4 ms·

Localised pay implies that the same employee is worth more to the company when they are in a high COL city than a low COL area (regardless of whether salary is

Localised pay implies that the same employee is worth more to the company when they are in a high COL city than a low COL area (regardless of whether salary is determined by value-add or market rate). How can that be the case when all employees are remote?

TheCoelacanth 6y ago
Only if you incorrectly believe that pay is based on value. It's actually based on how hard it is for them to get someone else to do your job and how hard it is for you to get another job. It is easier for them to replace a remote employee than a local employee, so that works against you. It is harder for you to find an alternate job if you live in a low COL area than if you live in a high COL area, so that also works against you. Obviously, this wouldn't be the case if every company went fully remote, but that isn't going to happen, so you should still expect a lot of remote jobs to adjust pay based on locality. If they don't, they are just leaving money on the table.
- ubercow13 6y ago
  I am not assuming pay has anything to do with value. The employee is already remote in the high COL area in this case. Why is it easier to replace you with a cheap low COL area employee once you've moved to a low COL area yourself? They could have just replaced you with a low COL employee before you moved. I think the other comment in this thread about rate limiting this change touches on the real reason.
  - tdeck 6y ago
    There are costs to replacing and ramping up an employee. The company reduces pay for those who move because it assumes they'll accept that reduction based on the difficulty of finding a better paying job while working out of that new location. It wouldn't even surprise me if the big tech companies actually colluded on these market discounts to keep wages low, given the wage fixing lawsuit a few years ago. If Google, and FB both cut your pay 30% for moving to Tulsa then employers can keep a lot more of their money and their people.

TheCoelacanth 6y ago

Only if you incorrectly believe that pay is based on value. It's actually based on how hard it is for them to get someone else to do your job and how hard it is for you to get another job. It is easier for them to replace a remote employee than a local employee, so that works against you. It is harder for you to find an alternate job if you live in a low COL area than if you live in a high COL area, so that also works against you. Obviously, this wouldn't be the case if every company went fully remote, but that isn't going to happen, so you should still expect a lot of remote jobs to adjust pay based on locality. If they don't, they are just leaving money on the table.

ubercow13 6y ago
I am not assuming pay has anything to do with value. The employee is already remote in the high COL area in this case. Why is it easier to replace you with a cheap low COL area employee once you've moved to a low COL area yourself? They could have just replaced you with a low COL employee before you moved. I think the other comment in this thread about rate limiting this change touches on the real reason.
- tdeck 6y ago
  There are costs to replacing and ramping up an employee. The company reduces pay for those who move because it assumes they'll accept that reduction based on the difficulty of finding a better paying job while working out of that new location. It wouldn't even surprise me if the big tech companies actually colluded on these market discounts to keep wages low, given the wage fixing lawsuit a few years ago. If Google, and FB both cut your pay 30% for moving to Tulsa then employers can keep a lot more of their money and their people.