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What's the guarantee that say your San Francisco/NYC employer will keep paying you city rates when you are living in a small town in mid-west. At some point the

What's the guarantee that say your San Francisco/NYC employer will keep paying you city rates when you are living in a small town in mid-west. At some point they will catch up and start saving money this way. Everyone at a tech company is not a crucial employee. Don't get me wrong, I am all in for getting paid SF rates while living in a cheap Texas suburb.

dheera 6y ago
If that really happens, the next order effect will be cheaper rents in the bay area. Even now, there are some good rent deals. I moved to a new apartment a couple weeks ago (mainly because I needed a better WFH space to work effectively) and got 6 weeks free on my lease, which isn't normally seen in the bay area. When the pandemic passes though I do hope to be able to return to working from an office, if just because it's less lonely and there is usually better sunlight in business spaces than what I get at home. Maybe 2-3 days a week in the office and 2-3 days from home would be a nice balance, when it is safe to do so. Employers may also see the value in at least providing some additional financial incentive for living closer to the office and being willing to come to the office (if safe), although enabling full remote work for those who choose it is something I also fully agree with.
kbos87 6y ago
Bingo. As a director of a team at a mid-sized tech company who had conversations with employees making decisions like this, I can tell you that it is standard practice to adjust salary for the cost of living and the availability of talent in a particular market. I work for a very pro remote work company, but that’s still how we did things. You want to move to the Midwest and work remotely, or apply for a transfer to a different regional office? Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. People usually weren’t jazzed about it but understood.
- vkou 6y ago
  Doesn't this just create an incentive for people to work remotely from high-COL areas, while living frugally? Does relocating from San Francisco to San Jose also come with a pay cut? What about to Stockton? Modesto? Further out?
  - ghaff 6y ago
    Generally speaking, CoL adjustments don't really make you whole. You may make more if you're in SF but housing is still going to take a significantly bigger chunk of your paycheck and you may or may not come out ahead at the end of the day. Being on the periphery of a high cost area is probably the best deal. For most companies, for example, I imagine that Boston/Cambridge will be considered the same as Boston suburbs--even though within an hour drive you can get to vastly cheaper housing than in the city proper.
    - vkou 6y ago
      > Generally speaking, CoL adjustments don't really make you whole. Only if you don't live frugally, or if you aren't a senior engineer. If you do, a lot of the high costs of a high-CoL area can be avoided. If you are a senior engineer, that XY% raise over a junior is free money... Applied to a larger starting salary. Oddly enough, high-CoL areas have the same, or higher % raises, when you are promoted, than low-CoL areas. In the mid-west, the wage difference between a senior and a junior may be $30,000. In the bay area, it can be $150,000. Your CoL doesn't go up just because you have a better job title.
    - godelski 6y ago
      I wanted to add: If you live in SF and make $150k/yr and are able to put away 10% on investments that's $15k/yr. If you work somewhere else and take a move and make $75k/yr and are able to invest 20%, you haven't made a financial change. But a pay cut that big likely means you're somewhere that has less going on, less access to food, less for different types of activities, lower quality schools (that are funded less because property tax is lower), lower quality hospitals (big cities can afford all the fancy equipment and big time doctors), etc. So to be honest, moving to a cheaper area with the exact same COL might not be better because of other factors involved.
- SauciestGNU 6y ago
  Just because it's standard practice doesn't make it right. Is the employee contributing less to the company based on their location in a cheaper market? I think not. So why should we as workers allow a company to extract more profit from our labor based solely on our physical location?
  - dvtrn 6y ago
    It does feel quite bizzaro doesn’t it? The manager here says Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers. I’d love to sit down to coffee with a hiring budget manager one day and get into the weeds on CoL against present value and just do all of the math until the cafe closes or one of us has to take the first coffee induced “bio break”. Or at least, this is how it would go if my company tried to sell me on this. Hell, I might even be amenable to the pay cut if the company was otherwise doing right by our relationship as employer and employee and I felt sufficiently invested in continuing that relationship, but we’re going to get real mechanical and be VERY thorough about it.
    - wtetzner 6y ago
      > my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers. It doesn't have anything to do with your skills. It's just that they believe they can replace you in Indiana with a lower salary. I'm not saying it makes a lot of sense, just that they're probably thinking about it in that way.
      - aaronblohowiak 6y ago
        Or that there is less demand for those skills in Indiana so the market for those skills in Indiana pays less than the market for those skills in a separate location. This raises the question of if "remote" is its own "virtual location" in terms of market. Unfortunately, there is not yet enough remote work for there to be an established "remote" market distinction. For people where there is only a handful of people with those skills in the world, they command ny/sf pay wherever they live.
- eecc 6y ago
  Exploitative crap you can only pull because of lack of unions and power asymmetry. Bleh
  - deleted 6y ago
    [deleted]
  - refurb 6y ago
    If you're in a union, you're usually stuck in pay bands based on seniority.
- simmons 6y ago
