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Your pay is based on the cost to hire your replacement. That’s it. There’s no crazy conspiracies, there’s no moral failing, they’re not running a calculator of

Your pay is based on the cost to hire your replacement. That’s it. There’s no crazy conspiracies, there’s no moral failing, they’re not running a calculator of how much value you generate. Would it sap your motivation to learn there are people doing your same job at FAANGs making double what you make? Or that some other job makes more money than you? Location based pay is just another variable. As with everything in jobs - if you don’t like the comp structure, it’s very rare you’ll argue them into changing it. If there are other companies who have comp structures you like more, go get a job there. If you can’t find any, you’ve probably learned something about the job market.

pyrodactyl 4y ago
Its not a crazy conspiracy, I know it's pretty clear why it's being done. And I know I can't do anything about it other than look for new opportunities. But should location based pay be just accepted because that's the norm? There are variables that can't be used to do discriminate like age, gender, race, sexual orientation etc. We've accepted equal pay for equal work in these cases. Is it that far fetched that even location should be treated the same?
- 1659447091 4y ago
  If looking at it from a company perspective, I'm not sure I would see much benefit for them in doing so. If a company is based in the US/EU and pays the same wage to workers in someplace like Asia, they would not gain much(financially) by hiring in Asia in the first place (companies that have no need to hire in Asia). Why bother dealing with the grumbling at home about exporting jobs to outside locations if they are just going to pay the same anyway. Might as well be the hero providing jobs to local workers at home and keep the money circulating there. As for the other, age, gender, race etc. All of that is also at home, so not discriminating against it is beneficial. What is not at home are foreign located workers.
  - brodock 4y ago
    Talent is scarse. People are hiring outside of the US because there is no one else to hire from at current payrange in those locations. You could start a biding war and pouch from other companies but that may not be financially viable for your business.
- Panzer04 4y ago
  You’re missing the point. Location based pay is not the norm, the norm is paying you as much as it would cost to find an equivalent replacement. That just happens to be location-dependant. It’s got nothing to do with discrimination, it’s purely about hiring for the lowest cost. They have to pay more in EU and US to get employees, and less wherever you live.
  - layoric 4y ago
    So if they quit, are you saying the company to refuse to hire a replacement from the US/EU due to some purely budget related limit? That is definitely not my experience working with a few remote first companies. They will try to find a suitable replacement in the relatively short period that is recruitment (1-3 months, depending on seniority). The cost difference for one employee is usually not big enough to worry about in the larger scheme of things. The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. In the current market, my guess is that this person would be replaced with someone NOT in that location unless for some reason it is business critical to have someone in that area, which is almost never for software developers.
    - RestlessMind 4y ago
      > The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. I work with HR team who sets compensations for our global workforce. If you think that HR and leadership does not take this opportunity cost in consideration when setting policies, you are badly mistaken. They are very rational in their decision making.
      - vladvasiliu 4y ago
        But then, why would the company agree to an increase in compensation if OP moved elsewhere? This is the point that doesn't make any sense. If it costs them X in OP's locale and 2X in EU, the company should kick them out if they decided to move and replace them with someone in the original locale, or maybe someplace even cheaper.
- googlryas 4y ago
  Would you accept if your landlord got upset when he saw how much some people are being charged for rent in silicon valley, and decided to triple your rent?
  - wruza 4y ago
    If it makes your neighborhood and/or city very similar to these in SV, why not?
    - googlryas 4y ago
      Why would it? Paying someone in (say) Warsaw a SV salary isn't going to make Warsaw like SV either.
    - quelltext 4y ago
      So, like full of homeless people and litter? No, thank you.
- t6jvcereio 4y ago
  You know why, and yet you were asking why. > If the company is willing to pay me that amount in a different location, why can't it pay me the same here?
- naniwaduni 4y ago
