7 ms·

We actually spoke to this topic in our Series C announcement last year. If we pay the same (rather than by some measure of PPP) in every location, we are effect

We actually spoke to this topic in our Series C announcement last year. If we pay the same (rather than by some measure of PPP) in every location, we are effectively discouraging applications from people who happen to be in more expensive areas. By making it about the cost of living, we make sure everyone is taken care of based on living needs. That said, we have an awesome chief culture officer who is leading efforts to make sure our comp calculator is fair and encourages people to apply.

pritianka 8y ago
https://youtu.be/5dhjw-TT964?t=5561 https://youtu.be/5dhjw-TT964?t=5561
- samueldavid 8y ago
  so by his words, it means that if I live in a third world country but I work as hard as my peer in SF I'm going to get paid less by a unit of work? even tho we both are equally good and working as hard?
jabits 8y ago
I did not know companies actually do this. I would never work for a different salary than my peers (based on location). In my small "virtual" company, most of my colleagues live and work in Wisconsin (US). I live in Hawaii, where the expenses are much higher, but I would never dream of asking for more money, and I would be laughed out of the room (virtually!). Years ago, when I was an officer in the Air Force, we all had the same salary, but the government did provide Housing Allowances. This is similar, but not the same thing. A unit of salary is for a unit of work, and I do not believe this should vary by geography. If their workers choose to live in SF vs Oklahoma or Buffalo, then they pay the price. I realize that I have less "real" wages than the rest of my team in Milwaukee or Green Bay, but Maui has its compensating benefits.
- 0xffff2 8y ago
  I agree, and I think that military housing allowances (which are adjusted for CoL) also have the additional justification that (generally speaking) you don't get to choose where you are stationed. As a service member, the military tells you where to go and you go, so it makes a certain amount of sense that you're then paid enough to live there. As a software developer in the civilian world, my physical location has nothing to do with my work, so it makes no sense for my compensation to be based on my location.
0xffff2 8y ago
I don't understand this rational at all. If a developer in SF is worth x dollars to you, why are they suddenly worth less if they move to a lower CoL area? If you're paying salaries that are livable in a high CoL area, you aren't discouraging people living there, you're freeing people to move wherever they want. I'm a Silicon Valley based dev who really wishes he could move far, far away from here without taking a huge pay cut, so I'm obviously biased. That said, in my view as an employee, the value I create for the company isn't based on my physical location, so why should my salary be?
- lordnacho 8y ago
  It's a negotiation, right? And at least some of the cards are known, such as an admittedly noisy estimate of what people will accept as a salary. Basically the company shares in your lowered living costs if you are somewhere cheap. Hopefully they won't eat the whole savings, something should be left for both parties.
  - ahkurtz 8y ago
    What do you think is the likely outcome here?
- jcdavis 8y ago
  > That said, in my view as an employee, the value I create for the company isn't based on my physical location, so why should my salary be Because your salary is much more influenced by market supply and demand than the value you create for your employer.
  - dragonwriter 8y ago
    The market for remote work isn't geographically constrained, so it doesn't make sense to make pay offers as if you were hiring in specific geographically constrained markets rather than the unconstrained remote work market.
    - jcdavis 8y ago
dx87 8y ago
So high COLA areas typically already have better schools, utilities, and public services, but you reward employees living in those areas with higher pay because it would be unfair to pay them the same as people in lower COLA areas? Why would anyone choose to work for you if they don't live in a high COLA area?
- pritianka 8y ago
  That's probably usually true but as an SF resident, I can tell you the schools, utilities, and public services aren't what I would call world class here :p. Wish this was more like New York that way hehe.
  - ahkurtz 8y ago
    Spend some time in the Midwest or deep South.
jkaplowitz 8y ago