  CoL adjustments have always seemed like a bit of a foreign idea to me, as someone who has been a freelancer for 20 years (WfH for 15). I'm not sure I would be able to sell my customers on the idea that I should get paid more because I live in X county. (Since my value proposition would be the same, assuming the customer wasn't in/near X.) On the other hand, if I lived in an area with a weaker tech scene, maybe my ability to negotiate would be weakened if they knew I didn't have a wealth of local options to fall back on?
- bogomipz 6y ago
  >"As a director of a team at a mid-sized tech company who had conversations with employees making decisions like this, I can tell you that it is standard practice to adjust salary for the cost of living and the availability of talent in a particular market." It's standard practice for your company maybe. This hasn't been my experience at all. I have had three jobs where this was not the case. I've had colleagues who have experienced similar as well. People should be paid for their time. I can't even believe a company would want to engage in salary reduction negotiations with employees they value.
- vsareto 6y ago
  >Happy to let you do it, but know that the market rate for your skills there is X This seems logical, but determining X is still in your authority, so let's not pretend this is fair. It's usually not a granular break down of skills either, or worse, it's calculated by job title plus a single primary skill, e.g. "Senior C#/.NET Developer".
  - jjeaff 6y ago
    Doesn't seem logical to me. Unless they are also offering to increase salaries if you decide to move to a higher col area.
- fredophile 6y ago
  Do you pay them more if they want to work remotely and move to an expensive market like New York or London?
  - kbos87 6y ago
    Yes, on the flipside, it works exactly the same way in reverse if someone is moving to a higher cost market. We benchmark against data from Radford & Comtrix (salary/pricing data providers) and adjust upwards on a regular basis too.
    - supergarfield 6y ago
      I'm a little confused by this. To simplify, it seems like either you want developers that are physically present in London, in which case you have to find some and pay them London rates, or you don't particularly care if they are physically present, in which case I don't understand why you would pay someone working remotely from London differently from someone working remotely from Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch. Presumably in both cases your company is getting the same value out of the employee. So why not hire only people working out of the Welsh countryside and refuse raises to anyone who wants to move to a higher COL area? In other words, it seems like if I decide to work remote and lie about where I physically spend most of my time, it would make no difference to the company but might make one to my compensation, which, ignoring any moral judgement, just seems strange for the company.
      - ghaff 6y ago
        >So why not hire only people working out of the Welsh countryside and refuse raises to anyone who wants to move to a higher COL area? Companies do this to a certain degree. My anecdotal observation is that a lot of tech companies that aren't in the Bay Area or only have a small presence there don't in fact try particularly hard to be competitive with the big Bay Area employers--unless there's someone they really really want. People may still join for various reasons.
      - bcrosby95 6y ago
- jjeaff 6y ago
  So, as a director of a big team, you also offer to increase the salary of employees who want to move to higher col areas like, say London or Tokyo right? I mean, it's only fair. You pay what the market rate for the talent in that area is.
  - ryandrake 6y ago
    All places I've worked that have multiple locations adjust salary both up and down when employees move to different markets. It's all about the prevailing rate for labor where you are located, and not some measurement of the "value you provide".
    - OJFord 6y ago
      Sure, but 'remote' is the 'location', not home town. You don't pay a non-London salary because the employee lives outside, or a Euro-denominated one because they commute from Paris.
    - jjeaff 6y ago
      Yes, but I assume these are all markets where these companies have physical presence. I doubt many are adjusting up because you want to move to London because you like the fog.
- ulfw 6y ago
  Market rates are such a weird idea. The whole concept is. You should pay for how GOOD an engineer is. Not for where (s)he lives.
  - stuxnet79 6y ago
    This is a simplistic view of the situation. Define "GOOD". For a business a "GOOD" engineer is one who is able to deliver business value at minimal cost. If by "GOOD" you mean talented then you have to realize that the US doesn't have a monopoly on talented coders. The greenback goes far in many places within your timezone. If borders are opened up via remote work companies will be forced to re-evalute the axes by which they quantify "GOOD" (talent, cost).
  - rubidium 6y ago
    As an employee it is. As an employer it’s not.
- ketamine__ 6y ago
  Do these transitions actually work? I can't imagine taking a massive pay cut because I need to be closer to ailing parents. That is going to generate a lot of bitterness. What is the turnover like at your company?
- badfrog 6y ago
  > You want to move to the Midwest and work remotely, or apply for a transfer to a different regional office? Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. It seems like nobody wins in this situation. If my goal is to maximize savings, I'd move to the Bay Area to get the maximum salary from you and find the cheapest housing in the area. I'd be miserable because I'm living in a place I don't like in a shitty apartment. On the other hand, if you offered to pay the same amount while I live in the midwest, I'd be happier with my living situation and be pocketing more cash. This would make me more productive and make me stay at the company longer, with no additional cost to you.
- deegles 6y ago
  If I deliver enough value to receive salary X, I don't see how my personal living arrangements factor in. There are stories of Google engineers vandwelling in company parking, by that standard they should have their salaries reduced. I'm sure that if one of your directs asked for a raise because they moved in to a more expensive apartment you would politely refuse. [0](https://www.businessinsider.com/google-employee-lives-in-truck-in-parking-lot-2015-10 https://www.businessinsider.com/google-employee-lives-in-tru...)
- OJFord 6y ago