  The norm isn't location-based pay, it's location-based summary rejection. I think it should be clear why we accept summary rejection based on location.
- mattdeboard 4y ago
  I agree with you it's horseshit. What you're saying sincerely makes total sense to me. Has to feel terrible. I would feel detached from my work as well, I think. You're experiencing alienation from the fruits of your labor. Your labor being exploited to maximize profit. Unfortunately, the comments here are right. It "makes sense" in the sense these experiences are characteristic of life within capitalism as a laborer. Functionally, your location is being "colonized," so to speak, by capital. I don't know if there's a real phrase for it, but I suppose it could be described as "telecolonization." Management has found a resource (your labor) that can be cheaply extracted by alienating you, the "telecolonized," from the value your labor creates. It is bullshit. If you want solutions, your recourse is either collective action/unionization or finding a new job. You're being exploited by capital more than your coworkers. That is the context from which this sense of unfairness arises, I believe.
  - jsmith99 4y ago
    Would it be less exploitative if firms refused to hire people in lower cost countries?
    - mattdeboard 4y ago
      Yes, because the workers would not be contributing labor to the company's output. To put it another way: Yes, zero exploitation of OP's labor is less than "some" exploitation of OP's labor. It clarifies things for me to replace "cheaper labor" with "more profitable labor". Why would a company refuse to hire more profitable labor? How could the company not having any relationship with OP exploit his labor more than hiring him as more profitable labor?
      - therealdrag0 4y ago
        The employee is welcome to work for a local company at local rates. It seems they prefer the colonizer? Is that exploitation any more than the US employee not getting paid 2x or 5 or 100 their current rate?
- navjack27 4y ago
  Imagine paying someone in my town where the median income is $39k and the median property value is $87k the same as someone in San Fran where the median income is $120k and the median property value is $1.15M. that would be unfair to everyone in my town who can't work remotely with a tech company that's in that area.
  - tradertef 4y ago
    This doesn't make any sense. Your pay should be based on the value you provide to the company you work for.. Not based on whether it is fair to your neighbor or not.
    - RestlessMind 4y ago
      > Your pay should be based on ... So do you advocate uniform global salaries across different locations in different countries?
    - closeparen 4y ago
      Even from a lefty perspective: people vary wildly in the value they produce. A society that paid based on output would be as if not more unequal than today's. Plus it does nothing for the people who need money to live but can't or don't do economic production: children, elderly, disabled, caregivers, etc. Socialists will sometimes emphasize the share of productivity captured by capital to argue for redistribution to labor as a class, but for individuals to be paid their own productivity is AFAICT not any serious movement's demand. And then obviously from the capitalist perspective, your employment only exists to the extent that the employer derives more value from your work than they pay you.
      - oreally 4y ago
        This. For all the talk that says software benefits the world, software developers do forget what's the perspective from the other side.
    - navjack27 4y ago
      Should and I agree.
- RestlessMind 4y ago
  > But should location based pay be just accepted because that's the norm? If we don't accept location based pay and start paying a uniform global salary, the wages will sync to Asian job market level rather than rising to SV level. Any company doing so will not be able to hire anyone in SV. OTOH any company paying SV level wages to everyone will do so only for a short while before they realize that they can increase the profit by reducing pay elsewhere. Why would they not do that?
- deleted 4y ago
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rtlfe 4y ago
> Your pay is based on the cost to hire your replacement. That's not necessarily true. Many fully remote companies hire from anywhere and pay location-adjusted wages. So it's a roll of the dice whether the replacement makes more or less than you.
- contravariant 4y ago
  What exactly is the rationale there? Why wouldn't companies just hire the people willing to work for a lower salary?
  - chrsig 4y ago
    because it's not the only factor in hiring? competency and likelihood to succeed in the role does still play a role
    - matt_attack 4y ago
      Hence it being the cost to hire/pay your replacement not just cost to hire anyone.
    - contravariant 4y ago
