> You can try to pay everyone according to the highest possible local salary you might compete against, but now you're arbitrarily paying more than you need to

> You can try to pay everyone according to the highest possible local salary you might compete against, but now you're arbitrarily paying more than you need to everywhere else. This is the difference. I don't see it as arbitrarily paying more than I need to. I see it as paying people the same for doing the same work. My goal is not to pay as little as possible, or even to pay a high rate relative to their local market. I can't look at someone in Romania doing the same job as someone in Chicago and tell them I'm paying them less because they're in Romania. I completely understand that this is not economically optimal, and I love capitalism. I just have no interest in saving money this way. > So you could try to set a median pay that's higher than the LCOL targets but lower than Bay Area salaries. Now you're attractive to some talent, but other people won't consider your company because it pays less than their alternatives. Salary is only one part of comp. Comp is only one part of what makes a company attractive.