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Zuckerberg says employees moving out of Silicon Valley may face pay cuts

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Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#191

Post by tzs »

Many comments have pointed out that pay is determined by the cost of replacement.

For employees at an office in SF (or Seattle or NYC or London or anywhere else), the relevant cost is how much they have to pay to get someone else in that same city. Hence, for non-remote workers the pay has to be high in high cost of living places.

Many people seem to think that when the same principle is applied to remote work, that means the pay should depend on the cost of living where that particular remote worker lives.

Is that actually the correct application of that?

If a remote worker in, say, Tulsa, OK quits and the company wants to replace them with another remote worker there is no reason they need the replacement to be in Tulsa, OK. It should be fine from the company's point of view if the replacement lives in Boise, ID (which has a lower COL than Tulsa), or Salt Lake City, UT (about the same COL as Tulsa), or Spokane, WA (higher COL than Tulsa).

So why should they offer more for workers that happen to live in Spokane, about the same for those in Salt Lake City, and less for those in Boise?

It seems to me to make the most sense from the company point of view to consider all remote workers to be essentially in the same location, and how much they pay should be what it takes to attract the number of qualified remote workers that they want to hire.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#192

Post by 6gvONxR4sf7o »

All the justifications of "salaries are just supply and demand" are evil to me (not that I'm saying facebook's choice here is evil). Yes, they'll often pay you the least they can get away with. They'll also treat you as badly as they can get away with.

Treating people as badly as you can get away with is not good, even if it's a natural product of supply and demand.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#193

Post by eeZah7Ux »

Jemaclus wrote: post #2

This is one of the things that's always bothered me. Let's say you hire me for your company in San Francisco and pay me $150K. You've made a calculation: my value to the company is greater than $150K, and $150K is a price you're willing to pay to leverage that value. In other words, the company will (eventually) make more than $150K per year off my contributions to the company. But now if I decide to move to Tulsa, O…

> has always struck me as bizarre and one-sided in favor of the businesses

Companies exist to extract the highest amount of profit from their employees.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#195

Post by pyuser583 »

talmr wrote: post #170
pyuser583 wrote: post #143

Earlier quoted context omitted.

The bay area offers a guaranteed supply of qualified employees. A tech firm in Boise might not be able to hire and Elixir developer at any price. In SF, there will be employees as long as you have cash. Not so elsewhere.

Also, they might not even want to hire for such a thing. There are plenty of businesses that don't need to be on fancy infrastructure or use the coolest new language for their backend.

Going old school is hard too. Not many COBOL programmers in New Jearsy.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#196

Post by em-bee »

joshpadnick wrote: post #34

We're a remote-first company and went through this same discussion when we began hiring people in different cities, not just in the USA but all around the world. What we found is that any approach to setting salaries has to balance the following factors: * Pay people enough to live comfortably * Pay people enough that they accept our offer vs competition * Pay people in a way that feels fair * Pay people in a way tha…

the problem with cost of living averages is that they don't take into account different living standards.

cost of living is largely driven by cost of property and rent. places with lower living standards are much cheaper than others. even within the same city. if the majority of people in a city accept those lower standards then the average goes down. But if you want to have the same nice apartment that that your colleagues in more expensive cities afford then your cost goes up.

this is especially noticeable in large asian cities where the majority of people live in cheaper housing than what a european standard would consider acceptable.

for example the salaries gitlab offers for china make it hard for any expat to work for them because they don't take this into account:

https://about.gitlab.com/handbook/total-rewards/compensation...

(i am picking out gitlab because they have this nice calculators that makes their pay very transparent)

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#197

Post by neilparikh »

floatingatoll wrote: post #20

Facebook and Palantir both used to pay people up to $10k/year to live within a mile or so of the office, since the cost of living in SF & Palo Alto & Menlo Park was so much higher than the rest of SFbay. I don't know if they still offer that perk, but I can attest that the increased costs of rent within a mile of those offices would, at that time, burn up that entire $10k and then some, relative to the rest of SFbay.…

Similarly, I always hear people talking about how tech companies should pay their contractors higher wages to account for the cost of living in the Bay Area. But given that the largest expense there is rent, that has the same problem: if there are more people looking for housing is greater than the number of available units, all you've done is changed who gets housing, and number of people with housing remains the same.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#198

Post by dntbnmpls »

Jemaclus wrote: post #2

This is one of the things that's always bothered me. Let's say you hire me for your company in San Francisco and pay me $150K. You've made a calculation: my value to the company is greater than $150K, and $150K is a price you're willing to pay to leverage that value. In other words, the company will (eventually) make more than $150K per year off my contributions to the company. But now if I decide to move to Tulsa, O…

> But now if I decide to move to Tulsa, OK, you want to cut my pay and reduce it to 90K, because of "cost of living".

See if it makes more sense going the other direction. Imagine you started in Tulsa making $90K. After a few years facebook wants you to move to SF. Would you still be happy with $90K in SF since that's what your worth to facebook? Of course not, you'd want cost of living adjustments.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#199

Post by huangc10 »

rukittenme wrote: post #96
huangc10 wrote: post #32

Always two sides to the same story. As a software engineer, of course I think I should make the same regardless of I'm on-site or remote. As a founder, of course I'm not going to pay someone who works on-site vs. remote the same. It's a never ending debate.

> I'm not going to pay someone who works on-site vs. remote the same. Sound like you'll be bringing lower quality remote engineers into a lower quality remote environment. Don't be surprised when that strategy blows up.

I am actually not a founder of any sort. I just mean if I put myself in the shoes of a founder. But true story, I am working at a successful startup that started from a Wordpress blog with a bunch of remote workers from Prague.

Re: Zuckerberg says employees moving out of Silicon Valley may face pay cuts

#200

Post by rongenre »

nostromo wrote: post #7

People should be warned that working remotely has been career suicide for as long as I've been in tech. Being "out of sight, out of mind" from management generally means you're passed over for promotions, and often the first to get cut during layoffs. It's just human nature. It's easier to layoff the person that's been working from across the country (or another country) than it is to layoff the person at the desk ne…

Working fully remote also means your hunt for your next job is really difficult. One of the upsides of working in a tech hub isn't just the job you have, but the next job you can find.
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