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This whole, complex strategy does not make much sense economically. Let's asume you want to hire someone with an average skillset: If you are trying to hire whe
by Archelaos 4y ago
This whole, complex strategy does not make much sense economically. Let's asume you want to hire someone with an average skillset: If you are trying to hire where the avarage rates are high, you could not compete with other companies. If you are hiring where the avarage rates are low, you are paying more than your competitors without additional benefits. The same line of thought applies for lower than average or higher than average skillsets, respectively. So on average, you have a choice of hiring someone lower than average from a high income region or someone higher than average from a low income region. The latter is always better economically. In the end, (all else being equal) market forces should drive you towards the traditional off-shoring strategy of just hiring as much as possible in the lowest income regions, but with an additional penalty if you dare to hire from a not so low income region.
- barry-cotter 4y agoIf that’s the case why does Google have offices in Zürich or London? Once you leave your home country it’s all off shore.
- alephnan 4y agoBut Google pays differently depending on where your office is …
- quickthrower2 4y agoIt makes sense because it is disruptive and people are not static spreadsheet entries of location and max pay. And most tech workers are savvy to what tech companies can make and that they are fighting for talent. The very talented person in the cheap country who was going to fly to the US to earn more now applies for this job, so this company wins. The SF resident who hates SF and who is up for living abroad but wants to save for retirement still: same thing.
- imtringued 4y agoYou call it complex but what you are suggesting is geographical price discrimination which is obviously far more complex because you need salary information for the location Obtaining that information is difficult so your company will just determine the median salary of the entire country instead of adjusting it based on the city. You leave less money on the table, precisely because the bureaucratic burden has massively increased.
- Archelaos 4y agoThe question is, when such market transaction costs come into play. I don't think that they are so high to justify not taking different salaries into account world-wide. Besides, determining the median salary might also be not very accurate without research. But at least for my country, differences between the salary for software engineering per region are quite transparent. They would not exist in the first place, if they were really so hard to determine, at least roughly.