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>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
by 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 agoStep 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 agoThat’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 agoLooking at the horrible website redesign, they are trying to innovate
- dralley 6y agoThe 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.
- Polylactic_acid 6y agoReddit is now bigger than twitter and is still growing. Their new platform is constantly pushing advertisements / forcing the app/signups which likely drives their profits up even higher.
- slg 6y agoMaybe this is a hot take for HN, but the quality of engineers is very low on the list of things that makes a company like Reddit a success. The actual infrastructure of the site has been routinely mocked by the Reddit community for years.
- paxys 6y agoWell yeah, that's the logical conclusion of this policy. Anyone who thinks Bay Area salaries are going to be standard nationwide is delusional. That's not how supply/demand works.
- wbl 6y agoIf productivity isn't affected by location why wouldn't the salaries rise accordingly? Companies don't care how much housing costs in an area are, they care about the compensation vs. what they get.
- themacguffinman 6y agoSalaries aren't determined by productivity, they're determined by supply and demand. This comes up every thread where someone expects for-profit corporations to be magically convinced to pay more than they can because "but my productivity" or something.
- wbl 6y agoAnd the willingness of workers to supply labor doesn't have much to do with expenses but their alternatives.
- themacguffinman 6y agoCool, what are their alternatives? This is a trend that is sweeping across tech, starting with some of the highest paying employers in FAANG and trickling down to companies like Reddit. When the industry norm becomes permanent WFH, what alternative is there? Seriously, what are you expecting workers to do exactly?
- wbl 6y agoTheir alternatives are the other remote companies! I'm expecting workers to do what they always have done, namely walk to the better paying employers. You earn the highest wages in any field in places where multiple employers are competing for labor, and the lowest in company towns.
- shuntress 6y agoStep 3 could just as easily be "continue to adjust salaries to remain competitive in expensive markets"
- cj 6y agoWhy would they do that, when they will have buckets and buckets of applications from people outside of "expensive markets"?
- shuntress 6y agoObviously, to avoid "Step 4 - Employees in expensive markets leave for other jobs."
- quickthrower2 6y agoAssuming employees in expensive markets are better. Is the hotdog at a music festival better?
- shuntress 6y agoAccording to Step 3, "Slowly allow salaries to stagnate until employees in expensive markets are no longer receiving fair pay", the employees in expensive markets are worth what they cost. Their pay is "fair". Is the food at an expensive restaurant better? - sometimes but that is not always why it is expensive.
- quickthrower2 6y agoI think we are arguing the same point from different angles!
- vidarh 6y agoEven if one assumes the engineers in the expensive markets are all better, there's nothing a company like Reddit does which requires a bunch top level engineers. Some of their scaling and site reliability stuff, maybe, but it'll be a small portion of their employees. They can solve that by paying accordingly more for their top technical positions to make those jobs competitive in expensive markets. [I'm not arguing in favour of this, btw. - just pointing out it's an easy problem to solve] The number of companies this would be a problem for is tiny.
- bityard 6y agoPerhaps that will provide incentive for employees to move to lower COL areas, or more importantly allow talented individuals to stay near where they grew up and stem the brain drain from rural communities. Both of these would seem like good outcomes to me.
- amf12 6y ago> 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: It will perhaps lead to an equilibrium where salaries are consistent across the US. I'm more curious about the effect it will have on the economy. But, now I wonder why is the boundary the US? Why not pay the same in Canada or Europe or Asia too? Are they any less valuable?
- sokoloff 6y agoIt’s more expensive overhead-wise to employ developers in Europe (higher benefits/social insurance costs, lower hours per year, much higher severance). I don’t find them any less valuable in general once those factors are accounted for.
- octoberfranklin 6y ago> But, now I wonder why is the boundary the US? Radically different legal system. Starts to matter in a hurry as soon as an employee runs off with your IP to start a competitor.
- _ah 6y agoMy predictions are similar: 1. Scale all salaries to expensive markets 2. Stagnate vs inflation, until salaries track mid-market cities (Denver, Austin) instead of San Francisco / NYC. A bout of high national inflation would make this easier. 3. This works well, but only for a while. To be easily productive remotely you should be a Sr Engineer. Juniors will have a harder time. So will managers. Companies focus (even more!) on only hiring experienced devs. Increased competition drives more work outside of the USA. 4. With lots of remote opportunity, there's even more mobility for individual employees. One company is functionally like any other... all of them take place out of the same room in your house, and only differ by who is on the video chat this week. The "shared culture", both company culture (we're all in this mission together!) and regional culture (east coast / west coast) starts to fade. Fading culture amplifies communication overhead, which slows velocity. A very few companies will overcome this with incredible levels of intentionality, but most will fail to do so. 5. To try to solve the culture problem, companies open smaller landing-zone offices in a couple of hub locations. Remote folks fly in once in a while to get excited and pick up a free tshirt. These smaller hub areas become a good place to onboard Jr employees (making hiring easier), and provide a nice environment for executives to meet with customers. 6. Living physically close to the hub office provides greater executive visibility, and greater promotability for folks who care about that. This reinforces the HCOL compensation premium for leadership only. Jr folks (generally young) are happy to scrape by in the city as always because "dating is the killer app for cities." But they move out as they gain seniority / age / start a family, depressing housing costs for ~10-15 years until population growth catches up again. 7. Startups are primarily founded 2 ways: Senior/stable founders launch distributed companies with their former co-workers around the country. Nobody wants to move. Juniors/new grads launch out of the city of their university, with people they met in school. 8. Weirdly, this means that it becomes somewhat efficient for super-tiny startups to locate just outside of major cities, because if you only have a few people it's probably cheaper to live there than buying tons of plane tickets to visit VCs in those areas. Have to raise that next round! But as soon as the company hits mid-size they are quick to move out to cheaper areas. 9. Given all the above, we'll see an averaging of salaries for all areas, with the exception of executive leadership. Vibrant HCOL downtowns will fade and hollow out, suburban hub offices will be more common. Cities with strong tech universities will do best, as always, since they provide the flow of new-grad startups and academic partnerships.
- gnopgnip 6y agoEmployers pay competitive salaries in SF and NYC because it is a competitive market, and because these employees bring value to the company
- kbenson 6y ago> Step 4 - Employees in expensive markets leave for other jobs. Alternative step 4 - Employees in expensive markets leave that market for a cheaper market but keep their job. I have a feeling that a lot of people in their 30's and 40's no longer really care to live in expensive markets, but traditionally felt it was hard to move and accept much lower wages. Decoupling the job from the location frees a lot of people to move that wanted to.
- mlthoughts2018 6y agoThis is pretty wild and unsubstantiated speculation, especially step 3. This is reminiscent of a fear-mongering conspiracy theory.