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Buffer’s Salary Formula 3.0

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Re: Buffer’s Salary Formula 3.0

#51

Post by StavrosK »

bryanlarsen wrote: post #39
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 rete…

I agree with you, but both those points use what I call "invalid proxy metrics". If you want to reward connectedness, do that. Connectedness doesn't correlate with cost of living very much. In other words, why would an introvert employee in SF get paid more than a conference/meetup organizer and pillar of the tech community in Bangalore?

> It's basically a retention bonus: somebody living in SF is far more likely to jump ship than somebody living in Podunk Hollow

That's more reasonable, but again, the probability of jumping ship doesn't correlate with cost of living. We already give people who are likely to jump ship more money than others when we do the initial salary negotiations, this is a strict subset of that.

Re: Buffer’s Salary Formula 3.0

#52

Post by [deleted] »

greysteil wrote: post #38
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 hir…

[deleted]

Re: Buffer’s Salary Formula 3.0

#53

Post by humanrebar »

karrotwaltz wrote: post #50
scrumper wrote: post #37

Earlier quoted context omitted.

Why's that? Food, housing, and transport cost different amounts in different locations.

But everything else is the same price. If my rent is twice the price of yours, should I really have twice your salary? If the formula for salary was (basic expenses * life factor) + (benchmark * role * experience) I would understand, but we're nowhere near that.

> But everything else is the same price.

It's more complicated than that, too. The average NYC rent is higher, but the average NYC apartment is also smaller. And the average commute for a SF employee is longer. Let's say you're in a three bedroom townhouse with a garage ten minutes from work in Austin. Is the COL adjustment going to pay you enough to have a three bedroom townhouse ten minutes from work in SF?

Also, COL is more local than the city. The rent in Jackson Heights, Queens is a fraction of the rent in Chelsea, Manhattan.

Re: Buffer’s Salary Formula 3.0

#54

Post by moxious »

jasonkester wrote: post #26
moxious wrote: post #22

Earlier quoted context omitted.

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…

Negotiating your market rate isn't caring about money 'first'. It's caring about money 'at all.' They're different. Leaving $50k/year on the table at age 30 will move your retirement date back ten years. It takes a lot of culture to make up for that.

Remember, labor is just another thing we buy and sell.

In other markets, like those for cars, there are specialists that focus on naming fixed, non-negotiable prices. What buffer is doing seems pretty similar.

Like I said, the market has lots of options for devs. I don't know if they're $50k off...when I said not all devs care about salary, I'm talking about the last 10%. I don't know anybody who ignores $50k.

Re: Buffer’s Salary Formula 3.0

#55

Post by moxious »

pleasecalllater wrote: post #42
moxious wrote: post #22

Earlier quoted context omitted.

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…

Yea, so an employee should work hard to make money for the pleasure of the CEO buying another home this month? I rather work for my family, not for the CEO's one. If a company doesn't want to pay me enough, I'm sure I will find another one.

This is excessively cynical, for two reasons; in the Buffer model, the CEO's pay is subject to the formula too, and in a startup where people are getting equity, your financial outcome is tied to the success of the company, and your main risk is the failure of the company, not some faceless person siphoning the dollars off.

Whenever you sell your labor, obviously the buyer of that labor thinks it's worth more than what they're paying for it, otherwise they wouldn't do it. So you're always working for someone else to make money unless you own your own thing.

It's just a question of degree there.

Re: Buffer’s Salary Formula 3.0

#56

Post by moxious »

hueving wrote: post #33
moxious wrote: post #20

Earlier quoted context omitted.

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…

It doesn't have to be a huge city. I'm in a midsize city not in the Bay area, and I agree with everything you're saying about places like Boulder.

I wrote this to contrast any size city with places like the endless suburbs or rural areas, not to create a hierarchy of "biggest is best".

Problems do also scale with size, so it's not like the massive benefits of cities are tradeoff-free. For as great as San Francisco is purported to be, they have a huge homeless problem that they seem to do relatively little about.

Re: Buffer’s Salary Formula 3.0

#57

Post by moxious »

pawelkomarnicki wrote: post #31
moxious wrote: post #18

Earlier quoted context omitted.

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).

I don't follow this at all. Yes companies are made by people not places, but people are in places. Those places matter a lot. Where will you find better people, in downtown London or rural Iowa?

Given a group of 7 people (posit some great team) their output is the same irrespective of location, sure -- but how did you get those 7 people? If you were in rural USA, your probability of ever having arrived at that situation is already much lower.

If location truly didn't matter, then you'd be able to move your SF team to Iowa and save a lot of money, but that's not going to work.

Re: Buffer’s Salary Formula 3.0

#58

Post by moxious »

rtpg wrote: post #25
moxious wrote: post #17

Earlier quoted context omitted.

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.

Market capitalism is a tool that lets you pay the person living in the countryside less. But we are the ones who decide whether paying the countryside person less is "fair". The moral weight of our actions are mostly independent of what a free market gives. The market is a tool, not the objective.

> The market is a tool, not the objective.

This perspective I agree on. Specifically, markets are a tool for finding prices, because we've observed all throughout humanity that alternative methods of pricing (and hence resource allocation) go poorly. It's the least worst system! If you need to do that thing (establish prices and distribution of resources with minimum waste) then the market is a great tool.

If you're trying to solve some other problem (establishing "fair" pay) -- then I agree that appealing to the market is like pounding nails with a saw. It isn't even supposed to do that thing.

In Buffer's case, they're trying to go after fairness, which is fine. But this overall post above (bringing us back to topic) is that they're starting to introduce factors that are swinging them back towards the market. The market is pretty tough to ignore in the long term, irrespective of our feelings about its fairness.

Re: Buffer’s Salary Formula 3.0

#59

Post by moxious »

andrewingram wrote: post #32
moxious wrote: post #17

Earlier quoted context omitted.

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.

I don't really know what should be done about salaries. I don't really believe that "fairness" can be defined, or even if it could be, that you could get a global workforce to agree on a definition.

On the other hand, I'd take the opposition position of yours and say that we should be incentivizing people to live in big cities for [many reasons](https://www.city-journal.org/html/why-big-cities-matter-more...). It is not perfect or tradeoff-free, but nothing ever is.

Re: Buffer’s Salary Formula 3.0

#60

Post by ci5er »

StavrosK wrote: post #27
moxious wrote: post #20

Earlier quoted context omitted.

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.

That's my point: Getting paid less on top of not having those advantages isn't appealing to me. However, your argument is not valid: Large size doesn't imply high cost. Neither Shanghai (most populous city) nor Manila (most dense city) have higher costs of living than SF.

> Manila (most dense city)

This comment doesn't take away from your point - but isn't densest either Dhaka or Mumbai?

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