First of all as an industry we haven't agreed on a term. Remote first or remote friendly are used by companies that do have a headquarter but are open to remote work like Stripe. Since remote can have a negative connotation some companies like Wordpress like distributed but that is also used by companies that have offices in multiple locations. At GitLab we prefer to use all remote https://about.gitlab.com/company/culture/all-remote/
The three biggest companies as far as I know are Wordpress, InVision, and GitLab. Wordpress and InVision both have around 1000 people while we're 45% smaller. I've heard that InVision has people work east coast hours but that doesn't show in their job listings.
I think remote will become much more popular. It saves people commuting time and gives them more flexibility to care for family, go to the gym at a convenient time, travel more, and deal with sick children. For the company you are able to hire outside of competitive metro areas and you save money by that https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ and on office costs.
It is early days for remote and it is still viewed as a risk by potential investors. But with tools like Zoom and better tools for asynchronous collaboration like InVision and GitLab I think it will become popular rapidly. Because you have to adjust you communication https://about.gitlab.com/handbook/communication/ I think new startups will be all remote while existing companies will find it much harder to change.
So, someone can change their mailing address to that of a friend living in a high income area and have a better pay? What about when moving, are employees' pays docked too?
For example, I come from a low-income area and most of my family is poor. By working in tech., I'm able to provide a safety net for parents and close friends. My home address is in my hometown but I would spend time at my significant other's apartment during the week to be close to work.
Why should my pay be less than that of a coworker that does the same exact same job as me simply because this is a remote company? What about someone that does a worst job or is less experienced? Unless that means that the only employees hired in high-pays area are senior and other employees are all junior or mid level and seen as cheaper labor, I don't see the reason... except as sour way to save company's operating cost.
Does that also mean that you believe someone in this situation should never have the resources to move to a high income area? Someone from a high-income area could live in a shared rental, save a big cushion of money and then move to a lower income area for less stress while knowing they will be able to retire. Someone from a low paying area wouldn't be able to do that.
Compensation should be based on output performance and the difficulties and complexity of the work being done.
2. "What about when moving, are employees' pays docked too?" => Please see https://about.gitlab.com/handbook/people-operations/global-c...
3. "Compensation should be based on output performance and the difficulties and complexity of the work being done." => Opinions differ about this across companies and some of them like Basecamp use your method. For our take Please see the section "Standard pay eats away at production and personnel" in https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/
The justification in the link essentially sounds to me like, "If you worked in the office at another company and moved to a lower cost of living city you'd also get your pay docked. We do the same because we're following the precedent and because you don't have other options."
This fails to mention the flip side - we developers do have other options. There are certainly SF companies I'm aware of that will be happy to outbid Gitlab's desire to pay a software engineer $75k because they moved to rural Nebraska.
Paying the poor less and the wealthy more.
It makes no sense that two employees with the same workload and same credentials would get a different pay based on their primary address' geolocation.
Just off the top of my head :
- Employee resides at their rich parent's home and get a higher pay vs. employee move near their mother's elderly care center in a ghetto and dock their pay.
- Employee lives alone with no dependents in a high pay area vs. employee being a single-parent in a low pay area.
- Employee lives on a native reservation and get less pay.
- Employee lives in a co-location in a high pay area vs. employee lives alone in a low pay area.
- Employee has impressive credentials in a low pay area vs. employee with no credential living in a high pay area.
This is nothing more than a loophole that allows you to give a bonus to employees living in high pay areas while keeping a clear conscience.
If anything, kudos for being open about the whole situation.
Interesting, but admittedly honest perspective from a CEO.
Money isn't everything, I've certainly taken a significant paycut to take a job I wanted and believed in. But I'd have to take a 50% paycut to work at Gitlab, so... no thanks. And worse yet, you'd openly pay a city dweller on my team twice as much to do the same work.
Would it be though?
If my legal address is a small apartment shared with 5 other individuals in a city I never go to, there's no legal reason pushing me to disclose any secondary housing I might own.
Another reason for such as situation is someone being homeless/nomad and having their address set to some organization or PO box in the city.
To be clear, I wholeheartedly disagree with GitLab's practice of docking people's pay just because they live somewhere cheaper (are they charging less to companies who are based in cheaper COL areas? no), but their policy is still their policy, and fraud is fraud.
This is absolutely not true. Gitlab says so very plainly in this blog post- https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/
> It’s not that we want to pay you based on your rent or compensate your cost of living. We want to make sure that we pay at or above market.
The blog post is very clear, and supported by the CEO's post above, that they are interested in paying the lowest amount they can get away with- that which they think is "at or above market". They don't care about cost of living. This is also made clear in their relocation policy, wherein they require you to get their permission to move to a different area, and you run a real risk of being denied/fired if you want to move to a higher cost of living area (The CEO has to approve such a move).
