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Remote First at Brex
- xyzzy_plugh 6y ago> Henrique used to play an online game called Ragnarök I feel like this was a rite of passage for an era of Brazilians.
- sergiotapia 6y agoIn my day Polaks and Brazilians played Tibia.
- giacaglia 6y agoThis seems like a big deal. More and more companies are transitioning to Remote First....
- mStreamTeam 6y agoBrex laid off a significant portion of their staff earlier this year. It sounds like they are trying to save more money by getting rid of their expensive office space in Manhattan and SF https://techcrunch.com/2020/05/29/brex-the-credit-card-for-startups-cuts-staff-amid-restructuring/ https://techcrunch.com/2020/05/29/brex-the-credit-card-for-s...
- Aperocky 6y agoMake sense.. offices are not being used while staff is as productive (probably not as happy though? but that's case by case) at home. A lot of offices may go bankrupt in the coming years, even when this whole thing is over.
- mStreamTeam 6y agoIts just interesting to see all these layoffs and cost cutting measures right after they raised a ton of money. In case you are unaware, Brex's business model is to lend money to startups. The kicker is they lend money to startups that banks and investors won't touch. They advertise themselves as a tech company but in reality they are closer to a high risk VC firm.
- Aperocky 6y agoAt this current time that doesn't feel like a sound business model.. but I could be wrong. It also seems that they won't need so many people? The VC firms I know are all capital heavy and very light on staff.
- mStreamTeam 6y agoThey were able to raise money from investors selling themselves as a tech company. Now that they have the money, they dont need the engineers anymore which explains the layoffs and downsizing. Brex feels like an attempt to gamble with someone else's money. They raised a ton of capital and now they are going to use it to invest in high risk startups.
- devmunchies 6y ago> selling themselves as a tech company They built a lot of the underlining infra for their Brex Cash product. > use it to invest in high risk startups Don't they require you to pay back the balance at the end of every month? And you're not aloud to go over a percentage of whats in your bank account. These restrictions limit the risk.
- mStreamTeam 6y agoEvery bank builds their own infrastructure, yet I've never heard a bank advertise themselves as a tech company...
- cercatrova 6y agoCapital One does, to my knowledge.
- CPLX 6y agoIs that actually true? I thought it was the other way around, and they only "lend" money to companies that have millions od dollars in VC investment already in the bank.
- carriganisms 6y agoI'm not sure remote first is actually cheaper when you factor in off-sites and WFH stipends. From the article: With that in mind, we decided to have office hubs in the major cities (starting with SF, NY, SLC, and Vancouver), where employees can work whenever they want. Our office hubs will also be important for those who miss the daily physical interactions and in-person collaboration of an office.
- saagarjha 6y agoThis isn't really related at all, but I've always considered "Brex" to be a strange name considering https://en.wikipedia.org/wiki/Bre-X https://en.wikipedia.org/wiki/Bre-X
- Sebguer 6y agoI expect a lot less thought (and research) goes into most startup names than you'd think.
- deleted 6y ago[deleted]
- carriganisms 6y agoA service that does planning and execution of off-site meetups for remote companies is a great business idea. Essentially, travel agency/event planning for remote first companies. Once we're past COVID, a lot of companies are going to stick with remote first and making the planning of off-sites easy seems like a must need service.
- saadatq 6y agoI know that InVision (InVision app.com, a remote-first company) has an entire team dedicated to planning their yearly offsite. I can imagine many other companies choosing to hire a company to help plan offsites. Great idea :-)
- paxys 6y agoThere are lots and lots of corporate event planning companies out there. We used to use them a bunch even when we were all in the same city.
- nrmitchi 6y ago> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-19. Standard relocation compensation adjustments will apply immediately for all employees who start at Brex after Sep 1, 2020. There are many different thoughts around the "right way" to do compensation adjustments in a remote-first world, but 4 years feels like way to long to have to deal with an SF->local pay discrepancy existing within teams. If someone was to join Brex in 2022, it would feel very weird to learn that their peer on the same team, in the same geographic region, is still getting their SF based comp package, but hasn't lived there in 2 years.
