This is interesting. I wonder if companies will start to try and tier wages according to where the possible new hire resides.
I don't want to debate whether this is the best approach in terms of treating employees fairly, but it certainly seems to have it's advantages for the company - they get to save money by hiring people in places with a lower compensation rate.
I haven’t heard people in favor of geography-agnostic salaries address this concern, which seems legitimate from the company’s perspective. I suppose there are tradeoffs either way.
> the incentives would lead these places to be dramatically over-represented relative to higher cost of living places.
vs. the not-at-all-lopsided and equally-represented status quo, where everyone lived in the same high-cost-of-living city?
Imagine a company offering a simple 100k geography-agnostic salary for an engineer. They’ll get some junior-to-mid-level candidates applying from lower cost of living places in the US, sure, and they’ll also get a lot of excellent senior applicants from India, Eastern Europe, Latin America, etc. If they hire based only on merit, they likely won’t be hiring from the US at all.
What’s the concern here, exactly? If you’re hiring into a remote team, and you locate an employee who possesses the requisite qualifications, integrates well into the team, fits the culture, is available during the hours required, proves themselves trustworthy, etc., — just hire them. If your business is doing well, the extra calculation on whether we can pay this hire less because of where they live seems disingenuous; chances are, the savings convert into bonus money for someone in upper management regardless.
(If you’re strapped for cash—bootstrapping or not willing to trade control for investor money—chances are you’re already not offering competitive rates to residents of costly areas anyway.)
My guess is that the companies that see it as a problem either (1) don’t have a strong remote culture, or (2) are trying to compensate for suboptimal hiring practices (e.g., candidates from more affluent areas tend to possess some qualities the company wants but can’t select for directly).
This has not been my experience working at the Director level. Maybe it's the lack of C in my title, but in my experience it's much more likely I find a way to save a few 100k, pats on the back are given, maybe a call out in a board meeting, then that money promptly gets allocated to another teams budget, and I'm unable to obtain raises or bonuses for the people who made it happen.
“Oh your company is in Backcountry Town, Flyover State? Well we will pay 20% less for your widgets then.”
The first is that being in-person is valuable to many companies, enough so they're willing to pay a significant premium for it. If you're remote, then you get less.
The second is that it's all about negotiation. Companies by and large have the upper hand here, and would pay much lower wages if they could. FAANGs do not pay 2-300k salaries for fun, but because of the local competition.
Software developers are finally getting a taste of what the average citizen has to deal with compensation-wise, no wonder people are reacting badly.
Employee wages are roughly bounded below by the cost to keep them alive, and roughly bounded above by the profit they produce. As for leveling the playing field between labor employers, there are known strategies for pooling labor's leverage. The gap is in convincing labor that those strategies are a net positive from them. For people who think that when they are hired that they are going into negotiations on equal footing, this is easier said than done.
They don't think they can, they know they can. So of course they will.
And from the employee side it's not a bad deal either so many people are happy to take it. Sure I wouldn't love a 20% pay cut, but if I can get a 50% reduction in cost of living by taking a 20% pay cut, that's a large raise effectively.
Inflexible entities either find someone willing to pay up or they have to find something else to do.
I think based on your home address but not sure.