I really like that Gitlab and their CEO are so open about their true motives like this. If they didn't pay so poorly, I would consider sending them my resume!
It is true. The things you pointed out in GitLab's post don't disagree with my points, they just go deeper. GitLab's 'market rates' are based on, at least in part, cost of living calculations. They are simply saying they go one step further and try to pay you above the standard cost of living, and hopefully above what others pay as well. It is completely missing the point to say they "don't care about cost of living", because while it may be true that their objective isn't to match COL exactly, COL is a major factor. In their actual compensation principles guide , they specifically state that the location factor component of their compensation is almost entirely based in Numbeo data (numbeo is a site that quantifies regional cost of living).
Say they own a house in a rural town that has been handed down from their parents, yet they decide to live in an apartment in some big city. They receive an interesting job offer and start working remote at Gitlab but haven't changed their legal address.
Suddenly, they paycheck is reduced unless they disclose their secondary address and somehow make it their main address.
Should that employee be required to sell their house? I would say no.
Well, it's no different if you live in a big apartment out of town and decide to rent a cheap broken down apartment in the city.
What if the employee does not have a fixed address? Are they fired on the spot? Perhaps never hired out of discrimination? Is their pay adjusted for each city they drive their van to? Do the employer require them to stop travelling? What if that person's fixed address is already registered at some organisation or mail center in a "high pay area"? Should they be required to change it to a "low pay area" to be ethical?
All that matter is what your actual cost of living is (measured by proxy via where you actually live) versus what you tell GitLab your cost of living is (measured by proxy via where you say you live (regardless of if its your primary address or a secondary address or whatever)). If you knowingly tell GitLab that your COL is higher than it actually is so that GitLab gives you higher pay, that is the very definition of fraud.
> What if the employee does not have a fixed address? ... Is their pay adjusted for each city they drive their van to?
Yes, it is adjusted by each new place's COL. GitLab details this out in their compensation handbook, if you're really interested.
> What if that person's fixed address is already registered at some organisation or mail center in a "high pay area"? Should they be required to change it to a "low pay area" to be ethical?
They should tell GitLab that they do not actually live in the high COL area and should be paid accordingly to the low COL area.
I think you're getting hung up on some sort of strict 'legal address' definition. In this discussion about compensation, I don't think GitLab gives a damn what your "legal address" is or where you get your mail delivered to. They care about your actual cost of living, and they use an address as a convenient way to measure that. If your actual cost of living doesn't match where your 'legal address' is or where you get your mail delivered, you would simply tell them "My legal address is X, but I actually live in Y".
Except they don't. If they cared for that they would ask for your rent and economic situation.
They are not asking your cost of living to help you, they are asking which hiring pool you belong to in order to cut on operational costs.
You could be living rent free & debt free in a high pay area and still get a higher pay than someone with dependents, debts and a high (for their area) rent.
This is the part that disturbs me.
Being born in a good situation and staying with your parents without any costs would mean your paycheck is bigger than someone born in a worst situation that is also living at home.
You might as well build your class barriers out of concrete at that point. Postal-code discrimination is something that should be removed from our lives. Remote working is one solutions to this issue. I really hope that this practice doesn't become a trend.
I think you misunderstand what "Cost of Living" actually quantifies. It is not meant to quantify your personal economic situation, and is far more than just rent. COL is meant to quantify how much it costs to afford a basic standard of living, such as the cost to buy a basic meal or afford a basic apartment. It is not meant to quantify each individual's specific economic situation, living arrangements, debts, dependents, etc.
Cost of living is difficult to accurately quantify, and the most accurate proxy is geographic location. I'm sure GitLab et al would give some adjustments to compensation based on extraneous personal factors, but it's not up to the company to hold your hand and make sure every employee is making exactly enough money to pay all of their bills. At some point that becomes the employee's responsibility.
>You could be living rent free & debt free in a high pay area and still get a higher pay than someone with dependents, debts and a high (for their area) rent.
Are you suggesting that someone who is debt free and rent free should be punished via a lower wage for their choices which led to them not being in debt? Conversely, should someone be paid a higher wage just because they made bad decisions earlier in life and have mountains of credit card debt?
As mentioned above, debt is specifically not included in COL calculations for these reasons. COL also doesn't change based on if you decide to live in a high rise condo or a camper van. Yes, if these people are doing the same work and live in the same area, someone living rent free and debt free should still get the same pay as someone with dependents and high rent. Their personal situation may be different, but their standard cost of living is the same.
And this isn't any different than any other company in the world, nor is it the business of any other company in the world to solve. I know someone who used to work at Google making a very high salary, but paid no rent and only minimal bills because he lived at his parents. And by the way, other companies adjust their pay geographically, too. A cashier at a McDonalds in rural Kansas gets less of an hourly wage than a cashier at a McDonalds in SF. This already is the norm, and though it isn't perfect, it isn't nearly as disastrous as you make it sound.
