Google staff squirm as remote workers face pay cuts
wired.com
wired.com
At the same time, Google's stock is up massively over the last two years. Google has been relatively aggressive with RSU allocations. That appreciation in RSU value will act as an offset for a subset of those who would churn. This must also factor into their current policy decisions. The team's at Google try very hard to optimize for retaining their best people, but they are dealing with very large numbers of individuals during an unusual time. Further, they have traditionally been leading the charge for geographic proximity and density for product teams. Lots of change for them to manage through right now.
That said, as a CTO at a startup (which counts Google Ventures as an investor) I have hired many engineers from Google over the past 18mo. Approximately half our engineers are ex Google, Amazon, Microsoft. Beyond our product and ENG culture, our policy is fully distributed work (within the US - compliance reasons) and that is the one benefit ex FAANG engineers seem to value the most, currently (small N, selection biases acknowledged). Over all roles, I would estimate more than half the company consists of ex FAANG employees. Many were tired of being locked into a geography which did not make them happy.
So I view this as a change in the market dynamics which is allowing startups like mine to help make these engineers happier. We have engineers that have joined, and immediately moved to Hawaii, or purchased a rural farm in the Midwest - and we are 100% supportive of them having a work/life that makes them happiest. Also, we've removed policies of paying differently based on the traditional tier 1, 2, and 3 geographies.
This is a market advantage that favors engineers, and as such - I'm very supportive :)
I'm not sure if FISMA/FedRAMP necessarily require it, but it certainly makes things 'easier' (as much as they can be).
Generally, the point is... federal stuff is the most likely candidate in my opinion.
Every country has their own laws and regulations around employment that you have to comply with, so even if it would be fine from the US side it would still cause a lot of legal work from the other side. Small companies might get away with hiring them as contractors, but large companies would get targeted if they did that too much since not every country is as lenient with these things as USA is.
Do you compete with Bay area FAANG salaries? It seems that part of the reason companies pay so much in Silicon Valley is because the cost of local labor is so high.
What would happened to the existing employees of the same company that already accepted lower salary for being in LCOL?
Google Mountain View pays differently than other Google branches (heck for a while, the pay in Google Seattle was slightly lower compare to HQ).
Now you have Google Señor Developer in LCOL accepted the fact that they get paid less than their compadre in Mtn View, but your Mtn View compadre decided to be your neighbour while refusing your level of pay. Wouldn't that create tension?
Companies want to be competitive in your local market so they can retain you and so they can "hire the best".
Where this gets murky is now everyone is remote so is there really a local market?
My experience is five of them could not replace me. They didnt have the skills. Maybe this has changed in the past year or so.
However the main difficulty with outsourcing is probably that the company want so save the hassle of recruiting and having employees and procures crappy programming sweatshops rather then having proper employer-employee relations.
If the goal was not to save "hassle" and cheaping out on already cheaper programmers hireing in LCOL countries would probably be a much different experience.
Also most of the big companies have their largest R&D centers in India (Microsoft, Google, Amazon, Adobe,..., Uber, etc.). It is ridiculous to say that those offices are doing any less work than their USA offices.
Don't expect smart folks from India to work for $20 or even $50 an hour. You will get what you pay for.
My experience is that if you can pay 0.5 x <your salary> to an Indian developer I am sure you can find someone who can totally replace you.
Most of the times companies who want to "offshore to India" want to pay no more than 0.1 x <their local developer salary> and then cry when they can't deliver.
Indian tech companies are offering really competitive salaries nowadays. I have even started to see some Indian companies hire/outsource to Europe because it's cheaper.
In my experience of looking for remote engineers, top talent costs the same pretty much everywhere and the great engineers in India (Russia, Poland,..) demand a pretty similar salary in USD when asked to perform the same tasks.
I think parent is under the impression that run of the mill engineers offshore SWEs can perform the same as a Googler.
I get around 1/3rd of what I would receive in the US, work with a globally distributed team, and I'm quite satisfied with my salary and the company quite satisfied with me.
Regarding the competencies of developers in India, I don't doubt your experience but I know that there are plenty of skilled developers working at Google, Linkedin, Amazon, Microsoft and countless budding startups in India.
Edit: The above numbers were 5 years ago, might be closer today, but still.
