New Remote-First Formula and Updated Salary Calculator
open.buffer.com
open.buffer.com
> One of the toughest decisions we made with the new formula was to remove the annual 3% loyalty increase given to teammates for each anniversary from their start date.
> We looked at a lot of options and in the end decided to remove it as it created an unsustainable, compounding affect on pay.
3% is at or just above inflation. If you can't afford to give these raises, you will see severe wage stagnation and, hopefully, a mass exodus of employees elsewhere.
The question on everyone’s mind was “Can we afford this?” and “is this sustainable?” When we sought input and advice from those outside of Buffer we also were asked, “Why would you pay your team members with more generosity than you need to?” As it turns out, our answers are: Yes, Yes and because we believe it’s the right thing to do.Comparing with [two years ago](https://open.buffer.com/transparent-salaries/) it looks like engineering at least has about 35% turnover, but everyone is up in salary - some by quite a bit if they've relocated.
If you're a fantastic dev (or whatever), why would you work here when other companies will pay you a lot more?
It's crazy that someone is willing to pay me $100k / year, and I'm super grateful for that. Really.
However, that doesn't mean that $100k / year (or whatever the minimum I'd be excited about) is the market rate. If ten other companies would pay me $300k, then I should go work there, right?
There's no speed limit. Just because someone is willing to pay you way more than you ever dreamed doesn't mean you should shun any more than that. Do your best and go to where you're valued the most.
I get offers from companies, but if the job/product is boring, a higher salary does not justify the switch for me.
I don't disagree with you, I tend to gravitate towards a high pay :) We will soon have a salary formula refactor too, but I think the raise might be a rounding error compared to remote pays.
There's no free lunch. Instead of giving the employee the money, much of it is handed directly over to the Government (then a bunch more directly from personal income taxes).
If you choose to forgo those things while in the US, there is a monetary advantage. If you choose to buy them yourself, you will probably find your final income level to be very close to the same as in Europe.
If I'm making six figures as a dev in the US, I probably have fairly generous benefits, including healthcare, vacation, parental leave, retirement plan contributions, disability insurance, etc. And I'm probably paying less in overall taxes than most Europeans (though it really depends).
Of course, I don't have the safety net things that lower-income Europeans do, but I almost certainly don't need them.
So what would the equivalent person in the EU making half as much be getting from their government that I'm not getting from mine?
(Btw, this isn't an argument for the US approach being better overall, but just which system is better for the selfish high-income professional)
But my larger point stands: the average cost per worker for those benefits is only maybe 10% higher than the cost in the US for our reduced benefits. So why are salaries 50% lower?
in US 6 weeks of paid vacation is still rare in professionals. 3 is common. So you're using 3-6 while in europe there is guaranteed 6. This is apples and oranges.
Besides: this is in addition to the sick time. Sick time is paid and you don't use vacation time for that in europe. How is that in US? Can you get additional 4 weeks paid sick time? Can you get 8?
Then in addition you have this perks in US as long as you work as professional in top companies. While the real difference in terms of health care is after this work. Last I check, average age at FANG is below 30 yrs in USA! Wow! So imagine you're 45, you dont work at google/etc: then at low impact events or maybe even medium events if you dont have family healthcare is comparable (your savings cover it). But at high cost/high impact situations or medium ones if you have full family, you're not covered (add to this highest in the western world cost of healthcare in US). While it's state funded in europe also at the high cost level (read cancer therapies and all the things like). This is big difference for last 40 years of live.
And then you have mentioned maternity: that alone (and most of people have families in any place of world) from family perspective is a huge difference financially AND child development.
p.s. and there is cost of living. in US alone you can easily have it in SanFran at 1.77x of US average - you can imagine how it scale to the other parts of world? Sauce: https://www.wolframalpha.com/input/?i=cost+of+living+index+S...
There are simply much more well funded companies in the US, desperate to find good candidates, thus driving up salaries.
What's also interesting to consider is that developers here seems to be fine with earning close to non tech jobs employees. You can do really well in many industry sectors. As a bus driver in Germany you can earn $31,435 which already buys you an ok level of living.
You say that now while everything is up. Imagine getting run over by a car and not being able to work anymore, i bet you would be better off in a european country in that case, but of course it makes no sense to consider a worst case scenario like that.
However, many things are not great for high income people. Let's say you earn 6k EUR/month in Germany, that leaves you with 3.4k net (if you quit Church tax). A considerable amount (500 EUR) goes to state pension which everyone expects will be almost nothing when our generation reaches that age and the healthcare is pretty basic, but you could change to private insurance and save some money as long as you are young.
