1. This is meaningless.
2. This is FAR more a factor of lifestyle choices than CoL. I've lived in extremely high and extremely low CoL places and there is not a big difference. I have a $1500 mortgage instead of a $1700 lease. Maybe apples are 20c cheaper a pound?
3. "It's better if we pay you less, really!" PS Other remote employers pay significantly more than you.
4. Pay people competitively for the role instead.
5. Pay people competitively for the role instead.
They claim they want a "geographically diverse team", but without saying what benefit that brings them, that doesn't really explain anything.
Hiring is hard. Sure there may be a theoretical "better hire" outside of the Bay Area, but if they have someone in front of them who seems like they would do a great job and wants to work for them, it behooves them to hire that person now, even if it costs more. The cost of not hiring them is probably more, in lost time and productivity.
Maybe as they get bigger and each individual role becomes less critical, they can start to focus their recruiting on areas outside of SF. But right now, given that the founders are in SF, it's probably a lot easier to recruit people here.
It is the same with factory workers, ideally you should pay them all the same and as much as you can. But when you start doing it all kinds of problems pop up like it is not sustainable because people want more, and factory does not earn as much. Then they strike and factory goes bankrupt, no more work.
If you will get concentration of people from one locale it is big risk for remote company. If company at some point will have to pull out from that locale because politics/taxes change for instance that is huge risk for those employees.
Social justice is not as easy as "give people because they deserve".
Can you maybe share what position you where considering and in what metro are you life?
... Oregon... entire state is same modifier?
I can rent a 4 bedroom house 2 blocks away from the university in La Grande for $1200/m.
I can rent a 3 bedroom house 2 blocks away from the university in Portland for $3900/m.
Does not compute.
It doesn't speak well that you need to be told which metro areas to add.
The US government had to address a similar issue and came up with a handy list of metro areas:
https://www.opm.gov/policy-data-oversight/pay-leave/salaries...
I find it a little odd that you would be so adamant about your compensation algorithm and not do basic due diligence exploring what others in the space have done in the space.
HN commenters shouldn't need to tell you what metro areas are missing - you should have proactively identified them.
The disparity is slightly decreased since I last run it but still a bit out of touch from "at or above market" in this case.
My local market (Montreal, Quebec, Canada) _severely_ underpays. It's common for people with 5+ years' experience to be making under 60k CAD (50k USD), if not way less. Because of that, many of the city's best devs either work remotely, or they move to Toronto, or New York, or the Bay Area.
When you base your salary calculations on local market rates, in very-low-market-rate areas, you're looking at an artificially lowered pool. I'm not surprised people balk when they find out how low you pay, because in their mind they aren't competing with local onsite developers. That isn't their market.
Also, there are many benefits to working onsite that don't appear to be factored into your calculations. Not all remote workers can work comfortably out of the home, and so there are office rental costs. Many onsite jobs provide things like free lunches, as well. It's possible these things are factored in; if so, it might be worth mentioning them here: https://about.gitlab.com/handbook/benefits/
EDIT: Removed a complaint about #3, as I saw from another comment that I misunderstood it. I still disagree with the premise - if I was unhappy at my current job, there are plenty of other remote companies that pay well, and even if there weren't, I'd gladly take a pay cut to do more fulfilling work - but it doesn't strike me as condescending anymore. Just ill-informed.
Ironically if you paid a high salary but allowed people to work in a low COL area, this wouldn't be an issue... because the workers could aggressively save for retirement and semi-retire fairly early in their career.
I've heard it used in the context of US government work. (They simply don't want people who are "in it for the money"). I don't know if that's based on studies or just a feeling.
Pensions don't exist anymore, you get a savings account (403b IIRC) w/ some % matching contrib
Did you mean "our" or "their"? If you're a Gitlab employee, please explicitly state that when making comments about your company on HN.
>Paying the same wage would lead to... A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team.
Weird, since it looks like you don't pay a ton in SF compared to market, and IIRC don't offer stock or large cash bonuses ala Mozilla. So if I had to pick between SF and say, Portland, I'd probably go with Portland since you don't seem to ramp up enough in SF. Basically, your salaries do the opposite of what they intend.
I also took a look at the salary tool, and it seems to lack nuance compared to say, the GS payscale, which differs based on granular localities. I see many states with wildly varying costs of living that only have one "compensation factor" that would have multiple regions on the GS payscale.
