonline.informs.org/doi/pdf/10.1287/orsc.1110.0691 https://pubsonline.informs.org/doi/pdf/10.1287/orsc.1110.069...
- 9y ago

cf 9y ago

I'm not sure I agree with some of these figures. Vancouver and Nashville are somehow considered to have similar cost of living. https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Canada&city1=Vancouver&country2=United+States&city2=Nashville%2C+TN https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

eagletusk 9y ago

Whoa $121k in Spain that's a superstar salary for a programmer there. Average for programmer according to glassdoor is 35,000 euro = ~42,000 usd.

kayoone 9y ago
yeah thought the same. 100k USD is next to impossible for a web developer in Berlin for example, and salaries for devs in Barcelona are considerably lower than here, maybe a max of 80k USD. That guy is living like a king.
- tychver 9y ago
  Berlin is a bit odd because of the huge changes in the last few years in companies starting offices here and the influx of VC funding. SoundCloud for example, had a bunch of engineers earning around that. Probably all laid off now, though. There are companies on StackOverflow jobs openly advertising €80-90k for senior developers now, and occasionally over 100k for specialist roles like ML or performance sensitive development in C++.
  - kayoone 9y ago
    yes i am sure those salaries are possible for certain specialties in high demand, but in this case we are talking about Senior Web Developers. I think for pure devs without a lead or other management role, it's hard to get more than 75k EUR or 90k USD, and in BCN i have the feeling it is at least 10k less.
    - tychver 9y ago
      Did you check stack overflow jobs? What people are currently earning and what people are openly offering now has diverged quite a bit just in 18 months or so. It’s hurting the smaller companies with less budget and it’ll only get worse when Google opens their big office.
      - 9y ago

danvoell 9y ago

There is a lot of typical HN negative analysis in this discussion. Let's step back and applaud the fact that this is open. Who else does that? People don't do it because they are afraid of this type of negative analysis. This is a very cool comparison for those who don't have concrete numbers to take into HR. Thanks for sharing Buffer!

romanovcode 9y ago
I would not applaud if my company would decide to make my salary open.
- clp16 9y ago
  Why?
  - ryanwaggoner 9y ago
    Not everyone wants their family and friends to be able to look up their salary. Or to know that they're the lowest (or highest) paid person in their department, etc.
    - carlmcqueen 9y ago
      STLtoday keeps a database of how much the teachers make in the Missouri school systems, while its not entirely accurate when you talk to teachers (sometimes the data is super stale, sometimes they have other 'responsibilities/commmities' that offer more money) I always felt wrong being able to look at it when they could not look at mine.
      - ryanwaggoner 9y ago
        Agree. I get the need for public accountability for government salaries, but I feel like having the data be anonymized would be better. The public needs to know the salary distribution, but not what Susan Baker made last year.

beberlei 9y ago

Initially when I saw this open salary approach and especially the calculator I was intrigued. But you cannot make salaries into a formula and get 100% good results. The approach Basecamp (37signals) has with picking a location, then paying people based on 95% percentile (top 5%) market rate regardless of where they live is just much easier to explain to employees than some arbitrary multiplier thing that just leads to endless discussions. https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d04f4f194b https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d...

pc86 9y ago
I think a multiplier is fine as long as it's for where the person actually lives, and is based on the actual overall COL as opposed to "well this isn't SF or NYC we we're automatically chopping 15-25% off your salary lolol"
- beberlei 9y ago
  i find cross country comparisons that lead to multipliers very hard and often arbitrary, because of differences in taxes, social security, health insurance and of course the exchange rate.

ronreiter 9y ago

So if I'm worth 500k a year to Buffer they will not be able to pay that to me. So stupid.

seattle_spring 9y ago
So if I'm worth 100 million a year to Google they will not be able to pay that to me. So stupid. Spoiler alert: There's a very large chance that you're not worth $500k to Buffer.

awareBrah 9y ago

This is interesting. One implication is that if I was in the dating market, I’d be worried my date would google me, find that I work for buffer, and instantly know how much I make. While that information isn’t exactly super important or secretive, I just think I’d rather reveal that kind of info on my own terms.

chatmasta 9y ago
They could just check Glassdoor. You should assume average salary for your position is public info.