      Sure, but why is a company willing to suddenly pay more for someone depending on where they live? I get that competency and likelihood to succeed play a role, but if you have those I don't see why location should play a role at all. I'm not saying they should give more/better offers to people in 'cheap' locations, I'm saying location shouldn't influence the offer at all.
      - arlattimore 4y ago
        Many companies can't hire people in 'any' location due to how their legal entities are setup in different countries, how many of them they may or may not have and possible complications with tax etc. Once you get past that basic hurdle, you might find that the company is willing to pay more because they want a given skilled worker to be co-located with the team they will be joining to increase productivity which might come at a higher price than hiring into a different location but potentially trading off worker and/or team efficiency.
swatcoder 4y ago
> Your pay is based on the cost to hire your replacement. That’s it. Only in an imaginary world of perfect information and labor liquidity, which is about as far from what we have (and could have) as can be. Location-adjusted pay for remote US workers is indeed a social norm, proposed by some firms and accepted by enough of labor for it to work for them. It persists mostly because it exists and because there’s no organized effort to disrupt it. Nonetheless, their are still many firms that don’t do that, many employees that don’t settle for it, and some firms that initially negotiate from it while accepting counteroffers that reject it. Reducing an extremely complicated market to an oversimplified post hoc theory, just because it exists a certain way, is neither correct nor helpful to the issue at hand. It does nothing but shut down richer discussion and reinforce an incidental status quo.
- AndrewKemendo 4y ago
  I'm emotionally with you, however the OP is right in that the GP most likely doesn't have any options other than quitting and going to a company that doesn't do this OP is also correct in that the following is how HR at almost every large company thinks about comp: 1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location. 2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value" So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested. The only way to do this in my mind is to never pass -- lets say -- 100 employees.
  - jogu 4y ago
    Just a small nit but I think you mixed up OP (Original Poster) and GP (Grand Parent).
    - jlkuester7 4y ago
closeparen 4y ago
If that were true companies would never hire in the Bay Area, or even the United States. There’s always a cheaper alternative. The question is, once the company has decided it wants you, what’s that going to take? Making national median offers to Bay Area candidates essentially swears off of ever hiring them. That could be a choice, but for now it remains a bench of talent and experience that companies want to draw from, even if not exclusively. Making Bay Area offers to rural candidates is giving them 4-5x their next best option, which is characteristic of either a) the devil, or b) rich people making expressive displays rather than business transactions. It’s like everything else, your leverage is your next best alternative, and until work goes fully remote location is a factor in that. EDIT: I will add that if you think calibrating an offer based on the worker’s alternatives is crass, think for a second about what exactly your skills, education, and experience are for. Those work through the same mechanism. If that mechanism is wrong, you should be happy to work for the national median wage across all industries and all education levels. Even a mediocre SWE salary is way too high.
- derefr 4y ago
  Bay Area companies hire in the Bay Area, for the same reason companies are founded in the Bay Area to begin with: because most of the VCs in the US live in the Bay Area. And Bay Area investors care a lot about having a package of colocated staff "human assets" that put an acquihire-based floor on the company's acquisition price. Companies that don't operate from the Bay Area, almost never hire Bay Area remote workers; and companies that are headquartered outside of the US, almost never hire US remote workers. Precisely because they cost too much, for a company that gets no advantage from doing so. (Source: we are a Canadian company; we hire from everywhere but the US.)
  - xyzzy_plugh 4y ago
    > Source: we are a Canadian company, and hire from everywhere but the US. I don't follow. This isn't true at all in my experience, plenty of companies in Canada and the US hire across Canada and the US. It's practically the norm. If you work for a Canadian company that doesn't hire in the US then you're comically underpaid. Wages are converging very fast. Many companies are paying parity and frankly folks are selling themselves short if they don't fight for parity. (If you're not talking about software development, then ignore me)
darth_avocado 4y ago