>You might as well build your class barriers out of concrete at that point.
I'm not sure how I see this is a class barrier. This is not saying "if you grew up in Compton, we will not pay you a high wage and you will never have the opportunity to move to a better area". This is saying "if you currently live in a low COL area, we will pay you accordingly. And we will pay you more if you make the decision to move somewhere with a higher COL". That is almost exactly the opposite of a barrier, as it is clearly saying we will up your pay if you choose to take on higher COL.
Many people view this as a matter of "two people performing the same work deserve equal dollar amounts". Other people (presumably like those who make the decisions at GitLab) think that "two people performing the same work deserve the equal quality of life", and the dollar amount required to obtain a standard quality of life is variable depending on where you live. Someone making $80k/year will live decently in SF, while someone making $80k/year will live an luxurious, king-like life in rural Laos. Assuming they are performing the same work, why should the Laotian enjoy a higher quality of life than the San Franciscan?
Since everyone is paying according to geographic location, companies who don't will be at a cost disadvantage to their competitors - now they can play arbitrage, and pay just slightly more than market rate in hope of attracting the best Engineers, and some do, but mostly businesses are conservative and just want to pay market-rate for their various functions, and save their "innovation energy" for their main product.
IMO asking this question is akin to asking something like "why aren't developers paid as much as doctors?", or, "why do realtors take a 3% cut instead of 2 or 4?"
To pay a worker less because they chose to, say, move back to their hometown to take care of their relatives puts a sour taste in my mouth. Reducing people's pay because they moved to another location makes no sense to me.
Gitlab's pricing is the same no matter what city the client is located. If the employee is able to provide the resources needed charge this price to the customers then the employees should get the same pay as any other employee.
Imagine busting your chops to close a complicated project on time only to learn that the junior two postal codes over is paid more than you to do simple tasks.
I would change employer.
In fact, have been in such a situation before. The home office was outside of the city and they later opened an office there. The new city hires were paid more than everyone else at the company. The result was that the company lost all their strong players.
I am now working even further from the city for that same salary they gave the city employees.
Hiring full-time remotes in a major way is still a relatively new practice, so we'll see how it all shakes out. It may very well be that actual pay-by-value takes root, but I wouldn't hold my breath. Pricing and markets are curious things, and there is huge inertia.
The price of something (compensation) will trend towards however much the opportunity cost is (the second best option). If it doesn't, then (assuming no giant moat) another business will spend less on compensation, be able to sell their product/service for less, and end up with your customers.
The output monitoring and quantification necessary for this is practically impossible - the output of programmers is deeply creative and subjective work. At best you can rank-order programmer output and award promotions. This all leads to getting paid efficiency wages and incentives under tournament theory. In short, a good chunk of your pay is a reward above unemployment or your next-best option, so that you are incentivized to work hard and your competitors are incentivized to compete for your slot. It's as economically efficient as piece work if employees aren't risk-averse, so mostly which system to use is based off of whether it's easier to monitor and quantify output versus rank-order and pay to overcome employee risk aversion.
>Why should my pay be less than that of a coworker that does the same exact same job as me simply because this is a remote company?
For better or worse, software developer pay is negotiated. Negotiation results are driven by BATNA - best alternative to negotiated agreement. For coworkers that are approximately as valuable to the company, they should get offered approximately the same efficiency wage above their BATNA. Workers in areas with fewer options available to them necessarily have a worse BATNA, so it remains fair that they get paid less.
Furthermore, although your entire salary gets paid by your current employer, they're only really enriching you by the difference between the pay and your BATNA. It's arguably less fair for remote companies to excessively enrich workers outside of competitive metro areas.
So in cheap areas you have to pay globally competitive, and in expensive areas you have to beat the locals.
Thus, it never makes sense to reduce pay for someone moving. Your goal should be to keep salaries above that floor, not pay as little as possible.
It's much closer to a 20-30% discount on SF than the 70% difference a raw cost of living comparison would conclude. ( https://www.bestplaces.net/cost-of-living/san-francisco-ca/l... )
That should be a factor for sure, but not the only factor. The price of something is not based on simply how valuable that thing is in and of itself. It is also based on the price of alternatives. This should be self-evident everywhere you look.
My relationships with my children improved significantly within weeks. I'm able to coach my children's sports teams and attend school events and other activities without any issue. I eat better. I exercise more. My garden looks better than ever.
I was attracted to GitLab because of the all-remote structure and the transparency value. After being here for 6 months, I'm even more convinced that this structure is the future of work.
This is the part that annoys me the most. Managers pretend that Seat Time = Productivity when we all know that's not the case. I've watched people sit and talk for hours, then sit and browse the internet or play games for hours. We just had a group of people who were told to stop playing online Chess all day.
