14 ms·

The key bit in the article ....To help drive the idea home (pun intended), we’ve reimagined our approach to compensation in the US. To support employees to liv

by NearAP 6y ago

The key bit in the article ....To help drive the idea home (pun intended), we’ve reimagined our approach to compensation in the US. To support employees to live where they want to and do their best work, we are eliminating geographic compensation zones in the US. It means that our US compensation will be tied to pay ranges of high-cost areas such as SF and NY, regardless of where employees live. We believe this is the right balance of flexibility and support for employees, recognizing the varied tradeoffs people consider when deciding where to live. Internationally, we have had one pay range per country, and now the US will be consistent with this approach.....

seibelj 6y ago
In a remote-working world, the best talent should always command top-dollar, regardless of where they live. If they are absolutely rockstar talent and can be just as good remotely, then why wouldn't they command the highest salary? In fact, they should be able to command even more money now as all the remote-OK companies bid for them without any friction over moving / commute issues. Honestly it's a win-win-win - a win for the company that has far larger talent pool, win for the employee who gets paid more and can move to a more desirable, low cost-of-living location, and win for the "left-behind" areas of the country where many rich techies will move to. This will reduce class divisions and equalize our communities without any coercion and continue to allow highly-skilled labor to extract maximum income from capital. I very much like this shift towards remote work - it is the silver lining to come out of the pandemic.
- tomarr 6y ago
  Well this assumes the management cost (or inefficiency) does not go up for remote, which is unclear.
  - jnwatson 6y ago
    From personal experience, top-tier individual contributors are cheaper to manage.
    - kevinventullo 6y ago
      That's part of what makes them top-tier!
  - corobo 6y ago
    Considering all the middle managers I know of are desperately trying to get the workforce back into offices because they seemingly have bugger-all to do now, I'd say you can cut out a fair few of them if you need to balance out a new cost. Without being overworked, can a remote manager manage more people than an on-site manager? I don't know any remote managers
    - thedufer 6y ago
      > Considering all the middle managers I know of are desperately trying to get the workforce back into offices because they seemingly have bugger-all to do now, I'd say you can cut out a fair few of them if you need to balance out a new cost. Are you sure you've diagnosed this correctly? The managers I know are ready to get back to the office for the exact opposite reason - managing remotely is much harder and more time-consuming.
      - corobo 6y ago
        I'm talking about the types that value ass in seat over output. Of course good managers are still needed :)
- gotoeleven 6y ago
  The best talent always has and always will command top-dollar. We're talking about reddit here.
- jcrawfordor 6y ago
  I think there's an even simpler reason than this... some companies that hire remote employees use the same payscale everywhere, and that gives remote workers substantial negotiation leverage. An offer for remote work from one employer that was NYC-based and offered me an NYC-competitive salary in a much cheaper city was enough to talk a different company which leveled by city substantially upwards. Having watched this effect happen, if I were considering moving while working for a company that would relevel salary based on CoL, I would almost certainly be considering offers from other employers - and if I were a manager with an employee who was moving to go remote I would really push back on adjusting their salary, knowing that there are competing employers who won't, and the employee will probably find out one way or another. I wouldn't call myself a source of advice on remote work necessarily because I kind of fell into remote work by accident pre-COVID, and COVID has really solidified the situation. But it also seems like remote work is going to be on the rise outside of the context of COVID. I live in a city with very little tech industry and so I only rarely here from recruiters, and those that do contact me are usually talking about relo to a different city. Just over the last two months or so I've started hearing from recruiters at nearly the level I did when I lived in San Francisco - and they're mostly not talking relo.
- Barrin92 6y ago
