8 ms·

Facebook’s New Remote Salary Policy Is “Barbaric”

34 points by illuminated 6y ago

belorn 6y ago
Can someone explain how cost-of-living salary adjustment work in practice? Can you move to an exclusive area, say a small island where the average house and land value is in the millions, and now demand a significant raise in order to afford living there?
- wdb 6y ago
  I would assume it will look similar to what GitLab is doing: https://about.gitlab.com/handbook/total-rewards/compensation/ https://about.gitlab.com/handbook/total-rewards/compensation...
  - fzzzy 6y ago
    This thing is just laughable. Detroit has a higher comp ratio than Ann Arbor. These people are literally smoking crack.
    - Duckpond 6y ago
      Their comp ratio for my country is less than 0.5. I'd have to take a serious pay cut to go work for them.
- jerf 6y ago
  I think this is the currently-inchoate reason people are finding this policy problematic... we know that it's bullshit. You'll be able to move from downtown $EXPENSIVE to rural $CHEAP and the company will aggressively and happily cut your salary and perhaps even "helpfully" backdate it for you, but if you one day announce to the company out of the blue that you want to move the other way for whatever reason, the company will at the very least drag they feet and probably eventually won't approve it. I've even seen this already happen in real life for distributed companies who already have non-Silicon Valley offices; when someone wants to move to SV and asks for the corresponding fairly massive raise, they've been told "no". There'll be a honeymoon period where this may be true but this is the inevitable stable point, and we all know it on one level or another. The only reason this looks even remotely feasible for the companies is the accidental historical fact of them all living in a high-expense area. Once they get more used to a more widespread remote workforce, this policy will only ever work out in the company's favor, never yours. There is NO WAY we're going to have the right to simply announce to our companies one day that of our own free will, we've decided to move to a 30% more expensive place (because why not? they'll pay for it, supposedly) and they'll just give us a 30% (or whatever) raise. Ludicrous nonsense. It's a lie. If this point isn't a stable point, it'll end up tipping in the other direction... companies pressuring their remote employees to stop living somewhere so expensive and move somewhere cheaper. "Pressuring" here includes things like "when layoffs hit, hit the high-cost-of-living employees first", in addition to direct threats. Enjoy the remote work honeymoon; it isn't going to last.
  - dandanqu82 6y ago
    I think a pay increase depends on the needs of the company. If your company is looking to hire someone with the job as you in the higher cost of living area, then a transfer and pay bump would be potentially easier than hiring a new employee. Now, if the company isn’t looking to employ more people in the high cost of living area I don’t see them paying someone more if that type of salary was not in their budget.
- dandanqu82 6y ago
  They say cost of living, but it’s more cost of labor. If you are a software engineer on this island, and the salaries for software engineering jobs there are a third of your salary because there is no tech industry, you will be paid significantly less. You don’t have opportunities to get a job that pays your old salary or more.
  - cableshaft 6y ago
    True, we didn't have anywhere near as many opportunities before, but if remote work becomes more and more the norm (especially in the wake of the pandemic), then we will have more opportunities to find work elsewhere, despite living in a region with less in-person job opportunities.
- mikekchar 6y ago
  Generally speaking, unless you are a contractor, it's hard to work for a company unless they have an office in the country where you live. So, while it's not an island, a good example of what you are talking about might be Monaco. Basically the entire country (tiny as it is) is filled with super rich people. But you can't easily work from Monaco because high tech companies do not have offices there. I have essentially the same problem in Japan. I mean, big companies usually have offices in Tokyo, but if I want to work for a startup somewhere, it's always going to be contracting. For a variety of reasons, that's sometimes not desirable (and a lot of companies refuse to hire contractors for lots of other reasons). So, basically, the only way you're likely to run into this is if you move to SF, which is usually no problem ;-)
skeeks 6y ago
I think it is not fair that everyone earns the same regardless where they live. Cost of living must (and probably already is) included. If everyone would earn the same amount, consequence would be more people moving to areas with lower living cost . Why not even move into a 3th world country and live like a king with your first world salary? Of course, one could argue, that Zuckerberg & co only want to make more money by decreasing salaries for their workforce. Instead of giving this money to shareholders, why not donate it? Especially now, when millions of people lost their jobs..