This system fails badly when people move between cheap and expensive cities over the course of their lives, and might need to build savings at expensive city levels when living in a cheap city. Why not just pay everyone at the expensive city level? If you were hiring a true consultant rather than an employee or a full-time "contractor," you would pay them solely based on value delivered and the defensibility of their pricing given GitLab's business needs. Their cost of living wouldn't matter. For employees at an all remote company, I don't see why their cost of living should matter any more than that. And applicants in expensive cities would not be dissuaded. Additionally, the calculator's attempt to handle cost of living fails to address hot markets outside the US (hello from Montreal), treats many countries as way more homogeneous in cost of living than they really are, and gives a seemingly quite inadequate 17% adjustment for contractors. That doesn't cover legal and accounting fees, paid time off of various types, the cost and limitations in health insurance coverage attainable by one-person companies, normally employer-side retirement contributions, etc.
- pritianka 8y ago
  This is really useful information. Thanks for sharing. I will put this in front of our CCO, Barbie.
  - jkaplowitz 8y ago
    Thanks!
  - ahkurtz 8y ago
    So you've never heard this before or won't comment here?
    - pritianka 8y ago
      "Additionally, the calculator's attempt to handle cost of living fails to address hot markets outside the US (hello from Montreal), treats many countries as way more homogeneous in cost of living than they really are, and gives a seemingly quite inadequate 17% adjustment for contractors. That doesn't cover legal and accounting fees, paid time off of various types, the cost and limitations in health insurance coverage attainable by one-person companies, normally employer-side retirement contributions, etc." I, personally, did not know about the way we treat intl comp on the calculator because I do not work in people ops. I found it useful new information.
mi_lk 8y ago
I really don't find it convincing. If you pay as much as your competitors, why would talents in expensive areas would be discouraged to apply to your company and go to your competitors? If you're assuming that big city people would feel bad because the small city people get paid more in terms of cost of living, then I'd say that's a bad assumption. People living in any city should know its pros and cons, why is it up to you to decide that the cost of living is the metric?
robdachshund 8y ago
Ew
fierro 8y ago
that's a weak argument; some places cost more to live because they are better places to live. It's a personal decision to live in New York over Kansas
dragonwriter 8y ago
> If we pay the same (rather than by some measure of PPP) in every location, we are effectively discouraging applications from people who happen to be in more expensive areas. If you do location-based pay, you are even more strongly discouraging applications from people in less expensive areas, especially if you don't adjust salaries for relocations after someone is employed, since someone in a less-expensive area who might consider working for you is encouraged to delay their application, seek employment that will let them wlive in a more expensive area, and then apply to GitLab (and, if you don't do post-enployment location-based adjustments, then move back to the cheap area.) > efforts to make sure our comp calculator is fair and encourages people to apply. As long as you pay people differently for the same work based on where they live when they apply, your comp calculator will not be fair. To the extent that place of residency at time of application correlates with status in any protected class, it also seems to be a pretty open and shut unlawful discrimination by disparate impact case waiting to be filed, too.
- DailyHN 8y ago
  So what I'm understanding is that, if I'm stuck in an awful city with low wages, Gitlab would like to prevent upward mobility so I stay there. What does this look like when it comes to company culture? Emphasis on maintaining a "diverse" team?
  - orf 8y ago
    Alternatively, they would offer you a fair salary what allowed you to move to a city with higher wages (and a higher cost of living).
- DouweM 8y ago
  Note that GitLab _does_ adjust compensation when relocating: https://about.gitlab.com/handbook/people-operations/global-compensation/#relocating https://about.gitlab.com/handbook/people-operations/global-c... + https://about.gitlab.com/job-families/move/ https://about.gitlab.com/job-families/move/ That means that as someone working at GitLab, my current wage is competitive compared to local companies, + I get all of the perks of remote work, working on open source, developer tooling, etc, and all of this will still be the case if I were to move elsewhere. The exact amount of money deposited into my account each month would go up or down, but my lifestyle would stay roughly the same. I know I’d make a lot more money if I lived in, say, the Bay Area, and if I made that same amount of money pretty much anywhere else I could live like a king, but I honestly don’t care. I quite like my decidedly not-king-like life today, and I love that with GitLab, I can have this same life and job wherever I choose to live. I’m currently living in the Netherlands, but am planning to move to Mexico in a few years to be closer to my fiancée’s family. If all goes well, GitLab will travel there with us, and while my compensation will see a decrease, our life style won’t. GitLab’s compensation