Currently an L6 SWE at Google coming up on 4 year cliff and decided to look for a new role externally. I'm a pandemic converted remote work proponent now living in a medium cost of labor area (i.e. not SF or NYC), and interviewed with several remote friendly companies. In short, I ended up with several Staff+ offers, notably at companies that, like Google, do cost-of-labor adjustments. My decision came down to two companies: one that decided to effectively opt out of their own CoL scheme to pay at top of market, and the other that stuck to theirs and who's offer therefore came in roughly 10% lower. The latter's financials are certainly strong enough they easily could have gone higher, so it was frustrating they weren't willing to be more competitive based on their principles. All other things being roughly equal, it was a no-brainer to accept the better offer. Had they matched, they certainly would've stood a better chance. What stood out to me is how misguided attempts at cost-of-labor adjustments are. I feel like it really boils down to this dilemma: after companies became remote friendly, they realized people globally would get paid differently for the same work, and now that people could live (almost) anywhere, that didn't make sense. For example, if Alice and Bob lived in SF and Detroit, respectively, Alice would almost assuredly be making a much higher salary than Bob pre-remote. If Alice moves to Detroit to work remote, then she would have much higher pay than Bob unless they either lowered Alice's or raised Bob's. Bob would certainly not be happy to know this, and therefore could cause mutiny. Companies figured the best way to handle this was to force Alice to take less money under the guise of receiving a new benefit (working remotely) instead of giving all of the Bob's unilateral and potentially hefty raises. It also ignores the fact that working remotely is also potentially a huge benefit to the company: less office footprint, less expensive (and silly) office perks, increased employee efficiency, etc, so it's not like companies are sacrificing by letting employees work remotely. The fallacy is that the real value of an employee is what it costs to replace or hire them, and in the tech industry, hiring talented people is crucial to innovation. A company can try to enforce their location adjustments when hiring people, but that requires all companies to effectively coerce with each other to do so. If one company realizes they can hire people by not making silly adjustments, then they have the advantage in making hires. That's what defines a free market, and it's silly that large companies (like Google) think they have the power to shift salaries lower based on where someone lives, just because they want to. We can choose to live by their rules, or we can take matters into our own hands and force them to make the choice whether to be competitive in hiring or retaining. For the record, I'm all for people working where they feel most productive and beneficial to the company, whether it's in an office, at home, or both. TL;DR cost of labor adjustments are misguided. Blind tax: Old TC: 650k New TC: 750k
The hilarious part is how misguided and selfish this post is in thinking it'll actually make a difference. You have no consideration of the different state taxes and fees involved when employees are employed in a different state.
What does state tax matter to employers? That only affects how much an employee pockets from what the company gives. And why am I selfish for sharing a view? You're free to do the same thing if you choose, or not, but I've thought about this enough that I wanted to share in case it inspired others.
"That only affects how much an employee pockets from what a company gives". Completely wrong. The American financial system is incredibly complicated and has different rules for different sizes of companies operating in their state, and companies have to abide by the state rules and often negotiate. You're selfish in that you're trying to convince others without providing a more holistic view of an already complex situation. Working remotely isn't free. People need to work to figure out finances. For smaller companies and start-ups that try to operate with as few expenses as possible, this isn't a luxury they can afford.
This the high quality stuff that occasionally comes on Blind amidst all the shitty prestigious stuff. Read this whole thing twice. Agree with every single word.. The only issue I see is: how will companies manage salaries between US and non US (EG India ) employees. For the same level, salaries in India are probably half of Salaries here. How can we get rid of that discrepancy?
TLDR needs to be at the beginning of the post.
It's why you see some employment researchers / experts predicting that at least within the US, salaries will begin to move towards towards some form of equilibrium as remote work has broken down barriers to entry into the marketplace. Good companies will always pay for top talent, regardless of where that talent is located. While some may try to save a few thousand here or there by trying to implement location based adjustments, unless these companies collude with the competition to keep salaries low in certain metro areas, in the long run, as long as remote/flexible work is here to stay, salaries will adjust upwwrds, as all it takes is one company with a good amount of hiring capacity in each market to raise comp levels (think of low cost airlines entering on a new route, but in reverse.) What I think will be very interesting is when more states (especially CA an NY just because of their outsized skilled workforce populations and influence on the labor market, in general) start to require the posting of salary bands in all job listings. That level of transparency, I think, is going to go a long way to killing off location adjustments (think about the person living in Atlanta who sees the same exact role with the same exact responsibilities posted on a company's site for both Atlanta and SF, but the SF location pays 50k more... you think that's going to fly?) I'm honestly a bit more skeptical about reaching equilibrium between different countries... or at least countries where freedom of movement is at least partially restricted. I'd argue that within the US relative equilibrium can be reached because there is no legal restriction on a person moving to another state, and remote work isn't tying a person to a particular office within a city/state. The main obstacle between two countries, however, is that work laws prevent the free movement of labor. In the example above with India and the US, unless you are a dual citizen, either your company will have to sponsor your move, or you'll have to figure out some other way to get a work permit, and immigration status, to live and work in the other country. Even if you want to leave the US and go work in Mumbai and work at a company where you are fully remote and don't have CoL adjustment, I'd imagine Indian immigration law likely prevents you from taking full advantage of this opportunity. Unless you live and work in the EU where labor laws between countries are more equivalent to labor laws between US states, I'd say that int'l immigration and labor law still crates less than a free market for Labor, and therefore, the idea that salaries in India would rise to the level of the US, or that companies would allow you to work in India permanently on US wages is likely much further off than we'd all hope. Caveat to the above is all of these "flavor of the week" digital nomad visas a lot of countries are beginning to offer, but I think by and large there's not yet a critical mass of either visa offerings, or people taking advantage of them, for this option to have a significant effect of the movement of labor across international borders.
Really great points
Teach me how to get that $650k tc first 😀😀
In short, interview at places known to pay well (even if you don't want to work there), get competing offers, and negotiate effectively.
How often to do this? Is it possible even in today’s economy/job market?
The TLDR is that companies will always pay the lowest possible to get an employee. Cost of labor is just one tool to ensure it is really as low as possible. The actual pay determines what quality they are going to get for the money, since only the top people compete for the top pay. If a company doesn't need A+ grade engineers (and most don't), they will keep cost of labor. Other part of the problem, which ties into quality control of employees - is that so many skilled tech workers are in HCOL locations. The hiring pool for LCOL is way smaller.
Perfectly penned!