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New Remote-First Formula and Updated Salary Calculator

open.buffer.com

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Re: New Remote-First Formula and Updated Salary Calculator

#131

Post by hajile »

lordCarbonFiber wrote: post #119
hajile wrote: post #109

Earlier quoted context omitted.

Explain to a dev that "we don't pay SV devs more, we just think you're worth less". You don't have to be on-site, so the real market is nationwide (if not international). Companies simply pretend it's limited so they can pay less.

That's true in theory, but rarely in practice. Committing to enabling remote work is nontrivial and doesn't suite every team nor every employee. And that still doesn't solve the talent issues; highly skilled professionals congregate in areas with amenities (culture, like minded people, access to top notch medical care, access to schools, access to public transportation, etc) so even if you're remote you're still comp…

That may be true to some degree, but if a dev makes 150K in Tennessee, they'd have to make 450K+ in SF to keep the same standard of living.

Are SF medicine or schools 3x better? Is public transportation 3x better? Is the culture 3x better?

I think not.

You can get comparable things in cities with a fraction of the living cost which self-evidently shows that people are paying too much for what they are getting.

Finally, if I'd rather live somewhere without any of those perks and pocket the money instead, should I be told that I can't? Should my decision be held against me?

Re: New Remote-First Formula and Updated Salary Calculator

#132

Post by amyjess »

pimmen wrote: post #23
hajile wrote: post #8

Why do companies continue to pay out higher salaries to devs in high cost of living areas? In this case, their payscale pays out 30-50K more in high cost living areas vs low cost areas. Rather than blow revenue rewarding bad life choices, offer to move them to an area with lower costs of living. Do that for only 10 employees and you have 300-500K EVERY SINGLE YEAR to re-invest into your company. In practically any ot…

If your devs are located in a bigger city, you can have an office located in that bigger city. If you have an office in a bigger city, you can recruit easier since there's more devs in a bigger city. If your devs are in a bigger city, there's a good chance they went to the bigger university in that bigger city. If you have devs from a bigger university you can more easily recruit from that bigger university. If your…

Big city != HCOL

The Dallas metro area is larger than the SF metro area (and so are the individual cities), but Dallas's COL is half as much as SF's.

Edit: For that matter, just to ward off the (valid) point that the SF metro area doesn't include most of SV, the Dallas metro area is larger than the SF and SJ metro areas combined. San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara have 6,172,302 people combined as of the 2010 Census, while Dallas-Fort Worth-Arlington has 6,426,214 people.

Re: New Remote-First Formula and Updated Salary Calculator

#133

Post by Balero »

hardwaresofton wrote: post #19

Another company that does open salary calculations is Gitlab: https://about.gitlab.com/jobs/developer/#compensation (this is a random developer job, you can check out other positions @ https://about.gitlab.com/jobs/ ) Here's the feature ticket: https://gitlab.com/gitlab-com/www-gitlab-com/issues/831 Disclaimer: I don't work for Gitlab, but I am a pretty biased rabid fan.

Rubbish for the UK (Bristol) I was paid more straight out of uni than I would get now 4 years later.

Re: New Remote-First Formula and Updated Salary Calculator

#134

Post by ryanwaggoner »

sidlls wrote: post #125
ryanwaggoner wrote: post #118

Earlier quoted context omitted.

Because subjectivity in favour of someone, is to the detriment of another employee (because the budget is limited) This is not how salaries work. Companies don't have a pool of $x for y employees. They try to hire every employee at as low a cost as possible. If you accept a salary at $10,000 below what they were willing to pay for that role, it's not like you can rest easy knowing that the other employees will get th…

> I'd like to better understand why we don't. My view: most workers just want a paycheck and at the end of the work day leave work at work. That isn't compatible with running a company. Besides, even in worker-owned companies an implicit hierarchy emerges and gains its own inertia until eventually "ownership" is technically true but doesn't mean much.

I'm not talking about "holacracy" or some super-flat structure. You can still hire management to run the company, but the employees get the ultimate profit from the company.

Member-owned cooperatives are interesting for some of the same reasons, and seem to work well in many cases.

Just wondering why we don't have more of these structures.

