4 ms·

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 lan

by 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 ;-)

by belorn 6y ago

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 ;-)