How to Pay Remote Workers

Salaries based on cost of living are always a mistery to me. If the company wants to have an honest relationship with the worker, the salary should be based on the value the employee is bringing, and that does not depend on where they live. Tying the salary to the cost of living looks like a way to cheat a worker out of the value they generate.

As a remote worker, I think there is an assumption of &#x27;necessary common suffering&#x27; which continues to make remote work a &#x27;privilege&#x27; rather than a simple logistical alternative. So long as there are on-location cubicle-dwellers who might get disgruntled to know that other employees are living some kind of fantasy high life from home (working in PJs, etc., all the tropes), then providing any remote working options becomes a potentially destabilizing force for a company.<p>Making a remote worker&#x27;s income less attractive is one way to redress that balance of perception.<p>I&#x27;m not sure how much progress we are ever going to make towards remote working as core practice, since the last decade has re-built a collapsed economy on the basis of hyper-inflated urban property values in 19thC-style urban conurbations such as NYC, SF, Tokyo, London, etc (and, increasingly, smaller satellite cities that had not benefited in this way until recent years, but have now become super-distant commuter communities).<p>The net-enabled, &#x27;dispersed&#x27; society is probably further away than it has ever been because of these factors.

I think that one of the greatest structural deficiencies of our economy is that high salaries are tied to onsite jobs in a few cities and that, therefore, real estate owners in those cities get to participate in that wealth creation that they are not actually a part of. So they reap where they didn&#x27;t sow, and that&#x27;s just unfair.<p>By working remotely, companies and workers are working together in cutting those landlords out of the equation, and that leaves a huge pile of money on the table that landlords are now not taking away from companies or workers (depending on how you look at it).<p>The question is: Should it be the worker or the company getting that pile of money?<p>My feeling is: It should be shared as companies and workers have to work together to make it happen.<p>If the whole pile of money goes to the workers, then companies are not incentivized to do anything to drive forward the remote work revolution.<p>If the whole pile of money goes to the companies, then workers will have an incentive to continue to play the old game whereby, if they want to earn more, they have to move to the valley and take an onsite job.<p>If the pile of money is shared somehow, then both sides have the right incentives to drive forward a real change for the better, and it&#x27;s a win-win situation for everybody involved (except the landlords).<p>I&#x27;m not saying the split has to be 50&#x2F;50. Realistically, the split will be determined by market forces like supply and demand around the particular job role. We&#x27;re already seeing this play out: For job roles that have low barriers of entry and for highly commoditized types of work, a greater proportion will go to the company, like what we are seeing on Upwork where everybody gets paid what an Indonesian freelancer gets paid. For jobs where it really matters to get the best people and where these people are hard to get, a greater proportion will go to the worker and you will see everybody around the world doing that kind of work earning as much as they would earn if they were doing that job onsite in the valley.

Used to work in Nicaragua for a US company with a local office. We were definitely being paid a lot less than our peers working directly in the US locations, at the same time we were being paid what was at the moment a lot more than the standard for other devs in the country.<p>There would have been no incentive for that company to open an office in Nicaragua if they would have had to pay similar salaries than what they were paying in USA, i mean, we have a lot more employee benefits and protections. Of course i would have loved to get more money out of it, and i feel we were delivering equal value than our peers, but if i think about it, the economics wouldn&#x27;t have made sense.

If anything remote workers should be paid <i>more</i> for being environmentally friendly

I&#x27;ve been a fully remote worker for almost a decade. I appreciate the fact that my compensation is on a scale implicitly tied to a higher cost of living than where I am. Nonetheless...<p>Companies don&#x27;t set pay to be fair. They set pay to attract and retain the talent they need. Otherwise, companies that employ people in India wouldn&#x27;t have a 3x pay spread for people doing the same work (hi Red Hat). Software developers in general wouldn&#x27;t make more than, say, plumbers. The potential employees&#x27; perception of fairness does come into the picture a bit, but that takes a <i>distant</i> back seat to good old supply and demand. If a company needs to pay more to attract and retain talent in area X, they pay more. If they need to pay less to attract and retain talent in area Y, they pay less. This is just basic business. Companies pay local prices for real estate or electricity, and they pay local prices for personnel.<p>The only thing different about remote workers is that there&#x27;s no single local standard to measure against. So you have to tailor things more specifically to the individual. But if you think that you should pay remote workers more or less because they&#x27;re more or less productive, or because you&#x27;re saving money by not having to provide them an office, you&#x27;re forgetting the purpose of pay. Attract and retain. Supply and demand. That&#x27;s <i>it</i>.<p>P.S. I&#x27;m not trying to make a moral argument here. I&#x27;m certainly no laissez-fair &quot;markets uber alles&quot; greed funnel. Quite the contrary. Companies are free to make their decisions on some different basis and more power to them, but there&#x27;s no escaping the fact that most will cut costs wherever they can. Of the places they might cut corners, geographic salary differences are far from the worst option. If and when salary fairness gets to the top of the list, I&#x27;d start with not paying <i>women</i> less.

One way that in-office workers can be more valuable is more accessible and a higher quality of communication.<p>Being able to discuss things face-to-face gives us more and higher quality (diagramming, eye contact) communication channels, in addition to avoiding things like bad audio, bad video, etc.<p>There is also lower friction in haphazard discussions; someone can overhear things and chime in a thought that could turn out to be useful. Sometimes, the effort of messaging or calling someone will cause us to not bother to include someone in the conversation for a chance that they could contribute.<p>If different timezones are involved, then a remote worker&#x27;s value is lowered due to the higher friction in addition to the round trip time for communication.

As a remote contractor, I&#x27;m strongly against this idea.<p>Living in a country with the cost of living lower than in the US allows me to take a job of an equally qualified American programmer by working for a smaller salary which is still twice as big as the highest offer from a local company.<p>The downside is that an equally qualified programmer from Egypt or Bangladesh can easily take that job from me, but I can find solace in the fact that this reduces the global poverty :)

You might not <i>need</i> to compete with Google, but I see an opportunity there.<p>Pay average Bay Area salaries to full remote workers in low CoL areas. Most likely top tech companies have no offices there, and even if they do, chances are you pay more.

&gt; Why on earth would it matter where your desk is?<p>It matters to product managers. Managing remote team is more difficult therefore PMs will always push against this.