Any info or insight on how common is it for companies that have both local and remote developers to offer different salary ranges based based on the employee's city/state/country? I am talking about regular full time remote employees ala 37signals, not lowest bidder outsourced contractors.
Anecdotally, companies which I've worked with set bands based on local market conditions and allocate you within the bands on a roughly cross-company performance basis. e.g. 10 levels of engineers, level 3 engineers in NYC and Bogota are roughly comparable in skill level but the ones in NYC make quite a bit more.<p>Mostly for internal sensibilities of fairness, it is generally the case that e.g. level 3 engineers in Bogota working at the company would earn above-market for their skillset in Bogota. The companies tried to strike a balance between "We want to pay them equitably with our employees in high-cost US locales.", "We want to retain them versus other offers.", and "We do not want to give them golden shackles by e.g. paying grossly more than any employer in their low-cost locale."<p>This assumes functioning remote cultures and regular, full-time, full-class employees. Consultants obviously do things differently. (And any consulting client which made reference to Nagoya FTE rates in a negotiation with me would have gotten a firm handshake and non-specific pleasantries <i>immediately</i>.)
Preface: this is purely anecdotal.<p>I've worked at two companies where I was explicitly told that I was being given a lower offer because I was working remote instead of relocating. Both companies offered to pay me more if/when I decided to relocate.<p>Both companies had lousy policies regarding remote employees that left me feeling like a second class citizen within the organization. Poor communication practices, poor or absent advancement opportunities. Both jobs ended around the 8 month mark.<p>By comparison, two other companies that I've worked remotely made me excellent offers, had awesome policies, great communication, and provided merit raises. At those places I felt like I was on equal footing with all other staff.<p>So, anecdotally, yes, there can be a gap, but any company that is likely to pay you less as a remote developer probably isn't going to be a good company to work remotely for.
I think there is something sort of foolish about the fact that across the board employees are basically not allowed to mention real numbers regarding how much they make or even things like the industry average pay.<p>Read these threads and you almost never hear anyone mention real numbers because they are terrified of either being fired or having their peers realize what a good/bad deal they've made.<p>Yet, in a lot of public institutions like Universities, public schools, salaries are a lot more transparent.<p>Companies probably don't want people to know what other people make because it gives the individual leverage to negotiate. We as developers are terrible at negotiating and don't want to admit it.<p>Anecdotally, in Lincoln, NE I've seen developers paid anywhere from $25,000 to $120,000, but most range in the $35,000 - 65,000 range. I believe most devs at UNL or the state of NE fall between 45k and 65k, but some can be a good bit higher.<p>What gets me is if a dev in the midwest who would normally get paid $60,000 or so, how much should they get paid as a remote worker for a startup in SF? In SF I assume a dev costs $120,000 or more, so if you were being hired there what is the right number to ask for?<p>In a truly remote work environment, does it really make sense to pay dramatically less or more just because of where someone lives? Is someone's relative value decided by their location or by their skills and abilities?
We pay the same (and offer a Singapore visa if they change their mind). The method is pretty simple: we pay X amount of money and get Y (or more) amount of code "value" back, and try and keep Y/X relatively stable.<p>Works out well for those living in cheaper cities, but it does suck a bit if you're in a high tax country/state, since Singapore's tax rate is in the single digit percent.
It's relatively common for their to be a gap between local and remote developers.<p>Buffer have been incredibly transparent about their approach to this: <a href="http://open.bufferapp.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/" rel="nofollow">http://open.bufferapp.com/introducing-open-salaries-at-buffe...</a>
A bit late to this discussion, but I'll provide a comment from the employer side. Employment is a market, and it has market-based dynamics. Most of the developers here are (understandably) looking at this from a cost-perspective - "I should be paid what value I provide" etc. That's not how it works. Just like products aren't priced by what they cost, employers don't value developers by the value they add.<p>Instead, developers are priced by companies at what the market will bear just like any other product. If a $40k salary in Bangalore will get them X quality of developer, and they need $120k in SF to attract the same quality of developer, then that's what the policy is. The policy might be disguised behind cost-of-living etc., but it's really market-based pricing.<p>In the same vein, keep in mind that it <i>costs</i> a company more to hire someone in an expensive area. So if developer skill was the only issue, why would companies <i>want</i> to hire locally if it costs more? The answer is If developer skill was the only thing at issue, no developers would ever get hired in SF because there's plenty of great developers elsewhere for less money. The reality is that having people local adds significant value, all other things being equal, so companies are willing to pay more for local people.
I make the same remote as I did as an in-house senior developer. But I will note that when I was interviewing for remote opportunities I came across a lot of cases where the salary was different for remote and on-site employees. Even signing bonuses of $10k or so to come in and work from the office.
I'm in a big financial institution in the US and we have many remote and many local workers in the IT side. The only difference in pay (that I know about) is they might pay local more in some areas because the cost of living, and often the wages, are higher in that area (like San Fran). Only bummer is they're slowly doing away with the remote working.
It's very interesting to read that most companies change salaries based on location. I'd like to hear from someone in a senior level position explain the reasoning behind that.<p>I think that it would make the most sense to pay someone what they are worth, regardless of location.<p>As a remote worker who moves quite a bit I'd be constantly having to renegotiate my salary.
Something I've noticed is that for projects that are publicly visible (i.e. open source), remote workers can often command higher rates as they work more like a contractor. The independence is a trade off for the quick ramp up.
I worked remotely as a sysadmin for an internet security startup in SF for almost 3 years. I made $45K/yr because I was living and working in Oklahoma. My co-workers living in SF doing the same job as me were making 2-3x more.