Google may cut pay of staff who work from home
bbc.com
bbc.com
Other active thread today: https://news.ycombinator.com/item?id=28141464
Google employees who work from home could lose money - https://news.ycombinator.com/item?id=28127240 - Aug 2021 (670 comments)
Google rolls out ‘pay calculator’ explaining work-from-home salary cuts - https://news.ycombinator.com/item?id=28137561 - Aug 2021 (100 comments)
Google may cut pay of staff who work from home - https://news.ycombinator.com/item?id=28141464 - Aug 2021 (41 comments)
- pay stays the same if WFH is from same city
- several employers other than Google have policies to adjust pay based on location
- the calculator they developed is to help make employees make data-based decisions (this is in contrast to other companies where no such calculator exists and one is left to guess and/or initiate talks with their boss that may or may not end awkwardly)
Another unspoken thing: there's such thing as salary negotiations and exceptions. "If I take a 10% cut, I'm leaving" is a perfectly reasonable thing to say in such a negotiation, and maintaining current salaries is something these types of employers are not culturally against (the way some middle management thinks of performance notwithstanding).
The general goal of the policy is to make things "fair" in the sense that they already have employees in lower-pay locations and it's unfair/potentially problematic to have two people in that same location doing similar work but being paid vastly different amounts. The "why don't they just pay everyone SV salaries everywhere" argument is obviously from people who never ran businesses and are just disguisedly wishing they made more money: saving money on salaries is done for the same reason companies do tax-related shenanigans. In Google's case, even the employees are kinda in on the scheme, as bottom line affects quarterly reports, and thus their equity compensation...
If you're going to say this in a negotiation, you have to be ready for the counterparty to say "OK".
I would replace it with explaining that the pay cut makes you unhappy and/or makes the position less appealing. Make it an assessment of the position and the pay, but don't talk about actions that will come from it (like leaving or job searching). Telling them what you'll do is like obviously telegraphing your next move in a fight.
While probably true, this kind of argument goes both ways.
Recent events have proved, if there was any doubt left, that a lot of people can work perfectly well from home and greatly value doing so, and that both desire and performance are highly dependent on the individual. Some businesses are going to have to get used to the idea that some of the good people they'd like to hire simply won't be willing to make long, inconvenient journeys to work every day any more or to live in expensive locations to avoid them. If they decide not to offer those people competitive compensation by national standards, they may increasingly find that others will, having themselves located any centralised facilities in more economic areas.
Pricing too much by location for highly remote-capable staff is a short-sighted policy anyway. It is surely a matter of time before environmental concerns put pressure on governments to discourage unnecessary travel. That probably means higher costs for travellers one way or another, which is only going to widen the gap in favour of remote working.
Salaries like anything are market based prices. Why are salaries different in SV over MidWest, is same reason a BigMac in SV costs more than in the MidWest..
WFH opens up the pool of employee's to a much larger scale, the more people that can do the same job the lower the wage for that job will be
People however do not want to look at labor as marketable good like a widget, they want to view labor as something else, its not.
For example, the federal government. There's a set pay scale for the country, with "locality pay" added in a number of cities/regions.
A few years ago, I know civilians who were working for the Navy in Washington, DC and their jobs were moved to Norfolk, VA. Their jobs did not change; but, due to locality pay, it was a 10% pay cut. (Yes, a number of people left and did not move.)
Or just maybe you are mischaracterizing an argument from people that take the notion of "equal pay for equal work" to heart and protested even against offshoring for similar reasons and against tax related shananigans that just transfer the social burdens of infrastructure onto income tax paying citizens.
The non-strawman argument is "equal pay for equal work", not "SV pay for everyone".
With pay from different locations, there is an argument to be made for varying salaries when the working conditions related to the office presence and the corresponding project involvements differ and one can argue it isn't equal work. With working from home, there can be variation in project involvement due to scheduling which again might be unequal work, but that would be more tied to which hours of the day are on the clock, if the hours worked are the same then an employer paying an employee less for living in a different city when all other working conditions are the same is merely the employer unfairly (ab)using their more powerful bargaining position to capture economic gains that should belong to the employee for making the choice to live in a cheaper area. So when you talk about fairness one can talk about two classes of employees (in office vs working from home) and then salaries tied to hours worked and the rest is discrimination.
