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Because for fully remote worldwide jobs, it doesn’t always make sense to pay everyone San Francisco salaries. E.g. GitLab, a 100% remote company with 1,400+ em

Because for fully remote worldwide jobs, it doesn’t always make sense to pay everyone San Francisco salaries. E.g. GitLab, a 100% remote company with 1,400+ employees pays local rates, and here’s why: 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...

andrew_ 5y ago
This would be valuable information to have on the post (e.g. "We pay regionally"). Personally, I avoid companies who adopt this practice.
- deleted 5y ago
  [deleted]
- cole-k 5y ago
  I'm not so in-the-know w/rt pay: are there a lot of companies that _don't_ do regional pay?
  - tibbetts 5y ago
    There are a lot of companies that don’t adjust salaries when engineers go remote, but they also only let engineers they are committed to keeping go remote in the first place.
    - HatchedLake721 5y ago
      Not a great example. An engineer that started on-site with regional pay that now went remote does not equal “we’re a company that hires remote worldwide and we don’t adjust to regional salaries”. A good example would be a company that hires new staff in multiple countries and continents that pays everyone regardless of their location.
  - MattGaiser 5y ago
    Most companies don’t have set salaries in practice anyway, so it ends up being whatever they successfully get away with. So in practice, yes, but companies aren’t so deliberate about it as to have it in policy.
  - andrew_ 5y ago
    Nuance is required here I think; with regard to working remotely - I've been working remotely now for 14 years. In my albeit limited experience (6 different employers, ~60 interviews) companies that were hiring remote before 2020 offered pay at the same rate/range as if they were hiring locally from their home base. I didn't run into a company that adjusted pay for geographic location until 2019. After 2020, I saw a marked increase in the practice. So much so that it became one of my first questions for recruiters/screeners. The entire industry view of remote work has now changed, and it at least appears that ideas around comp are as well.
    - perth 5y ago
      Remote workers in the US in cheap cost of living states are the new offshore workers, with less legal hoops to jump through because they’re US citizens.
  - azemetre 5y ago
    It depends what they mean by pay. Everyone company I know will absolutely do base salary for your region, while stock grants will be pretty universal between regions within countries. Depending on the company sometimes the differences in base salary will be very minimal, say $225k in Ohio versus $250k in SF.
- jeffalbertson 5y ago
  Agreed. At the end of the day you pay X for job Y. Adding a "where you live" variable makes no sense in the context of the work required for job Y.
  - PragmaticPulp 5y ago
    > At the end of the day you pay X for job Y. Common misconception but it’s not how markets work. You pay whatever it takes to get candidates onboard, but you ideally don’t pay more than necessary. You definitely don’t pay everyone more just because one of your employees lives in SF. This is more intuitive if you think of any other market you might personally operate in. Would you expect your local car mechanic to charge you twice as much as the other local shops just because they also have a location in San Francisco? No, you’d just go to the next mechanic who charged local rates. You aren’t interested in paying more than necessary and neither is your employer. It’s not nefarious, it’s just rational acting.
    - perth 5y ago
      The difference is, most tech companies aren’t selling the product/service exclusively in the region that the worker is working in, so the cost of the product/service, say for example Amazon prime, is the same nationwide despite the differences in cost of living, but the employees are paid regionally. Basically: most tech companies don’t adjust the price of their product for the region they are selling it in, but adjust the salary of the people making the product based on the region they live in.
      - PragmaticPulp 5y ago