  That doesn't make sense though, 'the market' isn't wherever they decide to move to, it's 'remote'. And yes, that will be less than SF rates, but it may well be more than non-remote rates wherever the employee happens to live. It's not paying less that's silly, it's paying an artificial amount less. The only way in which location should come into it is restricting candidates to those located in (or willing to work to) a particular time zone(s).
- city41 6y ago
  If Twitter’s move is a sign of things to come, the “potential market” you’re talking about can become quite large.
- soulnothing 6y ago
  I'm mixed on the cost of living to salary argument. If I provide X value to a company. Say I complete a project that generates Y revenue. Why am I now docked on pay, because I'm choosing to live in a lower cost of area. Have I contributed less to compete this business item that now generates revenue. I find I'm more productive working remotely. So I'm doing more to drive that revenue line for the company. I think this comes down, we're not paid based on revenue we generate. But to keep us out of the talent pool. Or how much an adjacent firm may be willing to pay us. I don't believe it's based on what I can offer. The next argument is on market salary demand. I live locally in a market that makes no use of my technical skill set. If I need to keep cash flowing I find any three month contract to keep the lights on. But then I go back to being remote, and compete on a remote pool. Now we're on a remote pool set. America, or another cheaper to live country. If it's an external firm, do we have a middle company that can handle that tax implications. So we can hire a developer in Southern Asia or Europe. That role can now be filled for a drastic monetary reduction. But at the cost of management over head. Time zone difference, communication lag, better remote processes / documentation, etc. I've helped a few teams acclimate to these off shore changes. As an aside I always found it odd companies that outsource a majority of their development to an off shore firm. That will never be on site. But if a full time, on site, employee asked for a wfh to watch a sick kid, they had to burn a PTO day. Compared to an off shore developer there is one thing a country local developer may offer. Better communication with stake holders. Working in the same time zone. Communication especially remote is a big deal. I've seen a number of teams not be able to adapt to the time zone difference or communication differences. I went to work for a FAANG company several years ago. I took a 35% pay cut off my last local job, while my rent increased by about 60%. I did it for the experience. I've never seen the high FAANG salaries people talk about, but that's just me. I'm also horrible at leet code / hacker rank so there's that, and I studied for over a year on hacker rank to get that job. As to my experience with cost of living adjustment frankly they've been border line insulting. Locally, on site, if I find a role that uses most of my skills I'm looking 150/180(full time / w2 contract). I had a fully remote contract role, that used all my skills and challenged me. That paid me 245. I always look at my rate as what is the given task and job duties, because I generally work medium to long term contracts. Senior Software, vs Dev Ops, vs SRE, vs Product manager all have different salary bands. I don't have a blanket salary, it's always what's the role you're asking me to do. When I first got a COL adjustment rate, I laughed. Then I became frustrated, and then I ignored COL adjusted salaries. Coming off a local contract role at 165, I was in talks for a more senior position, full time remote. A company out of a high cost of living area no less, started at 95. I'm not against being paid a bit less, but that drastic of a pay cut is insulting to senior staff. If you're going to pay me less, I want to know why. Regardless of locale, I'm incurring more costs. I pay for better internet, stocking of coffee/pantry, electricity, and the big expense space. I still live in a city. Getting a second bed room can help a lot ensure a better work from home environment. Globalization is going to become very interesting. I moved from New York for about a 10% salary reduction, while halving my rent. The determining factor is politics, and how people can adapt to working remotely.
- a_imho 6y ago
  Make remote protected. Substitute your argument for any protected class and see how silly it becomes[1]. Just because the market (actually people) [2] can discriminate against group X it does not make it right. [1] https://en.wikipedia.org/wiki/Equal_employment_opportunity https://en.wikipedia.org/wiki/Equal_employment_opportunity [2] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-wage-gap-look-like/ https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
rconti 6y ago
Yeah, it won't last forever. If remote work becomes more popular, salaries will become more harmonized, as well costs of living.
- chaostheory 6y ago
  Not forever, but it'll be longer than most people think. We've tried to make a vaccine for the original SARS. It's been 12 years now and there's still no successful, safe vaccine for it. For COVID-19, if a vaccine is released within the optimistic 18 months, how safe will it be compared to vaccines that went through all the trials normally?
  - jshevek 6y ago
    I believe rconti was not talking about the duration of COVID19 issues, nor the duration of WFH. Rather, the evolution of economic norms given the assumption of sustained normalization of remote work.
    - chaostheory 6y ago
      I think you're mistaken, since WFH gained massive adoption due to the COVID-19 outbreak. It's also what I believe he's referring to by, "Yeah, it won't last forever." I don't appreciate the downvote either for a reasonable comment.
- rootusrootus 6y ago
  Unfortunately a lot of folks are going to find out that 'harmonized' means lower, and maybe a lot lower. Cost of living may not adjust fast enough.
- HighPlainsDrftr 6y ago
  It depends. Many engineers will run elsewhere once they start getting paid less than they deserve, and the company is cutting paychecks for profits. The more extreme the difference, the crazier it will get.
chrischen 6y ago
The same reason they didn’t hire someone from the Texas suburbs rate in the first place. An employee’s rate depends on how much they would be going for in the market, and living costs are part of the employee’s expenses—not that of the company’s.
- notyourday 6y ago
  Suddenly the market becomes really large, including India, China and Eastern Europe in addition to the mid-west.