  >if they are absolutely rockstar talent and can be just as good remotely, then why wouldn't they command the highest salary? because this isn't how market economics work. You're not payed for being a rockstar, you're payed for the least amount of money you're willing to work for. Indian rockstar coders may be as productive as American ones, the difference is their cost of living is lower, so they're willing to do the same work for less money. Same reason your barista in SF makes more money than the same barista in Podunk Idaho despite serving just as much coffee.
  - Polylactic_acid 6y ago
    The end result will be a huge equalization in pay. People in low cost of living areas will become a lot richer and those in high cost of living places will become a lot poorer. Likely those high cost of living places will quickly drop in cost as most people spread out.
    - xur17 6y ago
      This seems like a desirable outcome. Wouldn't this mean a more even distribution of wealth rather than large concentrations in a few big cities?
      - Rebelgecko 6y ago
        It's interesting because that equalization would only affect people in certain industries which are already fairly well compensated. If people making tech salaries move to overlooked parts of the country, I wonder to what extent their wealth would trickle down to benefit their new communities? It would be interesting if a bunch of people leaving the Bay Area ended up congregating in certain low-COL communities. I wouldn't be surprised if a sort of rural gentrification occurs in the handful of Midwestern towns that have gigabit fiber. Would those areas remain low COL? Would the existing inhabitants become a sort of underclass?
        webmaven 6y ago
        > I wouldn't be surprised if a sort of rural gentrification occurs in the handful of Midwestern towns that have gigabit fiber. Would those areas remain low COL? Would the existing inhabitants become a sort of underclass? You'd see something like that, but keep in mind that outside of dense urban cores, you mostly don't have the same constraints on available real estate that drive existing residents out by rising prices (and the SF Bay Area's lack of housing inventory is largely self-inflicted, unlike, say, Manhattan). So, yes, some competition from well-heeled newcomers will drive prices up a bit (encouraging new construction), but without a constraint on housing inventory that drives the newcomers to compete with each other, what you get is just a bit of urbanization, rather than gentrification per-se.
manningthegoose 6y ago
This is great, glad to see reddit leading on this front. I do wonder what effect this would have on metro areas with high COL if more companies adopted this policy. Mass exodus? Probably not. But I imagine the effect will at least be measurable.
- paxys 6y ago
  I'm more interested in the effect on metro areas with a lower COL. Imagine an influx of young professionals with Bay Area salaries in cities like Denver, Austin, Huntsville, Madison, San Diego, Nashville, Charlotte, Salt Lake City. I can't imagine current residents would be too happy.
  - triceratops 6y ago
    In the short-term. In the long-term wouldn't everyone's wages rise?
  - manningthegoose 6y ago
    Definitely agree. Although maybe the increased dilution of tech workers (roughly same # spread across larger set of cities) will help mitigate this.
  - deleted 6y ago
    [deleted]
  - silentsea90 6y ago
    The only case where residents would be unhappy is when said residents flood the market causing meaningful inflation across local markets. It takes the entirety of the bay area young professionals to keep the bay area as expensive as it is. 1. Would the dispersion of the same talent (assuming talent isn't suddenly growing in size) + local tech talent being paid higher cause the same inflation even when split over a large number of cities? 2. If said inflation happens, would they not move again? I believe incentives here are to distribute this talent across the US, not concentrate in new cheaper centers
  - sologoub 6y ago
Thaxll 6y ago
This is such a bad idea, why would someone earning 150k in sf should earn the same in Deroit? It will just increase the price of living in cheaper area which will create the same problem as in SF, you work in IT you're ok otherwise life gets too expensive.
- core-questions 6y ago
  > It will just increase the price of living in cheaper area Also seen by some as the value of their houses rising, which they might welcome; and this only happens if there's some demand from other workers to work remotely from their area, which brings money into the area's service sectors. This could breathe new life into many parts of the country that are currently without any particular reason to go on existing. I could see smaller townships deliberately incentivizing remote workers and designing things around them as a primary source of monetary influx.
