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Comment by dsacco | Hacker News Reader

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.

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?

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.

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.

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.

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