I believe competition between the Tech giants is just so much bigger in the US, that everyone in their vicinity has to match those crazy salaries to even have a chance. That is not really the case in Europe. Spotify, Soundcloud, Zalando etc. all lie in the 50-90k EUR range i would assume. I don't really know what can be earned at Facebook/Google/MSFT in Europe though.
> there's no subjectivity in this formula
Yes, there isn't. Because subjectivity in favour of someone, is to the detriment of another employee (because the budget is limited). It just usually happens to be the case that the employers somehow "magically forget" to communicate this to the employees. So you are basically kept in the dark in two different respects: 1st regarding how your skills compare to others 2nd regarding how your salary compares to others
Basically this is just a spineless, sneaky tactic that employers like to use. Because the less information you have, the lower the chances that you can make a well informed decision about your job change.
This is not how salaries work. Companies don't have a pool of $x for y employees. They try to hire every employee at as low a cost as possible. If you accept a salary at $10,000 below what they were willing to pay for that role, it's not like you can rest easy knowing that the other employees will get that money. That $10k is now additional profit [1].
Anyway, you can think this system is unfair and that we should have another one, but this is the one we have now. So you can work at below market rates for companies like Buffer, or you can go get a higher salary at companies that don't do this.
1. This seems like an argument in favor of more worker-owned companies, which I think are fantastic. I think we should have a lot more of them, and I'd like to better understand why we don't.
My view: most workers just want a paycheck and at the end of the work day leave work at work. That isn't compatible with running a company. Besides, even in worker-owned companies an implicit hierarchy emerges and gains its own inertia until eventually "ownership" is technically true but doesn't mean much.
Member-owned cooperatives are interesting for some of the same reasons, and seem to work well in many cases.
Just wondering why we don't have more of these structures.
It's worth trying, though.
And they do this calculation in every quarter, adjusting it if necessary.
I don't even understand how can you think it works differently???
Hiring is supply / demand like anything else, and companies are trying to minimize their labor expenses and maximize profit, not spend a certain fixes amount (and no less!) on labor.
Don't put words in my mouth, because that's sg that only YOU said.
And, no, it's not exaggeration. It's common sense.
The approach Basecamp (37signals) has with picking a location, then paying people based on 95% percentile (top 5%) market rate regardless of where they live is just much easier to explain to employees than some arbitrary multiplier thing that just leads to endless discussions.
https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d...
Rather than blow revenue rewarding bad life choices, offer to move them to an area with lower costs of living. Do that for only 10 employees and you have 300-500K EVERY SINGLE YEAR to re-invest into your company. In practically any other industry, this kind of saving would be obvious.
Not everyone is willing to just move for a job if not necessary.
> so, just hire in low-cost areas!
The company execs might be based in a high-cost area (because of family ties, property ownership, etc.), and also might not be ready to eat the cost of running a remote organisation.
I don't think it's bad, it would be bad if they didn't have a better salary because of their location.
Does that mean they will hire people from the bay? No it doesn't mean that either. The formula could actually force them to hire people from cheaper places.
I've never lived in SV, nor do I want to -- there are areas of the US that pay SV prices with lower cost of living and progressive citizenship/policies, which I'd rather not name since then whoever's reading this would move there -- but the assumption that a "senior" dev in a low cost area is more valuable than a "beginner" dev in a high-cost area like the valley rests on a bunch of things that often are untrue/shaky at best.
- How do you even determine senior vs. beginner? Years of experience? Successful projects? Breadth of technology knowledge? depth of technology knowledge? interaction/propensity to share knowledge with team members?
- What has this senior dev in low-cost area been exposed to? What about the junior developer? If I asked them to solve a problem, which can imagine the widest breadth of possibilities? which can imagine the most stable/future-proof possibilities? This can come down to the person almost as much as the years of experience.
- What frameworks/tools/language are you talking about? (this seems like it may not matter, but if you're measuring contributions to a codebase, a developer with 1-2 years of experience in purely golang is going to be better/likely faster at grunt work maintaining an API in golang where the design choices have mostly already been made). Higher level refactorings and architectural work will likely be out of their reach for months/years to come as they mature, but if what you really needed was someone to put out fires with code that isn't terrible, 1-2 years will often suffice. It wouldn't take the senior engineer very long at all to learn the new language but they'll also have to spend some time unlearning old habits -- of course they'll also be bringing good habits that you may not already have as well, but happily dealing with grunt work and over-working yourself because you're "super psyched" is usually not something senior engineers will do -- newcomers/greenhorn often do this, however.
