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Ask HN: Location based pay is killing my motivation, how do others handle it?

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Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#361

Post by smileysteve »

robertlagrant wrote: post #279
benhurmarcel wrote: post #272

Earlier quoted context omitted.

> Your pay is based on the cost to hire your replacement. That’s it. That's not quite true. The cost of hiring your replacement is only the maximum they'll accept to pay you. But they will pay you only slightly above what they think you'll find elsewhere. So your pay is the MIN(cost of your replacement, what they think you can get elsewhere). That explains location-based pay for remote jobs. Because they take into ac…

I think it's 3 - the role has to be valuable enough to pay for: MIN(cost of your replacement, what they think you can get elsewhere, your value to the company)

In this case, 3 is proven as long as the company is actively hiring in the higher paid location

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#362

Post by smileysteve »

This is likely just a policy from your hr department on employees (or contractors).

You could work around it by starting your own company, have your employer contract with your new company for a given period or piece of work, and pay yourself from there. It moves some of the regulatory work from them to you, but allows you to charge market rates.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#363

Post by robertlagrant »

smileysteve wrote: post #361
robertlagrant wrote: post #279

Earlier quoted context omitted.

I think it's 3 - the role has to be valuable enough to pay for: MIN(cost of your replacement, what they think you can get elsewhere, your value to the company)

In this case, 3 is proven as long as the company is actively hiring in the higher paid location

Hmm yes. I think this is also evidence that the company values the person being in that location more than the other one, which might translate to higher (3).

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#364

Post by derefr »

gumby wrote: post #204
derefr wrote: post #153

Earlier quoted context omitted.

Bay Area companies hire in the Bay Area, for the same reason companies are founded in the Bay Area to begin with: because most of the VCs in the US live in the Bay Area. And Bay Area investors care a lot about having a package of colocated staff "human assets" that put an acquihire-based floor on the company's acquisition price. Companies that don't operate from the Bay Area, almost never hire Bay Area remote workers…

> Bay Area companies hire in the Bay Area, for the same reason companies are founded in the Bay Area to begin with: because most of the VCs in the US live in the Bay Area. You're putting the cart before the horse. Investors live all over the place, and large funds have offices in markets where there is a signifcant number of possible high growth companies to invest in. And they'll invest where they don't have an offi…

Two-sided markets have virtuous-cycle network effects, yes.

DARPA made Silicon Valley, but Stanford and UC Berkeley — and nearby communities that evolved to become basically playgrounds for the students of them — kept it going. Entrepreneurs came (or stayed) to capture the supply of smart and bored college-aged intellectual labor; and VCs came (or stayed) because of all the entrepreneurs.

But that doesn't mean that seed-stage companies don't move to (or stay in) the Bay Area these days primarily because of the VCs, rather than because of the talent. Talent is free to move anywhere it likes — especially these days. An entrepreneur will find just as many potential employees for their startup in literally any college city.

But tech VCs (and especially ex-tech-entrepreneur angel investors) will, despite having a presence in many places, mostly still live and spend their free time in the Bay Area. And so you'll be much more likely to have your name on their lips if you're showing up at local events they attend, bumping into them at restaurants, meeting them on the golf course, etc.

Let me put it this way: every Canadian seed-stage startup I know of, has their CEO regularly fly to the Bay — even if they're located on the east coast of Canada! — to rub shoulders with the Sand Hill VCs, in hopes that they'll get more attention there.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#365

Post by SQueeeeeL »

hcks wrote: post #332
SQueeeeeL wrote: post #247

Earlier quoted context omitted.

> You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages. I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. Just because a bunch of people could take your job doesn't mean they'll give a shit about the job. Good, well motivated, employ…

Well, I don’t think an employee who fantasises about sinking the ship by leaving is still a “good, well motivated” employee

Being aware of your value != wanting to ruin your company. I feel like many programmers are actually very happy with their positions and don't seek to change them.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#366

Post by derefr »

xyzzy_plugh wrote: post #160
derefr wrote: post #153

Earlier quoted context omitted.

Bay Area companies hire in the Bay Area, for the same reason companies are founded in the Bay Area to begin with: because most of the VCs in the US live in the Bay Area. And Bay Area investors care a lot about having a package of colocated staff "human assets" that put an acquihire-based floor on the company's acquisition price. Companies that don't operate from the Bay Area, almost never hire Bay Area remote workers…

> Source: we are a Canadian company, and hire from everywhere but the US. I don't follow. This isn't true at all in my experience, plenty of companies in Canada and the US hire across Canada and the US. It's practically the norm. If you work for a Canadian company that doesn't hire in the US then you're comically underpaid. Wages are converging very fast. Many companies are paying parity and frankly folks are selling…

(Context clarification: I'm not an employee of a Canadian tech company; I'm a cofounder + major shareholder of one. I'm looking at this from the hiring side, not the being-hired side.)

