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Remote First at Brex

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Re: Remote First at Brex

#21

Post by barry-cotter »

kag0 wrote: post #20
nrmitchi wrote: post #11

> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-1…

Can someone explain the rationale behind geographically based pay in remote-first companies? I don't necessarily disagree with it, but I don't know what aspects of the issue companies are actually looking at to decide that geo-based pay is the way to go.

> Can someone explain the rationale behind geographically based pay in remote-first companies?

How much you are paid depends on how much they have to pay you before you decide to quit. The lowest pay you’ll accept before you decide to quit is based on what you think you can get if you quit. That’s heavily influenced by geography. As geography and job markets become uncoupled compensation will become more uniform regionally and then globally.

Re: Remote First at Brex

#22

Post by nrmitchi »

gyulai wrote: post #18

For a remote company to adjust pay to employee's geography: so not cool. Offering remote and paying people based on what they're worth to the company: Part of the solution! (The problem being: Structural deficits in certain regions yield lack of adequately-compensated employment opportunities for the highly-skilled. This makes the highly-skilled relocate. This makes it difficult to overcome structural difficulties).…

I also suspect, but don't have evidence to back it up, that it will also further contribute to socioeconomic divides.

You grew up in a wealthy neighborhood and decide to live close to family? Here is a pay package at X.

You grew up in a poverty-stricken area in a poor state, and need to live close to home to support your family? Well the cost-of-living there is 60% cheaper, so here is a pay package at X*(1-0.6).

People who have the ability to move most likely still will, because it is economically viable.

People who have family obligations and grew up in less affluent areas will be the ones getting the short end of the "location-adjusted-comp" stick.

Re: Remote First at Brex

#23

Post by ryanSrich »

kag0 wrote: post #20
nrmitchi wrote: post #11

> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-1…

Can someone explain the rationale behind geographically based pay in remote-first companies? I don't necessarily disagree with it, but I don't know what aspects of the issue companies are actually looking at to decide that geo-based pay is the way to go.

It's a relic, and a bad one.

I run a remote-first, remote-only company and we pay everyone based on experience and merit. Not location. If you want to stretch $150k in San Francisco go for it. Good luck having to live with 3 other roommates.

However, if you want to take that same $150k and live like a king in the middle of Kansas that's an option as well. Adjusting someones pay simply because they're logging onto their computer from a different location is perplexingly stupid in a world where people can work from wherever.

Re: Remote First at Brex

#24

Post by philsnow »

nrmitchi wrote: post #11

> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-1…

If they were to scale the adjustment by 25% until Sep 2022, 50% until Sep 2023, 75% until Sep 2024, and then 100% thereafter, that would create a bunch of pay drops and they would probably be more likely to lose employees at those dates.

If they linearly interpolated the drop across the next 26*4 biweekly paychecks, would that be better.. or worse?

Re: Remote First at Brex

#25

Post by erik_seaberg »

ryanSrich wrote: post #23
kag0 wrote: post #20

Earlier quoted context omitted.

Can someone explain the rationale behind geographically based pay in remote-first companies? I don't necessarily disagree with it, but I don't know what aspects of the issue companies are actually looking at to decide that geo-based pay is the way to go.

It's a relic, and a bad one. I run a remote-first, remote-only company and we pay everyone based on experience and merit. Not location. If you want to stretch $150k in San Francisco go for it. Good luck having to live with 3 other roommates. However, if you want to take that same $150k and live like a king in the middle of Kansas that's an option as well. Adjusting someones pay simply because they're logging onto the…

Maybe someday all tech employers will be remote-first and pay will be the same everywhere. But if you don’t compete with Bay Area offers now, you filter out everyone who relocated to the Bay Area to benefit their career.

Re: Remote First at Brex

#26

Post by ryanSrich »

erik_seaberg wrote: post #25
ryanSrich wrote: post #23

Earlier quoted context omitted.

It's a relic, and a bad one. I run a remote-first, remote-only company and we pay everyone based on experience and merit. Not location. If you want to stretch $150k in San Francisco go for it. Good luck having to live with 3 other roommates. However, if you want to take that same $150k and live like a king in the middle of Kansas that's an option as well. Adjusting someones pay simply because they're logging onto the…

Maybe someday all tech employers will be remote-first and pay will be the same everywhere. But if you don’t compete with Bay Area offers now, you filter out everyone who relocated to the Bay Area to benefit their career.

That's my point. Your baseline should be bay area numbers. Don't change that number simply because the person you're hiring lives somewhere else.

It also leaves the company open to gaming. If I know I can make significantly more than my peers just by having an address on the bay area I could find a way to get an address while living somewhere else.

Re: Remote First at Brex

#27

Post by nrmitchi »

philsnow wrote: post #24
nrmitchi wrote: post #11

> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-1…

If they were to scale the adjustment by 25% until Sep 2022, 50% until Sep 2023, 75% until Sep 2024, and then 100% thereafter, that would create a bunch of pay drops and they would probably be more likely to lose employees at those dates. If they linearly interpolated the drop across the next 26*4 biweekly paychecks, would that be better.. or worse?

I don't know if it's better or worse. As I said, there are many ways to think about it. I do think that explicitly creating 2 different classes of employees probably wouldn't even make it to my short list.

As well, I don't think that the early employees, who are already golden-handcuff-d (based on the growth in their valuation), are likely to be leaving Brex based solely on their salaries being adjusted if they explicitly choose to move.

Honestly, I think the actual adjustment is likely to be a moot point, at least in the short term. Based on my experience chatting with people at Brex 18-ish months ago, my impression was that everyone there was very much in the "SF-or-bust" camp. Not only did it feel like they were very against remote, it felt like they were against people who didn't explicitly want to move to SF. I suspect that a majority of their staff that is already in SF is not going to permanently move out of the city in the next year or so. In 4 years? Who knows, but it's kind of why this 4-year window feels odd.

Re: Remote First at Brex

#28

Post by nrmitchi »

ryanSrich wrote: post #26
erik_seaberg wrote: post #25

Earlier quoted context omitted.

Maybe someday all tech employers will be remote-first and pay will be the same everywhere. But if you don’t compete with Bay Area offers now, you filter out everyone who relocated to the Bay Area to benefit their career.

That's my point. Your baseline should be bay area numbers. Don't change that number simply because the person you're hiring lives somewhere else. It also leaves the company open to gaming. If I know I can make significantly more than my peers just by having an address on the bay area I could find a way to get an address while living somewhere else.

And hey, if you had started at Brex prior to Sept 1st, you wouldn't even have to game the system. But your coworkers _would_ (and would also likely be at risk of being terminated for cause if they got caught, not to mention state-tax issues).

Re: Remote First at Brex

#29

Post by throw03172019 »

nrmitchi wrote: post #11

> What happens to my compensation if I move? Brex pays by geographic market, so we will ultimately adjust an employee’s Total Compensation Value (TCV) if they relocate to where pay rates are different. However, for current Brex employees who relocate before Sep 1, 2021, Brex will not make any compensation adjustments until Sep 1, 2024 to help each of us manage through the unusual circumstances associated with COVID-1…

Is this because of contracts including stock options? Harder to dial those back?

Re: Remote First at Brex

#30

Post by Rapzid »

gyulai wrote: post #18

For a remote company to adjust pay to employee's geography: so not cool. Offering remote and paying people based on what they're worth to the company: Part of the solution! (The problem being: Structural deficits in certain regions yield lack of adequately-compensated employment opportunities for the highly-skilled. This makes the highly-skilled relocate. This makes it difficult to overcome structural difficulties).…

I would resign immediately if my employer tried that.
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