At my former job, we lost excellent team members because of location-based pay adjustments, and it hurt every time. The person would decide to move to a different city (or country), they’d be told they were getting a pay cut, and they’d look for (and find) a new job instead. Often they wouldn’t even bother negotiating. I can’t blame them, it’s just rough, even a little humiliating.<p>When you have an employee who is performing well and wants to move cities and you cut their pay, you’re basically telling them one or more of:
- I don’t trust that you’ll do a good job remotely/in your new location/timezone, so I’ll pay you less.
- I value remote work less than in person, so I’ll pay you less.
- I am paying less or intend to pay less in the future people in your new location, so I have to pay you less too so that it’s “fair” to the other employees in that location.<p>In short, you’re giving the employee an really big push to shop around for other jobs, and that never ends well for the company. As an employer, why take the risk?<p>And that’s looking at the case of an existing employee who is moving. But even with new hires, I’ve been told all kinds of bogus reasons for why it’s the best (or only!) system, when there is only one reason, and that is saving money. Same reason companies have their customer support in Philippines or their sneaker factories in East Asia. Leveraging differences in market prices in a global environment. But it’s just cold economics, it has nothing to do with fairness.