If the dev works on a rarely used admin app, surprise, you pay them lower.
That has nothing to do with whether leadership can accurately assess the value of the projects and applications that are developed in general (a point I agree with you on).
I may be misunderstanding what you're saying, but people definitely move from places like Nashville (where I live now) to places like SF and NYC (where I'm moving next year) to increase their salary.
No one pays devs mid-six-figures in Nashville, but you can make that in SF and NYC (not easily, but possible).
If your devs are in a bigger city, there's a good chance they went to the bigger university in that bigger city. If you have devs from a bigger university you can more easily recruit from that bigger university.
If your office is in a bigger city, you can have more relevant personell in that bigger city such as sales and marketing. If you have sales and marketing in a bigger city, you can reach the customers in that bigger city. A bigger city has more customers than a smaller city.
If you have your devs in a bigger city, you can recruit devs from different industries in that bigger city. Bigger cities have more industries present, meaning you can bring in devs with different skillsets.
Basically, discouraging devs from living in big cities can be a very bad idea because. Opportunity costs are real costs.
The Dallas metro area is larger than the SF metro area (and so are the individual cities), but Dallas's COL is half as much as SF's.
Edit: For that matter, just to ward off the (valid) point that the SF metro area doesn't include most of SV, the Dallas metro area is larger than the SF and SJ metro areas combined. San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara have 6,172,302 people combined as of the 2010 Census, while Dallas-Fort Worth-Arlington has 6,426,214 people.
Living in a high cost area is not a "bad life choice".
No chance I'd work at Buffer, given they'd halve my salary because of my zip code. Other remote jobs don't. No brainier.
You don't have to be on-site, so the real market is nationwide (if not international). Companies simply pretend it's limited so they can pay less.
And that still doesn't solve the talent issues; highly skilled professionals congregate in areas with amenities (culture, like minded people, access to top notch medical care, access to schools, access to public transportation, etc) so even if you're remote you're still competing for the high CoL people at high CoL prices.
Are SF medicine or schools 3x better? Is public transportation 3x better? Is the culture 3x better?
I think not.
You can get comparable things in cities with a fraction of the living cost which self-evidently shows that people are paying too much for what they are getting.
Finally, if I'd rather live somewhere without any of those perks and pocket the money instead, should I be told that I can't? Should my decision be held against me?
Yes, and more, with the possible exception of schools (it's hit and miss here, same as anywhere).
Unfortunately for people in your position, companies know that your options are limited. Large supply of people that want to live away from jobs and pocket the difference compared to the number of jobs available => lower prices.
Both negative (taking away) and positive (adding) responses are beneficial to devs.
If if a company chooses to raise everyone's salary, Awesome! Now companies that lower salaries must compete.
If a company chooses to lower everyone's salary, Awesome! Devs in high-cost areas will be forced to move which will unify the market at which point devs in traditionally lower-wage areas will now be able to compete in a larger market and negotiate for more pay.
https://about.gitlab.com/jobs/developer/#compensation (this is a random developer job, you can check out other positions @ https://about.gitlab.com/jobs/)
Here's the feature ticket: https://gitlab.com/gitlab-com/www-gitlab-com/issues/831
Disclaimer: I don't work for Gitlab, but I am a pretty biased rabid fan.
Edit: It seems the COL is pegged to NYC but averaged for the entire state if you're not in one of a few select major metros. Someone who lives in Atlanta will make the exact same as someone living in rural Georgia? Come on.
Comparing Toronto (and much of Canada) in that tool to elsewhere was kind of depressing. Especially as the average salaries I've been shown ritually start higher than most places are willing to offer. I find companies who build out those calculators usually work with the most conservative data.
A big marker in their calculation was a rent price index given as a comparison to New York average prices as a benchmark.
Some external data points to Toronto rents sitting around $1300 for a 900 sqft unit[0]. Local city data puts an average 1 bed unit at ~ $1800 - $1920 (~ 700 - 900 sqft) — this spans to areas outside of the downtown region.[1a,b] You can also easily pay much higher than average in Toronto, depending on which part of the city you're living in.[1c]
Gitlab's NYC has a baseline index of 1 and Toronto with a rent index of 0.426. Brooklynn apartments come in around the same[2a,b] as /just slightly higher than Toronto.