- NullPrefix 6y ago
  >Why not even move into a 3th world country and live like a king with your first world salary? And that's a bad thing why exactly?
  - skeeks 6y ago
    Well, it would not be a bad thing per se. But if everyone would start doing that, costs will rise again and in the end, situation (high living cost, rents, etc.) will be the same. It is just not sustainable. You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not... Of course, you could be a really generous king and even help the people there to have better access to education. That would be sustainable.
    - lotsofpulp 6y ago
      > You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not How are people born in developed countries not already doing this via importing from countries with little or no labor laws and environmental protections? If anything, an educated person going to an undeveloped place and sharing their resources that would have gone to an already developed place is a huge benefit for the undeveloped place.
    - 6y ago
fzzzy 6y ago
[i was overly emotional when i posted this, sorry]
- sojournerc 6y ago
  Just to be clear, you're comparing actual discriminatory laws to a private company setting compensation on cost of living? No one's forcing people to move out of the valley... I live in Colorado and have plenty of opportunities, and the perks of living here, for me, far outweigh any salary increase I could get moving to the Bay Area. In fact I don't think you could pay me enough to move there. Quality of life is far more important to me than doubling my salary.
  - saargrin 6y ago
    which you will then spend on housing anyway
dareobasanjo 6y ago
What's actually barbaric is forcing people to move away from their friends and family in their hometowns to come live in San Francisco where there's literally faeces in the streets and a shack costs $1M let alone a livable home when can do the work just fine from their homes. The medium to large 6-figure salaries are a trade off and it's actually fairer to employees to allow them to make the choice themselves.
- fzzzy 6y ago
  A shack in SF is a million bucks precisely because Facebook won't pay a SF salary unless you are in SF. If they paid a SF salary no matter where you lived, then a shack in SF would not be worth one million dollars any more.
  - fao_ 6y ago
    So you're saying that not only would it be better for the workers, but San Francisco would become more affordable to poorer people who don't have tech jobs and who were perhaps born there? Sounds like a win-win to me.
  - Duckpond 6y ago
    Making housing more affordable sounds like a net win. Those working there would be able to afford better housing.
GhostVII 6y ago
Calling it 'Barbaric' to reduce the already absurd salaries of Facebook employees to slightly less absurd levels seems hyperbolic to say the least. No one is forcing you to work there, and if you are at Facebook you almost certainly have lots of other options (essentially all of which have the same policy of adjusting compensation based on CoL).
- gregd 6y ago
  It's not a stretch to imagine other companies looking at what Facebook gets away with, to also model their behavior. This isn't endemic to Facebook, so disregarding this as "only applying to Facebook" is absurd.
- HomeDeLaPot 6y ago
  What's barbaric is the low income, low savings, and high credit card/student debt that many Americans are saddled with.
mark_l_watson 6y ago
I don’t really agree with the article. Since 1998 I have lived in the mountains in Arizona, certainly a reasonably inexpensive place compared to California or the east coast. When working remotely I have always charged much lower rates, with the understanding that I do work on my own schedule, that is, I may be off line a lot, but in a weekly time scale I put in the required hours. Twice I have temporarily relocated to work on site (Google in Mountain View, Capital One in the Mid West). I earned much more money but my expenses were larger. I think Facebook’s plan sounds OK.
sceptical 6y ago
Not barbaric at all. This is normal for almost all larger companies. Pay is based on the local geographic market. Only at higher levels L6+ does the span diminish. It is basic supply and demand, < L6 is easy to replace.
pyuser583 6y ago
There’s a big difference between market value, and cost of living. There are plenty of places with lower cost of living where a software developer can earn Silicon Valley-level salaries. That’s especially true when you consider that lots of compensation comes in the form of stock options. I’ve heard stories of companies outsourcing to the Phillipines, etc. They build an ecosystem to train workers overseas. Then other companies swoop in. Pretty soon, the salaries are the same as in the US.
nunez 6y ago
I have two issues with this article: 1. The author uses Zapier as an example of how to "make up" for CoL salary adjustments. However, Glassdoor tells me that Zapier pays WAY under market compared to FAANG and others. They also have a high recruiting bar, which tells me that they are good at getting their engineers on the cheap. 2. Facebook will still likely pay higher to much higher than the local market since they use RSUs as the bulk of their total comp.