        > so the cost of the product/service, say for example Amazon prime, is the same nationwide Correct, but you’re forgetting that labor is also one of the product/service costs for a company. They treat it like a market, just as you would if you were hiring someone to work on your car or house. It’s called the labor market because it’s literally a market. Expecting companies to completely disregard the market aspect and just pay the maximum amount for everyone regardless of their actual cost is wishful thinking.
- heavyset_go 5y ago
  > Personally, I avoid companies who adopt this practice. As do I. The value of my labor doesn't change because I walked 5 blocks away into another ZIP code with significantly higher/lower costs of living. The only reason this flies is because most engineers have little to no ability to individually negotiate away such nonsense, while employers are happy to collude with one another to enforce these pay scales.
  - pc86 5y ago
    It doesn't make sense to go the zip code route, of course. It's too granular, to the point that even if "COL" changes zip code to zip code there's too much variance to make that meaningful unless your only view of "COL" is what it costs to rent a 2BR1BA apartment. If you pay everyone the same wages, you're immediately excluding people who live in VHCOL areas unless you pay VH wages, and spoiler alert, you almost certainly don't. If you're not competing with FAANGMULA-etc. on cash comp, you're not in the right ballpark. But guess what, you can still pay the person in Vietnam or India or Belarus or Oman a very strong regional wage and free up cash allowing you to offer a competitive VHCOL salary. There's no realistic reason to pay someone in eastern Europe $400k TC.
    - mulmen 5y ago
      Labor should be compensated for the value created, not the least they will accept.
      - isbvhodnvemrwvn 5y ago
        So early startups should get money from their workers?
        mulmen 5y ago
        I’m not sure how you arrived at that conclusion. If you go to the very beginning I’m sure many startups get money from employee #1, AKA the founder. But even in an early stage startup why hire someone that isn’t delivering value?
rapind 5y ago
It’s clear from that post that they are really just looking out for their employees… “Can’t hire as many people”, “they would stay for the money even if they weren’t happy”. Obviously this isn’t just about profit but about employee happiness guys.
RapperWhoMadeIt 5y ago
Check the job openings at duckduckgo [0]. They offer 100% remote jobs, their postings include the offered salary for the position and the salaries are location independent (which is insane, imagine doing 150-180k and living in a super cheap place like Guatemala, Croatia or some parts of Spain). I just mention this as a counter example. [0] https://duckduckgo.com/hiring https://duckduckgo.com/hiring
- forgotmyoldname 5y ago
  That sounds like a great policy, honestly. Instead of devaluing workers in other countries, they treat them as equal to local people. It also means they’re looking for talent on a level playing field and not trying to skimp out by hiring “cheap” workers.
  - jcims 5y ago
    Or they just don’t hire them
    - luckylion 5y ago
      Why wouldn't they? If you assume they're looking for value in exchange for money, they wouldn't care at all how great the deal is for the employee. Location-dependent pay could go side-by-side with wealth-dependent pay. You already have a trust-fund and no college-debt? You only get half what others are making for the same work.
  - medvezhenok 5y ago
    It sounds good, but I don't think it's that clear. You're actually introducing greater dislocations into remote markets by hiring at a unified standard across the board. Suppose the average wage somewhere is $10K/year, and you hire a developer at $100K/year there. I would argue that it might be more beneficial in aggregate both to the remote community and to your company to hire two developers at $50K/year from the same place (assuming those are market clearing prices), both because of the effect on the remote consumption (the two people will consume more than one most likely), and the fact that you're spreading out the economic opportunity in the remote area that you are hiring in (now there are two developers who are well paid relative to the median versus only one - and it's also more likely to spur further investment into development in general).
Ostrogodsky 5y ago
Does GitLab also price their products regionally?

