Tech Tent: Bye-bye Silicon Valley, hello global workforce?
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Now, I'm currently interviewing for other American companies, who will not know how much my American employer is paying me, and therefore has no choice but to offer me an American-tier salary or risk not hiring me. In Canada, skilled negotiators will be able to increase their salaries to be more in line with their american counterparts. And as skilled negotiators double, triple their salaries, their peers will realize that it is quite possible.
Companies that hire remotely will either learn a hard lesson (losing the people with domain knowledge which makes their money printer spin), or increase the salaries of their employees to swim along the same band. Attrition due to competitive recruitment right now in Ontario is crazy. As the competition increases (due to more people hiring remotely), salaries will increase. And local companies will get squashed (I don't interview with Canadian companies anymore).
Furthermore, most skilled software developer resources have been already been exhausted in Canada, primarily due to brain drain. The only skilled devs left here are the ones who need to be here to stay close to family. The rest are in the States.
I can imagine this being true in programming, but not being true for R&D where equipment and experiments with materials and prototypes are done.
As you point out Nationalism has been a pretty recent development. It has mostly been enforced by indoctrination in the education systems and culture. While it has had many many issues, we have seen it reduce the number of conflicts and wars by a lot, and thus it appears to be a reasonable solution.
Whatever solution aims to replace it would have to not only overcome all of these barriers, but provide better results as well.
Remote work actually is a drawback for the employee rather than the employer. Human contact is something that is quite important for relationships to form. Some people adapt well to it because they grew up on computers & grew up making friends on the internet, but for others in person communication is quite important.
I'd say it's a drawback for SOME employees, yes, but some others (Maybe the majority of the prepandemic remote force?) it's not, at all. It's awesome, and there are many of who never want to work in an office and deal with the commute every day again. We (somehow I'm speaking for all of us now) get enough human contact through our online relationships with our coworkers, and seeing them once or twice a year IRL.
> luck with landing with an exceptionally talented team.
For sure! I do consider it pretty lucky when you're able to do that. We seem to have done the same thing where I work, we just had someone leave for the first time in about 6 years!
I would think that you would also increase the risk of bad hires if you had any sort of inefficiency in your hiring process because then you would be less able to actually know the quality of who you were hiring by local reference.
However, to get away with that requires high levels of compensation otherwise people will take the safer option.
Also, “managing out” is one way of coddling a team but it’s not a choice. At best it convinces team members these people quit, but that’s hardly the reality of what’s going on.
I'm not so sure about it. Sure, if you compare work-related human contact to no human contact, the latter option is obviously worse.
But when you move to remote work, you get a lot of extra time and energy, which often creates more opportunity for socialisation. And this socialisation is, in my opinion, much healthier than with your colleagues. Want it or not, you're constantly "selling" yourself to your work peers: their opinion about you will greatly affect your career, and therefore income, and therefore a lot about your life. We all create a better, public version of ourselves, even if we do it semi-consciously. I don't even mean being dishonest (you should never do that), but just building a facade and toning down everything "negative".
Spending less time and energy doing that, and more time with people with whom you can be honest and open was one of the best things I've got out of switching to remote work.
I think it is all just rationalizations and prejudices. Sometimes teams work better, sometimes they work worse, and the distance is just one of many possible factors.
Commutes to the office mean that employees start the day sleep deprived and stressed out. Spending the day surrounded by one’s spouses, children and pets improves emotional resilience. People working from home have access to healthier meal options and avoid the afternoon brain fog that comes with catered lunches. Remote workers probably have a big, beautiful house in a sunny LCOL that is more pleasant to work in than an office in a typical overcast, drizzly tech metro.
So there might still be downsides from less efficient collaboration, but that’s outweighed by improved environment leading to better individual productivity.
But after being forced to work remotely for 1+ years I’ve found everything in your post to ring true for me personally. In addition, productivity is better because there are so many less interruptions (maybe only relevant to certain jobs requiring a lot of focus and a home environment without distractions)
Amusingly, when the lockdown began, I was fortunate to have space in my house to move my entire lab home. My colleagues and I have been making good use of rapid prototyping services and the FedEx truck to move stuff around. Hardware keeps getting "softer," and truth be told, 90% of what I do is coding anyway, because hardware runs on code. We are also learning to manage hardware remotely, so we don't always have to be co-located with it. We also use software contractors, though it's been a huge learning curve for us.