- alfalfasprout 6y ago
  Typical shortsighted viewpoint... cost of living increases along with the economy. Those higher paid workers will then spend their dollars in the economy thus bolstering local businesses. So many places in the US would kill for an influx of high paid individuals to kickstart their economy.
  - Thaxll 6y ago
    It works until too many people are paid big salary, it increases the cost of living because of demand. You should talk to the people in the bay area.
    - shuntress 6y ago
      You already refuted this in your original statement. >why would someone earning 150k in sf should earn the same in Deroit? Just replace Detroit with [Some other place] and replace SF with Detroit
- paxys 6y ago
  Why should two people adding the same amount of value to a company be compensated differently?
slg 6y ago
>we are eliminating geographic compensation zones in the US I am worried about the precedent this sets and the long term consequences. I can certainly imagine a scenario that plays out like the following: Step 1 - Eliminate geographic considerations for salary. Step 2 - Scale all salaries to expensive markets. Step 3 - Slowly allow salaries to stagnate until employees in expensive markets are no longer receiving fair pay. Step 4 - Employees in expensive markets leave for other jobs. Step 5 - Allow steps 3 and 4 to repeat themselves as many times as you like. Step 6 - Company has now decreased employee salaries and physical expenses like office space. Step 7 - Profit.
- fakedang 6y ago
  Step 6.5 - Watch as all the good talent ends up elsewhere Step 7 - Watch your lovely forum turn to shit Step 8 - Fail and declare bankruptcy/get sold to Yahoo
  - vermilingua 6y ago
    “Turn to shit” makes it sound like it hasn’t already. Reddit is no longer trying to innovate, they’re milking their incumbent userbase for the ad money until they can sell.
    - cvhashim 6y ago
      That’s unfortunately what happens when you’re funded and scale up with VC money. The investors want their returns so this is just a result of that. VC backed companies like Reddit will add unpopular features and intrusive ads to make money — users be damned.
    - 0-_-0 6y ago
      Looking at the horrible website redesign, they are trying to innovate
      - dralley 6y ago
        The day the "new" reddit design is enforced without some way to get around it is the day I quit permanently. "Old" reddit and HN, while not perfect, feel vastly more usable.
banana_giraffe 6y ago
I am curious: Why stop at the US? If reddit feels this is a good idea, then why not eliminate geographic compensation zones worldwide? I suppose the answer is: There's little friction to move inside the US, but a lot of friction (well, a ton right now, but even pre COVID, there was still a lot) to move outside the US and keep working for a US company. Not to mention time zone issues. I probably answered my own question, though I am curious what their rational is. That bit about time zones, though, is interesting to me. In my experience working with a team on both coasts, one side's gotta give. Generally, it's the side with fewer people, but one side ends up syncing up their work schedule to either be early or later. Tough to avoid.
- grecy 6y ago
  Earn a US salary but not have to put up with the US political nonsense while living in essentially the same timezone while living as a king in Costa Rica, or Ecuador, Chile, Argentina or similar? Yes please, times 1000.
  - deleted 6y ago
    [deleted]
  - MeinBlutIstBlau 6y ago
    You're also held hostage by their infrastructure too. I'm not saying it's bad cause I don't know, but if something went out, do you really trust them to get things back online in a reasonable amount of time?
    - kyawzazaw 6y ago
      how much reliability of an infrastructure does an an individual engineer need?
      - function_seven 6y ago
        I suppose if you have reliable and reasonably-priced mobile data, then you can deal with any other infrastructure issues that arise. Laptops don't need perfect power uptime, and software engineers don't always need to shower. But without that, at least the telecoms should probably be reliable.
tareqak 6y ago
That’s an excellent start, so hats off to Reddit for that. The next item on the list would be other things that vary within the US, such as the enforceability of non-compete clauses. Reddit can’t change the law for each state, but they can agree to not add those clauses for any US employee. How they would be held accountable is not a question I know how to answer beyond the realm of public opinion/memory. Again, I congratulate Reddit for the steps they took so far.

