Why not just pay everyone at the expensive city level? If you were hiring a true consultant rather than an employee or a full-time "contractor," you would pay them solely based on value delivered and the defensibility of their pricing given GitLab's business needs. Their cost of living wouldn't matter.
For employees at an all remote company, I don't see why their cost of living should matter any more than that. And applicants in expensive cities would not be dissuaded.
Additionally, the calculator's attempt to handle cost of living fails to address hot markets outside the US (hello from Montreal), treats many countries as way more homogeneous in cost of living than they really are, and gives a seemingly quite inadequate 17% adjustment for contractors. That doesn't cover legal and accounting fees, paid time off of various types, the cost and limitations in health insurance coverage attainable by one-person companies, normally employer-side retirement contributions, etc.
It’s been a while since I last played with it, but I recall finding the results from gitlab’s publicly accessible regional salary calculator producing some pretty absurd results in the Bay Area.
I live 45 minutes from San Jose, and expect remuneration at levels commensurate with my title and experience for the Bay Area in general, as should anyone dealing with cost of living issues here. The gitlab calculator however thinks I should earn 35k less, which feels like a punishment for trying to live somewhere commutable that I can, you know, actually afford to buy a house large enough for a normal family.
If I live in commute range of the same location, why pay me 35 grand less? Should I apologise for my less desirable zip code?
> https://about.gitlab.com/job-families/engineering/developer/ (scroll down lots for the calculator)
> GitLabbers may select any metro area within one hour and forty-five minutes of their residence when determining their geographical area
Arguably the calculator should be configured to just select the maximum permissible salary range inside the permitted radius based on a home zip code, given that presumably everyone who accepts a job offer at gitlab will do this manually anyway. You’d be foolish not to.
It’s still troubling how ‘wrong’ the numbers look for various regions I’m familiar with though.
They've got their formula and I think it's probably fair to say that they aren't paying at the top end of the range in expensive markets. Also by scaling on cost of living, they are getting mismatches with the local market -- both up and down. But it's a formula that's intended to be transparent. As much as they say publicly that they want to be competitive in every market, the reality is that a formula will never be able to achieve that.
I quite like their system. As a developer, I can look at what they are offering and decide before I apply if they are going to be in the ballpark I'm looking at. Not everybody has to work at Gitlab. Gitlab also doesn't have to hire all the best developers in every market -- their strategy is to hire around the world. SV is the most expensive market in the world -- in many cases by 1-2 binary orders of magnitude. Remote only companies don't have to pay those prices and I don't see why they should. That Gitlab even tries to hire in expensive markets is interesting to me. I'm not really sure what value they are getting from it.
I know in the US (and especially SV) there is a feeling that expensive markets attract the best talent. In my experience this isn't really true. In my experience expensive markets attract more people, but the range of ability and experience is about the same. So you may have more great developers in absolute numbers, but your chance of hiring them (especially if you are on a budget) is not any higher at all (and in many cases quite a bit lower).
I should note, in closing, that I may be strange: I don't care at all what anyone else makes in the company. I only care if people pay me what I want to be paid. If someone else makes more, then good for them. If they make less, then that's too bad. But I don't personally care either way.
If you are doing location-based pay at all, you can't really apply his rule because very large areas are connected by within-commute-distance links such that if you never distinguished places within commute distance by pay you'd essentially eliminate location-based-pay other than across high-friction borders or places that are (either in fact or at least for transit purposes) isolated islands.
I, personally, did not know about the way we treat intl comp on the calculator because I do not work in people ops. I found it useful new information.
It seems to me that the reverse of your policy would be best for the world. If you free people to move, they can choose community, friends, family, politics over being tied to a single geographic location where most of the activity is. This would help with availability of technologists in many disadvantaged locales, and would provide an influx of taxable income and consumer spending locally. This should have the ultimate effect of improving economic conditions in depressed areas, and when that happens you can actually come back and reduce everyone's wages across all locales because the economy is healthier and more robust. It works out for the owners too in the end, if they take a long enough view.
I guess it depends on your perspective whether this is the case. With the current policy, if the implementation works, GitLab employees should be free to move anywhere without sacrificing anything in terms of living conditions. If you live somewhere with low costs of living, you can move to your community in an area with higher costs of living, without noticing in the amount of things you can purchase. The same holds true when you move to an area with lower costs of living, but of course, you'd get paid less.