- devmunchies 6y agoI would just consider it a perk of having started at the company earlier, like having more vested stock. What sucks though is if you started at the same time as another employee in SF, but you are in the SLC office and are stuck on a lower relative pay band for 4 years.
- kag0 6y agoCan someone explain the rationale behind geographically based pay in remote-first companies? I don't necessarily disagree with it, but I don't know what aspects of the issue companies are actually looking at to decide that geo-based pay is the way to go.
- barry-cotter 6y ago> Can someone explain the rationale behind geographically based pay in remote-first companies? How much you are paid depends on how much they have to pay you before you decide to quit. The lowest pay you’ll accept before you decide to quit is based on what you think you can get if you quit. That’s heavily influenced by geography. As geography and job markets become uncoupled compensation will become more uniform regionally and then globally.
- whalesalad 6y agoI remember interviewing here and being bummed when they were 110% strictly no remote. Not surprised to see the about face here based on current events, but based on my experience it is a little surprising. Without saying anything disparaging I do not imagine it is a pleasant place to work.
- gyulai 6y agoFor a remote company to adjust pay to employee's geography: so not cool. Offering remote and paying people based on what they're worth to the company: Part of the solution! (The problem being: Structural deficits in certain regions yield lack of adequately-compensated employment opportunities for the highly-skilled. This makes the highly-skilled relocate. This makes it difficult to overcome structural difficulties). Offering remote and paying people based on where they are: Part of the problem!
- nrmitchi 6y agoI also suspect, but don't have evidence to back it up, that it will also further contribute to socioeconomic divides. You grew up in a wealthy neighborhood and decide to live close to family? Here is a pay package at X. You grew up in a poverty-stricken area in a poor state, and need to live close to home to support your family? Well the cost-of-living there is 60% cheaper, so here is a pay package at X*(1-0.6). People who have the ability to move most likely still will, because it is economically viable. People who have family obligations and grew up in less affluent areas will be the ones getting the short end of the "location-adjusted-comp" stick.
- aero142 6y agoSeems like there is a pretty strong market force here where it is much easier to recruit employees in cheaper cost of living cities by beating that offer.
- Rapzid 6y agoI would resign immediately if my employer tried that.
- enra 6y agoSo how do you imagine hiring people with similar experience/skill level SF if they base salary offers are $200k and Europe people are happy with $100k since their rent/mortgage/livingcost is about 5-10x less? Pay everyone $200k or $100k (essentially stop hiring in high cost location)? Until the markets/remote salaries align, you kind of have to pay based salaries the people are able/need to receive in their respected market.
- tempsy 6y agoI blame FB for setting this bad precedent. Now that they've set the standard for remote compensation every company now has cover to adjust compensation using some flawed cost of living calculator.
- neonate 6y agoMany companies were already doing that before FB and before Covid.
- nhumrich 6y agoI disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc my pay", but not seeing it the other way around as well. If you worked at a company based out of, say, detroit, but lived in SF, you would demand SF income, because otherwise you wouldn't be able to afford a living. This policy protects you, even if you do work at a SF place. Lets say, in theory, you move to some place cheaper, and that place starts becoming more expensive. Likewise, SF becomes cheaper over time (or, the company just moves HQ to somewhere cheap). By doing location based pay, your pay continues to go up, in line with your local area cost of living. Otherwise, if you were still getting paid based on SF cost of living, you would be loosing money every year. Eventually forcing you to move, which, you might not be able to do because of family, house, etc. Second, its ethical. "Salary" represents a quality of life, i.e. Purchasing power, not a raw number of dollars. If you were paid SF wages while you lived in a third world country, you could very well be the richest man in the country. This does not make sense. Nor is it ethical, think of the raw damage you could do to that economy. For a more common scenario, do you really feel that a mediocre software dev working for a SF company should be paid more than the local best ER doctor? Many professions simply cant be done "remote" Third, it makes all companies "equal". In a "remote first" company, the location of the HQ shouldn't matter. Maybe, not even exist. Most companies are actually "Delaware companies". Should they pay delaware salaries? And lastly, its just economics. The reason salaries are so high in SF is because no one wants to live in SF, because cost of living is so high. Its supply and demand. The cost of finding good talent in SF is astronomically high. As soon as you go "world wide", then you can attract great talent at a cheaper price. AKA, if you are going to demand a SF salary, they can certainly find someone cheaper and better (fire your ass). Frankly, _still_ getting paid a SF salary while in SF at a remote company is just incredibly generous of the company. At remote first companies, salaries will have a downward force. Over time, you will get paid less working remote.
