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Comment by bryanh | Hacker News Reader

Zapier CTO & co-founder here.

Much like Stripe's "hire a team" experiment - this is an experiment to pay people to "de-locate" from the Bay Area. Don't get us wrong, we absolutely love the Bay Area (I live here) but the cost of living is just outrageous for so many.

We're seeing a lot of candidates talking to Zapier (we're fully remote) about leaving the Bay Area to go "home" (some to start a family, some for other reasons) but want to stay in their tech career.

Happy to answer any questions, and I am sure there are a lot of Zapiens in the thread that could answer questions too.

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I have to admin, I have a bit of a crush on how you guys go about doing business. Fully remote, good salaries, honest focus on life outside of work, sounds utopian. It's a crazy world out there and very few people are willing to take a stand for what's actually important. high-five

We're certainly not perfect - but we try very hard. Thanks for the kind words Kirill!

Are you thinking about adjusting the salaries as well?

I mean, it sounds like a win-win situation to me. If a family can save, say, $3,000 a month on rent, and the company can save, say, $1,500 on an engineers salary, both are actually better off.

I guess the risk of moving out of the Bay Area is that you somehow are betting your future on a single company. If you decide to get a new job, you might be too far away from a decent tech hub. Another issue for families is moving both working partners. If the partner works at a company that might not be as flexible or open, moving somewhere else is going to be a tough decision, as it's always going to be better to have 2 jobs in the Bay Area, than just one outside of it.

Other Zapier co-founder here.

Are we competitive with Google engineering salaries? Probably not. But most Bay Area startups can't complete with Google on comp anyway.

Are we competitive with other Bay Area startup salaries? Likely. Six-figure engineering salaries, healthcare, retirement package, etc is the norm.

We saw several great teammates move away from the Bay Area and thought there might be others. This experiment is primarily to find people who already want to leave (for good reasons) but feel stuck because they like working for growing tech companies.

So do you adjust the salaries when they move? Your response didn't answer the commenter's question.

We do not adjust salaries when employees move. We try to pay similarly regardless of location.

Fantastic to hear. I've never (as an employee) found it fair that I would be paid more or less for the same work just because I happened to chose somewhere else to live.

I agree.

I understand paying remote workers less than someone on site since there may be productivity gains that come from that. However, remote is remote. Once someone is a remote employee it should make no difference if they're in Manhattan or Milwaukee.

Well in this scenario you _are_ being paid less just in case you happen to choose a place you really want to live, if cost of living is higher. Most cool places have a higher cost of living - if you're one of those people who loves it in a rural place that costs 50k to buy a great house and has nothing to do than you're golden. Otherwise you're going to get penalized going to a remote-only company because as a whole they just won't pay on that scale (and realistically, why should they?).

I think it may be a worthwhile question and I'm curious why you think this. Why shouldn't they? Is there a objective measurable reason remote employees shouldn't be paid the same?

I assume the point is that salaries aren't about fairness. So the objective measurable reason is that if you want to hire employees in high CoL areas, you'll need to pay more to be competitive.

To be clear, I have no issues with divorcing salary from location for a remote company. But it probably means you're paying generous salaries for people living in cheap locations and you'll have trouble hiring anyone who must must must live in SF for... reasons.

I know what you mean. At the same time I think it's less about what a company thinks is fair and more about what the market will bear. You can find more engineers willing to sell their labor at a lower price in lower cost locations.

Of course, for an all-remote company to adjust salaries by a five or ten thousand bucks based on location if someone moves, like some do, that just seems like they're trying to nickel and dime the person under the guise of being fair.

Unsolicited advice: remove the word "fair" from your understanding of economic transactions. Think in terms of incentives, bargaining power, and BATNA.