I also hear you in your concern. There is a flip side perspective to what you are saying as well where someone might be forced to uproot from their home which happens to be in a more expensive area because they would save so much elsewhere. But regardless of the specific arguments, what I have truly learned here in this thread is that we should continue the conversation in the community. I am going to sync up with the people ops org and suggest that we share our rationale in more detail in the near future and/or also incorporate the good points that were raised.
I do think it is amazing that GitLab brings these conversations to the fore because opacity has been the norm for way too long around comp and we need to change that as an industry and community.
If you do location-based pay, you are even more strongly discouraging applications from people in less expensive areas, especially if you don't adjust salaries for relocations after someone is employed, since someone in a less-expensive area who might consider working for you is encouraged to delay their application, seek employment that will let them wlive in a more expensive area, and then apply to GitLab (and, if you don't do post-enployment location-based adjustments, then move back to the cheap area.)
> efforts to make sure our comp calculator is fair and encourages people to apply.
As long as you pay people differently for the same work based on where they live when they apply, your comp calculator will not be fair.
To the extent that place of residency at time of application correlates with status in any protected class, it also seems to be a pretty open and shut unlawful discrimination by disparate impact case waiting to be filed, too.
What does this look like when it comes to company culture? Emphasis on maintaining a "diverse" team?
That means that as someone working at GitLab, my current wage is competitive compared to local companies, + I get all of the perks of remote work, working on open source, developer tooling, etc, and all of this will still be the case if I were to move elsewhere.
The exact amount of money deposited into my account each month would go up or down, but my lifestyle would stay roughly the same.
I know I’d make a lot more money if I lived in, say, the Bay Area, and if I made that same amount of money pretty much anywhere else I could live like a king, but I honestly don’t care. I quite like my decidedly not-king-like life today, and I love that with GitLab, I can have this same life and job wherever I choose to live.
I’m currently living in the Netherlands, but am planning to move to Mexico in a few years to be closer to my fiancée’s family. If all goes well, GitLab will travel there with us, and while my compensation will see a decrease, our life style won’t.
GitLab’s compensation philosophy is one of competing with the local market, instead of putting a fixed price on the value I or anyone else provides to the company, and that’s totally fine by me. If it wasn’t for GitLab, I’d probably be working at one of those local companies, so aren’t I still better off? For the company, it means that it/we can hire great people wherever they may be on earth, without being limited to the subset of great people who also happen to or want to live in the specific city the company happens to be based in.
This may come as a surprise to some, but there are some amazing engineers out there who have zero interest in living in the Bay Area, and who don’t particularly care about maximizing their yearly take home pay, as long as they make enough money to provide for themselves and their family, and can live in whatever city or country or continent that they prefer. The map on our team page is a testament to that: https://about.gitlab.com/team/ (mobile-friendly: https://gitlab-com.gitlab.io/teampage-map/)
FWIW, I know of colleagues who have moved to locations with both lower and higher cost of living compared to the location they were hired in, and I’ve never heard about requests to move being rejected.
As a software developer in the civilian world, my physical location has nothing to do with my work, so it makes no sense for my compensation to be based on my location.
I'm a Silicon Valley based dev who really wishes he could move far, far away from here without taking a huge pay cut, so I'm obviously biased. That said, in my view as an employee, the value I create for the company isn't based on my physical location, so why should my salary be?
Because your salary is much more influenced by market supply and demand than the value you create for your employer.
This all sounds weird for me to say because I certainly want devs to get paid, but this is the reality of the situation
That may indirectly imply some geographical constraints which could affect the shape labor market and the resulting supply/demand math leading to a salary. But it's definitely not what most companies do in their cost of living adjustments.
Basically the company shares in your lowered living costs if you are somewhere cheap. Hopefully they won't eat the whole savings, something should be left for both parties.
The market for engineer salaries is much higher, due to the demand. But the cost of living is very low, by comparison.
I've been complaining about this for a while, but it's one of those things that we can't just vote on and change the whole company salary structure.
I know you alone can’t do anything about this, but the longer this painful task is put off, the more difficult will be to rectify as Gitlab grows (more people = greater labor cost expense increase when the problem is addressed).
It’s peope ops debt.
If you're assuming that big city people would feel bad because the small city people get paid more in terms of cost of living, then I'd say that's a bad assumption. People living in any city should know its pros and cons, why is it up to you to decide that the cost of living is the metric?
Also, the link to the compensation calculator is 404 for me.