> Your pay is based on the cost to hire replacement What is being described here is supply/demand economics. If you think you’re being underpaid, quit, find something else that pays you more. The reason why you won’t quit is the reason why the company doesn’t pay you more. You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages. Part of the reason why wages in places like the Bay Area are high is because companies are competing with each other for talent and if you don’t pay people, they are ready to quit and replacements aren’t easy at lower wages.
- SQueeeeeL 4y ago
  > You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages. I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. Just because a bunch of people could take your job doesn't mean they'll give a shit about the job. Good, well motivated, employees are extremely hard to find. Understand your value and don't let some dude in a button down shirt who has never written a line of code trick you into thinking you aren't valuable.
  - patrulek 4y ago
    > I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. I would bet its rarely a case. We like to think that we are irreplacable, but after our quit company/project is still moving on.
    - SQueeeeeL 4y ago
      A lot of times they move on with larger technical debt, less understanding of their own systems, and less resiliency when things start to break. These issues accumulate over time especially if smooth transitions between technical knowledge isn't kept (like when employees are constantly jumping ship), and lead to places eventually hiring consultants for $1600 an hour to fix their technical mess. It also depends how regimented the team is, places like Amazon have large numbers of coders on the same project, watching over each other. But they also compensate their employees well.
RichardCNormos 4y ago
> Your pay is based on the cost to hire your replacement. And my effort is also based on the cost to hire my replacement.
kodah 4y ago
> there’s no moral failing, Sorry, but this logic needs to stop. If a company is selling a product online for a fixed cost to an entire region then the people who contribute to that product that do the same thing should be paid the same amount. That is, indeed, a moral failing. If a company wants to pay workers less based on where they live then their product should be similarly cheaper. We just don't see this though.
- sokoloff 4y ago
  Isn’t that how we got region-locked DVDs?
- nprateem 4y ago
  You don't understand cost vs customer value.
benhurmarcel 4y ago
> Your pay is based on the cost to hire your replacement. That’s it. That's not quite true. The cost of hiring your replacement is only the maximum they'll accept to pay you. But they will pay you only slightly above what they think you'll find elsewhere. So your pay is the MIN(cost of your replacement, what they think you can get elsewhere). That explains location-based pay for remote jobs. Because they take into account that your alternatives are mostly local, so they only have to compete with local rates. The only way out of this is to be willing to relocate, or convince them you're getting enough good remote offers that they have to compete with that.
- robertlagrant 4y ago
  I think it's 3 - the role has to be valuable enough to pay for: MIN(cost of your replacement, what they think you can get elsewhere, your value to the company)
  - spullara 4y ago
    they can't calculate 3 so it doesn't come into the conversation
    - robertlagrant 4y ago
      If they can't calculate 3 then how is there budget to hire you?
      - spullara 4y ago
        i don't know if you have worked in these organizations but they don't know.
        robertlagrant 4y ago
        I don't know to which organisations you're referring.
planede 4y ago
Wouldn't your replacement cost the same, regardless your location? They don't have to replace you with someone from the same location.
- sokoloff 4y ago
  They could, but if you’re on a team of 6, all of whom work in the same general area (even if remote), there’s a cost to hiring someone 4 time zones away, let alone 8 or 10.
  - planede 4y ago
    Yeah, but then don't say that it's just the cost of the replacement. Say that the same employee is just worth that much more if they are working from B instead of A, for X and Y reasons. Having said that, I am not really buying it. There are significant pay differences based on location even in the same time zone for the same remote work.
    - sokoloff 4y ago
      The problem on these threads is everyone is trying to boil a complex equilibrium of supply and demand across dozens of factors and billions of actors down to “it’s just this one or two things”.
hkt 4y ago
Hiring replacements is such a primitive measure, usually done on salary. In reality, OP will have institutional knowledge that will enable them to be more productive than a new replacement. It takes time to build that up and will without a doubt cost much more than a replacement's salary.