On a work visa you can only live so long in the US before you have to leave for one full year or morr. Greencard is a lottery, you aren't entitled to one.
I'm a Vancouverite who has worked in the US (flying to customer sites) for 15 years now. A coworker moved to the US, didn't get the Greencard lottery, had to move back.
That's wrong.
Other than that, the answer to "why don't Canadians drive 3 hours south" is "they do". The brain drain from Canadian tech is real.
The same job?
Sure.
Getting the same results? That's why every offshoring project I've seen was a complete success...
From the employer perspective, the strategy toward compensation has NEVER been "equal pay for equal work". I understand why that is intuitively fair to people, but it's not rooted in reality.
The strategy is "I want to pay as much as other employers in the area". That is, if you get a job in the same area and your pay drops 40-50%, then that's a BUG from Google's perspective. They were paying you too much.
They want to pay you an amount so your pay will drop 0% or 10% when you get another job. Or conversely, if someone local is going to Google, they should get 0-10% more, not a 40-50% increase.
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As you mention, a corollary of this is that if most programmers start working remotely AND most companies offer remote jobs, then Google will be forced to adapt. Basically if all companies start doing what Reddit does, then Google will have to do that too to stay competitive.
It's a market-based system. There are many instances where markets determining prices produces outcomes we view as unfair.
Though I guess you can argue that it shouldn't be purely market-based and it should take into account "company loyalty". As the article mentions, employees can also "quit in place", which changes the calculus a bit.
https://www.quora.com/Do-companies-like-Microsoft-Google-Ama...
Companies like the ones you've listed typically base salaries on "Cost of Labor" (for a given role in a given market), not "Cost of Living" (i.e. the price of a bucket of goods in a market) .
So that is exactly the misunderstanding here. People think the goal is "equal pay for equal work", or they think it's "cost of living". But neither of those is true -- it's a "cost of labor" adjustment.
Trillion dollar companies with their record quarterly profits cutting their employees pay is nonsense.
Ignoring the whole “well my company already knows I’m a great fit and hiring somebody new is a risk” argument as that is an issue with hiring & firing generally.
And then you have to ask: "was this worth it?". And my guess would be no.
Im NYC, Google just spent $2.1 billion on a Hudson yards building, in addition to the $2.4 billion for the Chelsea market and $600 million for the milk building across the street two years ago.
They have the money, they just might not want to lose their real estate investments value.
They tried to pull his chain on this, then realized he essentially was the market there.
Awkward exchange overall; felt very much like 'we want to dial the pressure of the thumb'.
Eventually they did a 180 on it and no adjustment happened. If it were me, it'd erode my trust. I'm thankful my employer only cares to know my location for tax/withholding purposes.
It's like you said... is there really a local market (with everyone remote?). Even then, this person was there just long enough to qualify for raises and already had several.
A bit like a slap in the face to have these rewards (presumably for your efforts) to be clawed back... because the employer essentially realized you didn't need as much anymore.
edit: To be clear, not Google - elsewhere.
If arguments about CoL or geography or nationalism quite being persuasive to potential hires, the hiring organization will simply switch to some other arguments. It's just business.
And remember, having the worker exit on their choice costs the company nothing.
Enough to have something that doesn't qualify as a "large" mortgage? Rarely.
It doesn’t impact tech people because the tech offices were always the bay, Seattle and nyc which often ended up in the same band.
As for losing talent, Google is sufficiently established that the majority of freshly minted computer science and software engineering graduates are still desperate to work for Google if they can get in. And Google doesn't need to hire all the top talent to grow or run with the same profit margins.
I suspect software engineering salaries for new hires will start declining in nominal terms within the next decade or so, as (1) automation lowers demand for engineers on the business side (2) the labor supply keeps growing (3) non engineers in tech companies demand adjustments to their own pay to match engineers or start leaving for other companies that do, leaving less money to pay engineers (4) MBAs keep moving into management and start cutting labor costs for their most expensive individual contributors to increase profits and satisfy shareholders.
When new graduates make as much as doctors, with only a fraction of the education, while every other profession, with the exception of junior investment bankers, including technical ones and non-software engineering professions, are lucky to crack $75k, I don't see how the current job market is sustainable.
EDIT: debugging skills are earned through experience, not taught.