My guess is that with all the whining CEOs in the Bay Area do about "how hard it is to find talent", this is the start of a long-term trend. Rents in the Bay Area have gone up about 10%/year for the last five years running (anecdote: my room cost 850/month five years ago, I moved out when it hit 1300/month) and with the new "Affordable housing" mandates (which the SF electorate voted for) coming into play, pretty much all construction is going to stop, because the economics of cross-subsidizing 1/3 of units (the new requirement) with the other two is pushing the unsubsidized units out of reach for all but the highest income-earners.

This place is mortgaging its future, and people are right to want out.

Source: http://www.sfhac.org/real-numbers-behind-prop-c/

We have an "affordable housing" mandate here in Boulder as well. But they built in a loophole. Builders can choose a one-time cash payment to avoid providing affordable units. >90% of builders chose that option. Does SF have a similar clause?

If you got such a deal to de-locate, would you continue to pay an inflated bay area price for services at the new place? If not, would it be fair to those people that you are not paying them a the bay area price just because of the location they choose to live?

Since they say they're a fully remote team already, then it sounds like the company doesn't derive any advantage from having an employee live in the Bay Area (the fact that they're willing to pay employees to leave makes this even more obvious).

What happens with subsequent comp adjustments then? Do your ramp their growth rate down to be more like their new area for future raises and promotions, or do you keep it based on Bay Area rates?

We try not to downscale raises/promotions based on location either.

For what it is worth - we're not out to benchmark against "Bay Area rates". We generally will lose in head-to-head compensation with any large, on-site technical organization in the Bay Area (Google, Facebook, Netflix, etc.) - but we try and be consistent and competitive (6 fig eng, health, retire, etc.) anywhere else in the world - no matter where you are (suburbs of Chicago, middle-of-nowhere-Kansas, metro Pittsburgh, Barcelona, etc.). Check out a few of our other comments for more details.

I'm very interested in this question from an academic perspective -- where will the remote vs. local market clear, if more companies start doing this.

Scenario A: More companies pay equally remote vs. local

Scenario B: cost-of-living adjustments mean companies pay the local prevailing wage of where the employee is located.

My prediction is that we'll get about 80% scenario A and 20% scenario B. Remotes might take a hit but it won't be large, and that's based on elasticity of demand -- I suspect companies have a less elastic demand for talent overall, vs. employee willingness to move.

I suspect you're right re: Scenario A. But I think it'll be at the detriment to engineers in high cost of living areas.

Manhattan and SV don't have a monopoly on great engineers for the vast majority of engineering roles.

Remotes won't take the hit. It's those who for some reason (family, prestige, other) are stuck in these centres.

The question was whether people should expect to be paid less if they de-locate than they would if they stayed in/near SF.

I think you misunderstood what I was asking, it wasn't to compare you with Google or anything. But I got my answer further down the thread, and it's amazing that you pay full salary to people who live outside of the Bay Area. Way to go!

What about other salaries for less in demand functions where employees typically have less leverage, like marketing?

I really love this idea! There are so many great places to live, if only you could find a good programming job there. I left Seattle for St. Louis to be close to family, and it was the best decision I ever made. Glad to see that Zapier is willing to try to innovate in this area! I hope it will spread.

First of all, I'd like to applaud this initiative. I worked remotely for 4 years (just switched to a local startup) and it was great for work-life balance (among other things). I wholeheartedly wish that it would be very successful.

This may not be something new for you guys, as you've been running remote agile teams, but how are you planning to deal with time differences? Are you reserving the right to ask remote employees to start their day at a particular time? Are you going to take time zones into consideration when building your teams?

We are already 100% remote and have been for the entire life of the company.

Time differences haven't been a big issue - it can be tricky to get everyone on a call when they need to be - but usually a little flexibility by all parties go a long way. Also, you can arbitrage time differences to knock down annoyance from on-call rotations and the like.

We ask employees to have their own "consistent" hours so that the rest of the team knows when they'll be available or not.

We do consider time zones when hiring - for example, we might explicitly hire Asian/Pacific for support scheduling reasons.

Also, you can arbitrage time differences to knock down annoyance from on-call rotations and the like.

I have no idea what that means.