Am I missing something? The interpretation seems grossly flawed, and it's used as justification all over the map for lowering salaries, or keeping them low. Has anybody worked on the provability of this kind of data being used, and how? Taking an average rent across a metropolis seems to make all kinds of assumptions that aren't even close to real-world.
Maybe it would be more honest to perform regular price-scrapes of apartment listing websites, putting together a custom index. Couple that with a model that looks at keywords, locations, and even photos for applying quality of life metric that could influence the outcome of the learning. I wouldn't expect every company running this program to put together something like that, but employing such a service would likely yield very different results, no?
Can somebody with more experience in this area weigh in?
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[0] https://www.torontorentals.com/blog/wp-content/uploads/block...
[1a] http://www.cbc.ca/news/canada/toronto/rent-toronto-canada-1.... [1b] https://blog.padmapper.com/canadian-rent-trends [1c] https://condos.ca/toronto/yorkville
[2a] https://www.timeout.com/newyork/blog/map-of-average-rent-by-... [2b] http://blog.nakedapartments.com.s3.amazonaws.com/blog/wp-con...
We have CEOs and government employees who have public salaries for the specific purpose of public accountability, not just because we're curious or because we're entitled to know the price of everything at all times.
Now, a world with perfect price transparency in the labor market might make sense, but two points:
1) We don't have that universal transparency now, so being the 1% of firms that does (or their employees) can put you at a disadvantage. Why do you think some places are passing labor-friendly laws that make it illegal to ask what previous salary was?
2) Price transparency doesn't have to mean that we get those prices from an "objective" formula that has no room for flexibility based on the facts and circumstances of each case, right? How is this different from mandatory minimum sentencing guidelines, or whatever?
I think that price transparency would probably help the average worker by bringing low performer salaries up and high performer salaries down, and it would probably harm overall productivity by harming incentives. But I'm not an economist.
On the other hand, this is great material for both internal and external recruiters to start poaching away Buffer employees to orgs that have the budget to pay them market rate.
"I see you're making ~20-30% below market rate. Would you be interested in talking about a new role?"
From my cursory glance, I have a bunch of problems here:
1) Most egregiously, it looks like they're slashing a bunch of salaries. Not the CEO, of course, but a lot of others seem to be going down. I would be immediately headed for the door in that scenario. Talk about a way to keep only the poor performers who can't get another job.
2) Related to the above, what signal does this send to future hires? "We'll pay you $X based on this fancy formula...until we decide to change the formula and slash your salary by 20%."
3) Large COL adjustments make no sense to me. So I work for a remote company and choose to live somewhere cheaper and they think that the value I'm providing is less? The end result of this is that remote devs get screwed on average, while the best remote devs avoid companies like this, rightfully so.
4) I didn't look very carefully, but they definitely seem to be underpaying in general. An advanced engineering manager (mobile) in a HCOL area gets $145k? I'm a senior mobile developer and I'm pretty confident I could significantly outearn the CEO if I lived in SF or NYC.
Yes you could. But not for a company the size of Buffer.
Here's the thing a lot of us often forget to realize: The value you bring to the company is proportional to the value the company extracts from the market.
Can your code improve Walmart's revenue numbers by 0.001% per year? Awesome, that's worth $4,858,700 based on Wikipedia numbers. I'm pretty confident you can get a gigantic salary with those results.
Can your code improve Buffer's revenue by 3% per year? Awesome, that's worth $468,000 according to their dashboard[1]
That's still a lot of money and I don't know if Buffer would negotiate because they like to use their formula. My point was that the value of your contribution can be orders of magnitude different for the same amount/quality/level of work and skill.
So what?
The fact that Buffer can't compete with market salaries for top talent isn't my problem, it's theirs.
Ya I don't get this logic. High COL areas are high because there are _lots_ of perks living there. It is much more desirable to live in SF than to live in East BF Mississippi. You are basically rewarding someone by living in a high COL.
When selecting remote jobs, I'm looking for compensation for the value I bring. The dollars I earn from my value should be up to me how to spend them: living in SF with all of the glorious food and such or living somewhere cheaper and saving money to retire earlier but having to pick between Applebees or Fridays (vomits).
Come to Dallas. You get to enjoy low COL (while it lasts) and have your pick of Sichuan, Thai, Indian, Vietnamese, Mexican, barbecue, etc. restaurants.
Interesting that you say that. I can't speak for US area, because I live in Europe. Looking at the Spain salary, which is about 110k seems pretty good to me. Working as a senior frontend dev in my area (which has similar costs of living as Barcelona) gets you payed about 30-40% less than that.
