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Comment by alexives | Hacker News Reader

This is definitely done already. GitLab (where I work as an engineer) has done it for a number of years. They used to publish the numbers and ranges for every role/location but they made it internal only a year or so back for reasons that I can't remember. You can still see the old calculator thanks to the internet archive - https://web.archive.org/web/20200606161551/https://about.git...

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.

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Apart from saving money, another aspect of their reasoning iirc was that paying a single rate would create a very lopsided team in terms of geography: the company would be offering the “best” salary to employees in the lowest cost of living places, and so the incentives would lead these places to be dramatically over-represented relative to higher cost of living places. That’s the theory anyway.

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.

> paying a single rate would create a very lopsided team in terms of geography

> 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?

That’s not even close to the status quo for most distributed companies—-it definitely isn’t for Gitlab.

So much this. I'm still hoping for the work-from-home revolution's best possible side effect: the leveling of the political playing field as safe districts get flooded with politically urban expats.

Unless a company limits its hiring to the US, the entire country can be described as “high cost of living” in terms of the incentive I’m describing.

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.

Imagine a company paying people what they are worth rather than what they can get away with.

Still waiting for a real argument that addresses this issue instead of substance-free snark.

Because as an employee I charge whatever I can get away with completely regardless of my worth or how much actual value I produce.

Companies can already do this; there are plenty of opportunities for outsourcing - and yet, somehow that "exodus of employment" hasn't yet happened - I get the sense that while going full remote may cause some jobs to get outsourced that weren't before, there won't be a total exodus, as has been repeatedly predicted in the past every time we've moved towards being more remote-capable.

Afaik, most companies that outsource are paying local market rates, not the same rate regardless of geography.

> the company would be offering the “best” salary to employees in the lowest cost of living places, and so the incentives would lead these places to be dramatically over-represented relative to higher cost of living places

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).

> chances are, the savings convert into bonus money for someone in upper management regardless.

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.

This; I’ve also heard it pitched as not wanting to inflate labor costs in other markets, but like…since when do companies care about that? It seems like an excuse made after the fact to try to justify paying people less for the same exact work. I don’t actually believe that companies are suddenly concerned with leveling the playing field and not pricing other smaller tech companies out of the talent market.

But why is this bad? Let people choose how to spend their money how they want. On geo, on food, on trips, on saving..on whatever. Pay them for their work, let them allocate their spending as they wish for their own priorities. Why does it matter where they live, or where groups cluster? Seems like a fear-driven response.

It's not bad in absolute terms, but to me it's understandable that globally distributed tech companies might want some portion of their workforce to come from tech hubs, or their home countries, or just to have a certain level of diversity in terms of where people are from, instead of primarily selecting for people from low cost of living places. It's not only about saving money, and I don't see how "fear" has much to do with it either. These incentives are real and could have a huge effect on the culture of a company.

+1 this is already being done at some large tech companies.

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