The amount of production outages we’re starting to see across Azure/GCP/AWS is telling if you ask me.
Even when I was there, the number of inexperienced grads who had never known anything except Google was growing rapidly. And they unfortunately seemed much more prone to bizarre outbursts, bad behavior and extremism of various kinds. They took where they worked for granted.
Except you are now stuck and can't transition back to a HCol area because all these years you were building less equity.
A 1M house in the Bay Area sells for 1M. A 300K house in Anywhere sells for... you guesses it, 300K.
No matter how good a doctor is, they can only treat so many patients and/or train so many juniors. A software engineer can scale almost infinitely in some respects. In this they are more like the investment bankers you mention, indeed in some circumstances interchangeable
Where I live has a higher CoL than almost all of the US, and local salaries are a fraction.
It's about google paying competitively compared to local companies. Nothing to do with cost of living.
1. Employee switches to 100% at home situation, same team, same role. But they remain in the employer’s town, they don’t move away.
2. Same as scenario #1, but they move away to somewhere with a cheaper cost of living.
#1 suffers no pay reduction, but #2 does.
That person is either incredibly naive or dishonest. If she's naive, she should start by asking herself why is she paid multiple times what someone doing the same job in Hyderabad is.
In reality a common cultural background (i.e. how to approach some kind of work) is a lot more important than a lot of managers want you to believe. Outsourcing also requires extensive planning and management, which increases the number of managers required and thus increases the costs of outsourcing.
E.g. VW tried outsourcing over the last 10 years and is now recruiting developers en masse in Germany because it failed to make it work.
Except for the fact that it's not outsourcing to the lowest bidder like companies tried back then.
Pretty much every major American tech company has a development center in India. The developers working here are employees of the parent company. They have the same or functionally similar culture as the HQ.
And the cost advantage has significantly shrunk because of the booming local startup scene.
No matter how you slice it, it’s very hard to get people to feel like they’re all on the same team. It can happen, but it take tremendous time and effort. If you’re ever interviewing and someone insists that using an outsourced development firm or Indian development center will only cost 30% as much as those close to the HQ - I’d recommend walking out. Because it’s clear they don’t understand (or perhaps care) about the true economics.
Rinse and repeat.
EDIT: by which I mean that the issue is more deep than just how to manage people. Managing an existing talent pool seems to part of the picture.
What the crews on the machine room think about the deal hardly matters.
Time difference: this can be mitigated for North America by using teams in South America, but scale is typically limited, The time difference in India is brutal for everyone, you end up having small windows of time to communicate synchronously either early or late, people are typically tired when this communication happens, either just waking up and trying to get their kids to school/ family going or trying to go to sleep so they can wake up early for another call… which leads to sleep deprivation!
One way around this is key individuals who have strong people + technical skills spend significant amounts to of time at the start of projects in North America(assuming it is a NA centric project) this allows them to fully immerse and absorb the nuances of the people, product, requirements and politics of the program, this is expensive and can be challenging from a visa perspective, any project I’ve worked on that has succeeded started with this.
Seems mean and greedy to me.
I use MY resources, My power/internet/aircon/floor space to do a job for my employer. Why should I be paying for that?
If a company can get the same or better quality of engineers in a lower cost of living area at a cost discount (example: Canada where salaries were about half than in SV and about 50% less than say Midwest US), why are they going to not take the discount? And this "arbitrage" is what it seems to be happening, with US companies hiring fully remote Canadians at 25% discount for them and still the Canadians making 25% more than they used to. (Obv this doesn't address existing employees who moved to LCOL)
If I as corporation buy from a third party OEM and they decide to move production from Texas to Malaysia or Vietnam, would you also feel strongly that I as customer am entitled to a discount?
Or would you consider that we have agreed to a contract where the supplier is delivering the same OEM product but now from a different location?
Labor, historically, has not been so mobile. There is not a single market for labor, there are many different markets.
And in each market, the company pays the prevailing market wage. For that reason, when someone moves from market A to market B, their wages are adjusted up or down based on the cost of labor in those markets.
Oh wait...
Does the company exist to support the HR department, or does the HR department exist to support the company and employees? At google, we know the answer.
You essentially get payed to afford housing in the area where you work, not by value.
You're paid about the same as other jobs you could get. The drop in salary is a loss of leverage you have over the company