pyrodactyl 4y ago

Its not a crazy conspiracy, I know it's pretty clear why it's being done. And I know I can't do anything about it other than look for new opportunities. But should location based pay be just accepted because that's the norm? There are variables that can't be used to do discriminate like age, gender, race, sexual orientation etc. We've accepted equal pay for equal work in these cases. Is it that far fetched that even location should be treated the same?

1659447091 4y ago
If looking at it from a company perspective, I'm not sure I would see much benefit for them in doing so. If a company is based in the US/EU and pays the same wage to workers in someplace like Asia, they would not gain much(financially) by hiring in Asia in the first place (companies that have no need to hire in Asia). Why bother dealing with the grumbling at home about exporting jobs to outside locations if they are just going to pay the same anyway. Might as well be the hero providing jobs to local workers at home and keep the money circulating there. As for the other, age, gender, race etc. All of that is also at home, so not discriminating against it is beneficial. What is not at home are foreign located workers.
- brodock 4y ago
  Talent is scarse. People are hiring outside of the US because there is no one else to hire from at current payrange in those locations. You could start a biding war and pouch from other companies but that may not be financially viable for your business.
Panzer04 4y ago
You’re missing the point. Location based pay is not the norm, the norm is paying you as much as it would cost to find an equivalent replacement. That just happens to be location-dependant. It’s got nothing to do with discrimination, it’s purely about hiring for the lowest cost. They have to pay more in EU and US to get employees, and less wherever you live.
- layoric 4y ago
  So if they quit, are you saying the company to refuse to hire a replacement from the US/EU due to some purely budget related limit? That is definitely not my experience working with a few remote first companies. They will try to find a suitable replacement in the relatively short period that is recruitment (1-3 months, depending on seniority). The cost difference for one employee is usually not big enough to worry about in the larger scheme of things. The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. In the current market, my guess is that this person would be replaced with someone NOT in that location unless for some reason it is business critical to have someone in that area, which is almost never for software developers.
  - RestlessMind 4y ago
    > The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. I work with HR team who sets compensations for our global workforce. If you think that HR and leadership does not take this opportunity cost in consideration when setting policies, you are badly mistaken. They are very rational in their decision making.
    - vladvasiliu 4y ago
      But then, why would the company agree to an increase in compensation if OP moved elsewhere? This is the point that doesn't make any sense. If it costs them X in OP's locale and 2X in EU, the company should kick them out if they decided to move and replace them with someone in the original locale, or maybe someplace even cheaper.
googlryas 4y ago
Would you accept if your landlord got upset when he saw how much some people are being charged for rent in silicon valley, and decided to triple your rent?
- wruza 4y ago
  If it makes your neighborhood and/or city very similar to these in SV, why not?
  - googlryas 4y ago
    Why would it? Paying someone in (say) Warsaw a SV salary isn't going to make Warsaw like SV either.
  - quelltext 4y ago
    So, like full of homeless people and litter? No, thank you.
t6jvcereio 4y ago
You know why, and yet you were asking why. > If the company is willing to pay me that amount in a different location, why can't it pay me the same here?
naniwaduni 4y ago
The norm isn't location-based pay, it's location-based summary rejection. I think it should be clear why we accept summary rejection based on location.
mattdeboard 4y ago
I agree with you it's horseshit. What you're saying sincerely makes total sense to me. Has to feel terrible. I would feel detached from my work as well, I think. You're experiencing alienation from the fruits of your labor. Your labor being exploited to maximize profit. Unfortunately, the comments here are right. It "makes sense" in the sense these experiences are characteristic of life within capitalism as a laborer. Functionally, your location is being "colonized," so to speak, by capital. I don't know if there's a real phrase for it, but I suppose it could be described as "telecolonization." Management has found a resource (your labor) that can be cheaply extracted by alienating you, the "telecolonized," from the value your labor creates. It is bullshit. If you want solutions, your recourse is either collective action/unionization or finding a new job. You're being exploited by capital more than your coworkers. That is the context from which this sense of unfairness arises, I believe.
- jsmith99 4y ago
  Would it be less exploitative if firms refused to hire people in lower cost countries?
  - mattdeboard 4y ago
    Yes, because the workers would not be contributing labor to the company's output. To put it another way: Yes, zero exploitation of OP's labor is less than "some" exploitation of OP's labor. It clarifies things for me to replace "cheaper labor" with "more profitable labor". Why would a company refuse to hire more profitable labor? How could the company not having any relationship with OP exploit his labor more than hiring him as more profitable labor?
    - therealdrag0 4y ago
      The employee is welcome to work for a local company at local rates. It seems they prefer the colonizer? Is that exploitation any more than the US employee not getting paid 2x or 5 or 100 their current rate?
navjack27 4y ago
Imagine paying someone in my town where the median income is $39k and the median property value is $87k the same as someone in San Fran where the median income is $120k and the median property value is $1.15M. that would be unfair to everyone in my town who can't work remotely with a tech company that's in that area.
- tradertef 4y ago
  This doesn't make any sense. Your pay should be based on the value you provide to the company you work for.. Not based on whether it is fair to your neighbor or not.
  - RestlessMind 4y ago
    > Your pay should be based on ... So do you advocate uniform global salaries across different locations in different countries?
  - closeparen 4y ago
    Even from a lefty perspective: people vary wildly in the value they produce. A society that paid based on output would be as if not more unequal than today's. Plus it does nothing for the people who need money to live but can't or don't do economic production: children, elderly, disabled, caregivers, etc. Socialists will sometimes emphasize the share of productivity captured by capital to argue for redistribution to labor as a class, but for individuals to be paid their own productivity is AFAICT not any serious movement's demand. And then obviously from the capitalist perspective, your employment only exists to the extent that the employer derives more value from your work than they pay you.
    - oreally 4y ago
      This. For all the talk that says software benefits the world, software developers do forget what's the perspective from the other side.
  - navjack27 4y ago
    Should and I agree.
RestlessMind 4y ago
> But should location based pay be just accepted because that's the norm? If we don't accept location based pay and start paying a uniform global salary, the wages will sync to Asian job market level rather than rising to SV level. Any company doing so will not be able to hire anyone in SV. OTOH any company paying SV level wages to everyone will do so only for a short while before they realize that they can increase the profit by reducing pay elsewhere. Why would they not do that?
deleted 4y ago
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deleted 4y ago
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rtlfe 4y ago

