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Remote First at Brex

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Re: Remote First at Brex

#91

Post by barry-cotter »

kag0 wrote: post #65
jlj wrote: post #57

Earlier quoted context omitted.

Game theory

I meant the thinking that tries to minimize cost and aims for "how much they have to pay you before you decide to quit".

Profit maximization. You make the point that companies can choose to hire employees that aren’t the bottom of the barrel but then you’re selling a different product to those who really are squeezing every penny. CostCo and Walmart are both successful superstores but one sells many more products, in smaller minimum purchases, and hires lower quality employees while paying less. These kinds of differentiation factors lead to what’s called oligopolistic competition[1]. They’re not in separate markets but they’re it selling the same product either.

[1] https://www.monash.edu/business/marketing/marketing-dictiona...

Re: Remote First at Brex

#92

Post by cercatrova »

nickcox wrote: post #74
jnwatson wrote: post #49

Earlier quoted context omitted.

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 wh…

Where are you sourcing your stat from? It's hard believe that the millions of developers in China, India, SE Asia, East Europe, etc. are outnumbered by people in New York and San Francisco. Cripes, US$150k is good money in London and that's a considerably higher cost location than rural Kansas.

Usually remote means US only for US based remote companies.

Re: Remote First at Brex

#93

Post by cercatrova »

mStreamTeam wrote: post #19
devmunchies wrote: post #17

Earlier quoted context omitted.

> selling themselves as a tech company They built a lot of the underlining infra for their Brex Cash product. > use it to invest in high risk startups Don't they require you to pay back the balance at the end of every month? And you're not aloud to go over a percentage of whats in your bank account. These restrictions limit the risk.

Every bank builds their own infrastructure, yet I've never heard a bank advertise themselves as a tech company...

Capital One does, to my knowledge.

Re: Remote First at Brex

#94

Post by gyulai »

enra wrote: post #31
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).…

So how do you imagine hiring people with similar experience/skill level SF if they base salary offers are $200k and Europe people are happy with $100k since their rent/mortgage/livingcost is about 5-10x less? Pay everyone $200k or $100k (essentially stop hiring in high cost location)? Until the markets/remote salaries align, you kind of have to pay based salaries the people are able/need to receive in their respected…

...the argument I was trying to make was: remote work with no geographical adjustment of pay could be a force for good in the world economy to bring about a non-ridiculous market equilibrium.

Ridiculous is what I call the situation where wealth creation done by tech companies and tech workers ends up in the pockets of Bay Area landlords instead of in the pockets of the people who take the risks and do the work.

Ridiculous is what I call the situation where other geographies invest heavily in getting their young people top-notch education (like in Europe), and instead of earning a return on that investment for themselves see their young people relocate to the Bay Area and contribute to the tax base there.

Ridiculous is what I call the situation where you're a top-notch tech professional and in order to earn money commensurate with your value you have to go through the hardships of the immigrant situation and be part of a culture / economic system that you may not like, subject yourself to political leadership that you may not approve of etc.

Shall I continue?

The good news is that the market will eventually sort this out: Some remote companies will be doing geographical adjustments to pay. Some will not.

The best workers in low-COL areas will end up with the companies not making adjustments. So making adjustments will leave you stuck with the worse workers. So you will end up getting what you pay for: If you pay little you will get low-quality work even in low-COL areas.

People in high-COL areas will figure out that there's an opportunity to have more disposable income by relocating away from high-COL areas and taking remote jobs with companies not making adjustments. The only people who can't do that is the people whose work is so low-quality that they actually can't compete internationally so that their high-COL postcode actually is their only viable argument when it comes to negotiating high compensation. So paying higher compensation to people in high-COL areas will become detached from the narrative that those also happen to be the best people. It will come to mean nothing more and nothing less than making donations to those poor needy Silicon Valley landlords, and I doubt that this is a cause that many tech companies will be getting behind, as opposed to using their money to do actual tech.