In fact, it looks like most of the points are pretty flaccid except for "If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results."
"I don't want to pay a fair wage because I can get more people with less salary" isn't a super compelling argument for workers.
Edit: added italics in quotes for readability and corrected a spelling error.
He's the CEO.
Thanks, and sorry for being harsh in my original reply, I should have couched my language to be less accusatory.
Do you mean this pay scale https://en.m.wikipedia.org/wiki/General_Schedule_(US_civil_s... ? It would be interesting to see if that would improve our date. I don’t think we have to go more granular than metro area, or did you mean something else?
As for payscale, I meant the locality pay tables:
https://www.opm.gov/policy-data-oversight/pay-leave/salaries...
The federal government aims to have everyone at the same grade and step to make roughly the same (adjusted for cost of living). Sounds similar to your goal.
To aid that they broke the USA into a group of metro areas.
You could look at the locality tables, and if there's states that have multiple entries on the GS payscale, adjust accordingly in your algorithm.
For example, Pennsylvania would have a low rate if you're in a small town like the capitol, a medium rate if you're in Pittsburgh (home to CMU) and a higher rate in the east near Philadelphia. Your model (IIRC) had one COL value for all of PA.
Similarly, you could look to the US State Department's per diem table to find a list of international localities that should have their own calculation. Many organizations rely on it. When I traveled on business for a multinational, they used the State Department Per Diem rates to determine what is a reasonable amount of money per day to give:
https://aoprals.state.gov/web920/per_diem_action.asp?MenuHid...
While the per diem rate itself may or may not be useful, a list of cities that should have a unique value for COL is a useful piece of data in itself.
To be honest, I'm surprised that nobody with input to the algorithm used either data source or a similar one - I don't know if say, Canada or the EU do their own calculations or leverage the US federal govt's. I know a few multinationals that use the federal guidelines for setting per diem costs rather than spend the effort calculating that in house. But the general idea - that a larger entity had to tackle this issue long ago and published their solution... I think it's a useful data source.
It's not about the idea of a salary calculator, it's about the ratios that you set. Not everything scales linearly and while you could absolutely live in a total dump and consider nearly 100% of the salary "disposable income", in order to live at a similar level to Western Europe, the expenses start increasing rapidly.
There are many counter examples of companies paying equal regardless of the location and:
1. Not everyone lives where it cheap. There are many factors when choosing where to live: Friends, family, emotional attachment to a place, ...
2. That's linked to 1, if they choose to move somewhere expensive that's on them, not imposed by the company.
3. Not true, someone unhappy isn't going to stick around just because they can make more money.
...
At the end of the day the main goal of paying less where the cost of living is cheaper is to increase the company profit. It's 100% reasonable but masking the reason behind some "fairness" bullet points is BS to me.
If you live in Omaha where tech salaries for the best of the best top out at $70-80k, but you're making $175k at Gitlab, it's going to take a lot to get you to leave.
Honestly the thing that bothers me most about all this "fairness" stuff if the implication that business is supposed to be fair in the first place. Salary negotiation is a leverage and your/the company's BATNA. That's why software developers can make $200k in certain areas and janitors make minimum wage. Yes, value provided to the company has something to do with it. Yes, scarcity of skill has something to do with it. But all those just flow into the equation of leverage and BATNA and you come out the other end with a range, and where you fall on that range is largely just your negotiating skill and whether or not you're willing to negotiate in the first place.
That being said, if you live in Omaha, and working for GitLab, you're going to need to be executive/director level to be making $175k. FrontEnd manager? $110, tops. Security manager, $130, tops.
I disagree. If I was making 175k in a city like that, I would probably work for a few years, then semi-retire. Maybe take a nonprofit job, do less hours and consult, or work for a local university with low pay but good work life balance. I wouldn't just ride it out for 10-20 years if I didn't enjoy the job.
If you're mid career and had aggressively saved prior to acquiring 400k, you could totally take up some sort of minimum wage gig to pay for insurance while your nest egg goes or take a nonprofit job.
That's my definition of "semi retirement", maybe yours is different.
With all due respect, this is b.s. Your company does this because it can, and because developers stuck in second and third tier cities (or countries) have little choice. It is blatant exploitation and a black mark on your company.
Edit: On closer examination, your third reason simply translates to : we are your best/only option right now so deal with it, this is borderline unethical practice.