  - TallGuyShort 6y ago
    There's a bit of a spectrum. Companies have learned to have employees working from home, but they're all in the timezone they were in before, they already got to work together in-person before being in this situation, and entire teams were put into the same situation at once. That's a step toward full support of remote people all over the globe, but the further you get the more you have to factor in legal overhead, cultural and situational differences, time zone difference, etc. To be clear - I'm a big fan of remote work, I'm just saying that companies have been forced to solve only a subset of the problem they face before the market really can scale to be that large for everyone.
    - notyourday 6y ago
      "Remote work" is globalization of white collar jobs. It is baffling to me highly paid tech workers do not see it. "Work from home" is the first step. If a company embraces work from home, it embraces completely asynchronous communication. As soon as that becomes an acceptable way of solving problems, Vlad making $50k/year in Ukraine who will do 65 hours a week will become a contender to replace Jackson in SF, who is making $250k/year and refuses to work more than 40 hours a week because of work/life balance.
      - dpoochieni 6y ago
        I do not know if its my non traditional background (no degree in computer science, big emphasis in history and philosophy since middle school) but I'm baffled by how politically naive many people in software can be. I understand why you might not like it but in pretending politics do not matter or won't affect you, you are letting other people decide and most importantly, think for you. How many people think tech companies are just completely well-intentioned in everything they do? Curb your enthusiasm, a healthy chug of skepticism is needed.
freepor 6y ago
They don’t need to pay SF rates. 100K in Indianapolis buys you a way better standard of living than 200K in SF.
- pb7 6y ago
  Only if you disregard things like weather, things to do, proximity to great nature, and maybe not even then.
  - rootusrootus 6y ago
    Maybe Indianopolis isn't the perfect example for everyone. Portland, perhaps. Better proximity to great nature, still a lot of things to do, great weather (and getting better every year thanks to climate change, while California gets drier and drier), somewhat lower cost of living, etc.
    - shuckles 6y ago
      Portland sees the same cost of living trends as the Bay Area, so enjoy the arbitrage while it lasts I suppose. (For what it’s worth, so does every similarly desirable metro area in the USA outside of Houston.)
      - rootusrootus 6y ago
        Agreed. We jokingly (and sometimes not jokingly) talk smack to Californians moving north to Portland in hopes they won't come, because along with the steady influx of people comes steadily increasing housing prices. As much as I have said for years I never want to live some place like Seattle, I have to admit that Portland isn't really that far behind.
  - freepor 6y ago
    If you do that you also have to disregard the other myriad ways in which Indianapolis is a better place to live than SF.
- 6y ago
lukevp 6y ago
Hey, as someone from a cheap Texas suburb... why did we get singled out for this example specifically?
nathan_long 6y ago
It cuts both ways, right? Companies: "I don't have to pay you $big_city rates because you live in $small_town and nobody there will offer you $big_city rates." Candidates: "I don't have to accept $small_town rates because I work remotely and can work for a company in $big_city."
- TallGuyShort 6y ago
  The market is / will be self-balancing in this case. If companies can't hire people they'll have to come up with more than you're offering. If you're unemployed, you'll have to accept less than you're asking.
- klodolph 6y ago
  > But if a company is fully remote, why should it adjust for costs of living at all? Candidate A lives in an expensive place and Candidate B has an expensive hobby. Neither is the company's concern, is it? The bottom line is that each is worth $X to the company and wants $Y in compensation. Because if it wants to hire workers that live in SF, it has to pay SF wages. It doesn't have to pay SF wages to workers living in Tulsa. Think about it flipped around a bit. Let's say that instead of hiring employees, you're buying candy bars. Someone running a bodega in NYC isn't gonna give you a discount just because you're going to have the candy bar mailed to Oklahoma. The bottom line is not the $X value and the $Y compensation. It's a lot more complicated than that. Just like the company's bargaining position is a complex mixture of the value that different employees provide and the opportunity cost of leaving a position unfilled, the employee's bargaining position is affected by the salary the company is willing to provide and the opportunity cost of accepting this job offer instead of another.
  - aantix 6y ago
    > It doesn't have to pay SF wages to workers living in Tulsa. Not yet. When Tulsa engineers wake up to their value, they hold the cards. I’ve been on the hiring side for good senior engineers. They’re hard to hire, period. They take a ton of time to properly screen and by the end of the interview process, the company has wasted so many resources that could have been used for development if they don’t land that person.
metajack 6y ago
At a certain point people will move to the bay area for the higher paycheck, so that keeps it adjusted pretty high. Companies are not competing against local-to-the-employee employers, they are competing with all employers globally. Even with regional adjustments, the math usually works out in your favor to not be in the bay area.
Vysero 6y ago
"What's the guarantee" - There is no guarantee. Then again, there is no guarantee that the person who bought my drink didn't spike it with molly either...
mLuby 6y ago
A straightforward legal fix is to make location one of the things you can't ask about during hiring, like age, marital status, or disability. All they should be able to ask is what fraction of their work hours you're available for. It could be that everyone must be online 9-5 PST, or there're a few hours of overlap, or there's no expectation of common work hours as long as you "get your work done."
thorwasdfasdf 6y ago
I'd be fine with that. Even 30% reduction in pay would still be much better in an affordable city like Chicago or Houston.