Re: Remote First at Brex

#95

Post by malyk »

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.

I think it all comes down to competition.

If I'm hiring a remote team globally, then you are competing against people I can hire anywhere. A great engineer in Brazil could cost...I don't know...$45,000. An engineer with the same exact skill set who lives in California might be $160,000 and one in Chicago might be $110,000.

If an employer paid $160,000 for every employee then they aren't using their capital very efficiently when they could have saved $115,000 on the employee in Brazil and potentially hired two more people for the team.

Re: Remote First at Brex

#96

Post by nhumrich »

maxlamb wrote: post #71
nhumrich wrote: post #48

Earlier quoted context omitted.

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…

The other viewpoint is that you provide the same value to your company whether you work in SF or in Kansas City (assuming WFH in both places). So basically you are saying "Hey, if I move to a cheaper place, please take 40% of my compensation and give it out to the C-Suite and shareholders, since I have no other options in my new city". I guess that is the reality of capitalism, and why ownership/equity is so importan…

this is already messed up though. Salary _does not equal the value you provide the company_. It represents the cost to extract the value. A quality senior engineer provides 3-7x the value of a junior, but only gets paid 30-40% more.

Re: Remote First at Brex

#97

Post by ptkd »

nhumrich wrote: post #47

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…

I think it just sets up some pretty weird incentives for employees, especially when you consider that cost-of-living calculators are often wrong. I don't think this model will work in the future.

Let's fast-forward 5 years and assume many companies have taken on this model and are now remote first. COL adjustments will have occurred, and COL is a very reasonable proxy to "desirability of living location", because as you mention these cities are based on supply and demand. When there's a high demand, COL goes up and as such so do the salaries of the folks living there.

So now employees are basically at a junction where they can live wherever they want. However, their employer will cover the expenses of living somewhere better (if we take this high COL = desirable line of thinking). So employees will go to these places, effectively costing the employer money!

The fundamental outcome of this change is employers are offering a giant "live somewhere expensive" stipend that can only be cashed if you choose to live somewhere expensive. It's just odd. I know for a fact if I was at one of these companies I'd move to wherever I could get the most money, because I think COL often overrates how expensive cities are.

Re: Remote First at Brex

#98

Post by ptkd »

gyulai wrote: post #94
enra wrote: post #31

Earlier quoted context omitted.

So how do you imagine hiring people with similar experience/skill level SF if they base salary offers are $200k and Europe people are happy with $100k since their rent/mortgage/livingcost is about 5-10x less? Pay everyone $200k or $100k (essentially stop hiring in high cost location)? Until the markets/remote salaries align, you kind of have to pay based salaries the people are able/need to receive in their respected…

...the argument I was trying to make was: remote work with no geographical adjustment of pay could be a force for good in the world economy to bring about a non-ridiculous market equilibrium. Ridiculous is what I call the situation where wealth creation done by tech companies and tech workers ends up in the pockets of Bay Area landlords instead of in the pockets of the people who take the risks and do the work. Ridic…

Some really compelling points here, nice

Re: Remote First at Brex

#99

Post by nhumrich »

ptkd wrote: post #97
nhumrich wrote: post #47

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…

I think it just sets up some pretty weird incentives for employees, especially when you consider that cost-of-living calculators are often wrong. I don't think this model will work in the future. Let's fast-forward 5 years and assume many companies have taken on this model and are now remote first. COL adjustments will have occurred, and COL is a very reasonable proxy to "desirability of living location", because as…

Whats to follow is completely anecdotal. I had a job at a decent/high salary in an expensive city. I moved and took a pay cut, to about an average salary in a much cheaper city. I feel significantly "richer" then before. I think the "more money is always better" is simply false. Its ultimately about how much money you make _after_ rent/mortgage. where rent should be equalized for equivalent housing. My $300k 5 bedroom house would be > 2mil in SF. A 2x or even 3x salary doesn't even begin to bridge the gap.
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