If you have people all over the world, nobody (or at least fewer people, depending on how the distribution works out) has to be on-call in the middle of the night, you can hand off close to the end of your normal working day.

Doesn't this make it easier for you to retain people by restricting their options in the future? For example if someone moves back to central Missouri, they're probably not going to find a lot of similar jobs, especially at the level of pay I'm imaging Zapier provides.

By the same token, moving to an area with a high CoL could be restricting if you lost your employment and had to scramble to find a new job.

It cuts both ways.

I wouldn't have moved to the Bay Area if there weren't as many jobs as there are. If you have the choice to relocate, you might as well go where the jobs are, right?

In today's economy it's usually easier to find a new job in a high CoL area.

Not in San Diego! High CoL area, relatively low wages, and tech jobs are relatively scarce. We moved to the Greater Salt Lake City area three months ago because CoL is much lower here, and there's a plethora of opportunity.

You make it seem like that's a bad thing? It's a trade-off. You're getting location flexibility at the cost of employment mobility. For some this will be a fine trade-off.

I think that may be true and is worth consideration when making any career or geographical move. In central Missouri - you certainly won't find $2400 studio apartments either!

To be honest - I wish more companies were remote welcome. It is just better in so many ways.

In my experience, if you want to go back, job opportunities for senior people come with pretty cushy relocation packages, so, no: not really.

Would an employee not have the same flexibility to stay in the Bay Area and work remotely from there to preserve their "options in the future"?

This would be my primary worry too. When I moved to the Bay Area I took a massive quality-of-life hit. Went from a place where a big two-story 2000+ sq ft home cost $100K or so and a 15 minute commute to here, where a mud hut costs $500K and your commute is 2 hours. But I was willing to do it because it's less risky employment-wise. If things go bad at one employer here, you're looking at maybe a 1-3 month job search that you can limit to a 50 mile radius. If things go bad in Nowheresville, USA, you're looking at a 3-9 month job search that will likely involve moving out of state.

There are some in between towns that offer a better balance. I've lived in Seattle and Boston and I think the job mobility still high but with a reduced cost of living. Not cheap by any national standard but 20-30% is a big difference in cost of living.

Your post makes it sound like the only place for tech jobs is the Bay Area...which I find is not true as an east coast remote.

I mean, yeah if you move to rural South Dakota you won't find much, but there are plenty of growing tech centers like Raleigh, Boulder, Austin, etc. that have much lower cost of living, but still a lot of availability in local tech jobs.

Also to note, the 3-9 month job search should be much more sustainable in Nowheresville, whereas in SF you are going to be screwed if your job search is extended.

So, honest question (not trying to troll) - what jobs are available in Raleigh/Boulder/Austin/etc?

Because where I'm sitting, facebook, Google, Amazon, Microsoft, and Apple, which are 5 of the top 6 most valuable US companies, are HQ'd in the Bay Area or Seattle. So if you want that caliber of job, with the opportunities and pay ($200-300k+ for mid-level people), you really do have to live in SF/Seattle.

I don't work a BigCo job for other reasons but the reasoning does seem sound.

Google is in Boulder. But from what I've heard of the area in general (not specific to Google), they have Bay Area housing prices with Colorado comp, so overall you are taking home less and getting less for your money.

i'm near enough to boulder that google's boulder location would be a <15 minute commute, and <$500k buys you a 2000 sqft house in a quiet neighborhood and enough of a yard you can't see through your neighbor's window. pretty sure that's rather drastically cheaper than sf. if you're ok with a 30 minute commute, you can shave $100k off that. 60 minute commute would shave another $100k off.

while i'm commenting, i'll note that i don't feel boulder really competes with NC's research triangle, or austin. boulder county population is 310k, and a sizable chunk of that is tied up in and around the university and government research facilities that i feel don't impact local tech industry that much.

Would you mind unpacking "NC research triangle"? North Carolina? Three research heavy universities?

ah, of course: https://en.wikipedia.org/wiki/Research_Triangle

The Raleigh, Durham, and Chapel Hill combined metro area in North Carolina.