philosophy is one of competing with the local market, instead of putting a fixed price on the value I or anyone else provides to the company, and that’s totally fine by me. If it wasn’t for GitLab, I’d probably be working at one of those local companies, so aren’t I still better off? For the company, it means that it/we can hire great people wherever they may be on earth, without being limited to the subset of great people who also happen to or want to live in the specific city the company happens to be based in. This may come as a surprise to some, but there are some amazing engineers out there who have zero interest in living in the Bay Area, and who don’t particularly care about maximizing their yearly take home pay, as long as they make enough money to provide for themselves and their family, and can live in whatever city or country or continent that they prefer. The map on our team page is a testament to that: https://about.gitlab.com/team/ https://about.gitlab.com/team/ (mobile-friendly: https://gitlab-com.gitlab.io/teampage-map/ https://gitlab-com.gitlab.io/teampage-map/) FWIW, I know of colleagues who have moved to locations with both lower and higher cost of living compared to the location they were hired in, and I’ve never heard about requests to move being rejected.
djloche 8y ago
There's serious room for improvement in the salary calculator, calculator to account for growing metro areas, and I think most of this comes from trying to rely on numbeo for your rent indexes. Eg. Why in the world doesn't Portland OR have its own rent index vs rest of OR? The 'Hot Markets' adjustment should also take a wider account for cities / towns / suburbs that are probably also booming. For example, I'm in the PDX metro area, but on the WA side of the river. My housing costs have gone up 41% to 2.5 years thanks to the booming housing market here, but the current gitlab calculation doesn't account for it thanks to the combined factor of being in the metro area but not in the right city/state, combined with the fact that the big growing metro area doesn't have it's own rent index. Of course, this could be smoothed over and fixed as part of the hiring process, but it would be nice to know up front that you were using up to date data in your attempts to pay market rate salaries.
briansteffens 8y ago
I was interested in working at GitLab a couple years ago but the salary calculator changed my mind. It lumped all the cities in Oregon together which gave some weird results depending on which city you live in. I can't imagine how wonky the data gets internationally, and it seems like the fairness of your salary would depend on the accuracy and granularity of the data GitLab has for your particular region.
- SuperQue 8y ago
  Yup, as a hiring manager I lost a couple of good hires due to the comp calculator. Especially in markets, like where I live. The market for engineer salaries is much higher, due to the demand. But the cost of living is very low, by comparison. I've been complaining about this for a while, but it's one of those things that we can't just vote on and change the whole company salary structure.
  - toomuchtodo 8y ago
    > but it's one of those things that we can't just vote on and change the whole company salary structure. I know you alone can’t do anything about this, but the longer this painful task is put off, the more difficult will be to rectify as Gitlab grows (more people = greater labor cost expense increase when the problem is addressed). It’s peope ops debt.
- detaro 8y ago
  Just looking at Germany: the salary calculator assumes everything outside a select few cities is costing the same. I sincerely hope they don't use that calculator to make the actual calculations for candidates but spend the effort to calculate an actual number for the location, otherwise that's entire areas that are just laughably inaccurate. E.g. Stuttgart, according to some numbers the city with the second-highest average rent in the country is not in a special case and thus assumed to be in the cheapest class. Let's estimate CoL 30 % higher than Berlin, 10 % less compensation.
agensaequivocum 8y ago
And now you are just discouraging those in cheaper cities such as myself.
pritianka 8y ago
Hi folks - appreciate the discussion here. Our ceo put down his thoughts in the GitLab handbook about our policy to pay local rates - https://about.gitlab.com/handbook/people-operations/global-compensation/#paying-local-rates https://about.gitlab.com/handbook/people-operations/global-c.... Do check it out. Doesn’t mean the calculator is perfect but speaks to the universal comp vs localized.
- 0xffff2 8y ago
  FYI, #2 on that list should say "than" rather than "then". Also, the link to the compensation calculator is 404 for me.
nserrino 8y ago
Ok, so maybe people in high cost of living areas aren't discouraged when the salary scales with their cost of living. But doesn't that effectively bias gitlab against those candidates because they have to pay them more? At some point there are unavoidable incentives that crop up as a result of the asymmetry.