Wages might be "converging" to the same numeric value — CAD$N in Canada vs USD$N in the US — but those are, and have always been, very different amounts of money. The two countries are still nowhere near the sort of economic equilibrium-state where Canadian companies are paying the prevailing US salary exchanged into Canadian dollars.

Also, there are a number of costs related to hiring US remote workers (as a company headquartered outside the US) that don't apply to hiring remote workers in most other countries. You're expected to provide some kind of private insurance plan, for example. Take-home pay may be converging, but the cost to the company of hiring a salaried US employee — or even a US contractor, as long as you care about being equitable / not building resentment when your employees talk amongst themselves about relative total compensation — is still higher than the cost to the company of hiring elsewhere.

And to be clear, the prevailing wage isn't even that relevant, as we're not really talking about "hiring the median American" vs "hiring the median [person living somewhere else]." We're talking about hiring people who apply for — and are considered top candidates for — remote tech jobs, among a global candidate pool. In the US, these people mostly happen to live in HCOL areas (like the Bay Area); which means their BATNA is to be paid far more than the US median wage for an SWE, because that's what the companies in HCOL areas have to offer to retain local talent there. To hire these people, you can't just offer "the going rate"; you have to offer FAANG money.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#367

Post by cabbagesauce »

badpun wrote: post #280
uf00lme wrote: post #198

I agree with you that most of the general HR arguments don’t hold water and are philosophical at best. All they try to do is hide the fact that you are not paid the way you are because of your talent or efforts. In most EU/commonwealth countries you can thank unionism for the benefits you have. For multinationals, one thing to note is the location of the employees normally has very little to do with the talent and st…

> Employee talent and costs are really generally not the focus of why companies setup shop where they do. I don't think that's the case. For example, there are plenty of large, mutlinational companies opening offices in Poland and hiring hundreds or even thousands of devs there specifically because you can get competent people for a fraction of what they'd cost in the company's mother country. Also, of course it's im…

So true! I wouldn't even start telling that Google not just underpays polish employees but cuts on the RSUs claiming that TC is adjusted to location based pay.

In the end it turned out the whole non-US IT world is a sweatshop now. Not like it wasn't like this before, but with exposure from apps like Blind the 500 pound elephant is no longer to be ignored.

Plus, the whole crybaby about remote work being kewl is USA-driven cost/time employee savings rationale too. In Europe, remote doesn't make much sense because it's 2x times smaller than the US.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#368

Post by tasuki »

timmyboop wrote: post #227
quickthrower2 wrote: post #95

Kind of depends what you are getting paid, but if it is less then $100k say, you can easily find remote jobs that pay more, play them off against each other. The companies are using sharp business practice to get you as cheap as possible, you can do the same to get as much as possible. Apply for 100 remote jobs, interview, smash the interviews, ask for top $ from all of them. See https://remoteok.com/ , etc. If on he…

>Kind of depends what you are getting paid, but if it is less then $100k say, you can easily find remote jobs that pay more, play them off against each other. Someone from Asia who is pretty good at their work can get a fully international remote job that pays north of 100K USD? Is this practically possible or is it super difficult like say getting into MIT or CMU. I'm asking because this seems farfetched and I have…

Asia is a big place. I'm in Eastern Europe, $100k is very possible when working remotely. Also, $100k is an outrageously good salary here - think 5 times the local average.

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#369

Post by robertlagrant »

amadeuspagel wrote: post #349
robertlagrant wrote: post #346

Earlier quoted context omitted.

There is no single one. Do you mean the market rate in the most expensive places to live in the world?

See that's kind of my question: Why and how is there no single market rate? If you have truly worldwide remote work, that's what you would expect, right?

I don't know why that would be. Markets aren't intrinsic to how things work; they emerge if people are allowed to trade (including their time as an employee) according to a set of predefined rules.

So salaries might go up in one region if people want to do business there, for the sole reason that there is competition amongst employers for the employees there. They'll go down (or stay the same) if there's competition amongst employers for employers.

How does your example raise salaries all over the world to the most expensive salaries, worded in a way that also explains how those expensive salaries came about?

Re: Ask HN: Location based pay is killing my motivation, how do others handle it?

#370

Post by mattdeboard »

okaram wrote: post #231
mattdeboard wrote: post #131

Earlier quoted context omitted.

Exactly. Alienation from the fruits of your labor. It's disgusting we expect people to tolerate it, and act like it's not a totally optional choice by management to exploit labor resources to get a better return on investment for the already wealthy. A modern take on colonization.

It's a choice by management,but it's an obvious choice. We should not expect everyone to be a horrible person, only motivated by profit, but we also should not expect people to act against their own interests all the time.

Following profit motive doesn't make one a horrible person. People operate rationally within the rules they're constrained by (e.g. capitalism). I just think we are capable of making better rules.
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