Re: New Remote-First Formula and Updated Salary Calculator

#135

Post by hajile »

kowdermeister wrote: post #92
ryanwaggoner wrote: post #67

I know this is cynical, but this really just reinforces my suspicion: the open salary thing is actually an attempt to underpay through a formula that's presented as objectively fair. Over time, it ends up gravitating your workforce towards average or below-average performers. There's no room for top talent here, because there's no subjectivity in this formula. If you're a fantastic dev (or whatever), why would you wo…

As worker in Eastern-Europe, their salaries look totally awesome to me. You'd be surprised for this money how many good people you could find.

There are other considerations. Most countries in Europe have lots of government services that offer non-monetary advantages. You have to buy most of those things in the US.

There's no free lunch. Instead of giving the employee the money, much of it is handed directly over to the Government (then a bunch more directly from personal income taxes).

If you choose to forgo those things while in the US, there is a monetary advantage. If you choose to buy them yourself, you will probably find your final income level to be very close to the same as in Europe.

Re: New Remote-First Formula and Updated Salary Calculator

#136

Post by sillysaurus3 »

ryanwaggoner wrote: post #128
sillysaurus3 wrote: post #105

Earlier quoted context omitted.

It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Also $300k total comp translates to $450k fully-loaded cost to the employer, meaning you can only hire four of those engineers before you burn through $2M funding per year. Are you sure that's worth it?

It's probably mistaken to say that 10% of the software engineering workforce could become millionaires within 3.3 years if {condition}, for all values of condition ruling out survivorship bias. Have you ever earned $300k in a HCOL? Because I have (NYC) and you're doing very well if you get to save $100k of that. If you're single, by default you lose $120k to taxes, so then you need to keep your budget under $6700 / m…

And my point wasn't that 10% of engineers are doing that, but just that they are capable of getting that kind of job with some effort. If all 10% of them tried, that would push the market down, so I'm really just talking capability, not whether 10% of devs could all be simultaneously making that

There's an old Feynman quote:

"All the time you're saying to yourself, 'I could do that, but I won't' -- which is just another way of saying that you can't."

I used to feel the same way as you. But actions are all that matter, not beliefs. It was materially impactful to let go of the notion that "people could if they tried" and flip to "some do, some don't, and if they don't, they won't until proven otherwise." It turns out to be a handy general rule about people, not just this one scenario.

You might be right about total comp. But $350k vs $450k is rather quibbling: the main cost to the employer is a $350k burn rate.

And in Buffer's situation, it's all about averages, not outliers. If you're hiring 10 engineers, being more generous than Buffer's salaries seems like a mistake. After all, Buffer is proof that the market will bear these.

I think what's happening is that Buffer is one of the few companies willing to publish the data, so suddenly everyone is watching and analyzing them. But these kinds of tough decisions are routine.

It's very important to avoid http://www.paulgraham.com/pinch.html as a company. The company has to focus on not dying, since that's the way to win.

On the other hand, it's worrisome that there are no outliers at all. A fair market should look closer to a J curve rather than an even distribution. But everyone will just need to get used to the idea that some engineers will make $300k and others $100k. That is fair, because that $100k engineer could not easily get a non-$100k job, or else they would have done so. (Conversely, that's why the $300k engineer is making $300k: because they put effort into making sure they can get another one if they need to.)

That seems to explain your reaction pretty well, right? You balked because you're one of those $300k engineers that has a lot of options. Most don't.

EDIT: Actually, the distribution of engineering salaries seems pretty good: http://www.wolframalpha.com/input/?i=96917++101331+106709+10...

https://i.imgur.com/RLxLGzi.png

There aren't any outliers, but it's not linear, which is a good sign.

Re: New Remote-First Formula and Updated Salary Calculator

#137

Post by sidlls »

sillysaurus3 wrote: post #96
ryanwaggoner wrote: post #59

Earlier quoted context omitted.