pritianka 8y ago

https://youtu.be/5dhjw-TT964?t=5561 https://youtu.be/5dhjw-TT964?t=5561

samueldavid 8y ago
so by his words, it means that if I live in a third world country but I work as hard as my peer in SF I'm going to get paid less by a unit of work? even tho we both are equally good and working as hard?

jabits 8y ago

I did not know companies actually do this. I would never work for a different salary than my peers (based on location). In my small "virtual" company, most of my colleagues live and work in Wisconsin (US). I live in Hawaii, where the expenses are much higher, but I would never dream of asking for more money, and I would be laughed out of the room (virtually!). Years ago, when I was an officer in the Air Force, we all had the same salary, but the government did provide Housing Allowances. This is similar, but not the same thing. A unit of salary is for a unit of work, and I do not believe this should vary by geography. If their workers choose to live in SF vs Oklahoma or Buffalo, then they pay the price. I realize that I have less "real" wages than the rest of my team in Milwaukee or Green Bay, but Maui has its compensating benefits.

0xffff2 8y ago
I agree, and I think that military housing allowances (which are adjusted for CoL) also have the additional justification that (generally speaking) you don't get to choose where you are stationed. As a service member, the military tells you where to go and you go, so it makes a certain amount of sense that you're then paid enough to live there. As a software developer in the civilian world, my physical location has nothing to do with my work, so it makes no sense for my compensation to be based on my location.

0xffff2 8y ago

I don't understand this rational at all. If a developer in SF is worth x dollars to you, why are they suddenly worth less if they move to a lower CoL area? If you're paying salaries that are livable in a high CoL area, you aren't discouraging people living there, you're freeing people to move wherever they want. I'm a Silicon Valley based dev who really wishes he could move far, far away from here without taking a huge pay cut, so I'm obviously biased. That said, in my view as an employee, the value I create for the company isn't based on my physical location, so why should my salary be?

lordnacho 8y ago
It's a negotiation, right? And at least some of the cards are known, such as an admittedly noisy estimate of what people will accept as a salary. Basically the company shares in your lowered living costs if you are somewhere cheap. Hopefully they won't eat the whole savings, something should be left for both parties.
- ahkurtz 8y ago
  What do you think is the likely outcome here?
jcdavis 8y ago
> That said, in my view as an employee, the value I create for the company isn't based on my physical location, so why should my salary be Because your salary is much more influenced by market supply and demand than the value you create for your employer.
- dragonwriter 8y ago
  The market for remote work isn't geographically constrained, so it doesn't make sense to make pay offers as if you were hiring in specific geographically constrained markets rather than the unconstrained remote work market.
  - jcdavis 8y ago

dx87 8y ago

So high COLA areas typically already have better schools, utilities, and public services, but you reward employees living in those areas with higher pay because it would be unfair to pay them the same as people in lower COLA areas? Why would anyone choose to work for you if they don't live in a high COLA area?

pritianka 8y ago
That's probably usually true but as an SF resident, I can tell you the schools, utilities, and public services aren't what I would call world class here :p. Wish this was more like New York that way hehe.
- ahkurtz 8y ago
  Spend some time in the Midwest or deep South.

jkaplowitz 8y ago

This system fails badly when people move between cheap and expensive cities over the course of their lives, and might need to build savings at expensive city levels when living in a cheap city. Why not just pay everyone at the expensive city level? If you were hiring a true consultant rather than an employee or a full-time "contractor," you would pay them solely based on value delivered and the defensibility of their pricing given GitLab's business needs. Their cost of living wouldn't matter. For employees at an all remote company, I don't see why their cost of living should matter any more than that. And applicants in expensive cities would not be dissuaded. Additionally, the calculator's attempt to handle cost of living fails to address hot markets outside the US (hello from Montreal), treats many countries as way more homogeneous in cost of living than they really are, and gives a seemingly quite inadequate 17% adjustment for contractors. That doesn't cover legal and accounting fees, paid time off of various types, the cost and limitations in health insurance coverage attainable by one-person companies, normally employer-side retirement contributions, etc.

