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Buffer’s Salary Formula 3.0

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Re: Buffer’s Salary Formula 3.0

#31

Post by pawelkomarnicki »

moxious wrote: post #18
chrisan wrote: post #8

Earlier quoted context omitted.

Ya.. I don't get how they can call this a "remote-first" approach or adheres to "Do the Right Thing" for the employees The reason these high cost of living places exist is because they are in high demand due to all the benefits. Someone living in North Dakota (sorry anyone who is, I'm sure it is great!) won't have all the culture, food, weather, entertainment, night life, etc of someone living in the bay area. A "Do…

If people were truly paid for what they did and not where they were, this would probably exclude most Bay Area people since they're at the top of the market. Perhaps your company has adjusted to the normalcy of SF rates? OTOH, location matters a lot. Otherwise your company wouldn't be in the Bay Area. Centers of gravity are a thing. Why not pay for location? Even if an employee is remote only, if they network well wh…

Location matters for PR purposes, a great team located in the Bay Area will have the same output if located in rural USA, Europe, or Asia. Companies are made by people, not places (unless you're a farmer, but that's a different story entirely).

Re: Buffer’s Salary Formula 3.0

#32

Post by andrewingram »

moxious wrote: post #17
ploggingdev wrote: post #7

Earlier quoted context omitted.

Basecamp recently started paying all employees SF salaries : https://m.signalvnoise.com/basecamp-doesnt-employ-anyone-in-... They are a class act, I'm not aware of any other company that does this.

That comes across to me really strange. Labor is a market just like bananas or mobile phone data. How does it make sense to pay the ceiling price of all markets, everywhere? I'm all for personally earning more money, but this also disproportionately rewards people who live in cheap places.

Given what high salaries has done to cities like London and San Francisco, I believe it's an ethical urgency for companies that can afford it to pay the same salaries regardless of location. We should be incentivising people to not live in big cities, it might actually do something to (a) fix housing prices and (b) help reduce the ridiculous political polarisation we've been seeing.

Re: Buffer’s Salary Formula 3.0

#33

Post by hueving »

moxious wrote: post #20
StavrosK wrote: post #14

Earlier quoted context omitted.

That's the thing, you don't get the same quality of life. If you're in the valley, you have many orders of magnitude greater job liquidity than anywhere else, which is why you're paying the living cost premium. Otherwise, why would you live in a high-cost area?

There are a zillion reasons to live in high cost areas aside from job liquidity. The magic of concentrations of people is that the advantages scale faster than population growth because of the network effect. Which, separately, is why cities are awesome and population density is a good thing for the planet and most people, even if it upsets some people that they can't have a big yard.

I think you might be blinded by your love for high density. Traffic, long commutes, higher crime, higher rent compared to the average salary (adults need roommates), long lines for anything decent, crappy parking or crappy public transit... These are all reasons that almost every large city in the US sucks.

Smaller cities like Boulder, Fort Collins, etc offer a decent amount of variety while eliminating the majority of the problems with the large cities.

Career is about the only thing a big city can be critical for and you have to be in the right city for your field.

Re: Buffer’s Salary Formula 3.0

#34

Post by JustSomeNobody »

moxious wrote: post #22
jasonkester wrote: post #15

To me, this seems like it will ensure your company only ever has average developers. A good developer can negotiate a bette rate if he wants, or at the least, he'll be offered gigs at above average rates. By sticking to the exact market average according to their salary surveys, they're only able to select from the list of candidates who don't meet the above criteria. That is, the below average ones, and the occasion…

Not all developers care about salary first. I see this overall approach as more like flying a flag and publicly indicating culture because there's a particular crowd they want. This is how they advertise what's important to them and draw like minded people closer. That seems 100% legit to me, and super useful for any dev considering them that they're so straightforward. No one has to like it or choose it for themselv…

They should. All companies care about money first, so why shouldn't the employees? Having an awesome work culture should be something every company strives for and shouldn't make up for mediocre pay practices.

Re: Buffer’s Salary Formula 3.0

#35

Post by phantom_oracle »

A couple of things to point out:

- They say they are doing away with location-specific factors in the formula. However, their formula still uses Numbeo to calculate cost-of-living based on your locality (which is location-specific)

- They seem to be transparently "hiding" (an oxymoron I know) the fact that their new formula is stripping away 2 major benefits:

   - Removing 3% Loyalty Raise
   
   - The Salary Choice Option Now Phases out at 4 Years ("In fact, in May of 2016, we stopped offering this choice.")
I actually mentioned this company in my comment about the Basecamp salary adjustments [1]

I'm going to agree with StavrosK on this and say that these formulas are pointless at best (and probably just a means to give HR/finance/marketing some extra work).

