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Comment by oblio | Hacker News Reader

Ah, that's easy.

The negotiating power of a company, which is practically a group of people, is much higher than that of employees, which are just 1 person. A big company loses what? 0.00001% of its revenue if it doesn't hire the right person for a specific position? An employee loses 100% of their revenue if they don't get hired or get fired.

So companies can pretty much do what they want (up to a point where they cause uproar and those individuals to bunch up into a group fighting the company).

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This is mistaken. Companies need good employees, and particularly skilled developers.

If you're a skilled developer, I urge you to exercise your negotiation power. You have much more than you think.

The problem is, most people aren't willing to walk from job offers. Walk. There are more.

> and particularly skilled developers.

skilled developers are much more common than people think. We get the impression of rarity precisely because we limit the search pool to local areas where very often many top companies are competing for the same talent pool.

But at the end of the day there are a ton of super smart developers in EU, China, India, Japan, South America or even lower to mid COL areas in the U.S. who are more than happy to take 50% of Silicon Valley pay and just do as well of a job.

At the very end of the day vast majority of software engineering is far from rocket science, and you don't need someone who can re-invent MapReduce out of thin air just to refactor that clusterfuck of Redux code.

Technically correct, but even GitLab has a relatively short list of countries where they hire[0]. Legal requirement are probably going to continue to limit the talent pool for the foreseeable future.

[0] - https://about.gitlab.com/handbook/people-group/employment-so...

Doing some simple math on your "limited talent pool" in the "short list of countries" brings the total population of those countries up to:

* ~900 million people for where they use companies (and probably in the low tens of million of possible employees)

* probably ~2 billion people for where they use contracts (and probably some more low tens of millions of possible employees)

Those are <<huge>> pools of people.

Just as there are super smart, skilled developers in these areas, there are also lots and lots of software companies in EU, China, India, Japan and South America. These companies will need to up their game to keep these talented developers from fleeing to better paying, outsourced jobs.

This might not mean much for someone who made their career in SV, but certainly means a lot to an Indian, Russian or Brazilian developer.

There's not much need to outsource as long as companies are swimming in cheap money. For most U.S companies dev money is barely an issue and in Europe they mostly don't earn that much to begin with.

If this bubble bursts then yeah painful changes will likely come.

Skilled developers are numerous, but there's an ocean of mediocrity making it harder for companies to find the ones they will be willing to accept. On top of that, when they do find them, these candidates have typically already realized their negotiating power.

Recent numbers at my place of work (looking for a couple of senior hires):

3 months, 200 applicants, 35 full-day technical interviews, 2 offers. 1 accepted. The guy who rejected had a competing offer.

I'm poking around currently, and there's definitely an appetite for companies to get strong candidates in for interview. However, I keep these numbers in mind. The odds are against us.

This depends on so, so many personal and professional factors:

1. Your line of development is popular (I wish PL/I developers good luck with their job searches!)

2. That you're geographically located in a "hot" location and you can easily relocate (which is frequently not the case, due to family concerns or other concerns) <<or>> you like remote work and are good at it.

3. That you can easily handle interview stress (a ton of people can't) and that you're good at interviewing (which you can improve at, but you need to spend time, plus see: stress).

I'm probably forgetting a bunch.

In any case, the balance is tilted a lot more towards big companies.

I feel like this underestimates the cost of someone leaving. Presumably that person was worth the money and necessary before and will need to be replaced. The replacement will be less valuable (lacking the relevant knowledge) and cost a lot of money to recruit.

I think companies often undervalue the cost of annoying employees in random trivial ways, creating the nudge that causes them to shop around for another job. This is not a trivial annoyance and I understand that the tech job market is extremely hot at the moment so causing people to apply to other jobs and find companies willing to increase their pay by a lot does not sound like a smart business decision.

But maybe I’m wrong or Google have some great internal productivity data that makes this incentivising all worth it to them.

Nobody wants attrition, but it does happens. In the long term competition for WFH jobs is basically by timezone rather than by geo area. That means as an employee you're competing against a bigger talent pool, and as the workforce renews itself, we should expect a trend towards equalization of pay across WFH roles in the same timezone.

Pay in low-COL satellite offices of big companies isn’t massively different from pay in Silicon Valley (averages are more different as more senior people will be in the main office) so it isn’t obvious to me that pay far away from the office should be massively lower. One argument for this to be the case is that an employee could reasonably threaten to move to Silicon Valley for higher pay (at another company.)

Obviously there is a larger supply of workers in a time zone than a metro area, but there is a larger demand for them too. And a workers can reasonably threaten to move to the part of the US where they would be paid the most.

> Pay in low-COL satellite offices of big companies isn’t massively different from pay in Silicon Valley (averages are more different as more senior people will be in the main office)

Software engineer pay is quite different, between, say, London and Paris, or between Switzerland and any place in Europe... And it has more to do with talent competition than cost of living. France or Germany aren't inexpensive places to live in but there isn't as much software talent competition, so pay is still lower there from what I can tell.

You're right that a bigger pool doesn't necessarily mean more competition or lower wages, just a trend towards equalization: some people's pay could move up from access to a pool with higher competition for talent. But the pay for the people whose location puts them already at the top of the pay ladder has only one way to go relative to others who will WFH in the same timezone.

> And it has more to do with talent competition than cost of living.

This statement is easily falsifiable.

Salaries for anything are much higher in Switzerland.

I doubt there's more "janitor talent competition" in Switzerland than in France, yet Swiss janitors are paid more :-)

I bet it's harder to staff a janitor job in Switzerland than in France, with unemployment rate being so much higher in the latter country... Might that explain the difference as well?

I guess what I'm saying is that businesses as a whole tend to hire people at the lowest possible costs given to them by the job market, not based on what they want the worker's disposable income to be after costs are deducted.

Costs of living do affect the offer side of the market - the willingness of people to take various jobs at various salaries.

What I'm observing in software engineering is places with smaller differences in cost of living than in pay levels, which I'd attribute to talent competition...

I meant offices in the US. I don’t have a good reason for the variation in Europe. Above I wrote:

One argument for this to be the case is that an employee could reasonably threaten to move to Silicon Valley for higher pay (at another company.)

In software engineering the employee probably doesn't lose his revenua since he/she is likely already employed, and if not, will likely have other options.

In reality the supply and demand of employees of particular type determines the "negotiating power", and this can change over time.

This depends highly on where you live. If you live somewhere with at-will employment you have very little power in this situation. If you live somewhere with...basic employment regulations then it's a very different situation.

It's never a fair fight. Even in the most abusive of cases, a company can hire lawyers and a company's revenue is much, much higher than the income an employee makes.

So the company can drag even a lawsuit across many, many years, practically guaranteeing big companies are bullet proof.

This is a problem other countries don't have to that extent because labor unions have far greater leverage compared to the US . In Germany we have huge and powerful labor unions in the metal industry for example.

This is why it's important to negotiate as a group and to consolidate interests, because that's just what individual owners of big companies did by incorporating.

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