pritianka 8y ago
This is really useful information. Thanks for sharing. I will put this in front of our CCO, Barbie.
- jkaplowitz 8y ago
  Thanks!
- ahkurtz 8y ago
  So you've never heard this before or won't comment here?
  - pritianka 8y ago
    "Additionally, the calculator's attempt to handle cost of living fails to address hot markets outside the US (hello from Montreal), treats many countries as way more homogeneous in cost of living than they really are, and gives a seemingly quite inadequate 17% adjustment for contractors. That doesn't cover legal and accounting fees, paid time off of various types, the cost and limitations in health insurance coverage attainable by one-person companies, normally employer-side retirement contributions, etc." I, personally, did not know about the way we treat intl comp on the calculator because I do not work in people ops. I found it useful new information.

mi_lk 8y ago

I really don't find it convincing. If you pay as much as your competitors, why would talents in expensive areas would be discouraged to apply to your company and go to your competitors? If you're assuming that big city people would feel bad because the small city people get paid more in terms of cost of living, then I'd say that's a bad assumption. People living in any city should know its pros and cons, why is it up to you to decide that the cost of living is the metric?

robdachshund 8y ago

fierro 8y ago

that's a weak argument; some places cost more to live because they are better places to live. It's a personal decision to live in New York over Kansas

dragonwriter 8y ago

> If we pay the same (rather than by some measure of PPP) in every location, we are effectively discouraging applications from people who happen to be in more expensive areas. If you do location-based pay, you are even more strongly discouraging applications from people in less expensive areas, especially if you don't adjust salaries for relocations after someone is employed, since someone in a less-expensive area who might consider working for you is encouraged to delay their application, seek employment that will let them wlive in a more expensive area, and then apply to GitLab (and, if you don't do post-enployment location-based adjustments, then move back to the cheap area.) > efforts to make sure our comp calculator is fair and encourages people to apply. As long as you pay people differently for the same work based on where they live when they apply, your comp calculator will not be fair. To the extent that place of residency at time of application correlates with status in any protected class, it also seems to be a pretty open and shut unlawful discrimination by disparate impact case waiting to be filed, too.

DailyHN 8y ago
So what I'm understanding is that, if I'm stuck in an awful city with low wages, Gitlab would like to prevent upward mobility so I stay there. What does this look like when it comes to company culture? Emphasis on maintaining a "diverse" team?
- orf 8y ago
  Alternatively, they would offer you a fair salary what allowed you to move to a city with higher wages (and a higher cost of living).
DouweM 8y ago
Note that GitLab _does_ adjust compensation when relocating: https://about.gitlab.com/handbook/people-operations/global-compensation/#relocating https://about.gitlab.com/handbook/people-operations/global-c... + https://about.gitlab.com/job-families/move/ https://about.gitlab.com/job-families/move/ That means that as someone working at GitLab, my current wage is competitive compared to local companies, + I get all of the perks of remote work, working on open source, developer tooling, etc, and all of this will still be the case if I were to move elsewhere. The exact amount of money deposited into my account each month would go up or down, but my lifestyle would stay roughly the same. I know I’d make a lot more money if I lived in, say, the Bay Area, and if I made that same amount of money pretty much anywhere else I could live like a king, but I honestly don’t care. I quite like my decidedly not-king-like life today, and I love that with GitLab, I can have this same life and job wherever I choose to live. I’m currently living in the Netherlands, but am planning to move to Mexico in a few years to be closer to my fiancée’s family. If all goes well, GitLab will travel there with us, and while my compensation will see a decrease, our life style won’t. GitLab’s compensation philosophy is one of competing with the local market, instead of putting a fixed price on the value I or anyone else provides to the company, and that’s totally fine by me. If it wasn’t for GitLab, I’d probably be working at one of those local companies, so aren’t I still better off? For the company, it means that it/we can hire great people wherever they may be on earth, without being limited to the subset of great people who also happen to or want to live in the specific city the company happens to be based in. This may come as a surprise to some, but there are some amazing engineers out there who have zero interest in living in the Bay Area, and who don’t particularly care about maximizing their yearly take home pay, as long as they make enough money to provide for themselves and their family, and can live in whatever city or country or continent that they prefer. The map on our team page is a testament to that: https://about.gitlab.com/team/ https://about.gitlab.com/team/ (mobile-friendly: https://gitlab-com.gitlab.io/teampage-map/ https://gitlab-com.gitlab.io/teampage-map/) FWIW, I know of colleagues who have moved to locations with both lower and higher cost of living compared to the location they were hired in, and I’ve never heard about requests to move being rejected.

