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Ask HN: Local vs. remote salary gap

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Re: Ask HN: Local vs. remote salary gap

#11

Post by patio11 »

Anecdotally, companies which I've worked with set bands based on local market conditions and allocate you within the bands on a roughly cross-company performance basis. e.g. 10 levels of engineers, level 3 engineers in NYC and Bogota are roughly comparable in skill level but the ones in NYC make quite a bit more.

Mostly for internal sensibilities of fairness, it is generally the case that e.g. level 3 engineers in Bogota working at the company would earn above-market for their skillset in Bogota. The companies tried to strike a balance between "We want to pay them equitably with our employees in high-cost US locales.", "We want to retain them versus other offers.", and "We do not want to give them golden shackles by e.g. paying grossly more than any employer in their low-cost locale."

This assumes functioning remote cultures and regular, full-time, full-class employees. Consultants obviously do things differently. (And any consulting client which made reference to Nagoya FTE rates in a negotiation with me would have gotten a firm handshake and non-specific pleasantries immediately.)

Re: Ask HN: Local vs. remote salary gap

#12

Post by ryanSrich »

It's very interesting to read that most companies change salaries based on location. I'd like to hear from someone in a senior level position explain the reasoning behind that.

I think that it would make the most sense to pay someone what they are worth, regardless of location.

As a remote worker who moves quite a bit I'd be constantly having to renegotiate my salary.

Re: Ask HN: Local vs. remote salary gap

#13

Post by troels »

ryanSrich wrote: post #12

It's very interesting to read that most companies change salaries based on location. I'd like to hear from someone in a senior level position explain the reasoning behind that. I think that it would make the most sense to pay someone what they are worth, regardless of location. As a remote worker who moves quite a bit I'd be constantly having to renegotiate my salary.

Sense for who? As an employer, it makes sense to pay as little as you can get away with. Cost of living has a pretty big say in that matter.

Re: Ask HN: Local vs. remote salary gap

#14

Post by izolate »

bfwi wrote: post #6
nedwin wrote: post #2

It's relatively common for their to be a gap between local and remote developers. Buffer have been incredibly transparent about their approach to this: http://open.bufferapp.com/introducing-open-salaries-at-buffe...

As I read this, Buffer doesn't pay remote employees less. Rather, you're payed more if you work from expensive cities (eg. Hong Kong), than if you work from cheaper cities (eg. Bucharest)

I've never understood or agreed with this approach. Your lifestyle choices should have no bearing on your salary. If somebody reduces costs by choosing a cheaper city to live in, it should be regarded as any other frugal activity. That is, an independent and completely personal affair.

I understand the cost saving benefit from an employer's perspective, but since that's not me, I've chosen my side.

Re: Ask HN: Local vs. remote salary gap

#15

Post by bgun »

ryanSrich wrote: post #12

It's very interesting to read that most companies change salaries based on location. I'd like to hear from someone in a senior level position explain the reasoning behind that. I think that it would make the most sense to pay someone what they are worth, regardless of location. As a remote worker who moves quite a bit I'd be constantly having to renegotiate my salary.

We try to equalize net pay taking into account a reasonably consistent standard of living. As mentioned above, equalizing gross salary across geographies where employees have dramatically different purchasing power doesn't feel fair and takes a toll on morale.

If you move often and work remotely, it seems to me that salary renegotiation would become as routine as any number of other tasks you doubtlessly encounter.

Re: Ask HN: Local vs. remote salary gap

#16

Post by ktavera »

I make the same remote as I did as an in-house senior developer. But I will note that when I was interviewing for remote opportunities I came across a lot of cases where the salary was different for remote and on-site employees. Even signing bonuses of $10k or so to come in and work from the office.

Re: Ask HN: Local vs. remote salary gap

#17

Post by ryanSrich »

bgun wrote: post #15
ryanSrich wrote: post #12

It's very interesting to read that most companies change salaries based on location. I'd like to hear from someone in a senior level position explain the reasoning behind that. I think that it would make the most sense to pay someone what they are worth, regardless of location. As a remote worker who moves quite a bit I'd be constantly having to renegotiate my salary.

We try to equalize net pay taking into account a reasonably consistent standard of living. As mentioned above, equalizing gross salary across geographies where employees have dramatically different purchasing power doesn't feel fair and takes a toll on morale. If you move often and work remotely, it seems to me that salary renegotiation would become as routine as any number of other tasks you doubtlessly encounter.

What doesn't seem fair is that if I move from San Francisco to Kansas City to save money my pay goes down. I'm not doing anything differently. I'm still working the same amount of time, doing the same level of work.

Re: Ask HN: Local vs. remote salary gap

#18

Post by programminggeek »

I think there is something sort of foolish about the fact that across the board employees are basically not allowed to mention real numbers regarding how much they make or even things like the industry average pay.

Read these threads and you almost never hear anyone mention real numbers because they are terrified of either being fired or having their peers realize what a good/bad deal they've made.

Yet, in a lot of public institutions like Universities, public schools, salaries are a lot more transparent.

Companies probably don't want people to know what other people make because it gives the individual leverage to negotiate. We as developers are terrible at negotiating and don't want to admit it.

Anecdotally, in Lincoln, NE I've seen developers paid anywhere from $25,000 to $120,000, but most range in the $35,000 - 65,000 range. I believe most devs at UNL or the state of NE fall between 45k and 65k, but some can be a good bit higher.

What gets me is if a dev in the midwest who would normally get paid $60,000 or so, how much should they get paid as a remote worker for a startup in SF? In SF I assume a dev costs $120,000 or more, so if you were being hired there what is the right number to ask for?

In a truly remote work environment, does it really make sense to pay dramatically less or more just because of where someone lives? Is someone's relative value decided by their location or by their skills and abilities?

Re: Ask HN: Local vs. remote salary gap

#20

Post by zaroth »

ryanSrich wrote: post #17
bgun wrote: post #15

Earlier quoted context omitted.

We try to equalize net pay taking into account a reasonably consistent standard of living. As mentioned above, equalizing gross salary across geographies where employees have dramatically different purchasing power doesn't feel fair and takes a toll on morale. If you move often and work remotely, it seems to me that salary renegotiation would become as routine as any number of other tasks you doubtlessly encounter.

What doesn't seem fair is that if I move from San Francisco to Kansas City to save money my pay goes down. I'm not doing anything differently. I'm still working the same amount of time, doing the same level of work.

Dollars simply aren't worth the same in San Fran as they are in Kansas City. Your pay is actually not "going down" in an economic sense.

Taxes are part of it. If overall state taxes (property, local, state, sales, and other fees) is 25% of your gross in CA, and 15% of your gross in MO, companies can reasonably expect to pay less in MO for the same work.

Another way to think about it, what percentile does your pay fall into for similar jobs in San Francisco versus Kansas City. If being paid $120k as a 5-yr Rails Developer in San Francisco puts you at the 50th percentile, move to Kansas City and all of a sudden that same $120k could put you in the 80th percentile (numbers are totally made up). Assuming developers aren't actually smarter in CA than MO, your percentile pay shouldn't change.

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