Home to UNC, Duke, and the somewhat famous Research Triangle Park, a suburban campus containing R&D for Red Hat, IBM, and several big pharmaceutical companies.

The Palo Alto of the South.

Can you share some links to real estate listings like you are mentioning, and what towns or parts of Boulder they are in? There are cheap homes in places like Longmont, but there is no real downtown to speak of. Are these cheap houses you mention suburban subdevelopment sprawl? Or are they urban homes on the edge of the city?

Amazon & Microsoft both have a significant software presence in Phoenix. I don't know if they still do, but at one point Google had some stuff here as well.

Amazon recruiters have also been pinging me for jobs they have in SoCal, although I wouldn't say that LA is significantly cheaper than the Bay Area or Seattle.

I guess your last point depends on one's savings. I think for most people's savings a 3-9 month job search is a pants-on-fire emergency, regardless of where in the country you are.

I used to live in South Florida, and I bet I could exhaust the search space of "tech jobs south of Orlando" in about two weeks of interviewing. After that, you're looking at a move. It's not like the same companies will interview you over and over until you pass.

I've never ever lived in the Bay Area and I've never looked longer than a month for a job. In fact I've never been out of work and it's very easy to change jobs when the need arises. I think your information is very misinformed.

Congratulations on the good fortune but I think your experience is either really recent or atypical. I've been through two major tech job downturns now (2000-2002 and 2007-2009--there have been others before that) and I can tell you things can change very quickly.

I've been working in the field for 20 years. I've seen the same down turns as you. I lived in the heart of the rust belt most of my life. Numerous of my friends have ha the same experience as me, I don't believe it's actually atypical at all.

Remote work is still an option, as is moving back or wherever (since this specific worry is predicated on moving to start with, arguments that moving is 'not always possible' seem weak).

"Doesn't this make it easier for you to retain people by restricting their options in the future?"

In a way, yes. I am 100% remote and live in a very remote area. I doubt I could get a similar job anywhere in the state, but I did it anyway. Why? First, I love where I work and before moving away and I worked from home long enough to see that it was good. Am I stuck with this company? Yeah, pretty much. Chances of finding remote work are slim, but I accept that. My work/life balance and happiness living where I never thought I could is nearly priceless. It is a trade off, but one that I'm happy with. It may not be for everyone.

When I was younger I'd hop jobs every couple years, get a nice raise, learn something new and move one. Now I just don't care. I found a place I can see my self working at for many more years. When there is a mess in the "office" microwave, I know who to blame and you can't put a price on that.

Do you pay people less if they decide to leave the expensive area?

There is a response here:

https://news.ycombinator.com/item?id=13896328

> We do not adjust salaries when employees move. We try to pay similarly regardless of location.

Cool idea! I hope the experiment produces positive results. A few random thoughts:

- offering a perk to some employees that you don't offer to other employees could get you in trouble

- say all delocated employees are from SF are young white males, and an older black woman want a delocation bonus to move from a non-SF city to somewhere else (hint: I bet your lawyer is gonna say you need to cancel the perk, or offer it to everyone, and I would agree with that lawyer)

- as an new employee eligible for your delocation reimbursement, I'd rather it just be a bonus, as I don't wanna have to explain to the company exactly what I spent the money on (why is it any of your business that I spent $8,000 at Kink Movers to relocate my 50 Shades Of Grey Inspired BDSM Dungeon?)

Qualifying relocation expenses can be reimbursed tax free. A bonus is subject to income taxes.

As a perk, you'd only get $4-5k back (30% marginal federal income tax, 9% marginal CA income tax, 6.5% Medicare and social security tax).

My company gave me a relocation bonus and used a third party service to handle it. I got all of the money upfront, and had to sign a document saying I'd pay back a prorated amount if I left the company within a year. I was asked to submit reimbursements directly to the third party, so I didn't have to give the receipts for my fictional BDSM dungeon to the company directly. The taxable portion was the total bonus minus any moving expenses. I liked this model.

