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At GitLab we pay market rates instead of paying the same wage for the same role in different regions. Paying the same wage in different regions would lead to:

by sytse 8y ago

At GitLab we pay market rates instead of paying the same wage for the same role in different regions. Paying the same wage in different regions would lead to: 1. A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team. 2. Team members in high-wage regions having less discretionary income then ones in low-wage countries with the same role. 3. Team members in low-wage regions being in golden handcuffs and unlikely to leave even when they are unhappy. 4. If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results. 5. If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions. Also see https://about.gitlab.com/handbook/people-operations/global-compensation/#paying-local-rates https://about.gitlab.com/handbook/people-operations/global-c...

discordianfish 8y ago
Why would somebody from a low-wage region accept a lower wage if they could work for high-wage region company which just pays them as their other employees?
iandanforth 8y ago
I appreciate the thought you've put into this. I've read the full linked page as well. I offer the following comments not because I think it will change your mind but because it appears that you want to be both careful and consistent in this process. - The following two quotes appear contradictory. "All things being equal, we will hire people in lower cost markets vs. higher cost markets." "we want a geographically diverse team." Contradiction: Stated motivation vs. declared decision criteria. - The "Paying Local Rates" list could be re-organized as follows (programmer nitpick) 1. A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team. 2. If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results. 2.1 Team members in low-wage regions [would be] in golden handcuffs and unlikely to leave even when they are unhappy. 3. If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions. 3.1 Team members in high-wage regions [would have] less discretionary income then ones in low-wage countries with the same role. - The "Relocating" section has weak rhetorical grounding. Graph 3 - Status Quo Comparison - You'd have to quit for a non-remote friendly company. Graph 4 - Status Quo Comparison - The best you could hope for is a pay cut. These two paragraphs do not advance your values. A reader who needs persuading will see this as aiming for a low bar. Consider an alternative which poses this as a principled opposition to a broken system: "We compensate based on normalized standard of living. To obtain a life with standard qualities 1., 2. and 3. we pay so that you can have those things. We are willing to pay the tax of high-rents in some areas to attract talent from all areas but offer a bonus relocation payment when engineers transfer to areas that lower our costs as well. We feel that the status quo is broken, some areas are over-priced, and that ultimately reward should be commensurate with the value the company derives from its employees." Graph 5 - Adjusting compensation is fair. A reader who disagrees with your policy will not agree that consistent == fair. The basic counter argument is that employee output should be a black box like any product, it you derive value X and are willing to pay value Y (assuming a socially acceptable profit margin), then as the consumer you should pay Y. The origin of the product should be a non-factor. Market purists feel it is a pretty fundamental violation akin to a claw-back to tell a producer they must immediately lower their rates when they implement efficiency gains in their production process. Imagine a gitlab customer coming to you and saying "Hey I heard you were able to reduce your incremental server costs by 10%! Well done! Where's my discount?" Again you don't have to agree with this view but as your document is otherwise comprehensive you might want to address it.
zerr 8y ago
You forget one crucial thing - a quality of life. If you aim for fairness, you should aim equality in terms of a quality of life and not some "market rate" numbers. With a "market rate" income, I bet someone living in Canada or Switzerland has much better life compared to someone in Pakistan or Zimbabwe - do you think this is fair?
Aeolun 8y ago
I mean, from your perspective this makes sense, though as far as I’m concerned it boils down to “We want to pay the least amount of money for the best people.” But for me as a developer, even though Gitlab would be really interesting to work for, it’s generally a bad deal because pretty much any other remote company is going to pay me a great deal more. You’re basically relegating Gitlab to being the second choice for anyone in any region. Gitlab is amazing though, so it must be working out alright.
dragonwriter 8y ago
> At GitLab we pay market rates instead of paying the same wage for the same role in different regions. No, because the market for remote work is not geographically segregated, so if you are paying location-specific rates for non-location-specific work, you are selectively paying above or below market rates (possibly both) to some employees.

by sytse 8y ago

discordianfish 8y ago

Why would somebody from a low-wage region accept a lower wage if they could work for high-wage region company which just pays them as their other employees?

iandanforth 8y ago

I appreciate the thought you've put into this. I've read the full linked page as well. I offer the following comments not because I think it will change your mind but because it appears that you want to be both careful and consistent in this process. - The following two quotes appear contradictory. "All things being equal, we will hire people in lower cost markets vs. higher cost markets." "we want a geographically diverse team." Contradiction: Stated motivation vs. declared decision criteria. - The "Paying Local Rates" list could be re-organized as follows (programmer nitpick) 1. A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team. 2. If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results. 2.1 Team members in low-wage regions [would be] in golden handcuffs and unlikely to leave even when they are unhappy. 3. If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions. 3.1 Team members in high-wage regions [would have] less discretionary income then ones in low-wage countries with the same role. - The "Relocating" section has weak rhetorical grounding. Graph 3 - Status Quo Comparison - You'd have to quit for a non-remote friendly company. Graph 4 - Status Quo Comparison - The best you could hope for is a pay cut. These two paragraphs do not advance your values. A reader who needs persuading will see this as aiming for a low bar. Consider an alternative which poses this as a principled opposition to a broken system: "We compensate based on normalized standard of living. To obtain a life with standard qualities 1., 2. and 3. we pay so that you can have those things. We are willing to pay the tax of high-rents in some areas to attract talent from all areas but offer a bonus relocation payment when engineers transfer to areas that lower our costs as well. We feel that the status quo is broken, some areas are over-priced, and that ultimately reward should be commensurate with the value the company derives from its employees." Graph 5 - Adjusting compensation is fair. A reader who disagrees with your policy will not agree that consistent == fair. The basic counter argument is that employee output should be a black box like any product, it you derive value X and are willing to pay value Y (assuming a socially acceptable profit margin), then as the consumer you should pay Y. The origin of the product should be a non-factor. Market purists feel it is a pretty fundamental violation akin to a claw-back to tell a producer they must immediately lower their rates when they implement efficiency gains in their production process. Imagine a gitlab customer coming to you and saying "Hey I heard you were able to reduce your incremental server costs by 10%! Well done! Where's my discount?" Again you don't have to agree with this view but as your document is otherwise comprehensive you might want to address it.

zerr 8y ago

You forget one crucial thing - a quality of life. If you aim for fairness, you should aim equality in terms of a quality of life and not some "market rate" numbers. With a "market rate" income, I bet someone living in Canada or Switzerland has much better life compared to someone in Pakistan or Zimbabwe - do you think this is fair?

Aeolun 8y ago

I mean, from your perspective this makes sense, though as far as I’m concerned it boils down to “We want to pay the least amount of money for the best people.” But for me as a developer, even though Gitlab would be really interesting to work for, it’s generally a bad deal because pretty much any other remote company is going to pay me a great deal more. You’re basically relegating Gitlab to being the second choice for anyone in any region. Gitlab is amazing though, so it must be working out alright.

dragonwriter 8y ago

> At GitLab we pay market rates instead of paying the same wage for the same role in different regions. No, because the market for remote work is not geographically segregated, so if you are paying location-specific rates for non-location-specific work, you are selectively paying above or below market rates (possibly both) to some employees.