> Your pay is based on the cost to hire your replacement. That's not necessarily true. Many fully remote companies hire from anywhere and pay location-adjusted wages. So it's a roll of the dice whether the replacement makes more or less than you.

contravariant 4y ago
What exactly is the rationale there? Why wouldn't companies just hire the people willing to work for a lower salary?
- chrsig 4y ago
  because it's not the only factor in hiring? competency and likelihood to succeed in the role does still play a role
  - matt_attack 4y ago
    Hence it being the cost to hire/pay your replacement not just cost to hire anyone.
  - contravariant 4y ago
    Sure, but why is a company willing to suddenly pay more for someone depending on where they live? I get that competency and likelihood to succeed play a role, but if you have those I don't see why location should play a role at all. I'm not saying they should give more/better offers to people in 'cheap' locations, I'm saying location shouldn't influence the offer at all.
    - arlattimore 4y ago
      Many companies can't hire people in 'any' location due to how their legal entities are setup in different countries, how many of them they may or may not have and possible complications with tax etc. Once you get past that basic hurdle, you might find that the company is willing to pay more because they want a given skilled worker to be co-located with the team they will be joining to increase productivity which might come at a higher price than hiring into a different location but potentially trading off worker and/or team efficiency.

swatcoder 4y ago

> Your pay is based on the cost to hire your replacement. That’s it. Only in an imaginary world of perfect information and labor liquidity, which is about as far from what we have (and could have) as can be. Location-adjusted pay for remote US workers is indeed a social norm, proposed by some firms and accepted by enough of labor for it to work for them. It persists mostly because it exists and because there’s no organized effort to disrupt it. Nonetheless, their are still many firms that don’t do that, many employees that don’t settle for it, and some firms that initially negotiate from it while accepting counteroffers that reject it. Reducing an extremely complicated market to an oversimplified post hoc theory, just because it exists a certain way, is neither correct nor helpful to the issue at hand. It does nothing but shut down richer discussion and reinforce an incidental status quo.

AndrewKemendo 4y ago
I'm emotionally with you, however the OP is right in that the GP most likely doesn't have any options other than quitting and going to a company that doesn't do this OP is also correct in that the following is how HR at almost every large company thinks about comp: 1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location. 2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value" So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested. The only way to do this in my mind is to never pass -- lets say -- 100 employees.
- jogu 4y ago
  Just a small nit but I think you mixed up OP (Original Poster) and GP (Grand Parent).
  - jlkuester7 4y ago

closeparen 4y ago

If that were true companies would never hire in the Bay Area, or even the United States. There’s always a cheaper alternative. The question is, once the company has decided it wants you, what’s that going to take? Making national median offers to Bay Area candidates essentially swears off of ever hiring them. That could be a choice, but for now it remains a bench of talent and experience that companies want to draw from, even if not exclusively. Making Bay Area offers to rural candidates is giving them 4-5x their next best option, which is characteristic of either a) the devil, or b) rich people making expressive displays rather than business transactions. It’s like everything else, your leverage is your next best alternative, and until work goes fully remote location is a factor in that. EDIT: I will add that if you think calibrating an offer based on the worker’s alternatives is crass, think for a second about what exactly your skills, education, and experience are for. Those work through the same mechanism. If that mechanism is wrong, you should be happy to work for the national median wage across all industries and all education levels. Even a mediocre SWE salary is way too high.