Maybe they should be afraid of this negative analysis. You don't get a pass on bad decisions just because you're making them openly. From my cursory glance, I have a bunch of problems here: 1) Most egregiously, it looks like they're slashing a bunch of salaries. Not the CEO, of course, but a lot of others seem to be going down. I would be immediately headed for the door in that scenario. Talk about a way to keep only…

We all like to tell ourselves that we are impactful and in the top 1%, but most of us could not land a job for $300k total comp. It would also be a mistake to pay us that much. Negative growth of your runway chart is a quick way to get into the fatal pinch. Those Buffer salaries are quite reasonable for engineers. If you're not looking at them hungrily, then may I suggest you're probably not the customer here? And by…

I don't think $300k is "top 1%". Maybe top 20%. I'd rate myself no better than being at the lower end of the 60th to 80th percentile: I'm slightly better than average, at best and on a good day. My all-in compensation is around (but more than) $200k, and I work at a relatively unknown public company with ~300 employees. I can easily get ~$50k-$100k more if I wanted to play the "code monkey interview" game simply by refreshing myself on leetcode for a bit and finally acquiescing to the recruiters from FB, Amazon and Google that ping me every so often during the year, following up with Lyft, Uber or Netflix, or even leveraging myself into a smart startup.

Re: New Remote-First Formula and Updated Salary Calculator

#138

Post by amyjess »

ryanwaggoner wrote: post #59
danvoell wrote: post #42

There is a lot of typical HN negative analysis in this discussion. Let's step back and applaud the fact that this is open. Who else does that? People don't do it because they are afraid of this type of negative analysis. This is a very cool comparison for those who don't have concrete numbers to take into HR. Thanks for sharing Buffer!

Maybe they should be afraid of this negative analysis. You don't get a pass on bad decisions just because you're making them openly. From my cursory glance, I have a bunch of problems here: 1) Most egregiously, it looks like they're slashing a bunch of salaries. Not the CEO, of course, but a lot of others seem to be going down. I would be immediately headed for the door in that scenario. Talk about a way to keep only…

> Large COL adjustments make no sense to me. So I work for a remote company and choose to live somewhere cheaper and they think that the value I'm providing is less? The end result of this is that remote devs get screwed on average, while the best remote devs avoid companies like this, rightfully so.

Well, that depends where the company is headquartered and how much the local employees make.

Let's say the company is headquartered in SF, and the local employees make an SF-typical salary. If the company pays all remote employees what they pay their local employees, then that's a very nice deal for remote employees in low COL areas. If the company uses COL adjustments for remote employees, then employees located in lower COL areas take a pay cut, and your argument holds.

But imagine if the company was instead located in a low COL area like Phoenix and the local employees make a Phoenix-typical salary. If the company is paying all remote employees what they pay their local employees, then remote employees in high COL areas won't make enough money to live on. So in this case, using COL adjustments for remote employees is the only way for it to be worth it for people in high COL areas to consider working for them.

Re: New Remote-First Formula and Updated Salary Calculator

#139

Post by sillysaurus3 »

ryanwaggoner wrote: post #134
sidlls wrote: post #125

Earlier quoted context omitted.

> I'd like to better understand why we don't. My view: most workers just want a paycheck and at the end of the work day leave work at work. That isn't compatible with running a company. Besides, even in worker-owned companies an implicit hierarchy emerges and gains its own inertia until eventually "ownership" is technically true but doesn't mean much.

I'm not talking about "holacracy" or some super-flat structure. You can still hire management to run the company, but the employees get the ultimate profit from the company. Member-owned cooperatives are interesting for some of the same reasons, and seem to work well in many cases. Just wondering why we don't have more of these structures.

Tradition is very hard to change. It would take a major, visible demonstration that those proposed structures give a big advantage over those that don't.

It's worth trying, though.

Re: New Remote-First Formula and Updated Salary Calculator

#140

Post by jamie_ca »

eximius wrote: post #12

Wow, this is really terrible. This looks like a PR explanation for why they're slashing everyone's salaries. A cursory glance shows everyone either staying the same or dropping. > One of the toughest decisions we made with the new formula was to remove the annual 3% loyalty increase given to teammates for each anniversary from their start date. > We looked at a lot of options and in the end decided to remove it as it…

You might be reading the table wrong? Last column is their adjusted baseline, 2nd column is their baseline+options+dependents.

Comparing with [two years ago](https://open.buffer.com/transparent-salaries/) it looks like engineering at least has about 35% turnover, but everyone is up in salary - some by quite a bit if they've relocated.

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