andrew_ 5y ago

This would be valuable information to have on the post (e.g. "We pay regionally"). Personally, I avoid companies who adopt this practice.

deleted 5y ago
[deleted]
cole-k 5y ago
I'm not so in-the-know w/rt pay: are there a lot of companies that _don't_ do regional pay?
- tibbetts 5y ago
  There are a lot of companies that don’t adjust salaries when engineers go remote, but they also only let engineers they are committed to keeping go remote in the first place.
  - HatchedLake721 5y ago
    Not a great example. An engineer that started on-site with regional pay that now went remote does not equal “we’re a company that hires remote worldwide and we don’t adjust to regional salaries”. A good example would be a company that hires new staff in multiple countries and continents that pays everyone regardless of their location.
- MattGaiser 5y ago
  Most companies don’t have set salaries in practice anyway, so it ends up being whatever they successfully get away with. So in practice, yes, but companies aren’t so deliberate about it as to have it in policy.
- andrew_ 5y ago
  Nuance is required here I think; with regard to working remotely - I've been working remotely now for 14 years. In my albeit limited experience (6 different employers, ~60 interviews) companies that were hiring remote before 2020 offered pay at the same rate/range as if they were hiring locally from their home base. I didn't run into a company that adjusted pay for geographic location until 2019. After 2020, I saw a marked increase in the practice. So much so that it became one of my first questions for recruiters/screeners. The entire industry view of remote work has now changed, and it at least appears that ideas around comp are as well.
  - perth 5y ago
    Remote workers in the US in cheap cost of living states are the new offshore workers, with less legal hoops to jump through because they’re US citizens.
- azemetre 5y ago
  It depends what they mean by pay. Everyone company I know will absolutely do base salary for your region, while stock grants will be pretty universal between regions within countries. Depending on the company sometimes the differences in base salary will be very minimal, say $225k in Ohio versus $250k in SF.
jeffalbertson 5y ago
Agreed. At the end of the day you pay X for job Y. Adding a "where you live" variable makes no sense in the context of the work required for job Y.
- PragmaticPulp 5y ago
  > At the end of the day you pay X for job Y. Common misconception but it’s not how markets work. You pay whatever it takes to get candidates onboard, but you ideally don’t pay more than necessary. You definitely don’t pay everyone more just because one of your employees lives in SF. This is more intuitive if you think of any other market you might personally operate in. Would you expect your local car mechanic to charge you twice as much as the other local shops just because they also have a location in San Francisco? No, you’d just go to the next mechanic who charged local rates. You aren’t interested in paying more than necessary and neither is your employer. It’s not nefarious, it’s just rational acting.
  - perth 5y ago
    The difference is, most tech companies aren’t selling the product/service exclusively in the region that the worker is working in, so the cost of the product/service, say for example Amazon prime, is the same nationwide despite the differences in cost of living, but the employees are paid regionally. Basically: most tech companies don’t adjust the price of their product for the region they are selling it in, but adjust the salary of the people making the product based on the region they live in.
    - PragmaticPulp 5y ago
      > so the cost of the product/service, say for example Amazon prime, is the same nationwide Correct, but you’re forgetting that labor is also one of the product/service costs for a company. They treat it like a market, just as you would if you were hiring someone to work on your car or house. It’s called the labor market because it’s literally a market. Expecting companies to completely disregard the market aspect and just pay the maximum amount for everyone regardless of their actual cost is wishful thinking.
heavyset_go 5y ago
> Personally, I avoid companies who adopt this practice. As do I. The value of my labor doesn't change because I walked 5 blocks away into another ZIP code with significantly higher/lower costs of living. The only reason this flies is because most engineers have little to no ability to individually negotiate away such nonsense, while employers are happy to collude with one another to enforce these pay scales.
- pc86 5y ago
  It doesn't make sense to go the zip code route, of course. It's too granular, to the point that even if "COL" changes zip code to zip code there's too much variance to make that meaningful unless your only view of "COL" is what it costs to rent a 2BR1BA apartment. If you pay everyone the same wages, you're immediately excluding people who live in VHCOL areas unless you pay VH wages, and spoiler alert, you almost certainly don't. If you're not competing with FAANGMULA-etc. on cash comp, you're not in the right ballpark. But guess what, you can still pay the person in Vietnam or India or Belarus or Oman a very strong regional wage and free up cash allowing you to offer a competitive VHCOL salary. There's no realistic reason to pay someone in eastern Europe $400k TC.
  - mulmen 5y ago
    Labor should be compensated for the value created, not the least they will accept.
    - isbvhodnvemrwvn 5y ago
      So early startups should get money from their workers?
      - mulmen 5y ago
        I’m not sure how you arrived at that conclusion. If you go to the very beginning I’m sure many startups get money from employee #1, AKA the founder. But even in an early stage startup why hire someone that isn’t delivering value?

rapind 5y ago

It’s clear from that post that they are really just looking out for their employees… “Can’t hire as many people”, “they would stay for the money even if they weren’t happy”. Obviously this isn’t just about profit but about employee happiness guys.

RapperWhoMadeIt 5y ago

Check the job openings at duckduckgo [0]. They offer 100% remote jobs, their postings include the offered salary for the position and the salaries are location independent (which is insane, imagine doing 150-180k and living in a super cheap place like Guatemala, Croatia or some parts of Spain). I just mention this as a counter example. [0] https://duckduckgo.com/hiring https://duckduckgo.com/hiring

forgotmyoldname 5y ago
That sounds like a great policy, honestly. Instead of devaluing workers in other countries, they treat them as equal to local people. It also means they’re looking for talent on a level playing field and not trying to skimp out by hiring “cheap” workers.
- jcims 5y ago
  Or they just don’t hire them
  - luckylion 5y ago
    Why wouldn't they? If you assume they're looking for value in exchange for money, they wouldn't care at all how great the deal is for the employee. Location-dependent pay could go side-by-side with wealth-dependent pay. You already have a trust-fund and no college-debt? You only get half what others are making for the same work.
- medvezhenok 5y ago
  It sounds good, but I don't think it's that clear. You're actually introducing greater dislocations into remote markets by hiring at a unified standard across the board. Suppose the average wage somewhere is $10K/year, and you hire a developer at $100K/year there. I would argue that it might be more beneficial in aggregate both to the remote community and to your company to hire two developers at $50K/year from the same place (assuming those are market clearing prices), both because of the effect on the remote consumption (the two people will consume more than one most likely), and the fact that you're spreading out the economic opportunity in the remote area that you are hiring in (now there are two developers who are well paid relative to the median versus only one - and it's also more likely to spur further investment into development in general).

Ostrogodsky 5y ago

Does GitLab also price their products regionally?