In the past I've been interviewed by several startups which when the point for salary negotiations came asked: "What do you _need_ to earn?". Somehow some companies (if not even most companies overall) seem to think that that's an acceptable line of thinking, and Buffer seems to be one of them. Their "dependent grant" seems to go into the same direction: "Oh you have a dependant? Then you naturally _need_ to earn more."
Those Buffer salaries are quite reasonable for engineers. If you're not looking at them hungrily, then may I suggest you're probably not the customer here? And by "customer" I mean "competent engineer who never bothered to put together a portfolio or play the interview treadmill cycle game and is therefore making ~$100k total comp."
Those people exist. And contrary to what the vocal monitory says, they don't kill your company if you hire them. Matasano proved that.
At any rate, my point isn't that this will kill Buffer, but I suspect it'll be a drag on their performance over the long run. Who knows though. And I don't really care; it's not my company.
What I care about is whether I'd go work for them or advise others to do so. And my answer would be no. I think you can make more with a little bit of effort. And even if you can't, I think working for a company that won't yank the rug out from under you with a paycut like this is worth a premium.
Also $300k total comp translates to $450k fully-loaded cost to the employer, meaning you can only hire four of those engineers before you burn through $2M funding per year. Are you sure that's worth it?
Have you ever earned $300k in a HCOL? Because I have (NYC) and you're doing very well if you get to save $100k of that. If you're single, by default you lose $120k to taxes, so then you need to keep your budget under $6700 / month. Which isn't really that hard, but most don't. Granted, tax-advantaged retirement savings and other things can change the math here, but my point is that it would take more like 8-10 years (depending on market growth), not 3.3.
And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that.
Finally, I'd like to see a breakdown of the $300k to $450k number. The premium that employers pay to get to fully-loaded cost isn't a fixed percentage, it goes down as comp rises. So yes, it might cost $120k fully loaded to employ an $80k engineer ($40k on top of their salary), but why does it cost $150k for someone making more?) The cost for office space and healthcare are two of the biggest costs of employing someone, and they're relatively fixed, right? $450k might be realistic, just seems high to me.
There's an old Feynman quote:
"All the time you're saying to yourself, 'I could do that, but I won't' -- which is just another way of saying that you can't."
I used to feel the same way as you. But actions are all that matter, not beliefs. It was materially impactful to let go of the notion that "people could if they tried" and flip to "some do, some don't, and if they don't, they won't until proven otherwise." It turns out to be a handy general rule about people, not just this one scenario.
You might be right about total comp. But $350k vs $450k is rather quibbling: the main cost to the employer is a $350k burn rate.
And in Buffer's situation, it's all about averages, not outliers. If you're hiring 10 engineers, being more generous than Buffer's salaries seems like a mistake. After all, Buffer is proof that the market will bear these.
I think what's happening is that Buffer is one of the few companies willing to publish the data, so suddenly everyone is watching and analyzing them. But these kinds of tough decisions are routine.
It's very important to avoid http://www.paulgraham.com/pinch.html as a company. The company has to focus on not dying, since that's the way to win.
On the other hand, it's worrisome that there are no outliers at all. A fair market should look closer to a J curve rather than an even distribution. But everyone will just need to get used to the idea that some engineers will make $300k and others $100k. That is fair, because that $100k engineer could not easily get a non-$100k job, or else they would have done so. (Conversely, that's why the $300k engineer is making $300k: because they put effort into making sure they can get another one if they need to.)
That seems to explain your reaction pretty well, right? You balked because you're one of those $300k engineers that has a lot of options. Most don't.
EDIT: Actually, the distribution of engineering salaries seems pretty good: http://www.wolframalpha.com/input/?i=96917++101331+106709+10...
https://i.imgur.com/RLxLGzi.png
There aren't any outliers, but it's not linear, which is a good sign.
Well, that depends where the company is headquartered and how much the local employees make.
Let's say the company is headquartered in SF, and the local employees make an SF-typical salary. If the company pays all remote employees what they pay their local employees, then that's a very nice deal for remote employees in low COL areas. If the company uses COL adjustments for remote employees, then employees located in lower COL areas take a pay cut, and your argument holds.
But imagine if the company was instead located in a low COL area like Phoenix and the local employees make a Phoenix-typical salary. If the company is paying all remote employees what they pay their local employees, then remote employees in high COL areas won't make enough money to live on. So in this case, using COL adjustments for remote employees is the only way for it to be worth it for people in high COL areas to consider working for them.