ryanwaggoner 9y ago

I know this is cynical, but this really just reinforces my suspicion: the open salary thing is actually an attempt to underpay through a formula that's presented as objectively fair. Over time, it ends up gravitating your workforce towards average or below-average performers. There's no room for top talent here, because there's no subjectivity in this formula. If you're a fantastic dev (or whatever), why would you work here when other companies will pay you a lot more?

kowdermeister 9y ago
As worker in Eastern-Europe, their salaries look totally awesome to me. You'd be surprised for this money how many good people you could find.
- ryanwaggoner 9y ago
  Let me be clear: from one perspective, I get paid a ridiculous amount of money for what I do. I push buttons and think for a living. I spend a few hours per day doing it, I really enjoy it, and I can do it anywhere in the world from my laptop. It's crazy that someone is willing to pay me $100k / year, and I'm super grateful for that. Really. However, that doesn't mean that $100k / year (or whatever the minimum I'd be excited about) is the market rate. If ten other companies would pay me $300k, then I should go work there, right? There's no speed limit. Just because someone is willing to pay you way more than you ever dreamed doesn't mean you should shun any more than that. Do your best and go to where you're valued the most.
  - kowdermeister 9y ago
    I get that, my point is that with their "lower" salary I could get the best of both worlds like staying in my current city (Budapest) and earning as much as a good CEO here. I get offers from companies, but if the job/product is boring, a higher salary does not justify the switch for me. I don't disagree with you, I tend to gravitate towards a high pay :) We will soon have a salary formula refactor too, but I think the raise might be a rounding error compared to remote pays.

Perignon 9y ago

I love how the CEO's salary stays the same. Well done! Also fuck COL adjustments just because someone decides to live somewhere else, thats not fair in the least.

boxingdog 9y ago

This is bullshit, employees should be paid based on how much they help the company regardless on where they live.

allandubey 9y ago

Why??? Openess in work culture is great! Telling the whole world about how much each individual earn is a slap on their privacy... Just because you can, you shouldn’t. Be ready to welcome attrition.... Let me post the link of this page on each employee’s linkedin fb accounts...lol.. anything in the name of innovation.

philipps 9y ago

I am a fan of open salary models inside the organisation, but don’t see the value in sharing it publicly. It’s something we implemented at the non-profit I co-founded and it has increased the sense of ownership and buy-in from everyone on the team. One reason for not sharing the actual amounts is that non profits generally pay less than for profit companies and I don’t want our team to be pegged to their non profit salary when they decide to move on.

seattle_spring 9y ago

If I worked somewhere that tried to rationalize why they were cutting all of the employees salaries but leaving the executive salaries in-tact, I would leave immediately.

nsxwolf 9y ago

Salary transparency leading to lower salaries... I had been led to believe to expect the opposite.

sidlls 9y ago

The transparency is great. Here's a question: why doesn't Buffer pay the "low CoL" developers more? It doesn't seem right that "low CoL" workers get paid so little compared to their peers.

anonacct37 9y ago
I agree. The first step to fixing or avoiding a problem is knowing it's there. It's great to be able to have a little more understanding of what companies are thinking when they try to judge an employees value based on location rather than... value provided to the company. I think the dynamics are pretty interesting. Forgive me if this seems like a not so humble brag, but I'm remote and paid way more than anyone at buffer. I also have a pretty decent network of remote friends at my company and at other good companies. With that in mind I can tell you that the practical effect of Buffer's policies is that they have decided to self-select for developers who are currently underpaid and historically have not had their pick of good jobs. Because otherwise they'd be taking a pretty big paycut to work at buffer and, while possible, it seems unlikely that social media management is a dream job for many developers. So the entire open policy, no matter it's surface intent, is basically a policy to grab sub-par talent. Especially insecure talent who is willing to buy into "radical transparency". Meanwhile, my base is pretty close to their CEO's compensation, but I live in a low COL area. It turns out that the marketplace is competitive enough right now that it's a viable bargaining technique to say "pay me X, where X < Value provided" and some companies will, without arguing (as if the argument made any sense at all) that many people in your zip code make < X. I guess that was a really long winded way of saying that buffer has implemented policies that self-screen out the best developers, which is fine. You probably don't need the best developers to send tweets on a schedule.