djloche 8y ago

There's serious room for improvement in the salary calculator, calculator to account for growing metro areas, and I think most of this comes from trying to rely on numbeo for your rent indexes. Eg. Why in the world doesn't Portland OR have its own rent index vs rest of OR? The 'Hot Markets' adjustment should also take a wider account for cities / towns / suburbs that are probably also booming. For example, I'm in the PDX metro area, but on the WA side of the river. My housing costs have gone up 41% to 2.5 years thanks to the booming housing market here, but the current gitlab calculation doesn't account for it thanks to the combined factor of being in the metro area but not in the right city/state, combined with the fact that the big growing metro area doesn't have it's own rent index. Of course, this could be smoothed over and fixed as part of the hiring process, but it would be nice to know up front that you were using up to date data in your attempts to pay market rate salaries.

briansteffens 8y ago

I was interested in working at GitLab a couple years ago but the salary calculator changed my mind. It lumped all the cities in Oregon together which gave some weird results depending on which city you live in. I can't imagine how wonky the data gets internationally, and it seems like the fairness of your salary would depend on the accuracy and granularity of the data GitLab has for your particular region.

SuperQue 8y ago
Yup, as a hiring manager I lost a couple of good hires due to the comp calculator. Especially in markets, like where I live. The market for engineer salaries is much higher, due to the demand. But the cost of living is very low, by comparison. I've been complaining about this for a while, but it's one of those things that we can't just vote on and change the whole company salary structure.
- toomuchtodo 8y ago
  > but it's one of those things that we can't just vote on and change the whole company salary structure. I know you alone can’t do anything about this, but the longer this painful task is put off, the more difficult will be to rectify as Gitlab grows (more people = greater labor cost expense increase when the problem is addressed). It’s peope ops debt.
detaro 8y ago
Just looking at Germany: the salary calculator assumes everything outside a select few cities is costing the same. I sincerely hope they don't use that calculator to make the actual calculations for candidates but spend the effort to calculate an actual number for the location, otherwise that's entire areas that are just laughably inaccurate. E.g. Stuttgart, according to some numbers the city with the second-highest average rent in the country is not in a special case and thus assumed to be in the cheapest class. Let's estimate CoL 30 % higher than Berlin, 10 % less compensation.

agensaequivocum 8y ago

And now you are just discouraging those in cheaper cities such as myself.

pritianka 8y ago

Hi folks - appreciate the discussion here. Our ceo put down his thoughts in the GitLab handbook about our policy to pay local rates - https://about.gitlab.com/handbook/people-operations/global-compensation/#paying-local-rates https://about.gitlab.com/handbook/people-operations/global-c.... Do check it out. Doesn’t mean the calculator is perfect but speaks to the universal comp vs localized.

0xffff2 8y ago
FYI, #2 on that list should say "than" rather than "then". Also, the link to the compensation calculator is 404 for me.

nserrino 8y ago

Ok, so maybe people in high cost of living areas aren't discouraged when the salary scales with their cost of living. But doesn't that effectively bias gitlab against those candidates because they have to pay them more? At some point there are unavoidable incentives that crop up as a result of the asymmetry.