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Remote First at Brex

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Re: Remote First at Brex

#41

Post by ponker »

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.

The fact is that having an employee in New York City, in the average case, is worth more than having an employee in Mongolia. They can talk to a customer more easily, given that your customers are more likely to be English-speaking Yankees fans in the Eastern Time Zone than Mongolian speakers in Ulaanbataar. They can go to an event more easily, since there are more conventions in NYC than Mongolia. They can fly to the company retreat more quickly and more cheaply. They can culturally align a product/brochure/email to a target customer more easily than their counterpart because the target customer is most likely to be in a high cost of living area (that's why they're high cost of living... lots of people with lots of money to spend on salaries or SaaS applications). If you need to read a bunch of English text, such as reading through a competitor's annual report or developer documentation, the New Yorker will likely be able to do so more quickly. They are more likely to understand "rich people" references that target customers make, like "I was at the regatta last weekend so I missed your call." There is an advantage to global diversitt for a company serving a global audience, but there are also a lot of reasons to, software engineering skills being equal, prefer the New York employee.

Re: Remote First at Brex

#42

Post by ponker »

mStreamTeam wrote: post #9
Aperocky wrote: post #6

Earlier quoted context omitted.

Make sense.. offices are not being used while staff is as productive (probably not as happy though? but that's case by case) at home. A lot of offices may go bankrupt in the coming years, even when this whole thing is over.

Its just interesting to see all these layoffs and cost cutting measures right after they raised a ton of money. In case you are unaware, Brex's business model is to lend money to startups. The kicker is they lend money to startups that banks and investors won't touch. They advertise themselves as a tech company but in reality they are closer to a high risk VC firm.

Not at all surprising, raising a ton of money usually gets that investor onto your board who probably now wants you to cut unnecessary spending.

Re: Remote First at Brex

#44

Post by shard »

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…

Sounds like a way to incentivise new employees to move to the highest COL locations ASAP, to take advantage of the salary bump for things such as 401k contributions, any matching 401k company contributions, and Social Security earnings calculations.

Re: Remote First at Brex

#45

Post by ponker »

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 agree with this in principle because the outcome of non-adjusted pay will be a "race to the bottom" on wages, which will get more wages to people in poorer areas that helps them lift those areas out of poverty, while basically making New Yorkers unhireable as remote workers unless they possess extraordinary skill.

To think that anything else would happen, like the ludicrous "Bay Area salary" becoming the global standard offer, is like thinking that anyone would hire a house painter who quotes twice the market price to paint your house, by explaining that he lives in a 6-bedroom posh waterfront condo and also maintains a country house.

Re: Remote First at Brex

#46

Post by neonate »

tempsy wrote: post #37

I blame FB for setting this bad precedent. Now that they've set the standard for remote compensation every company now has cover to adjust compensation using some flawed cost of living calculator.

Many companies were already doing that before FB and before Covid.

Re: Remote First at Brex

#47

Post by nhumrich »

I disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc my pay", but not seeing it the other way around as well. If you worked at a company based out of, say, detroit, but lived in SF, you would demand SF income, because otherwise you wouldn't be able to afford a living.

This policy protects you, even if you do work at a SF place. Lets say, in theory, you move to some place cheaper, and that place starts becoming more expensive. Likewise, SF becomes cheaper over time (or, the company just moves HQ to somewhere cheap). By doing location based pay, your pay continues to go up, in line with your local area cost of living. Otherwise, if you were still getting paid based on SF cost of living, you would be loosing money every year. Eventually forcing you to move, which, you might not be able to do because of family, house, etc.

Second, its ethical. "Salary" represents a quality of life, i.e. Purchasing power, not a raw number of dollars. If you were paid SF wages while you lived in a third world country, you could very well be the richest man in the country. This does not make sense. Nor is it ethical, think of the raw damage you could do to that economy. For a more common scenario, do you really feel that a mediocre software dev working for a SF company should be paid more than the local best ER doctor? Many professions simply cant be done "remote"

Third, it makes all companies "equal". In a "remote first" company, the location of the HQ shouldn't matter. Maybe, not even exist. Most companies are actually "Delaware companies". Should they pay delaware salaries?