A side benefit is that, being un-located, there's no reason for me to be tied to a particular work site within a global business, or to be dependent on only the skill sets available at that site.
It's not binary. Companies with remote workers can still fly them to HQ or off-sites on a semi-regular basis (in normal times).
Why is it that software engineers tend to get substantial raises by changing companies while receiving only small raises when they stay at the same company?
1. Because companies are often run by financial types who have a hard time imagining that one SWE could be a multiple more valuable than another (either inherently or because of company-specific domain experience). Why pay this current, good SWE 1.5x what they were making, when the salary study that I have in my inbox says...?
2. An employee seeking a raise at their current company is negotiating with one company. An employee seeking a raise at all possible companies has more flexibility.
They don't need all companies (or one specific company) to be willing to pay them more, just one out of all of them.
B told me one day that when A left, the company foolishly failed to offer him a counter offer to stay. The way B put it was "they literally could have paid A one million dollars per year and dumped the rest of the team but they couldn't wrap their heads around that and of course didn't. When A left, the team went right down the toilet and they closed that whole branch of their product line"
A bit of an extreme example, but yes as you pointed out, not one that "the suits" can really grok, or HR for that matter.
I had an experience where I refused to extend a contract because one engineer left the project.... The whole team left within three days of that engineer announcing his departure.
My current hypothesis is that the technology industry hasn't been around for as long as other industries, so people that go to business school, for instance, don't understand the value that SWE's offer to businesses.
When the tech industry was small, this was probably ok. But today, those assumptions no longer hold.
Because in construction industry structural engineers and architects are paid way better. (Structural engineers and architects are the closest professions to software engineers/programmers/etc)
I worked in a small SaaS company that had only a few million in revenue. The amount of value that I brought that company in terms of its revenue wasn't that great compared to other companies.
And while I didn't switch to tech (I joined the public sector instead), if I had gone back to a big tech company, the revenue per employee would have likely been an order of magnitude or more... and they could pay more too.
While working at a company, the additional value that is brought to the company after a year or two or ten isn't as much as bringing value to a company that is able to translate technical skills to even more value because it is in a different sector.
This contrasts with other careers where a given job won't change significantly from company to company.
The difference between software developer and those other careers is the flexibility and demand for the skills across a wide range of companies.
As long as the wage gap is less than the required "risk/laziness incentive", rational employees will not leave (=> small raises are presumably enough to achieve that).
(personal perspective)
If a companies didn’t pay more than people are currently making at their current job, they wouldn’t be able to hire experienced talent in meaningful numbers. So virtually all companies are forced to pony up a premium to obtain talent.
20%: @ 100k --> 120k. @ 200k --> 240k. @ 300k --> 360k. 30%: @ 100k --> 130k. @ 200k --> 260k. @ 300k --> 390k
Also, while some people will move to a good new opportunity for less money, I imagine it isn't super-common until you get into money is mostly about keeping score level. Many/most people have a lifestyle that's somewhat aligned with their salary do dropping it by 20% is probably fairly significant.
It's not always about the money. However, most people would leave if made aware of a relatively large gap in their salary vs the market.
I left for a $2k annual raise, but that wasn't because I wanted a raise.
On getting a new hire, the 20% raise to get them to join is much easier because that extra cost is only going to a few people, one time (and they don't necessarily know it's a 20% increase in the person's previous pay).
I don’t get this - how would the other employees know about the raise ?
Company doesn't know which of their employees fall in to that group. So they could either regularly offer everyone raises that are competitive with job switching to keep the few people who would otherwise leave; or offer everyone token try not to piss them off too much raises and accept that they're going to lose some people who they otherwise would have been willing to pay more money to keep.
Those with very ambitious workforces that are largely made up of people who will job hop tend to go with the first option. Plenty of people at FANG are getting 30%+ raises in their earlier years, you see it whenever people discuss salary.