34 points by illuminated 6y ago

Can someone explain how cost-of-living salary adjustment work in practice? Can you move to an exclusive area, say a small island where the average house and land value is in the millions, and now demand a significant raise in order to afford living there?

wdb 6y ago
I would assume it will look similar to what GitLab is doing: https://about.gitlab.com/handbook/total-rewards/compensation/ https://about.gitlab.com/handbook/total-rewards/compensation...
- fzzzy 6y ago
  This thing is just laughable. Detroit has a higher comp ratio than Ann Arbor. These people are literally smoking crack.
  - Duckpond 6y ago
    Their comp ratio for my country is less than 0.5. I'd have to take a serious pay cut to go work for them.
jerf 6y ago
I think this is the currently-inchoate reason people are finding this policy problematic... we know that it's bullshit. You'll be able to move from downtown $EXPENSIVE to rural $CHEAP and the company will aggressively and happily cut your salary and perhaps even "helpfully" backdate it for you, but if you one day announce to the company out of the blue that you want to move the other way for whatever reason, the company will at the very least drag they feet and probably eventually won't approve it. I've even seen this already happen in real life for distributed companies who already have non-Silicon Valley offices; when someone wants to move to SV and asks for the corresponding fairly massive raise, they've been told "no". There'll be a honeymoon period where this may be true but this is the inevitable stable point, and we all know it on one level or another. The only reason this looks even remotely feasible for the companies is the accidental historical fact of them all living in a high-expense area. Once they get more used to a more widespread remote workforce, this policy will only ever work out in the company's favor, never yours. There is NO WAY we're going to have the right to simply announce to our companies one day that of our own free will, we've decided to move to a 30% more expensive place (because why not? they'll pay for it, supposedly) and they'll just give us a 30% (or whatever) raise. Ludicrous nonsense. It's a lie. If this point isn't a stable point, it'll end up tipping in the other direction... companies pressuring their remote employees to stop living somewhere so expensive and move somewhere cheaper. "Pressuring" here includes things like "when layoffs hit, hit the high-cost-of-living employees first", in addition to direct threats. Enjoy the remote work honeymoon; it isn't going to last.
- dandanqu82 6y ago
  I think a pay increase depends on the needs of the company. If your company is looking to hire someone with the job as you in the higher cost of living area, then a transfer and pay bump would be potentially easier than hiring a new employee. Now, if the company isn’t looking to employ more people in the high cost of living area I don’t see them paying someone more if that type of salary was not in their budget.
dandanqu82 6y ago
They say cost of living, but it’s more cost of labor. If you are a software engineer on this island, and the salaries for software engineering jobs there are a third of your salary because there is no tech industry, you will be paid significantly less. You don’t have opportunities to get a job that pays your old salary or more.
- cableshaft 6y ago
  True, we didn't have anywhere near as many opportunities before, but if remote work becomes more and more the norm (especially in the wake of the pandemic), then we will have more opportunities to find work elsewhere, despite living in a region with less in-person job opportunities.
mikekchar 6y ago
Generally speaking, unless you are a contractor, it's hard to work for a company unless they have an office in the country where you live. So, while it's not an island, a good example of what you are talking about might be Monaco. Basically the entire country (tiny as it is) is filled with super rich people. But you can't easily work from Monaco because high tech companies do not have offices there. I have essentially the same problem in Japan. I mean, big companies usually have offices in Tokyo, but if I want to work for a startup somewhere, it's always going to be contracting. For a variety of reasons, that's sometimes not desirable (and a lot of companies refuse to hire contractors for lots of other reasons). So, basically, the only way you're likely to run into this is if you move to SF, which is usually no problem ;-)

skeeks 6y ago

I think it is not fair that everyone earns the same regardless where they live. Cost of living must (and probably already is) included. If everyone would earn the same amount, consequence would be more people moving to areas with lower living cost . Why not even move into a 3th world country and live like a king with your first world salary? Of course, one could argue, that Zuckerberg & co only want to make more money by decreasing salaries for their workforce. Instead of giving this money to shareholders, why not donate it? Especially now, when millions of people lost their jobs..