derefr 4y ago
Bay Area companies hire in the Bay Area, for the same reason companies are founded in the Bay Area to begin with: because most of the VCs in the US live in the Bay Area. And Bay Area investors care a lot about having a package of colocated staff "human assets" that put an acquihire-based floor on the company's acquisition price. Companies that don't operate from the Bay Area, almost never hire Bay Area remote workers; and companies that are headquartered outside of the US, almost never hire US remote workers. Precisely because they cost too much, for a company that gets no advantage from doing so. (Source: we are a Canadian company; we hire from everywhere but the US.)
- xyzzy_plugh 4y ago
  > Source: we are a Canadian company, and hire from everywhere but the US. I don't follow. This isn't true at all in my experience, plenty of companies in Canada and the US hire across Canada and the US. It's practically the norm. If you work for a Canadian company that doesn't hire in the US then you're comically underpaid. Wages are converging very fast. Many companies are paying parity and frankly folks are selling themselves short if they don't fight for parity. (If you're not talking about software development, then ignore me)

darth_avocado 4y ago

> Your pay is based on the cost to hire replacement What is being described here is supply/demand economics. If you think you’re being underpaid, quit, find something else that pays you more. The reason why you won’t quit is the reason why the company doesn’t pay you more. You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages. Part of the reason why wages in places like the Bay Area are high is because companies are competing with each other for talent and if you don’t pay people, they are ready to quit and replacements aren’t easy at lower wages.

SQueeeeeL 4y ago
> You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages. I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. Just because a bunch of people could take your job doesn't mean they'll give a shit about the job. Good, well motivated, employees are extremely hard to find. Understand your value and don't let some dude in a button down shirt who has never written a line of code trick you into thinking you aren't valuable.
- patrulek 4y ago
  > I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. I would bet its rarely a case. We like to think that we are irreplacable, but after our quit company/project is still moving on.
  - SQueeeeeL 4y ago
    A lot of times they move on with larger technical debt, less understanding of their own systems, and less resiliency when things start to break. These issues accumulate over time especially if smooth transitions between technical knowledge isn't kept (like when employees are constantly jumping ship), and lead to places eventually hiring consultants for $1600 an hour to fix their technical mess. It also depends how regimented the team is, places like Amazon have large numbers of coders on the same project, watching over each other. But they also compensate their employees well.

RichardCNormos 4y ago

> Your pay is based on the cost to hire your replacement. And my effort is also based on the cost to hire my replacement.

kodah 4y ago

> there’s no moral failing, Sorry, but this logic needs to stop. If a company is selling a product online for a fixed cost to an entire region then the people who contribute to that product that do the same thing should be paid the same amount. That is, indeed, a moral failing. If a company wants to pay workers less based on where they live then their product should be similarly cheaper. We just don't see this though.

sokoloff 4y ago
Isn’t that how we got region-locked DVDs?
nprateem 4y ago
You don't understand cost vs customer value.

benhurmarcel 4y ago

> Your pay is based on the cost to hire your replacement. That’s it. That's not quite true. The cost of hiring your replacement is only the maximum they'll accept to pay you. But they will pay you only slightly above what they think you'll find elsewhere. So your pay is the MIN(cost of your replacement, what they think you can get elsewhere). That explains location-based pay for remote jobs. Because they take into account that your alternatives are mostly local, so they only have to compete with local rates. The only way out of this is to be willing to relocate, or convince them you're getting enough good remote offers that they have to compete with that.

robertlagrant 4y ago
I think it's 3 - the role has to be valuable enough to pay for: MIN(cost of your replacement, what they think you can get elsewhere, your value to the company)
- spullara 4y ago
  they can't calculate 3 so it doesn't come into the conversation
  - robertlagrant 4y ago
    If they can't calculate 3 then how is there budget to hire you?
    - spullara 4y ago
      i don't know if you have worked in these organizations but they don't know.
      - robertlagrant 4y ago
        I don't know to which organisations you're referring.

planede 4y ago

Wouldn't your replacement cost the same, regardless your location? They don't have to replace you with someone from the same location.

sokoloff 4y ago
They could, but if you’re on a team of 6, all of whom work in the same general area (even if remote), there’s a cost to hiring someone 4 time zones away, let alone 8 or 10.
- planede 4y ago
  Yeah, but then don't say that it's just the cost of the replacement. Say that the same employee is just worth that much more if they are working from B instead of A, for X and Y reasons. Having said that, I am not really buying it. There are significant pay differences based on location even in the same time zone for the same remote work.
  - sokoloff 4y ago
    The problem on these threads is everyone is trying to boil a complex equilibrium of supply and demand across dozens of factors and billions of actors down to “it’s just this one or two things”.

hkt 4y ago

Hiring replacements is such a primitive measure, usually done on salary. In reality, OP will have institutional knowledge that will enable them to be more productive than a new replacement. It takes time to build that up and will without a doubt cost much more than a replacement's salary.