by NearAP 6y ago

seibelj 6y ago

In a remote-working world, the best talent should always command top-dollar, regardless of where they live. If they are absolutely rockstar talent and can be just as good remotely, then why wouldn't they command the highest salary? In fact, they should be able to command even more money now as all the remote-OK companies bid for them without any friction over moving / commute issues. Honestly it's a win-win-win - a win for the company that has far larger talent pool, win for the employee who gets paid more and can move to a more desirable, low cost-of-living location, and win for the "left-behind" areas of the country where many rich techies will move to. This will reduce class divisions and equalize our communities without any coercion and continue to allow highly-skilled labor to extract maximum income from capital. I very much like this shift towards remote work - it is the silver lining to come out of the pandemic.

tomarr 6y ago
Well this assumes the management cost (or inefficiency) does not go up for remote, which is unclear.
- jnwatson 6y ago
  From personal experience, top-tier individual contributors are cheaper to manage.
  - kevinventullo 6y ago
    That's part of what makes them top-tier!
- corobo 6y ago
  Considering all the middle managers I know of are desperately trying to get the workforce back into offices because they seemingly have bugger-all to do now, I'd say you can cut out a fair few of them if you need to balance out a new cost. Without being overworked, can a remote manager manage more people than an on-site manager? I don't know any remote managers
  - thedufer 6y ago
    > Considering all the middle managers I know of are desperately trying to get the workforce back into offices because they seemingly have bugger-all to do now, I'd say you can cut out a fair few of them if you need to balance out a new cost. Are you sure you've diagnosed this correctly? The managers I know are ready to get back to the office for the exact opposite reason - managing remotely is much harder and more time-consuming.
    - corobo 6y ago
      I'm talking about the types that value ass in seat over output. Of course good managers are still needed :)
gotoeleven 6y ago
The best talent always has and always will command top-dollar. We're talking about reddit here.
jcrawfordor 6y ago
I think there's an even simpler reason than this... some companies that hire remote employees use the same payscale everywhere, and that gives remote workers substantial negotiation leverage. An offer for remote work from one employer that was NYC-based and offered me an NYC-competitive salary in a much cheaper city was enough to talk a different company which leveled by city substantially upwards. Having watched this effect happen, if I were considering moving while working for a company that would relevel salary based on CoL, I would almost certainly be considering offers from other employers - and if I were a manager with an employee who was moving to go remote I would really push back on adjusting their salary, knowing that there are competing employers who won't, and the employee will probably find out one way or another. I wouldn't call myself a source of advice on remote work necessarily because I kind of fell into remote work by accident pre-COVID, and COVID has really solidified the situation. But it also seems like remote work is going to be on the rise outside of the context of COVID. I live in a city with very little tech industry and so I only rarely here from recruiters, and those that do contact me are usually talking about relo to a different city. Just over the last two months or so I've started hearing from recruiters at nearly the level I did when I lived in San Francisco - and they're mostly not talking relo.
Barrin92 6y ago
>if they are absolutely rockstar talent and can be just as good remotely, then why wouldn't they command the highest salary? because this isn't how market economics work. You're not payed for being a rockstar, you're payed for the least amount of money you're willing to work for. Indian rockstar coders may be as productive as American ones, the difference is their cost of living is lower, so they're willing to do the same work for less money. Same reason your barista in SF makes more money than the same barista in Podunk Idaho despite serving just as much coffee.
- Polylactic_acid 6y ago
  The end result will be a huge equalization in pay. People in low cost of living areas will become a lot richer and those in high cost of living places will become a lot poorer. Likely those high cost of living places will quickly drop in cost as most people spread out.
  - xur17 6y ago
    This seems like a desirable outcome. Wouldn't this mean a more even distribution of wealth rather than large concentrations in a few big cities?
    - Rebelgecko 6y ago
      It's interesting because that equalization would only affect people in certain industries which are already fairly well compensated. If people making tech salaries move to overlooked parts of the country, I wonder to what extent their wealth would trickle down to benefit their new communities? It would be interesting if a bunch of people leaving the Bay Area ended up congregating in certain low-COL communities. I wouldn't be surprised if a sort of rural gentrification occurs in the handful of Midwestern towns that have gigabit fiber. Would those areas remain low COL? Would the existing inhabitants become a sort of underclass?
      - webmaven 6y ago
        > I wouldn't be surprised if a sort of rural gentrification occurs in the handful of Midwestern towns that have gigabit fiber. Would those areas remain low COL? Would the existing inhabitants become a sort of underclass? You'd see something like that, but keep in mind that outside of dense urban cores, you mostly don't have the same constraints on available real estate that drive existing residents out by rising prices (and the SF Bay Area's lack of housing inventory is largely self-inflicted, unlike, say, Manhattan). So, yes, some competition from well-heeled newcomers will drive prices up a bit (encouraging new construction), but without a constraint on housing inventory that drives the newcomers to compete with each other, what you get is just a bit of urbanization, rather than gentrification per-se.

manningthegoose 6y ago

This is great, glad to see reddit leading on this front. I do wonder what effect this would have on metro areas with high COL if more companies adopted this policy. Mass exodus? Probably not. But I imagine the effect will at least be measurable.

paxys 6y ago
I'm more interested in the effect on metro areas with a lower COL. Imagine an influx of young professionals with Bay Area salaries in cities like Denver, Austin, Huntsville, Madison, San Diego, Nashville, Charlotte, Salt Lake City. I can't imagine current residents would be too happy.
- triceratops 6y ago
  In the short-term. In the long-term wouldn't everyone's wages rise?
- manningthegoose 6y ago
  Definitely agree. Although maybe the increased dilution of tech workers (roughly same # spread across larger set of cities) will help mitigate this.
- deleted 6y ago
  [deleted]
- silentsea90 6y ago
  The only case where residents would be unhappy is when said residents flood the market causing meaningful inflation across local markets. It takes the entirety of the bay area young professionals to keep the bay area as expensive as it is. 1. Would the dispersion of the same talent (assuming talent isn't suddenly growing in size) + local tech talent being paid higher cause the same inflation even when split over a large number of cities? 2. If said inflation happens, would they not move again? I believe incentives here are to distribute this talent across the US, not concentrate in new cheaper centers
- sologoub 6y ago