- nhumrich 6y agoI disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc my pay", but not seeing it the other way around as well. If you worked at a company based out of, say, detroit, but lived in SF, you would demand SF income, because otherwise you wouldn't be able to afford a living. This policy protects you, even if you do work at a SF place. Lets say, in theory, you move to some place cheaper, and that place starts becoming more expensive. Likewise, SF becomes cheaper over time (or, the company just moves HQ to somewhere cheap). By doing location based pay, your pay continues to go up, in line with your local area cost of living. Otherwise, if you were still getting paid based on SF cost of living, you would be loosing money every year. Eventually forcing you to move, which, you might not be able to do because of family, house, etc. Second, its ethical. "Salary" represents a quality of life, i.e. Purchasing power, not a raw number of dollars. If you were paid SF wages while you lived in a third world country, you could very well be the richest man in the country. This does not make sense. Nor is it ethical, think of the raw damage you could do to that economy. For a more common scenario, do you really feel that a mediocre software dev working for a SF company should be paid more than the local best ER doctor? Many professions simply cant be done "remote" Third, it makes all companies "equal". In a "remote first" company, the location of the HQ shouldn't matter. Maybe, not even exist. Most companies are actually "Delaware companies". Should they pay delaware salaries? And lastly, its just economics. The reason salaries are so high in SF is because no one wants to live in SF, because cost of living is so high. Its supply and demand. The cost of finding good talent in SF is astronomically high. As soon as you go "world wide", then you can attract great talent at a cheaper price. AKA, if you are going to demand a SF salary, they can certainly find someone cheaper and better (fire your ass). Frankly, _still_ getting paid a SF salary while in SF at a remote company is just incredibly generous of the company. At remote first companies, salaries will have a downward force. Over time, you will get paid less working remote.
- ptkd 6y agoI think it just sets up some pretty weird incentives for employees, especially when you consider that cost-of-living calculators are often wrong. I don't think this model will work in the future. Let's fast-forward 5 years and assume many companies have taken on this model and are now remote first. COL adjustments will have occurred, and COL is a very reasonable proxy to "desirability of living location", because as you mention these cities are based on supply and demand. When there's a high demand, COL goes up and as such so do the salaries of the folks living there. So now employees are basically at a junction where they can live wherever they want. However, their employer will cover the expenses of living somewhere better (if we take this high COL = desirable line of thinking). So employees will go to these places, effectively costing the employer money! The fundamental outcome of this change is employers are offering a giant "live somewhere expensive" stipend that can only be cashed if you choose to live somewhere expensive. It's just odd. I know for a fact if I was at one of these companies I'd move to wherever I could get the most money, because I think COL often overrates how expensive cities are.
- daavable 6y agoCompanies don't pay employees based on "what they're worth to the company". Just like with other goods and services, the market dictates the price. So, companies pay what they can to compete for talent in the market. This meant that in high-competition markets like SV, the price (for engineering talent) was very high. If now the market dynamics have shifted by not limiting supply to the SV area, then you would SV companies to pay LESS for the same engineering talent. So, if you argue that people should be paid the same no matter where they live, then you should also be prepared for salaries for many engineers to fall.
- alexeys 6y agoIt will take years for markets to even out. Think SV vs rural Alabama. Paying market rate for the talent is table stakes. And I do agree, there will be less incentive to pay SV rates, so engineers living in SV will have to work even harder to demonstrate in the interviews that they are worth the money. Interesting times are coming.
- tallgiraffe 6y agoThere are some good pro's and con's to this strategy, but given market forces I can imagine the future where everyone "works" from the same address in the Bay Area, while being based elsewhere. Maybe I am hoping to see this as a hack :)
- momokoko 6y agoYou laugh but that already happens where “former” Bay Area employees relocate to a cheaper region but maintain a Bay Area address for their cost of living adjustment.