There are arguments to be made for allowing employers to do this, since perhaps as a matter of public policy it is better for people to concentrate in cities or for forbidding it for alternate reasons. But the public policy question wouldn't change the fact that employers are choosing to pay people based on criteria not at all related to work they do. There is still room in "equal pay for equal work" to tie office presence to a higher salary, if it is genuinely more valuable, just put the dollar value on that.
But that's also a logically problematic notion in the sense that it's a complete utopia given how our world currently operates (i.e. there's a reason why most of your clothes are made in China or thereabouts) and, on top of that, it's a self-defeating idea. The logical conclusion of that line of thinking - an ad absurdum, if you ask me - is that everyone gets paid the same for similar work, and therefore also have to accept 2M house prices, including the folks making your socks in Malaysia. In reality, though, you don't get to have a cake and eat it too, that's literally the basis of how inflation works (and why Austin folks resent Californians for example).
You do raise a good point about strictly WFH jobs vs locality-dependent jobs (e.g. a McDonalds worker has to be physically present at a location) and I think it ties a bit into why management is often reluctant to go forward w/ WFH policies: management is largely about multiplicative effects, and there can be very tangible differences in in-office vs WFH depending on timezones (in fact, I know a consulting company that very successfully convinced their clients that offshoring is more expensive than a north american workforce due to time lost on back and forth communication with India timezones)
Why _should_ an engineer working from Seattle, where rent is ~2k for a 1bd, not get paid more than the engineer working from Bentonville, AR, where a 1bd is $800? Your compensation is made up of what the company expects for you to spend _because_ you're working in a particular location.
(Disc: I work for Google, opinion is my own tho.)
> Your compensation is made up of what the company expects for you to spend _because_ you're working in a particular location.
That's Google's model?! I can live 10 minutes away from the office or 1 hour away by train, I still live in the same city.
If I move my apartment 50 minutes closer to the office, I'm still going to the same office, but my rent will go up. I should get more compensation right? My compensation is based on what I'm expected to spend by location.
Funny, but off-topic story relating to this: I once had my debit card shut off because I tripped a fraud alert by being in 5 different cities on the same day. This was in LA, and I really was in 5 different cities that day, but I probably didn't drive 50 miles.
Almost everyone does not care about the sellers costs (COGS). They only care or they can get what they want at a lower price from another seller.
If I bought a Kia Rio, would they say "You have lower car expenses compared to other employees, we're going to pay you less because you don't need the money"? Or conversely, if I choose to buy a $150,000 car should I be able to tell Google "Hey you need to pay me more because I have very high car expenses?"
That's obviously silly. But if you want to live somewhere that a house costs $2MM, it's your employer's responsibility to foot the bill for it, and if I buy a house in Bentonville AR for 1/10th of the price, my pay gets cut?
If we move to Beverly Hills should that person get paid more than Seattle? (yes of course Google has to have an office there per these rules)
Should employees who choose to own a car be paid more than someone who uses public transit or their own bike?
You are paid $x in order to produce $y. Assuming our $y's are the same what we choose to spend our $x on should be personal and private.
Similar to me, living in the MidWest, there is no amount of money in the world that force me to move to Silicon Valley, the West Coast, or New England Area... None.... I would rather live in a box under a bridge.
if one can do the work remotely at the same quality as they would in office. i dont get why they should be paid less.
Why _should_ they do get payed more.
If home office is a standard it's their decision to live in a expensive area.
People are payed for the work they do, not because they live in a privileged area. You could go as far as say it's a form of discrimination to pay people depending on where they live.
I mean are you next reducing payments for people transmuting a lot because they live in a cheaper area.
And then shouldn't you also pay less to people owning property because they have long term less living cost?
The actual problem is Silicon Valley and similar places being completely out of balance.
Google does not pay someone in Seattle more than AR simply because the rent is higher. The reason wages are higher is a result of people in Seattle demanding more money because their costs are higher, and if Google wants to attract talent there they have to offer a wage people will accept, that wage happens to be lower in Bentonville than Seattle
WFH changes the dynamic in that Google can now recruit from anywhere in the US, thus the competition for a given job is higher so in normal times that will mean a lower wage over all
There are many people that would not work for Google in the past in part because they could not or were unwilling to relocate to a city with a Google office, WFH eliminates this need thus more people will be willing to work for Google.