However top tier talent can be hired remotely, and will generally be worth well above market in less sophisticated markets. When I first looked at your salary scale a few years ago when I was living in Oakland and the discrepency between SF and Oakland was absolutely ridiculous. I assume that has been fixed, but even as someone who might accept your SF pay, I know my worth, and would not consider working for you in any other region. I'm sure you'll find some good talent that doesn't know their own value, but you'll miss out disproportionately on the seasoned talent.
That's like saying that I'll work for free cause the boss wants to buy his wife a new ferrari.
Bottom line is that you pay market rate for the programmer. Whether he is programming out of a cardboard box in slum or working in a golden palace in Switzerland, it should not matter cause to the employee, your personal life does not matter. Any body that hears any of these reasons during a salary negotiation or raise should immediately look for work elsewhere. I know I would.
Granted, I do believe there is wiggle room for personal reasons("I just had a baby" etc)but gitlab should be paying employees based on the value they bring the company and/or market rate.
My major criticism is they have some states where there is one rate of pay for the entire state. Oregon being the most egregious - it's my understanding the difference in COL in Portland versus a rural area in Oregon (or small town like Eugene) is a lot.
I don’t work at Gitlab, use it, or anything.
> 1. A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team.
Wrong. You are assuming that people only care about maximizing disposable income. That is plainly incorrect. The vast majority of people won't move to a 3rd world country with a much worse standard of living, language barrier, uproot their family's life, have safety issues and what not, so that they would have potentially 2x - 5x spending power. The reality is cost of living around the world differs, but not to the extent that this influences a large number of people in an organization into switching countries.
> 2. Team members in high-wage regions having less discretionary income than ones in low-wage countries with the same role.
Wrong. And, also, WTF. It is also not your place to determine people's discretionary income, who do you think you are - their mum? a slave owner? A TV, a Macbook, a car, fuel costs about the same everywhere in the world, because there's a global market. That's true for pretty much everything but rent and food. And you're also completely unaware of various tax rules in countries that may give long-term benefits / short-term tax hikes that end up fundamentally changing earnings and lifestyle. Not that any of that would be your business, but if you're going to do that using this justification, you need to do extremely detailed and sophisticated research. Otherwise, your social equality goal will definitely backfire.
> 3. Team members in low-wage regions being in golden handcuffs and unlikely to leave even when they are unhappy.
Wrong again. Any employee can go work for another company that hires remote workers. Most of these companies don't adjust salaries to some perceived cost of living factor, so, in effect, you are making yourself incredibly uncompetitive with this practice. For instance, I am extremely good at what I do and I command the global market rates that reflect that. Therefore, I would never consider working with Gitlab.
> 4. If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results.
That's the only actual reason. If you paid competitive rates globally, you'd spend more money.
> 5. If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions.
LOL, let's pretend that's a thing you could do even if you wanted to. In fact, if you could pull it off, you'd do it.
To sum it up, you just lost a lot of people's respect on here by giving a bullshit answer to a serious question. You should've told the truth, people generally respond well to honesty. It is not unreasonable that a startup (or, indeed, any business) would want to reduce costs as much as possible. This BS response, that tries to make it seem like you're doing everyone a favor by not paying global market rates, is just a turn off for most intelligent people.
It was lose the respect of these people here - or his employees who they have to justify these policies to.
"low-wage regions" includes roughly 98% of the land mass of the world. That sounds like a silly reason.
> 2. Team members in high-wage regions having less discretionary income than ones in low-wage countries with the same role.
Which is how capitalism works.
> 3. Team members in low-wage regions being in golden handcuffs and unlikely to leave even when they are unhappy.
...at this point I surrender to their illogic.
With all due respect, this is b.s. Your company does this because it can, and because developers stuck in second and third tier cities (or countries) have few options. It is blatant exploitation on and a black mark on your company.
Gitlab is an otherwise admirable company with a fine product. Consider correcting this policy asap.
I am not going to argue about compensation or how we do compensation at GitLab, but I must say:
> second and third tier cities (or countries)
That is really hurtful to say. Personally I would never want to move somewhere else "just for the money". People happily living somewhere else than SV and being happy without SV compensation is a real thing, believe me.
Paying the same wage in different regions would lead to:
1. A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team.
2. Team members in high-wage regions having less discretionary income than ones in low-wage countries with the same role.
3. Team members in low-wage regions being in golden handcuffs and unlikely to leave even when they are unhappy.
4. If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results.
5. If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions.