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I think author gets many things wrong. As for location, the motivation is stated here, and in my opinion, it really makes sense: https://handbook.gitlab.com/ha

I think author gets many things wrong. As for location, the motivation is stated here, and in my opinion, it really makes sense: https://handbook.gitlab.com/handbook/total-rewards/compensation/#paying-local-rates https://handbook.gitlab.com/handbook/total-rewards/compensat... Imagine they would pay Bay Area salaries everywhere including Philippines or Ukraine. People there would be in "golden handcuffs" and burn out instead of changing job when it's time to go. This would produce terrible results for both the company and people. And of course, if they chose to pay some kind of world-median salaries, then they wouldn't hire people in California or London at all. There are other controversial things said about product managers being unneeded, and that the company shouldn't have more than 100 developer for a product. I think it's pretty clear that the author is a great autonomous engineer who would be happy and very successful in a (relatively) small startup. Maybe if not for the tax rule changes waiting, he would have left the company earlier, and would write a happy article about his experience there. This gets us back to the location-based rates again by the way:). Imagine how difficult it would be for the author to leave the company if in addition to stocks, he would have had $300k compensation in Amsterdam.

paulddraper 3y ago
> Imagine they would pay Bay Area salaries everywhere including Philippines or Ukraine That would be absurd. But what if they paid Philippines or Ukraine salaries everywhere instead? They wouldn't hire Bay-area engineers. Okay. And maybe the offshore has too much language/timezone friction. Okay. So choose a different price point, whatever is the cheapest to get engineers who match your condition, regardless of what their steet address is.
chrsig 3y ago
> People there would be in "golden handcuffs" and burn out instead of changing job when it's time to go Good ol' "we can't pay you that much, because what if we wanted to stop paying you that much. It'd be bad for you if we handed you this pile of money, you might hurt yourself. We're helping you by keeping it to ourselves, trust us."
- cmaggiulli 3y ago
  I think there’s at least something true hidden in the post you’re responding to. While I don’t necessarily think it’s a strong enough point to base salary decisions on, nor do I think it’s the actual reasoning behind GitLabs policy, I can for sure see how being overly paid for a job that you’ve grown to hate produces poor results for the company and possibly the employee
- boo-ga-ga 3y ago
  They actually do not hide the main reason and state it first: "If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results." That's why I like their approach and communication. As a Ukrainian, I would be happy to work for CA salary here, but I do understand that a good local market rate is enough for me if the job is great. EDIT: and one more thing to add here: as an employer, you usually prefer to hire people whose motivation is not only money. You want to work with people who like the job and their colleagues. The current market practice is to pay local rates. Thus any company that pays much more, has to address the challenge of filtering out people with "incorrect" motivation.
imiric 3y ago
> Imagine they would pay Bay Area salaries everywhere including Philippines or Ukraine. People there would be in "golden handcuffs" and burn out instead of changing job when it's time to go. You're saying that as if companies retaining employees is a bad thing. Stock options are already a form of widely used "golden handcuffs". If people want to keep working somewhere, compensation should only be one decisive factor among many others. > And of course, if they chose to pay some kind of world-median salaries, then they wouldn't hire people in California or London at all. Why not? People in London or California would have to compete by the same criteria as people in Ukraine or the Philippines. This is only a good thing, as it opens up the talent pool to a global market. The point of fair compensation is not about giving everyone the _same_ salary. It's about removing the location aspect from affecting compensation, and making it more of a merit-based system. Especially for a remote-first company like Gitlab, where people are free to work from anywhere. It's ridiculous that employees are encouraged to live in countries with high compensation just to take advantage of this system, and are penalized for working from countries they actually want to live in. Not to mention that it makes the lifestyle of a digital nomad much more complicated. What if I want to live 3 months in London, and 3 months in the Philippines? That kind of lifestyle would involve messy contractual changes and salary adjustments. This system makes no sense, and is a remnant of traditional corporate structures. Of course companies love it, because they can get the same quality workforce by hiring internationally for much cheaper. Offshoring is an old corporate tactic, and needs to be abolished. It's shameful and hypocritical that remote-first companies like Gitlab still cling to it. <hr> Taking a look at the article you linked, it's quite clear: > If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results. Translation: it would cost us more to hire quality people everywhere, and we'd rather hire them cheaply. > A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team. Thinly veiled diversity claim. The same thing happens with the current system, where people are encouraged to concentrate in higher-wage regions. Removing this only gives them the freedom to live anywhere. > Team members in high-wage regions having much less discretionary income than ones in low-wage countries with the same role. So? Since when is a company concerned about how much "discretionary income" employees have? Your only job is to compensate people fairly for the role based on their abilities. > Team members in low-wage regions being in golden handcuffs and sticking around because of the compensation even when they are unhappy, we believe that it is healthy for the company when unhappy people leave. Addressed above. This is BS, since you already give them golden handcuffs in the form of stocks, perks, benefits, etc. Compensation shouldn't be the only "handcuff". > If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions, we want the largest pool to recruit from as practical. Again, entirely backwards. It's not about paying everyone the "lowest" or "highest" wage. It's about paying everyone fairly for the role and their experience/merit. You don't need to choose either Bay Area salaries or Ukraine salaries, but come up with your own compensation structure. Buffer has been doing this for a long time now, and they have cost-of-living location bands, but have removed two of the lowest ones in 2022[1]. I would go a step further and leave only the highest band for people who want to live in the most expensive regions in the world. But then again, since you've made yourself more attractive for world-class talent, it's likely that you won't have a large concentration of people living in these places anyway. So there's your diversity. And even if you remove the entire concept of location bands, and people in these expensive regions get paid less than other opportunities in their region, they'd likely still want to work for you because you give them much more than just a fair salary, right? All I read are excuses the company made up to avoid just saying: we want to hire talented people and pay them less. At least have the decency to be honest about it. [1]: https://buffer.com/resources/location-independent-salaries/ https://buffer.com/resources/location-independent-salaries/

paulddraper 3y ago

> Imagine they would pay Bay Area salaries everywhere including Philippines or Ukraine That would be absurd. But what if they paid Philippines or Ukraine salaries everywhere instead? They wouldn't hire Bay-area engineers. Okay. And maybe the offshore has too much language/timezone friction. Okay. So choose a different price point, whatever is the cheapest to get engineers who match your condition, regardless of what their steet address is.

chrsig 3y ago

> People there would be in "golden handcuffs" and burn out instead of changing job when it's time to go Good ol' "we can't pay you that much, because what if we wanted to stop paying you that much. It'd be bad for you if we handed you this pile of money, you might hurt yourself. We're helping you by keeping it to ourselves, trust us."

cmaggiulli 3y ago
I think there’s at least something true hidden in the post you’re responding to. While I don’t necessarily think it’s a strong enough point to base salary decisions on, nor do I think it’s the actual reasoning behind GitLabs policy, I can for sure see how being overly paid for a job that you’ve grown to hate produces poor results for the company and possibly the employee
boo-ga-ga 3y ago
They actually do not hide the main reason and state it first: "If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results." That's why I like their approach and communication. As a Ukrainian, I would be happy to work for CA salary here, but I do understand that a good local market rate is enough for me if the job is great. EDIT: and one more thing to add here: as an employer, you usually prefer to hire people whose motivation is not only money. You want to work with people who like the job and their colleagues. The current market practice is to pay local rates. Thus any company that pays much more, has to address the challenge of filtering out people with "incorrect" motivation.

imiric 3y ago

> Imagine they would pay Bay Area salaries everywhere including Philippines or Ukraine. People there would be in "golden handcuffs" and burn out instead of changing job when it's time to go. You're saying that as if companies retaining employees is a bad thing. Stock options are already a form of widely used "golden handcuffs". If people want to keep working somewhere, compensation should only be one decisive factor among many others. > And of course, if they chose to pay some kind of world-median salaries, then they wouldn't hire people in California or London at all. Why not? People in London or California would have to compete by the same criteria as people in Ukraine or the Philippines. This is only a good thing, as it opens up the talent pool to a global market. The point of fair compensation is not about giving everyone the _same_ salary. It's about removing the location aspect from affecting compensation, and making it more of a merit-based system. Especially for a remote-first company like Gitlab, where people are free to work from anywhere. It's ridiculous that employees are encouraged to live in countries with high compensation just to take advantage of this system, and are penalized for working from countries they actually want to live in. Not to mention that it makes the lifestyle of a digital nomad much more complicated. What if I want to live 3 months in London, and 3 months in the Philippines? That kind of lifestyle would involve messy contractual changes and salary adjustments. This system makes no sense, and is a remnant of traditional corporate structures. Of course companies love it, because they can get the same quality workforce by hiring internationally for much cheaper. Offshoring is an old corporate tactic, and needs to be abolished. It's shameful and hypocritical that remote-first companies like Gitlab still cling to it. <hr> Taking a look at the article you linked, it's quite clear: > If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results. Translation: it would cost us more to hire quality people everywhere, and we'd rather hire them cheaply. > A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team. Thinly veiled diversity claim. The same thing happens with the current system, where people are encouraged to concentrate in higher-wage regions. Removing this only gives them the freedom to live anywhere. > Team members in high-wage regions having much less discretionary income than ones in low-wage countries with the same role. So? Since when is a company concerned about how much "discretionary income" employees have? Your only job is to compensate people fairly for the role based on their abilities. > Team members in low-wage regions being in golden handcuffs and sticking around because of the compensation even when they are unhappy, we believe that it is healthy for the company when unhappy people leave. Addressed above. This is BS, since you already give them golden handcuffs in the form of stocks, perks, benefits, etc. Compensation shouldn't be the only "handcuff". > If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions, we want the largest pool to recruit from as practical. Again, entirely backwards. It's not about paying everyone the "lowest" or "highest" wage. It's about paying everyone fairly for the role and their experience/merit. You don't need to choose either Bay Area salaries or Ukraine salaries, but come up with your own compensation structure. Buffer has been doing this for a long time now, and they have cost-of-living location bands, but have removed two of the lowest ones in 2022[1]. I would go a step further and leave only the highest band for people who want to live in the most expensive regions in the world. But then again, since you've made yourself more attractive for world-class talent, it's likely that you won't have a large concentration of people living in these places anyway. So there's your diversity. And even if you remove the entire concept of location bands, and people in these expensive regions get paid less than other opportunities in their region, they'd likely still want to work for you because you give them much more than just a fair salary, right? All I read are excuses the company made up to avoid just saying: we want to hire talented people and pay them less. At least have the decency to be honest about it. [1]: https://buffer.com/resources/location-independent-salaries/ https://buffer.com/resources/location-independent-salaries/