People keep saying this, but it's only true in an employer's market. In an employee's market, it works the other way around, because now the good employees have a wider choice of potential employers. Which kind of market do you think software development is?
I am certain heads down work is easier from home. Especially if you have a good setup.
I don’t know how to reconcile this.
A hybrid approach isn’t it because the best (technical) mentoring happens when someone is heads down and gets stuck. Plus commuting some days and not others is hella disruptive to a routine. I need routine to be most productive.
Why can't we be paid simply for what we produce?
Rather than by where we live, the people we know, where we work from, the salary negotiations years ago when we were hired, ...
I have yet to see a better method of determining price than two parties agreeing on a number.
There's information asymmetry here, as the employer knows what all the other employees make.
Also, it seems that "agreeing on a number" doesn't work as Google unilaterally decides that working from home somehow changes the agreement.
But even without full knowledge (which is probably impossible to achieve and one of the functions of a market is to incorporate the various pieces of knowledge of all the participants), prices are still determined by two parties agreeing on a number, and just because Google has more power, the opposing entity is still agreeing to the new number if they continue selling their labor to Google.
This is being spun as a decrease instead of seeing that people actually have had an increase because of CoL. which no longer applies if you move.
If you agreed to $X and then move to say the Bay Area would you expect them to keep your salary the same?
Note, this doesn't always apply, for example, doctors in rural communities can sometimes make more money because they are needed and most don't want to go there.
What does that actually mean though, in concrete terms? Profit sharing?
1) I want to be paid _more_ if I'm working from home. My employer doesn't have a right to use my personal property (my home, my energy, my coffee, etc.) without additional compensation.
2) Driving up compensation regardless of location is a great way to incentivize monopolistic behavior (e.g. FAANG) over the talent market while making it more difficult for new / smaller orgs to compete for talent.
My feeling is that things should be left the same, but I think your POV is definitely valid. The _space_ at home becomes a problem especially for those in expensive cities and lower compensations. Affording an extra bedroom is not always possible.
This is the Nth article trying to convey the new narrative.
The narrative that "we need to go back".
No!
We don't need. The market is hot and we can choose.
Take the simple math. 1 hour commuting one way.
2 hours by day, 10 hours by week, 40 hours by month.
Working at home gives you back at least 40h.
Working at home GIVES you BACK AT least 1 Week!
And I am not even talking about better food, spresso machine and gym!
Now we are fighting climate change staying at home and reducing our carbon print not commuting.
Think of the children!
Yes, or at least if you move to higher cost markets (Zurich, sf, etc.) You'll be paid more than you might have been otherwise. It just happens than Google already has established offices in like all of the most expensive cities.
And doesn't mean that we have to pay everyone more who _has_ to come to work? I.e. because they need to go the factory floor? Or they need to go the power plant?
Don't just look at half the equation.
You only have to pay someone more if you cannot find someone to do the job for lower pay.
Now I can be at my gym when it opens at 06:30, have a good workout, shower, walk home, cook breakfast, and still have 30 mins before I need to start working.
I can even fit in short cardio sessions in the evening and have returned home and made a nutritious meal by the time I’d normally just be getting home from work.
I go to the gym seven times a week now with no net reduction in my free time.
I eat a better diet. I save money. I’m happier and more relaxed. My home office is a much more productive space than the noisy open plan office we have.
I never start the working day in a bad mood whereas a bad commute (delays, bad weather, unpleasant people, etc) used to put me in a lousy mood for the rest of the day.
I got a lot of reading done and I didn't consider it to be "wasted time".
Another favorite long commute was 45 minutes by bike, almost all on a separated bike trail.
Of course, my current 30 second bedroom to livingroom commute is probably my favorite commute of all time, but my point is not all commutes are horrible. And even my current work-from-home commute has its drawbacks, like no clear separation between office and home life.
Then this will not be a problem for Alphabet employees that are unhappy with a decrease in pay.
If Google didn't do the thing, then the employees also didn't have to to a thing and that would have been easier.
Their new one; "Evil."
Google employees are in a more-than-fair position when it comes to negotiate compensation. If the deal sucks, then Google will revise it and/or lose part of its talents, but the issue will fix itself.
Then again, maybe the issue was they were compensating people so that they accept SV commutes and house prices, and everyone is realizing that most people don't need to live in SV. So the ludicrous compensations aren't needed either.