NullPrefix 6y ago
>Why not even move into a 3th world country and live like a king with your first world salary? And that's a bad thing why exactly?
- skeeks 6y ago
  Well, it would not be a bad thing per se. But if everyone would start doing that, costs will rise again and in the end, situation (high living cost, rents, etc.) will be the same. It is just not sustainable. You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not... Of course, you could be a really generous king and even help the people there to have better access to education. That would be sustainable.
  - lotsofpulp 6y ago
    > You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not How are people born in developed countries not already doing this via importing from countries with little or no labor laws and environmental protections? If anything, an educated person going to an undeveloped place and sharing their resources that would have gone to an already developed place is a huge benefit for the undeveloped place.
  - 6y ago

fzzzy 6y ago

[i was overly emotional when i posted this, sorry]

sojournerc 6y ago
Just to be clear, you're comparing actual discriminatory laws to a private company setting compensation on cost of living? No one's forcing people to move out of the valley... I live in Colorado and have plenty of opportunities, and the perks of living here, for me, far outweigh any salary increase I could get moving to the Bay Area. In fact I don't think you could pay me enough to move there. Quality of life is far more important to me than doubling my salary.
- saargrin 6y ago
  which you will then spend on housing anyway

dareobasanjo 6y ago

What's actually barbaric is forcing people to move away from their friends and family in their hometowns to come live in San Francisco where there's literally faeces in the streets and a shack costs $1M let alone a livable home when can do the work just fine from their homes. The medium to large 6-figure salaries are a trade off and it's actually fairer to employees to allow them to make the choice themselves.

fzzzy 6y ago
A shack in SF is a million bucks precisely because Facebook won't pay a SF salary unless you are in SF. If they paid a SF salary no matter where you lived, then a shack in SF would not be worth one million dollars any more.
- fao_ 6y ago
  So you're saying that not only would it be better for the workers, but San Francisco would become more affordable to poorer people who don't have tech jobs and who were perhaps born there? Sounds like a win-win to me.
- Duckpond 6y ago
  Making housing more affordable sounds like a net win. Those working there would be able to afford better housing.

GhostVII 6y ago

Calling it 'Barbaric' to reduce the already absurd salaries of Facebook employees to slightly less absurd levels seems hyperbolic to say the least. No one is forcing you to work there, and if you are at Facebook you almost certainly have lots of other options (essentially all of which have the same policy of adjusting compensation based on CoL).

gregd 6y ago
It's not a stretch to imagine other companies looking at what Facebook gets away with, to also model their behavior. This isn't endemic to Facebook, so disregarding this as "only applying to Facebook" is absurd.
HomeDeLaPot 6y ago
What's barbaric is the low income, low savings, and high credit card/student debt that many Americans are saddled with.

mark_l_watson 6y ago

I don’t really agree with the article. Since 1998 I have lived in the mountains in Arizona, certainly a reasonably inexpensive place compared to California or the east coast. When working remotely I have always charged much lower rates, with the understanding that I do work on my own schedule, that is, I may be off line a lot, but in a weekly time scale I put in the required hours. Twice I have temporarily relocated to work on site (Google in Mountain View, Capital One in the Mid West). I earned much more money but my expenses were larger. I think Facebook’s plan sounds OK.

sceptical 6y ago

Not barbaric at all. This is normal for almost all larger companies. Pay is based on the local geographic market. Only at higher levels L6+ does the span diminish. It is basic supply and demand, < L6 is easy to replace.

pyuser583 6y ago

There’s a big difference between market value, and cost of living. There are plenty of places with lower cost of living where a software developer can earn Silicon Valley-level salaries. That’s especially true when you consider that lots of compensation comes in the form of stock options. I’ve heard stories of companies outsourcing to the Phillipines, etc. They build an ecosystem to train workers overseas. Then other companies swoop in. Pretty soon, the salaries are the same as in the US.

nunez 6y ago

I have two issues with this article: 1. The author uses Zapier as an example of how to "make up" for CoL salary adjustments. However, Glassdoor tells me that Zapier pays WAY under market compared to FAANG and others. They also have a high recruiting bar, which tells me that they are good at getting their engineers on the cheap. 2. Facebook will still likely pay higher to much higher than the local market since they use RSUs as the bulk of their total comp.