dheera 6y ago

If that really happens, the next order effect will be cheaper rents in the bay area. Even now, there are some good rent deals. I moved to a new apartment a couple weeks ago (mainly because I needed a better WFH space to work effectively) and got 6 weeks free on my lease, which isn't normally seen in the bay area. When the pandemic passes though I do hope to be able to return to working from an office, if just because it's less lonely and there is usually better sunlight in business spaces than what I get at home. Maybe 2-3 days a week in the office and 2-3 days from home would be a nice balance, when it is safe to do so. Employers may also see the value in at least providing some additional financial incentive for living closer to the office and being willing to come to the office (if safe), although enabling full remote work for those who choose it is something I also fully agree with.

kbos87 6y ago

Bingo. As a director of a team at a mid-sized tech company who had conversations with employees making decisions like this, I can tell you that it is standard practice to adjust salary for the cost of living and the availability of talent in a particular market. I work for a very pro remote work company, but that’s still how we did things. You want to move to the Midwest and work remotely, or apply for a transfer to a different regional office? Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. People usually weren’t jazzed about it but understood.

vkou 6y ago
Doesn't this just create an incentive for people to work remotely from high-COL areas, while living frugally? Does relocating from San Francisco to San Jose also come with a pay cut? What about to Stockton? Modesto? Further out?
- ghaff 6y ago
  Generally speaking, CoL adjustments don't really make you whole. You may make more if you're in SF but housing is still going to take a significantly bigger chunk of your paycheck and you may or may not come out ahead at the end of the day. Being on the periphery of a high cost area is probably the best deal. For most companies, for example, I imagine that Boston/Cambridge will be considered the same as Boston suburbs--even though within an hour drive you can get to vastly cheaper housing than in the city proper.
  - vkou 6y ago
    > Generally speaking, CoL adjustments don't really make you whole. Only if you don't live frugally, or if you aren't a senior engineer. If you do, a lot of the high costs of a high-CoL area can be avoided. If you are a senior engineer, that XY% raise over a junior is free money... Applied to a larger starting salary. Oddly enough, high-CoL areas have the same, or higher % raises, when you are promoted, than low-CoL areas. In the mid-west, the wage difference between a senior and a junior may be $30,000. In the bay area, it can be $150,000. Your CoL doesn't go up just because you have a better job title.
  - godelski 6y ago
    I wanted to add: If you live in SF and make $150k/yr and are able to put away 10% on investments that's $15k/yr. If you work somewhere else and take a move and make $75k/yr and are able to invest 20%, you haven't made a financial change. But a pay cut that big likely means you're somewhere that has less going on, less access to food, less for different types of activities, lower quality schools (that are funded less because property tax is lower), lower quality hospitals (big cities can afford all the fancy equipment and big time doctors), etc. So to be honest, moving to a cheaper area with the exact same COL might not be better because of other factors involved.
SauciestGNU 6y ago
Just because it's standard practice doesn't make it right. Is the employee contributing less to the company based on their location in a cheaper market? I think not. So why should we as workers allow a company to extract more profit from our labor based solely on our physical location?
- dvtrn 6y ago
  It does feel quite bizzaro doesn’t it? The manager here says Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers. I’d love to sit down to coffee with a hiring budget manager one day and get into the weeds on CoL against present value and just do all of the math until the cafe closes or one of us has to take the first coffee induced “bio break”. Or at least, this is how it would go if my company tried to sell me on this. Hell, I might even be amenable to the pay cut if the company was otherwise doing right by our relationship as employer and employee and I felt sufficiently invested in continuing that relationship, but we’re going to get real mechanical and be VERY thorough about it.
  - wtetzner 6y ago
    > my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers. It doesn't have anything to do with your skills. It's just that they believe they can replace you in Indiana with a lower salary. I'm not saying it makes a lot of sense, just that they're probably thinking about it in that way.
    - aaronblohowiak 6y ago
      Or that there is less demand for those skills in Indiana so the market for those skills in Indiana pays less than the market for those skills in a separate location. This raises the question of if "remote" is its own "virtual location" in terms of market. Unfortunately, there is not yet enough remote work for there to be an established "remote" market distinction. For people where there is only a handful of people with those skills in the world, they command ny/sf pay wherever they live.
eecc 6y ago
Exploitative crap you can only pull because of lack of unions and power asymmetry. Bleh
- deleted 6y ago
  [deleted]
- refurb 6y ago
  If you're in a union, you're usually stuck in pay bands based on seniority.
simmons 6y ago
CoL adjustments have always seemed like a bit of a foreign idea to me, as someone who has been a freelancer for 20 years (WfH for 15). I'm not sure I would be able to sell my customers on the idea that I should get paid more because I live in X county. (Since my value proposition would be the same, assuming the customer wasn't in/near X.) On the other hand, if I lived in an area with a weaker tech scene, maybe my ability to negotiate would be weakened if they knew I didn't have a wealth of local options to fall back on?
bogomipz 6y ago
>"As a director of a team at a mid-sized tech company who had conversations with employees making decisions like this, I can tell you that it is standard practice to adjust salary for the cost of living and the availability of talent in a particular market." It's standard practice for your company maybe. This hasn't been my experience at all. I have had three jobs where this was not the case. I've had colleagues who have experienced similar as well. People should be paid for their time. I can't even believe a company would want to engage in salary reduction negotiations with employees they value.
vsareto 6y ago
>Happy to let you do it, but know that the market rate for your skills there is X This seems logical, but determining X is still in your authority, so let's not pretend this is fair. It's usually not a granular break down of skills either, or worse, it's calculated by job title plus a single primary skill, e.g. "Senior C#/.NET Developer".
- jjeaff 6y ago
  Doesn't seem logical to me. Unless they are also offering to increase salaries if you decide to move to a higher col area.
fredophile 6y ago
Do you pay them more if they want to work remotely and move to an expensive market like New York or London?
- kbos87 6y ago
  Yes, on the flipside, it works exactly the same way in reverse if someone is moving to a higher cost market. We benchmark against data from Radford & Comtrix (salary/pricing data providers) and adjust upwards on a regular basis too.
  - supergarfield 6y ago
    I'm a little confused by this. To simplify, it seems like either you want developers that are physically present in London, in which case you have to find some and pay them London rates, or you don't particularly care if they are physically present, in which case I don't understand why you would pay someone working remotely from London differently from someone working remotely from Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch. Presumably in both cases your company is getting the same value out of the employee. So why not hire only people working out of the Welsh countryside and refuse raises to anyone who wants to move to a higher COL area? In other words, it seems like if I decide to work remote and lie about where I physically spend most of my time, it would make no difference to the company but might make one to my compensation, which, ignoring any moral judgement, just seems strange for the company.