I think this is a pretty prescient move. I am having a harder time every year having a normal life in the Bay Area.

One thing I wish is that {insert current employer} would do the same thing and then subsidize Fiber in the new area to ensure high quality VC.

Does the employee's chosen "de-location" need to be approved? E.g. would Zapier prefer Pittsburgh to Moab?

We haven't fleshed out all the nitty gritty details - but no - we wouldn't prefer Pittsburgh to Moab.

This is an interesting experiment. How about de-location outside US? Say Toronto or Waterloo, Canada? There is obviously a good tech scene there. So I like many others are curious how salaries are adjusted to COL? Would someone who de-located be making similar Bay Area salaries or would it be similar to what's offered by the local tech companies there?

I don't think we'd be against that at all - but we probably could not help with the visa situation.

Btw American citizens can work in Canada without a visa - see TN status. Just need a job offer and relevant university degree.

Are you big enough that you have employees in most states now? The reason I ask is because some states have a pretty high bar for the first employee, since it comes with a lot of associated costs that aren't based on salary.

We consider this as just part of running a remote business - eventually it'll plateau as we are present in all the locations. For example, we have way more employees in Texas alone than in Idaho, Montana, North Dakota, South Dakota, etc. combined.

I really like this idea! No one else mentioned it on the comments (and I saw this post too late for too many others to notice), but if we got more companies to do this, then it could have an impact on bringing more tech jobs to red states to "share the wealth" and change the electoral map, as well! It could help red state folks and blue state folks spend more time together and understand each other a little better. I would be very pleased if you could mention this aspect in your blog post and also try to convince other companies to do the same. This is so awesome!

I think this is a very creative program. It would be better if it was a blanket relocation package that wasn't tied to moving away from the bay area. You are 100% remote, so why not move from anywhere to anywhere?

EDIT: My question is why it is hinged on moving away from a city. I think it is a legitimate question. Someone living in NYC or Seattle might have similar issues with the cost of housing.

Definitely a legitimate question - we often see people moving from various locations (I think like 60% of Zapiens have moved during their tenure, or something like that).

As an experiment, we wanted to start with the obvious high cost of living center - the Bay Area. In the future, we may open it up to more cities, maybe even a blanket package as you describe.

I find it extremely interesting for this to be viewed as an "experiement". If the experiment fails, how would you recover? Move all your talent back to the bay area? Not trying to be a dick here, but genuinely interested on what your mitigation strategy is.

We're fully remote - always have been and plan on staying that way.

If the experiment "fails" - we'll just stop offering this for new employees.

Has there been any response from Bay Area local governments? I would imagine it might not be their favorite idea that businesses are trying to incentivize employees to leave. If this sort of idea takes off, would local gov try to counter these incentives to leave in some way?

Getting tech workers to leave (or at least stemming the flow) is an explicit policy goal of the progressives controlling SF.

They might want the jobs if they were going to the local poor. Not jobs that outsiders move in for.

If they try to counter these incentives by letting more housing get built, that would be a positive outcome, no?

Not a chance.

This is one of the richest areas in the US and the overwhelming sentiment is, "we need people to stop moving here". You can actually get votes here by making it harder for companies to hire, on the theory that traffic, pollution, etc. won't be that bad.

It's unlike any other place in the US. Truly one-of-a-kind.

Seattle, and to some extent Portland, are trending in the same direction.

We've certainly not heard of any.

The small cities in the Bay Area actually work against each other for a worse outcome for the whole.

See Kim-Mai Cutler's brilliant article. https://techcrunch.com/2014/04/14/sf-housing/

There are also a lot of people who've never located to the Bay Area for lifestyle reasons and may be interested.

Hey Bryan, I'd like to meet you over coffee and tell you a bit about something that could be very helpful for Zapier. Can't share too much here. Please ping me at simone.brunozzi @ gmail

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