4 ms·

I haven't made my mind on this yet tbh. I tend to not agree with the argument that workers are bringing the same value to the company no matter their location.

I haven't made my mind on this yet tbh. I tend to not agree with the argument that workers are bringing the same value to the company no matter their location. What about doctors that live outside major cities. Should they be compensated the same as the doctors in the centre of NY? I think that's a utopian state where it just can't co-exist with the current way of how markets work. On the other hand, I totally agree with Sid (from GitLab)[1]: > "If we pay everyone the San Francisco wage for their respective roles, our compensation costs would increase greatly, and we would be forced to hire a lot fewer people. Then we wouldn’t be able to produce as much as we would like," Sid explains. "And if we started paying everyone the lowest rate possible, we would not be able to retain the people we want to keep. > "So you end up in a place where the compensation is somewhere in between. And that would cause us to have a concentration of team members in low-wage regions because it’s a better deal for them. They’re getting more than the market rate, so they’re more likely to apply and accept an offer. And they’re more likely to stay regardless of how happy they are, which is not healthy for them or the company." That makes sense! Both company and the employees are equally happy. I don't find anything wrong with that. I think choosing an "above the local rate" rate to pay your employees is the way to go. Rate them based on the criteria you think it's best and put that in perspective against their local rate and the rate ofc that they want. They are going to be some that live in Greece and want to be compensated with SF rates. That's fine and they are probably able to do it. But that shouldn't affect your own strategy. 1: https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-ra...

dennisy 6y ago
Thanks for the reply. This makes sense, however it does mean you will end up hiring mostly from low wage regions. Which may not be a bad thing for the company, however it will be for people in higher wage regions.
- kostarelo 6y ago
  If you can afford to pay above the rate for those, then go for it. If not, I don't see a reason why worrying about them. That's like saying a company that primarily works on a smaller countrys' market, thus their revenue is much smaller, cannot afford to hire engineers from SF and that's hurting those engineers for some reason?
- verganileonardo 6y ago
  This sounds like a positive consequence of that policy. People move to lower rage regions, they spend less time commuting, the have more money available for other expenses (as rent is not a big chunk of their income). In the end, this pushes to a decentralized workforce and may reduce the cost of living on highly populated areas (NYC or SF)

dennisy 6y ago

Thanks for the reply. This makes sense, however it does mean you will end up hiring mostly from low wage regions. Which may not be a bad thing for the company, however it will be for people in higher wage regions.

kostarelo 6y ago
If you can afford to pay above the rate for those, then go for it. If not, I don't see a reason why worrying about them. That's like saying a company that primarily works on a smaller countrys' market, thus their revenue is much smaller, cannot afford to hire engineers from SF and that's hurting those engineers for some reason?
verganileonardo 6y ago
This sounds like a positive consequence of that policy. People move to lower rage regions, they spend less time commuting, the have more money available for other expenses (as rent is not a big chunk of their income). In the end, this pushes to a decentralized workforce and may reduce the cost of living on highly populated areas (NYC or SF)