    - ghaff 6y ago
      >So why not hire only people working out of the Welsh countryside and refuse raises to anyone who wants to move to a higher COL area? Companies do this to a certain degree. My anecdotal observation is that a lot of tech companies that aren't in the Bay Area or only have a small presence there don't in fact try particularly hard to be competitive with the big Bay Area employers--unless there's someone they really really want. People may still join for various reasons.
    - bcrosby95 6y ago
jjeaff 6y ago
So, as a director of a big team, you also offer to increase the salary of employees who want to move to higher col areas like, say London or Tokyo right? I mean, it's only fair. You pay what the market rate for the talent in that area is.
- ryandrake 6y ago
  All places I've worked that have multiple locations adjust salary both up and down when employees move to different markets. It's all about the prevailing rate for labor where you are located, and not some measurement of the "value you provide".
  - OJFord 6y ago
    Sure, but 'remote' is the 'location', not home town. You don't pay a non-London salary because the employee lives outside, or a Euro-denominated one because they commute from Paris.
  - jjeaff 6y ago
    Yes, but I assume these are all markets where these companies have physical presence. I doubt many are adjusting up because you want to move to London because you like the fog.
ulfw 6y ago
Market rates are such a weird idea. The whole concept is. You should pay for how GOOD an engineer is. Not for where (s)he lives.
- stuxnet79 6y ago
  This is a simplistic view of the situation. Define "GOOD". For a business a "GOOD" engineer is one who is able to deliver business value at minimal cost. If by "GOOD" you mean talented then you have to realize that the US doesn't have a monopoly on talented coders. The greenback goes far in many places within your timezone. If borders are opened up via remote work companies will be forced to re-evalute the axes by which they quantify "GOOD" (talent, cost).
- rubidium 6y ago
  As an employee it is. As an employer it’s not.
ketamine__ 6y ago
Do these transitions actually work? I can't imagine taking a massive pay cut because I need to be closer to ailing parents. That is going to generate a lot of bitterness. What is the turnover like at your company?
badfrog 6y ago
> You want to move to the Midwest and work remotely, or apply for a transfer to a different regional office? Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move. It seems like nobody wins in this situation. If my goal is to maximize savings, I'd move to the Bay Area to get the maximum salary from you and find the cheapest housing in the area. I'd be miserable because I'm living in a place I don't like in a shitty apartment. On the other hand, if you offered to pay the same amount while I live in the midwest, I'd be happier with my living situation and be pocketing more cash. This would make me more productive and make me stay at the company longer, with no additional cost to you.
deegles 6y ago
If I deliver enough value to receive salary X, I don't see how my personal living arrangements factor in. There are stories of Google engineers vandwelling in company parking, by that standard they should have their salaries reduced. I'm sure that if one of your directs asked for a raise because they moved in to a more expensive apartment you would politely refuse. [0](https://www.businessinsider.com/google-employee-lives-in-truck-in-parking-lot-2015-10 https://www.businessinsider.com/google-employee-lives-in-tru...)
OJFord 6y ago
That doesn't make sense though, 'the market' isn't wherever they decide to move to, it's 'remote'. And yes, that will be less than SF rates, but it may well be more than non-remote rates wherever the employee happens to live. It's not paying less that's silly, it's paying an artificial amount less. The only way in which location should come into it is restricting candidates to those located in (or willing to work to) a particular time zone(s).
city41 6y ago
If Twitter’s move is a sign of things to come, the “potential market” you’re talking about can become quite large.
soulnothing 6y ago
I'm mixed on the cost of living to salary argument. If I provide X value to a company. Say I complete a project that generates Y revenue. Why am I now docked on pay, because I'm choosing to live in a lower cost of area. Have I contributed less to compete this business item that now generates revenue. I find I'm more productive working remotely. So I'm doing more to drive that revenue line for the company. I think this comes down, we're not paid based on revenue we generate. But to keep us out of the talent pool. Or how much an adjacent firm may be willing to pay us. I don't believe it's based on what I can offer. The next argument is on market salary demand. I live locally in a market that makes no use of my technical skill set. If I need to keep cash flowing I find any three month contract to keep the lights on. But then I go back to being remote, and compete on a remote pool. Now we're on a remote pool set. America, or another cheaper to live country. If it's an external firm, do we have a middle company that can handle that tax implications. So we can hire a developer in Southern Asia or Europe. That role can now be filled for a drastic monetary reduction. But at the cost of management over head. Time zone difference, communication lag, better remote processes / documentation, etc. I've helped a few teams acclimate to these off shore changes. As an aside I always found it odd companies that outsource a majority of their development to an off shore firm. That will never be on site. But if a full time, on site, employee asked for a wfh to watch a sick kid, they had to burn a PTO day. Compared to an off shore developer there is one thing a country local developer may offer. Better communication with stake holders. Working in the same time zone. Communication especially remote is a big deal. I've seen a number of teams not be able to adapt to the time zone difference or communication differences. I went to work for a FAANG company several years ago. I took a 35% pay cut off my last local job, while my rent increased by about 60%. I did it for the experience. I've never seen the high FAANG salaries people talk about, but that's just me. I'm also horrible at leet code / hacker rank so there's that, and I studied for over a year on hacker rank to get that job. As to my experience with cost of living adjustment frankly they've been border line insulting. Locally, on site, if I find a role that uses most of my skills I'm looking 150/180(full time / w2 contract). I had a fully remote contract role, that used all my skills and challenged me. That paid me 245. I always look at my rate as what is the given task and job duties, because I generally work medium to long term contracts. Senior Software, vs Dev Ops, vs SRE, vs Product manager all have different salary bands. I don't have a blanket salary, it's always what's the role you're asking me to do. When I first got a COL adjustment rate, I laughed. Then I became frustrated, and then I ignored COL adjusted salaries. Coming off a local contract role at 165, I was in talks for a more senior position, full time remote. A company out of a high cost of living area no less, started at 95. I'm not against being paid a bit less, but that drastic of a pay cut is insulting to senior staff. If you're going to pay me less, I want to know why. Regardless of locale, I'm incurring more costs. I pay for better internet, stocking of coffee/pantry, electricity, and the big expense space. I still live in a city. Getting a second bed room can help a lot ensure a better work from home environment. Globalization is going to become very interesting. I moved from New York for about a 10% salary reduction, while halving my rent. The determining factor is politics, and how people can adapt to working remotely.
a_imho 6y ago
Make remote protected. Substitute your argument for any protected class and see how silly it becomes[1]. Just because the market (actually people) [2] can discriminate against group X it does not make it right. [1] https://en.wikipedia.org/wiki/Equal_employment_opportunity https://en.wikipedia.org/wiki/Equal_employment_opportunity [2] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-wage-gap-look-like/ https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...

