I have to say I am constantly amazed at how high silicon Valley renumeration is. 600k to 1M would get you a lot of engineers pretty much anywhere else. Even if we don't look at the higher end, 200k is very common it would seem, and that would get you 2x engineers is Europe. Im in Europe and I've seen the quality of engineering is no different; the SV engineers perform the same (and some much worse), but still hiring plans favour SV typically. Can someone explain why, especially for publically traded companies that are typically very tight on budgets?
This seems like penny-pinching that has the possibility of creating friction among remote teams. The realistic business impact is marginal, and the downside seems higher than the upside.<p>I mean here are their salaries[1], how much do you think their fancy "cost-of-living bands" are actually saving? It's probably more of a bureaucratic headache to make sure the bands are always up to date. Speaking of savings, it's always a bit gauche when a CEO/founder pays themselves the biggest salary, especially in a startup, where they have the most equity and the most long-term upside, but that's neither here nor there.<p>[1] <a href="https://buffer.com/salaries" rel="nofollow">https://buffer.com/salaries</a>
Why does it make sense to pay different per location?<p>Because you should pay equal. If you just use the same number on the payslip, some get more than others. It's like with currency. There is no reason to pay everyone 10k of their local currency, as that won't make sense. But paying 10k of the same makes none as well as for some this means they can have butlers, and other only get a bed under the next bridge.<p>Payment should be equal in Terms of living standard. Otherwise they are not equal.
Getting employees to accept remote work was a brilliant reverse psychology move by companies. Now industry salaries will drop as it becomes acceptable to hire in low cost regions or abroad. This will happen automatically as the market adjusts.<p>If you are a highly paid engineer and want to keep it that way, you should do everything in your power to limit the industry to specific geographical locations.
I imagine there's a lot of value in having your employees share a timezone for the benefit of easy cooperation, so it might make sense to have at least timezone-dependent salaries.<p>There might also be value in having your employees be able to easily physically meet, and then location-dependent salaries make sense.
The costs in some parts of Europe has increased, e.g. people might now need to pay 500+ EUR per month (from like 150EUR) for the energy bill (electricity, gas and water) but I don't expect this will get swiftly adapted to cover this major jump by these COL schemes
I completely don't get location-based pay. I provide you with some work, that's worth some amount of money. Why does my location change the value of my work? Do I suddenly become better if I move to SF?<p>I get that some people have arguments for it, I just entirely disagree that any of them are valid. Whether I'm in a city that costs a lot to live in is no more the responsibility of my employer than whether I like to drive Ferraris.
I really hate location-based pay. Why should people from East Europe or Vietnam subsidize rich people in SF? If you can not afford your rent talk to city hall, get a van or change city! Do not export your problems to other parts of the world!