Other companies go with the latter.
Another employer knows they have to offer you a strong incentive to switch jobs. You are taking the risk that will go form a job you like to one you don't. Or they won't like you, which is a still a risk to the employee switching jobs.
I don't think it is so much that employers don't appreciate existing employees, or that they worry raises beget future raises. It's mostly that if you have been a job for awhile they think you are somewhat happy.
For example, a company decides to move to the opposite part of the city, despite the fact that many employees chose it because it was conveniently close to their homes. Or, there is a team where the colleagues have great synergy (their personalities are compatible, their strenghts balance each other's weaknesses), and when they finish a project, instead of giving a new project to the same team, they are randomly assigned to different teams.
If the company is aware that they are paying the below market rate and their employees are staying there for non-financial reasons, why would they destroy those reasons?
Therefore, it seems to me more likely that the employers mostly just don't have a clue... either about market rates, or the things that make their employees happy. They pay existing employees less, because they can; and they pay new employees more, because they must; but there is no grand strategy like "make them happy and then they will be willing to stay here for less", only short-sighted paying everyone as little as possible.
In 'Supply and Demand' - developers in high cost of living areas will have a different 'supply curve'.
So the 'market clearing price' for developers in 'high cost of living' areas will be higher.
"In Canada, skilled negotiators will be able to increase their salaries to be more in line with their american counterparts."
No, actually, 'skilled negotiators' who understand 'Supply and Demand' will realize that their position to demand salary is systematically weakened by the fact their costs are lower.
Their price will be 'higher' than that for local jobs, but lower than their American counterparts, and definitely lower than Bay Area prices.
Finally - your comment is missing the Giant Elephant in the room.
There are 50x more developers out there in much lower cost of living centres than Canada.
You literally cannot afford to accept a job for <$40K a year - but developers in Poland can.
If we are going with the premise that 'Talent is Now Global' (And BTW I don't agree with this mostly, but for the purposes of this comment, assume it is true) - then the 'lower cost of developers' in other countries will affect those in 2cnd tier (i.e. relatively wealthy but not NYC/SF) cities.
I'm based in Canada and just hired a bunch of E. European developers for 1/3 the cost of local devs. and they are great - at least for the work I'm having them do.
Try to take a more nuanced approach.
Edit: imagine if you were selling widgets. Same widget. The price in USA is $1 per widget, by manufacturers made in USA. Their cost is probably 90 cents to make.
You live in Ukraine and your cost of making widgets is 50 cents. There are a bunch of other widget makers in Ukraine with the same cost.
When you and your competitive peers in Ukraine take your widgets to market, do you think you're going to be able to sell for the same $1 as the US sellers? No.
Because some of your 'peers' will lower their price a little bit in order to generate sales and that will bring the price down to where operating margins are tolerable. Probably 57 cents or something like that.
So this notion that a 'Foreign Dev' is going to earn the same salary as those living in SF/NYC - all other things being equal - just is not true. It's not a 'lesson that companies need to learn' - the market already has that built in.
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October 30, 2020—Ottawa—The Honourable Marco Mendicino, Minister of Immigration, Refugees and Citizenship, tabled the 2021‒2023 Immigration Levels Plan today, which sets out a path for responsible increases to immigration targets to help the Canadian economy recover from COVID-19, drive future growth and create jobs for middle class Canadians.
The pandemic has highlighted the contribution of immigrants to the well-being of our communities and across all sectors of the economy. Our health-care system relies on immigrants to keep Canadians safe and healthy. Other industries, such as information technology companies and our farmers and producers, also rely on the talent of newcomers to maintain supply chains, expand their businesses and, in turn, create more jobs for Canadians.
[...] [T]he global travel restrictions and capacity constraints led to a shortfall in admissions over the last several months. To compensate for the shortfall and ensure Canada has the workers it needs to fill crucial labour market gaps and remain competitive on the world stage, the 2021 to 2023 levels plan aims to continue welcoming immigrants at a rate of about 1% of the population of Canada, including 401,000 permanent residents in 2021, 411,000 in 2022 and 421,000 in 2023. The previous plan set targets of 351,000 in 2021 and 361,000 in 2022.
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https://www.canada.ca/en/immigration-refugees-citizenship/ne...
Whats more likely to happen in that Canada may finally get a robust and dynamic technology labor market. With its sensible immigration laws, I know that a lot of my international peers are seriously considering moving to Canada. New immigrants will favor Canada over the immigrant hostile, gun-obsessed and anti-science US.
I've been hearing that for a long time, especially during the last 4 years. Yet it has not materialized.
Often, for international workers, attorneys will file twice: one in Canada and one in the US. If the US one gets slapped with RFEs or isn't strong enough to qualify, the Canadian one is used and is systematically approved.
> Whats more likely to happen in that Canada may finally get a robust and dynamic technology labor market.
Negotiating easier free trade with the US as well as matching US law would be more productive, as it would dramatically expand the customer base. But what's crucially lacking is a strong investment culture of venture capitalism and risk taking.
Being a minority doesn't excuse you from being racist and xenophobic.
This obviously isn't a problem if you're FAANG or Salesforce, but for a company of 20 it is.
when you 1099 an employee you force them to bear your tax and benefit burden. people who take the 1099 job do so because they don’t have a w2 offer or don’t understand. a 1099 has far less net profit at the same salary as w2. this is how contractors maker more money but have less real income
I looked up 1099 calculator. For Arizona total self employed tax is about 20%. That seems quite fair.
In EU I prefer self-employment. I can put car, home office and even babysitting into expenses and save on taxes.
An employer paying a group rate for health insurance will pay less per person than an individual paying an individual rate.
Even if the employer were to pass on the savings of not having the person in the group health insurance, the 1099 contractor would need to pay more to get the same coverage.
And beyond that there are things like a 401k matching or a pension that a full time employee has that a contractor doesn't have access to.
You can at least get health insurance with pre-existing conditions now but it can be very expensive. You may not be able to get disability insurance.
Being a 1099 contractor is mostly not a good deal for someone who actually wants a stable long-term full-time job.
I used to do contracting all over EU.... and it was pure bliss. Even with VAT "complexities", it's still about a million times easier to do taxes as a contractor in EU/UK, than it is to do your own taxes in US.
The final thing about contracting in US is that average employer cost of health insurance is over $20k per employee. If you don't fall under someone else's employer sponsored healthcare plan, your self employment income will be greatly diminished. (In US freelancers don't get huge bumps in hourly rates, just because they're not full time benefited employees)
The only reason most companies get away with this arrangement is because the government has refused to enforce it except in egregious cases, and ignorance on the part of the employee.
But it's a pretty tenuous situation. See Uber in CA.
You pay everybody outside your local jurisdiction as contractors, and you pass on the significant savings to them as salary, so they can approximate the normal employee benefits purchased directly for themselves. I understand this is a bit more complicated in the US as health insurance is a key benefit, but not impossible, and that's not a problem in most of the rest of the world.
Employees do need to register locally as freelancers, file invoices & do taxes, but that's a relatively simple process for such cases everywhere I'm aware of, and any costs can be included in the salary bump. We made it work with no big problems or complaints for anybody in the 2 years I was there.
https://gosmallbiz.com/the-independent-contractor-checklist/
Things were going very quickly from 1 to 20+ countries in like 4 years.
But... very few locations are really desirable.
Most digital nomad countries themselves are countries on demographic decline, or otherwise quite poor.
In EU it's either extreme bureaucracy of obtaining it, or some other very odd requirement that quietly sinks the whole appeal.
Dubai is one shining exception, except it's a rather expensive place. $5k month take-home on the bank statement pre-requisite is very sensible. You will be spending more than a half of that every month, and easily more than $5k if you want to live fancy.
I'm seriously thinking of Dubai now to live there for at least a year. Covid has totally busted the rental market there, it makes sense to exploit. You can get a minimally furnished villa for a year for AED 40000-50000, which is mindblowingly low for Dubai.
P.S. Don't EVER go to work in Dubai on a regular work visa without expressed guarantee that the employer will not put any bond, or lien on you, or your papers.
P.P.S. Yes, you can even buy pork there as of late: https://cdn-0.dubaiofw.com/wp-content/uploads/2017/01/where-...
It’s called Croatia, which is part of the European Union. It is better than the Estonian Digital Nomad visa because you do not need a “sponsor”, also known as formal local connections to get the visa.
You can also get Croatian national health insurance (obavezno) and supplementary insurance (dopunsko) without issue. As an American, I would get the tertiary insurance (dodatno), which has medical underwriting. It allows you to see private providers with virtually no wait. Anyways, I am extremely unhealthy and somehow I was able to get tertiary insurance.
More here on the visa: https://www.expatincroatia.com/digital-nomad-visa-croatia/
With an American salary, you get to live as a king or a queen. Quality of life is very similar to the US. I am a dual US|Croatian citizen working remote part time for a US company, but of course I can do that without a visa due to my status anywhere in the European Union because I am a dual citizen.
There are only a handful of western countries with high quality of living that will let you have such visas on the premise of “willing to pay the taxes”. There is a reason why.
NYC is half the size of Tokyo, but has more going for it.
Dublin is just about a million. Amsterdam is about a million.
FTFY
Way too many human rights and labor abuse issues to be worth the risk IMHO.
I worked in Doha short term once, and frequent Dubai.
There is so many expats there other than people who effectively sold themselves into indentured slavery because of they can't read the employment contract, that I would say it worth the consideration.
The occasional horror stories of Western C-level exec getting on the bad side of their employers, and getting stuck in the country are very much real, but again most of them wouldn't be examples of good deliberation, and they very much knew what they are going for.
There are other things in life than cheap rental and fancy living, even if you don't happen to be personally directly affected.
https://www.amnesty.org/en/countries/middle-east-and-north-a...
https://www.hrw.org/middle-east/n-africa/united-arab-emirate...
On other hand life in Dubai can be by far more liberal than in most parts of the world. Anything other than fornicating on the beach probably goes there.
Far more people complain about Dubai being a Sodom with hipsters, rather than it being a "puritan Arab kingdom"
For whom I have the most pity are by far the Emirati natives. Forced to live in this Disneyland for foreigners under a gunpoint.
That's for their legal citizens. It was even a bigger shock for me to know how Emiratis can torment, and keep in destitution their own Arabs just for some "wrong surname" because of some century old matter: https://en.wikipedia.org/wiki/Bedoon_(stateless)
Unless you're poor, gay, a woman, a foreign worker or whoever else the entirely lawless society of SA wishes to execute this week.
You're OK with living in a place where there is no actual law and people can be imprisoned or executed with minimal trial. That seems very risky to me.
If you go by that logic, you can only leave in a select few countries. It's an unfortunate world, but remember that by bringing your culture and ideals, you are actually helping changing the place.
It's hard to pass on the things that happen in the middle west culture, it's so different and against a lot of philosophies that I cultivated my whole life. Maybe I'm not prepared enough, but I would hardly bring my family to that situation
Also, people like the social aspect of work. That's why I think everyone is pretty much going back to the office as soon as this is over.
The secret is just: no meetings. Meetings should be exceptional. If you have discussions in a timezone, record it for those who can't attend. Prefer async, prefer written communication.
Have lots of one-on-one communication.
90% of the meetings I have ever attended were counter-productive anyway and were just there because a middle manager wanted to feel useful by wasting devs time. If you are having a meeting where one person is doing most of the talking it can be done async. Feedback can be given async. Demos can be done async.
Some conversations need realtime, but most of these can happen one-on-one, recorded for people who are in a different TZ.
Yes, that's a different way of working, but it is not too hard, we have the tools and it makes sense. The only obstacle is a culture of the useless meeting. Kill it, embrace the async world. Keep realtime communication for meaningful 1-on-1.
Embracing async communications is the key. If I send you a message at 3am just reply when you are ready. If I need a real time meeting I can schedule it, but that's rare for developer communication.
With a small difference it feels as if it is basically the same timezone so people schedule meetings with that assumption, but clearly it isn't. By the time I'm awake in California it's basically noon in EST.
When most of my team was in India with a 12.5hr time difference it was actually easier because it was obvious to everyone that we're on opposite cycles so meetings were an exception and nobody expected real-time communication and acted accordingly.
Most devs earn wages relative to their local market/CoL. The few that earn way above are the exception that proves the rule.
Sure, offshoring has had an impact, but the best jobs stay close to home where the money and the C-suite is.
[1] https://blog.pragmaticengineer.com/software-engineering-sala...
I think now "where" is less about geographical location and more about social network and other intangible things like this.
Prices in London are probably similar to those in NY or even Bay Area.
This really presages trouble with industries being upended on the basis of technological innovations. The light at the end of the tunnel is that long-term, companies that value and can utilise technical talent to innovate rather than sustain will win out and heat up the talent market.
But my real passion is audio and signal processing. I look at job postings around the country for embedded developers and DSP specialists; fields that require much more specialist skills than the CRUD web apps and PDF reports I generally produce for my employers, but those jobs are offering a fifth of my current income! I've seen jobs saying "master's degree in computer science and 5 years of experience required" offering 30k.
We pay our grad students more than that.
Edit: obviously, it's not really a mystery as to why; you get paid money when you work in an industry that has lots of it. But the discrepancy is still shocking.
He makes 3/4 of what the president of my small defense contractor company makes, a guy who has been an RF engineer for 35 years prior to taking on the leadership role.
The two fresh grad EE's we have are both spinning software in their free time to nab software dev jobs over EE jobs, because the pay is often double.
I think the future will be more of a distributed hub model. People will often work remotely but will need to be able to be in person a few days a week in selected tech hubs. To avoid being left out one will need to be near a “hub” so you can be easily in person on those days when it makes sense to be in person.
Some will say “but I can be fully productive 100% remote.” That may be somewhat true, but the practicalities of that fall apart real quick when your on zoom and the rest of your team is going to grab lunch together.
If we have a remote workforce, why wouldn't I want to move somewhere where I can find people of like mind and spirit and feed that need for social interaction with them rather than with my company ?
It's a combination of the immense wealth generated by the tech industry and the rigid supply inelasticity of America's NIMBY housing policies. Anywhere this unstoppable force meets this unmoveable rock, prices explode. The entire area quickly becomes unlivable for anyone who didn't get in on the property ladder early. Then the tech industry is forced to go out and find a new tech hub for all the junior engineers who are bid out of a house by the senior engineers who cashed out their RSUs.
Full remote is the one opportunity the industry has to actually break this cycle. After all it's not just a problem for tech recruiters, it's also having all kinds of disastrous spillovers for the regular non-tech folk, who happen to be unlucky enough to live in the next metro targeted by the tech industry.
I think dissipation would happen if tech was actually expanding into a few large metros. Houston, Chicago, and Miami all have reasonable COL, but more importantly have way more population to absorb an influx of high wage earners. It's an interesting question, and one I don't really know the answer to. Why does the tech industry seem to consistently prefer mid-size metros like Austin to large metros like Miami.
What good does coming into an office do if most of the people you actually work with are in a different office. In normal times, I could come into an office, but relatively few of the people I interact with are actually in that office. So I'd be doing video calls from the desk in the office rather than my desk at home. Maybe I'd bump into one or two people I knew in the cafeteria.
Only need 1 or 2 devs? You are more likely to find them locally and this makes it easier for you with tax/legal etc. Local people are more likely to be culturally closer to you which makes both recruitment and performance management easier. There are no time-zones etc.
The truth is, after you grow just a little bit bigger, in most countries, there are simply not enough local devs to meet the demand, you have to go remote, probably nationally and ultimately globally. This brings many challenges and in some cases costs a lot in legal/tax/hr costs, depending on whether you are sub-contracting to another EU country or somebody in China. Culturally hard, timezone inefficiency and many other well-know issues.