rconti 6y ago

Yeah, it won't last forever. If remote work becomes more popular, salaries will become more harmonized, as well costs of living.

chaostheory 6y ago
Not forever, but it'll be longer than most people think. We've tried to make a vaccine for the original SARS. It's been 12 years now and there's still no successful, safe vaccine for it. For COVID-19, if a vaccine is released within the optimistic 18 months, how safe will it be compared to vaccines that went through all the trials normally?
- jshevek 6y ago
  I believe rconti was not talking about the duration of COVID19 issues, nor the duration of WFH. Rather, the evolution of economic norms given the assumption of sustained normalization of remote work.
  - chaostheory 6y ago
    I think you're mistaken, since WFH gained massive adoption due to the COVID-19 outbreak. It's also what I believe he's referring to by, "Yeah, it won't last forever." I don't appreciate the downvote either for a reasonable comment.
rootusrootus 6y ago
Unfortunately a lot of folks are going to find out that 'harmonized' means lower, and maybe a lot lower. Cost of living may not adjust fast enough.
HighPlainsDrftr 6y ago
It depends. Many engineers will run elsewhere once they start getting paid less than they deserve, and the company is cutting paychecks for profits. The more extreme the difference, the crazier it will get.

chrischen 6y ago

The same reason they didn’t hire someone from the Texas suburbs rate in the first place. An employee’s rate depends on how much they would be going for in the market, and living costs are part of the employee’s expenses—not that of the company’s.