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
If your company is willing to pay you more for living somewhere else even if they don’t gain anything from it, it means they’re underpaying you right now.
SV (and other markets) basically refuse to hire remote (and often refuse to relocate employees). This splits the market up into mini-markets where the slight oversaturation of devs allows the local market to dictate prices (under-saturation would boost salaries even in a small market). This is born out with the fact that those who do work remotely seem to have higher salaries for a given experience level (their market is much bigger and more diverse).
The obvious answer is unions. Joint negotiations would yield immediate effects. No large company could survive even a day or two of IT strikes without extreme losses. Unlike other jobs, you can't simply replace your staff because most of a company's software IP is held in the heads of its employees and is far too complex to decypher before the losses occur.
Vote with your feet. If you think you would be paid more in SF, what is stopping you from packing up and moving? That's what's lowering your salary.
I say let people be envious.
Benefits are another story, and I'd love to see triplebyte release some data about those.
For every company that uses perks as a cash replacement in a healthy way, there's another that expects you to overlook poor absolute numbers in favor of wishy washy things like illiquid equity and coldbrew kegs.
Unless your stock is very liquid, cash is king. Everything else is a distant second.
It can be argued that not disclosing salaries is a way to suppress wages; an asymmetry of information. Is open salary information where "everyone at the same level gets the same salary, but there's some gotchas" another way to do the same thing?
Their transparent webapp thing[1] is really nice to play with btw, it feels like a no bullshit vibe for newcomers as well as current employees.
It makes me think that these "formulas" will probably not age well with time. They're already at their version 3, which would probably not be a good formula at the early days of the start up and will probably not be a good formula in 3-5 years.
Somehow related, I remember having something like these to rank posts on one of my boards (similar to the weight ranking of HN). I had:
* time influence negatively
* number of upvotes and downvotes in the comments influence positively
* number of heavy posters influence positively
* number of upvotes for the post influencing positively
It was really tricky to tweak, in the end with the website scaling up I was constantly tweaking the formula. I don't think there is a "always work" formula.
So, yeah, ti doesn't make much sense in practice. But it's nice to have the numbers open.
What it does do is attract all the people that find those salaries public to be higher than the ones they have now. Im sure they get plenty of applicants on this measure alone.
Average for programmer according to glassdoor is 35,000 euro = ~42,000 usd.
SoundCloud for example, had a bunch of engineers earning around that. Probably all laid off now, though.
There are companies on StackOverflow jobs openly advertising €80-90k for senior developers now, and occasionally over 100k for specialist roles like ML or performance sensitive development in C++.
For instance that guy making $128k in Montpellier in France, that's €108k right now. Assuming he works 45 weeks that's a daily rate of 480€. Not crazy for an experienced developer.
I know the total costs of an employee are higher in the EU, but are they really 2x - 4x? Top companies in the US offer pretty robust (expensive) benefits, including healthcare. What would make the total cost of a dev in the EU getting paid $42k equal to the total cost of a US employee getting $121k (and total cost of $150k - 175k)?
Here's a question: why doesn't Buffer pay the "low CoL" developers more? It doesn't seem right that "low CoL" workers get paid so little compared to their peers.
It's great to be able to have a little more understanding of what companies are thinking when they try to judge an employees value based on location rather than... value provided to the company.
I think the dynamics are pretty interesting. Forgive me if this seems like a not so humble brag, but I'm remote and paid way more than anyone at buffer. I also have a pretty decent network of remote friends at my company and at other good companies.
With that in mind I can tell you that the practical effect of Buffer's policies is that they have decided to self-select for developers who are currently underpaid and historically have not had their pick of good jobs. Because otherwise they'd be taking a pretty big paycut to work at buffer and, while possible, it seems unlikely that social media management is a dream job for many developers.
So the entire open policy, no matter it's surface intent, is basically a policy to grab sub-par talent. Especially insecure talent who is willing to buy into "radical transparency".
Meanwhile, my base is pretty close to their CEO's compensation, but I live in a low COL area. It turns out that the marketplace is competitive enough right now that it's a viable bargaining technique to say "pay me X, where X < Value provided" and some companies will, without arguing (as if the argument made any sense at all) that many people in your zip code make < X.
I guess that was a really long winded way of saying that buffer has implemented policies that self-screen out the best developers, which is fine. You probably don't need the best developers to send tweets on a schedule.
Spoiler alert: There's a very large chance that you're not worth $500k to Buffer.