I mean, thanks for being open, but I don’t get this at all. Cost of living depend on so many factors. Why take it into account at all? Why charge customers based on value you provide, but pay employees by what their own expenses are?
https://docs.google.com/spreadsheets/d/11s9VSyf4yaYUsqBKLaVH...
So while it's not perfectly "fair", the outcome for most people involved is still pretty great.
This is incorrect. Costs and salaries are market based, shaped by supply and demand.
But in the case of remote, isn't the market the whole area to which you're open? If a company is open to hiring from the entire US, the market becomes the whole country. So if you decide on hiring engineer E, why would you pay more if E decides to live in SF instead of [low COL city]? E is the same exact person and whatever work they do is not dependent on where they happen to be.
The only variation I could see as "fair" would be dependent on how taxation varies. I'm not familiar with how these things work in the US, but if there's variation in payroll or income tax due to the state where the employee actually works, I can understand that for a given cost the company, the employee's after tax salary may vary.
Indeed, if all companies went full remote overnight, the demand wouldn't change that much, whereas the supply would be much larger.
If the company doesn't expect the employees to be physically present in a given location, the supply of talent is increased since it isn't restricted to a given area anymore.
So while I understand that people living in SF wouldn't appreciate having their salaries cut to the level of [low COL city], I don't see how companies would continue to pay SF rates when they can access talent for a lower price just because they live someplace else. And said talent could even be the same exact SF engineer deciding to live someplace else for personal reasons.
Could those employees move elsewhere? Sure. That may in fact happen. But right now, an engineer in SF has both remote demand and local demand at FAR higher rates than someone in idaho.
Someone in SF can get high offers from companies in that area, so you have to match to get him.
How much of a surcharge do employers need to pay in order to attract people who live in SF? And is the talent pool there worth paying that?
To be totally fair, companies that sell in more than one market universally charge higher prices for the same thing in areas with higher cost of living.
That's pretty much what "higher cost of living" means.
I'm intrigued by the progression of the subthread from "it's weird for GitLab to do this on the employee side when nobody does it on the customer side" to "it's weird for GitLab to do this on the employee side when everybody does it on the customer side".
Say a company has a choice between engineer H from a high CoL area and engineer L from a low CoL area. They are otherwise comparable in their skills, experience, etc. Why would they hire H when L is expected to be able to do the job to the same standard?
How is this eliminating competition based on location? People would move to a lower CoL area, so they could get an advantage.
How so? If the CoL adjustment is high enough, they should have equal costs.
But I do see your overall point that with a CoL adjustment people in a low CoL area would in theory be able to be hired easier, because in theory they wouldn't need to be held to as high of a hiring bar.
And when it comes to location, I was talking about the location of the buyer. You're talking about the location of the employee. With a physical product being sold by onsite employees, the location of the buyer and the employee are the same. But with a digital product the location of the buyer and the employee are not necessarily the same, so something purchased in a high CoL area could have been produced by an employee in a low CoL area, and vice versa. So it doesn't make much sense to change the price of a product based on the location of the buyer in that case.
Typing this out, I realized there's an error in my previous comment, I didn't need to say "and fully remote employees". A digital product is sufficient to uncouple the employee's CoL from the buyer's CoL. The employees can all be onsite and the CoLs between the buyer and employees would still be uncoupled.
Added to that, I pay a lot less for rent, food, and entertainment, and I have the freedom to move anywhere I want.