Thaxll 6y ago

This is such a bad idea, why would someone earning 150k in sf should earn the same in Deroit? It will just increase the price of living in cheaper area which will create the same problem as in SF, you work in IT you're ok otherwise life gets too expensive.

core-questions 6y ago
> It will just increase the price of living in cheaper area Also seen by some as the value of their houses rising, which they might welcome; and this only happens if there's some demand from other workers to work remotely from their area, which brings money into the area's service sectors. This could breathe new life into many parts of the country that are currently without any particular reason to go on existing. I could see smaller townships deliberately incentivizing remote workers and designing things around them as a primary source of monetary influx.
alfalfasprout 6y ago
Typical shortsighted viewpoint... cost of living increases along with the economy. Those higher paid workers will then spend their dollars in the economy thus bolstering local businesses. So many places in the US would kill for an influx of high paid individuals to kickstart their economy.
- Thaxll 6y ago
  It works until too many people are paid big salary, it increases the cost of living because of demand. You should talk to the people in the bay area.
  - shuntress 6y ago
    You already refuted this in your original statement. >why would someone earning 150k in sf should earn the same in Deroit? Just replace Detroit with [Some other place] and replace SF with Detroit
paxys 6y ago
Why should two people adding the same amount of value to a company be compensated differently?

slg 6y ago

>we are eliminating geographic compensation zones in the US I am worried about the precedent this sets and the long term consequences. I can certainly imagine a scenario that plays out like the following: Step 1 - Eliminate geographic considerations for salary. Step 2 - Scale all salaries to expensive markets. Step 3 - Slowly allow salaries to stagnate until employees in expensive markets are no longer receiving fair pay. Step 4 - Employees in expensive markets leave for other jobs. Step 5 - Allow steps 3 and 4 to repeat themselves as many times as you like. Step 6 - Company has now decreased employee salaries and physical expenses like office space. Step 7 - Profit.

fakedang 6y ago
Step 6.5 - Watch as all the good talent ends up elsewhere Step 7 - Watch your lovely forum turn to shit Step 8 - Fail and declare bankruptcy/get sold to Yahoo
- vermilingua 6y ago
  “Turn to shit” makes it sound like it hasn’t already. Reddit is no longer trying to innovate, they’re milking their incumbent userbase for the ad money until they can sell.
  - cvhashim 6y ago
    That’s unfortunately what happens when you’re funded and scale up with VC money. The investors want their returns so this is just a result of that. VC backed companies like Reddit will add unpopular features and intrusive ads to make money — users be damned.
  - 0-_-0 6y ago
    Looking at the horrible website redesign, they are trying to innovate
    - dralley 6y ago
      The day the "new" reddit design is enforced without some way to get around it is the day I quit permanently. "Old" reddit and HN, while not perfect, feel vastly more usable.

banana_giraffe 6y ago

I am curious: Why stop at the US? If reddit feels this is a good idea, then why not eliminate geographic compensation zones worldwide? I suppose the answer is: There's little friction to move inside the US, but a lot of friction (well, a ton right now, but even pre COVID, there was still a lot) to move outside the US and keep working for a US company. Not to mention time zone issues. I probably answered my own question, though I am curious what their rational is. That bit about time zones, though, is interesting to me. In my experience working with a team on both coasts, one side's gotta give. Generally, it's the side with fewer people, but one side ends up syncing up their work schedule to either be early or later. Tough to avoid.

grecy 6y ago
Earn a US salary but not have to put up with the US political nonsense while living in essentially the same timezone while living as a king in Costa Rica, or Ecuador, Chile, Argentina or similar? Yes please, times 1000.
- deleted 6y ago
  [deleted]
- MeinBlutIstBlau 6y ago
  You're also held hostage by their infrastructure too. I'm not saying it's bad cause I don't know, but if something went out, do you really trust them to get things back online in a reasonable amount of time?
  - kyawzazaw 6y ago
    how much reliability of an infrastructure does an an individual engineer need?
    - function_seven 6y ago
      I suppose if you have reliable and reasonably-priced mobile data, then you can deal with any other infrastructure issues that arise. Laptops don't need perfect power uptime, and software engineers don't always need to shower. But without that, at least the telecoms should probably be reliable.

tareqak 6y ago

That’s an excellent start, so hats off to Reddit for that. The next item on the list would be other things that vary within the US, such as the enforceability of non-compete clauses. Reddit can’t change the law for each state, but they can agree to not add those clauses for any US employee. How they would be held accountable is not a question I know how to answer beyond the realm of public opinion/memory. Again, I congratulate Reddit for the steps they took so far.