Another big issue is the type of work. If you have a job where you can easily package up tasks and they don't need much management input, you can much more easily farm it out to a managed firm in e.g. the Phillipines. One of my previous companies only went remote because they couldn't find enough people to recruit, it cost them the same amount after expenses per-person in Vietnam as it did in the UK.
As to whether it works, if you are naiive and think it is just about money, it is very likely to fail but plenty of companies have global teams and it works just great thanks.
BS, you can have 2x more skilled engineers for half the price and same quality, logic demands that you do not pay an Indian dev (which will still have greater salary than average in India) the same as US one.
I've had some experience in this and what I've realized is that the really good remote developers in India already know their value and they can demand US level salaries for their time.
Yes, it's still not as many and you can still find a lot of good developers for relatively (relative to US) low pay, but the trend is clearly changing.
If you're a developer in the Ukraine with great English and reasonable business skills, you should be able to land a pretty good dev job with a global company.
Another, just as good dev in the Ukraine that only knows Russian/Ukrainian, will have much harder time and will likely be limited to working with just local companies, significantly limited with options.
The people spouting "it's all about how much value you produce" are so naïve and ignorant of their privileges / market realities that it hurts.
With devs the compensations will match only when the good foreign developers have just as many alternatives as the good U.S. developers (or at least close to parity - exact parity will never happen due to jobs that simply can't be offshored - contracts with government agencies, for example)
But, if you onboard people into your startup I don't think most people would consider it a wise strategy to underpay certain team members that are part of a distributed team based on where they live..
Whilst I do not love the salary disparity between onshore and offshore workers, the issue is complex. For example, one has to wonder what would happen to local economies in Indian regions, and elsewhere, that are dependent on revenue from offshoring were Western companies to simply stop the practice[0]. Also, bear in mind that many offshoring outfits are set up by locals who see an opportunity to offer a service to companies in the US and Europe at substantially lower cost than they'd have to pay in their own regions whilst benefitting both themselves and their employees: i.e., there's some complicity there and it's fundamentally very different from, say, colonial exploitation.
I still don't love it, but I can see the benefits for both sides.
[0] One can take this argument too far of course: viz., child labour in the fashion industry. But the situations of a child stitching trainers and a software developer working for an offshoring provider are so different as to render the argument ad absurdum and disrespectful to both of them.
How much perverse pleasure do you think is a reasonable amount when they save a few thousand dollars a month, while at the same time publicly raising millions and paying developers junior than him more money... and doing everything in their power to burn more money to get ahead of the competition...
Fo you want to wait for the whole world to change or just have that senior dev make better decisions for himself
People that run business know that they need to keep a coherent symmetry on some level in how the team is structured and how they're compensated.
Save money by paying some people on your team less based on where they live.. yea, for those that think it's a good idea, good luck with that..
Businesses of all kinds offshore labour: small, medium, large, public, private, sole trader, partnerships, VC funded[0], bootstrapped, profitable, loss making, you name it. They all do it for what, for them, are rational reasons. Often very boring reasons. Offshoring can be the difference between profit and loss, the difference between a business that is sustainable and one that is not. A failed business can't employ anyone, whether onshore or offshore.
Now you can argue about whether a business that isn't sustainable without offshoring should exist at all, but that is straying further off topic than I care to go, and frankly is also another rabbit hole likely to lead to unhelpful oversimplification.
You might like to imagine gleeful scheming and maniacal laughter in the boardroom, but I'd confidently bet that that's almost never what's going on in the vast majority of businesses.
[0] You talk about "publicly raising millions": raising funding is not what the vast majority of businesses spend much time doing, and it's not what most businesses who use offshoring spend much time doing.
This is different from hiring a remote employee to your company where you've advertised a salary range as part of the job description.
In my experience that's almost always how it works because you have to employ people in such a way that you abide by all local laws. I have seen people employed as independent contractors but, and again this varies by country, there are often restrictions around criteria like how long you can do that for. It's also kind of a PITA for the "employee" because it means they might have to do things like sort out their own taxes and healthcare. If you have a legal entity in place you can do that for them. That means you either set up a subsidiary, or you using a local offshoring firm. And this applies regardless of the country.