notyourday 6y ago
Suddenly the market becomes really large, including India, China and Eastern Europe in addition to the mid-west.
- TallGuyShort 6y ago
  There's a bit of a spectrum. Companies have learned to have employees working from home, but they're all in the timezone they were in before, they already got to work together in-person before being in this situation, and entire teams were put into the same situation at once. That's a step toward full support of remote people all over the globe, but the further you get the more you have to factor in legal overhead, cultural and situational differences, time zone difference, etc. To be clear - I'm a big fan of remote work, I'm just saying that companies have been forced to solve only a subset of the problem they face before the market really can scale to be that large for everyone.
  - notyourday 6y ago
    "Remote work" is globalization of white collar jobs. It is baffling to me highly paid tech workers do not see it. "Work from home" is the first step. If a company embraces work from home, it embraces completely asynchronous communication. As soon as that becomes an acceptable way of solving problems, Vlad making $50k/year in Ukraine who will do 65 hours a week will become a contender to replace Jackson in SF, who is making $250k/year and refuses to work more than 40 hours a week because of work/life balance.
    - dpoochieni 6y ago
      I do not know if its my non traditional background (no degree in computer science, big emphasis in history and philosophy since middle school) but I'm baffled by how politically naive many people in software can be. I understand why you might not like it but in pretending politics do not matter or won't affect you, you are letting other people decide and most importantly, think for you. How many people think tech companies are just completely well-intentioned in everything they do? Curb your enthusiasm, a healthy chug of skepticism is needed.

freepor 6y ago

They don’t need to pay SF rates. 100K in Indianapolis buys you a way better standard of living than 200K in SF.

pb7 6y ago
Only if you disregard things like weather, things to do, proximity to great nature, and maybe not even then.
- rootusrootus 6y ago
  Maybe Indianopolis isn't the perfect example for everyone. Portland, perhaps. Better proximity to great nature, still a lot of things to do, great weather (and getting better every year thanks to climate change, while California gets drier and drier), somewhat lower cost of living, etc.
  - shuckles 6y ago
    Portland sees the same cost of living trends as the Bay Area, so enjoy the arbitrage while it lasts I suppose. (For what it’s worth, so does every similarly desirable metro area in the USA outside of Houston.)
    - rootusrootus 6y ago
      Agreed. We jokingly (and sometimes not jokingly) talk smack to Californians moving north to Portland in hopes they won't come, because along with the steady influx of people comes steadily increasing housing prices. As much as I have said for years I never want to live some place like Seattle, I have to admit that Portland isn't really that far behind.
- freepor 6y ago
  If you do that you also have to disregard the other myriad ways in which Indianapolis is a better place to live than SF.
6y ago

lukevp 6y ago

Hey, as someone from a cheap Texas suburb... why did we get singled out for this example specifically?

nathan_long 6y ago

It cuts both ways, right? Companies: "I don't have to pay you $big_city rates because you live in $small_town and nobody there will offer you $big_city rates." Candidates: "I don't have to accept $small_town rates because I work remotely and can work for a company in $big_city."

TallGuyShort 6y ago
The market is / will be self-balancing in this case. If companies can't hire people they'll have to come up with more than you're offering. If you're unemployed, you'll have to accept less than you're asking.
klodolph 6y ago
> But if a company is fully remote, why should it adjust for costs of living at all? Candidate A lives in an expensive place and Candidate B has an expensive hobby. Neither is the company's concern, is it? The bottom line is that each is worth $X to the company and wants $Y in compensation. Because if it wants to hire workers that live in SF, it has to pay SF wages. It doesn't have to pay SF wages to workers living in Tulsa. Think about it flipped around a bit. Let's say that instead of hiring employees, you're buying candy bars. Someone running a bodega in NYC isn't gonna give you a discount just because you're going to have the candy bar mailed to Oklahoma. The bottom line is not the $X value and the $Y compensation. It's a lot more complicated than that. Just like the company's bargaining position is a complex mixture of the value that different employees provide and the opportunity cost of leaving a position unfilled, the employee's bargaining position is affected by the salary the company is willing to provide and the opportunity cost of accepting this job offer instead of another.
- aantix 6y ago
  > It doesn't have to pay SF wages to workers living in Tulsa. Not yet. When Tulsa engineers wake up to their value, they hold the cards. I’ve been on the hiring side for good senior engineers. They’re hard to hire, period. They take a ton of time to properly screen and by the end of the interview process, the company has wasted so many resources that could have been used for development if they don’t land that person.

metajack 6y ago

At a certain point people will move to the bay area for the higher paycheck, so that keeps it adjusted pretty high. Companies are not competing against local-to-the-employee employers, they are competing with all employers globally. Even with regional adjustments, the math usually works out in your favor to not be in the bay area.

Vysero 6y ago

"What's the guarantee" - There is no guarantee. Then again, there is no guarantee that the person who bought my drink didn't spike it with molly either...

mLuby 6y ago

A straightforward legal fix is to make location one of the things you can't ask about during hiring, like age, marital status, or disability. All they should be able to ask is what fraction of their work hours you're available for. It could be that everyone must be online 9-5 PST, or there're a few hours of overlap, or there's no expectation of common work hours as long as you "get your work done."

thorwasdfasdf 6y ago

I'd be fine with that. Even 30% reduction in pay would still be much better in an affordable city like Chicago or Houston.