And lastly, its just economics. The reason salaries are so high in SF is because no one wants to live in SF, because cost of living is so high. Its supply and demand. The cost of finding good talent in SF is astronomically high. As soon as you go "world wide", then you can attract great talent at a cheaper price. AKA, if you are going to demand a SF salary, they can certainly find someone cheaper and better (fire your ass). Frankly, _still_ getting paid a SF salary while in SF at a remote company is just incredibly generous of the company. At remote first companies, salaries will have a downward force. Over time, you will get paid less working remote.

Re: Remote First at Brex

#48

Post by nhumrich »

tempsy wrote: post #37

I blame FB for setting this bad precedent. Now that they've set the standard for remote compensation every company now has cover to adjust compensation using some flawed cost of living calculator.

I disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc my pay", but not seeing it the other way around as well. If you worked at a company based out of, say, detroit, but lived in SF, you would demand SF income, because otherwise you wouldn't be able to afford a living.

This policy protects you, even if you do work at a SF place. Lets say, in theory, you move to some place cheaper, and that place starts becoming more expensive. Likewise, SF becomes cheaper over time (or, the company just moves HQ to somewhere cheap). By doing location based pay, your pay continues to go up, in line with your local area cost of living. Otherwise, if you were still getting paid based on SF cost of living, you would be loosing money every year. Eventually forcing you to move, which, you might not be able to do because of family, house, etc.

Second, its ethical. "Salary" represents a quality of life, i.e. Purchasing power, not a raw number of dollars. If you were paid SF wages while you lived in a third world country, you could very well be the richest man in the country. This does not make sense. Nor is it ethical, think of the raw damage you could do to that economy. For a more common scenario, do you really feel that a mediocre software dev working for a SF company should be paid more than the local best ER doctor? Many professions simply cant be done "remote"

Third, it makes all companies "equal". In a "remote first" company, the location of the HQ shouldn't matter. Maybe, not even exist. Most companies are actually "Delaware companies". Should they pay delaware salaries?

And lastly, its just economics. The reason salaries are so high in SF is because no one wants to live in SF, because cost of living is so high. Its supply and demand. The cost of finding good talent in SF is astronomically high. As soon as you go "world wide", then you can attract great talent at a cheaper price. AKA, if you are going to demand a SF salary, they can certainly find someone cheaper and better (fire your ass). Frankly, _still_ getting paid a SF salary while in SF at a remote company is just incredibly generous of the company. At remote first companies, salaries will have a downward force. Over time, you will get paid less working remote.

Re: Remote First at Brex

#49

Post by jnwatson »

ryanSrich wrote: post #40
crashedsnow wrote: post #32

Earlier quoted context omitted.

I don't see it as a relic, or a bad one. Some people can't just up and move to a cheaper location for a job they don't know they'll have in a year's time. How do you decide what to pay? Paying based on "experience and merit" needs to be anchored on something, so you just end up either massively over-paying someone in a location that's cheap, or massively under-paying someone in an expensive area. If you want to pay e…

> Any company with shareholders is accountable first to them (for good or bad) and I'm not sure your board or CFO would agree that paying peak makes sense Good thing I have neither a board or a CFO. But to respond directly, I think you're down playing how much of an advantage over paying (as you've put it) can be for acquiring great talent. Great companies are built by great people. Paying them well for the work they…

I understand the ideal of it, but the main reason why it doesn't work is simple supply and demand. Your employment opportunity will seem compelling for folks that live in LCOL areas, or folks trying to escape HCOL. But for the 5x as many programmers that live in HCOL areas, your pay isn't competitive.

If you want to reduce your candidate pool by 70 or 80%, by all means, go for it, but there's a clear market reason why folks are paid geographically.

Re: Remote First at Brex

#50

Post by saadatq »

carriganisms wrote: post #8

A service that does planning and execution of off-site meetups for remote companies is a great business idea. Essentially, travel agency/event planning for remote first companies. Once we're past COVID, a lot of companies are going to stick with remote first and making the planning of off-sites easy seems like a must need service.

I know that InVision (InVision app.com, a remote-first company) has an entire team dedicated to planning their yearly offsite. I can imagine many other companies choosing to hire a company to help plan offsites. Great idea :-)
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