Living in SF/NY/London is expensive, but the tradeoffs for living in these areas is the high demand for technical skills and networking (tradeoffs in a professional sense).

[1] https://news.ycombinator.com/item?id=16051062

Re: Buffer’s Salary Formula 3.0

#36

Post by dalai »

murukesh_s wrote: post #11
StavrosK wrote: post #3

I really dislike adjusting salaries of remote employees by location. Oh, you live in San Francisco, where everything costs a lot because it's trivial to network and get a multitude of job offers the minute you change your LinkedIn status? Let us pay you for the privilege double what we pay someone in Kenya who has none of these opportunities! Or, alternatively, "You don't live in SF so we don't have to compete with a…

What about living cost? I agree the difference now is higher than adjusted for living cost, but it's really unfair for someone living in the high cost area to get paid the same salary as someone who need to spend only a 5th of that to get the same quality of life.

The salary is compensation for your work and is typically based on your skills, experience and responsibilities. As a remote worker you have the option to choose your location to get the quality of life you want. Should I get a 50% raise just because I decided to move from Canada to California to enjoy the weather?

If the company forced you to be in a high cost area, then by all means they should adjust for it. If they want their employees to be in a specific area they could add a bonus for it.

Think of it the other way. Let's say we have two people with exactly the same skills and experience, the only difference is that one lives in SF and the other in Sri Lanka. They both provide the same value to the company but according to the calculator, if the person in Sri Lanka gets $100,000 the person in SF should get $438,000. Is that fair?

Re: Buffer’s Salary Formula 3.0

#38

Post by greysteil »

StavrosK wrote: post #3

I really dislike adjusting salaries of remote employees by location. Oh, you live in San Francisco, where everything costs a lot because it's trivial to network and get a multitude of job offers the minute you change your LinkedIn status? Let us pay you for the privilege double what we pay someone in Kenya who has none of these opportunities! Or, alternatively, "You don't live in SF so we don't have to compete with a…

That's not quite how the economics works here.

A fully rational company should be thinking "what do I have to pay to get the work I need doing done?" If that work can be done remotely then that optimisation works out as:

- Who can I hire in low cost locations and pay less for, without sacrificing quality (which I'm using VERY broadly to represent ANY differences in the work, team interactions, etc.).

- If I can't hire enough of those, fast enough, how much am I willing to pay in high-cost locations.

In the short term, when the company is trying to hire fast, talent is scare globally, and the company isn't connected to all global talent pools (so struggle to hire there) a sensible optimisation is salaries adjusted by location.

In the long term, as the company has time to build its remote brand and (if) its hiring requirements stabilise, a sensible optimisation will be work leaving high-cost centres like SF.

Don't feel too sorry for people in low-cost centres who work gets redistributed to at a lower cost - in the long term work from the high-cost centres is shifting to them, unless there are quality reasons for it to stay in the high-cost areas.

Re: Buffer’s Salary Formula 3.0

#39

Post by bryanlarsen »

StavrosK wrote: post #3

I really dislike adjusting salaries of remote employees by location. Oh, you live in San Francisco, where everything costs a lot because it's trivial to network and get a multitude of job offers the minute you change your LinkedIn status? Let us pay you for the privilege double what we pay someone in Kenya who has none of these opportunities! Or, alternatively, "You don't live in SF so we don't have to compete with a…

There are definite advantages a company can get when an employee lives some place well-connected, the casual networking that happens when all of your friends are in the industry. Very occasionally such a connection can land a big lead or a 10x employee or whatever. So that could be used as justification for the salary differential. Pretty flimsy though.

But they should just call a spade a spade. It's basically a retention bonus: somebody living in SF is far more likely to jump ship than somebody living in Podunk Hollow. So just practice some of that radical transparency they're claiming and say that outright.

Re: Buffer’s Salary Formula 3.0

#40

Post by gaius »

murukesh_s wrote: post #11
StavrosK wrote: post #3

I really dislike adjusting salaries of remote employees by location. Oh, you live in San Francisco, where everything costs a lot because it's trivial to network and get a multitude of job offers the minute you change your LinkedIn status? Let us pay you for the privilege double what we pay someone in Kenya who has none of these opportunities! Or, alternatively, "You don't live in SF so we don't have to compete with a…

What about living cost? I agree the difference now is higher than adjusted for living cost, but it's really unfair for someone living in the high cost area to get paid the same salary as someone who need to spend only a 5th of that to get the same quality of life.

unfair for someone living in the high cost area to get paid the same salary

Unfair how? The ENTIRE POINT of paying in currency rather than in square feet of living space is that it abstracts all of this - you earn the cash proportionate to the value you create then spend it however (and wherever) you like

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