Forcing people to come into the office full-time is just management's way of making their jobs easier and making themselves feel better. In my experience, it's a substitute for doing other things that they should be doing, like reviewing code that their team has committed that week, talking to their team about what they're working on, what they're planning to work on, what challenges they're facing, etc.
And you're right that it makes management's job easier. It is management's job to make sure that their teams are producing work, and the unfortunate reality of a lot of workers is that unless they have the threat of someone walking by and seeing that they aren't being productive, they will end up wasting a lot of time. This doesn't mesh well with remote work. Not everyone is like that, but many are, and that's enough to ruin the remote work experience for everyone.
What was their job? We're not talking about software developers here, are we?
Why wouldn't it be...
Who are these managers cand how can I get a job working for them.
All I have to do is show up, no goals, no performance reviews, no castigation ver failing to deliver value through working software...
Okay, snark aside, if we throw away the completely clueless managers who don't actually manage people, we have to look at managers who want you in the office AND want the job done.
We may have criticisms for them, but we surely cannot say that they think that seat time equals productivity. The very fact that they manage performance with other metrics tells us that they don't think seat time equals productivity.
So... I am not saying that some managers aren't in need of percussive cluestick application, nor am I saying that working on offices is the OneTrueWayToShipWorkingSoftware, but I am suggesting that the argument is richer and deeper than "Managers think seat time equals productivity."
Work in the IT department of any small or medium-sized enterprise. They seem to be the norm there.
As an early rising, that sounds so amazing. Living in the west coast, waking up early to work, and then having the whole rest of the day/daylight to enjoy when you're free at 2-3pm PST. Sounds too perfect. ha
I'd estimiate that I am 2x-3x more productive than any job I've had before because of the all-remote culuture. I get to work less and produce more outcomes. Documenting everything and having documentation from others is a major reason for this.
_Team members in different time zones may have to compromise on meeting times._
There is almost _nothing_ worse than this trap, especially if even a small majority of your team is in an inconvenient timezone, daily "standup" at 6:30am? ompany meeting at 1:30am here and there? You can keep it.
We try to prevent meetings as much as possible in GitLab by working async but I agree it is a huge problem, especially for the people in APEC.
In my case, my company has offices in San Francisco and Eastern Europe. 10 hours apart. Meetings at 8am for me are 6pm for them. So basically everyone has to compromise somewhat. As long as you go into things with understanding that this is the case, it's not that bad - especially if there is flexibility.
If you're working west coast USA to India (a common occurrence), it's 12.5 hours difference.
> It saves people commuting time and gives them more flexibility to care for family, go to the gym at a convenient time, travel more, and deal with sick children.
I have 4 young children at home. When I came back to GitLab after having my fourth I noted in our Thanks channel - 'Much easier transition coming back from paternity then I’ve ever had. Being at home & being able to step away to help is so much better than commuting into an office and not being able to help at all.'
I'll add that it also makes it much easier for households with two incomes. If both partners are career professionals, then there's the ever-present challenge of finding a metro offering concurrent opportunities. Often times one partner will have to sacrifice career opportunities so that the other can relocate to take a better job.
Unfortunately because of longstanding cultural norms, the side that sacrifices is usually the wife. So there's also the angle that a more remote-centric economy would help promote gender equality.
A few points--I've experienced managers who have both supported my working remote, acknowledging that the proper tools, organization and workstyle make it possible for anyone to be successful while working remotely, but I've also had managers (at my previous employer, who I'd call a "distributed" company) who maybe just 'tolerated' my being remote because of the results I was able to produce. I heard about how I might miss opportunities because of lack of face-time with execs, and sat through calls where I was the only one not in the room and the conference room speaker pod felt like it was miles away. In the end, collaborative tools and individuals who deliver results are going to be successful regardless of location, IMO.
But, all-remote puts us all on a level playing field, so no one is missing out on opportunities for growth, advancement or development, because we’re all sitting in the same exact place. Then, it’s our skills, expertise and drive that set us apart, not our location.
And, all-remote means the company is both investing in the proper workplace and collaboration tools to enable success, but also in the necessary training (asynchronous comms were a completely new concept to me: https://about.gitlab.com/handbook/communication/#internal-co...) and documentation (i.e. GitLab’s handbook which documents EVERYTHING and is now 2960 pages long: https://about.gitlab.com/handbook/tools-and-tips/#count-hand...) to enable work across time-zones and lifestyles.
And, on a personal note, as a working mother, all-remote and async comms means I can start when I get my kids off to school and be finished and waiting for them when they get off the bus. And, when someone is sick and needs to stay home, I no longer feel like it’s a huge, stressful obstacle that I need to work around, or apologize for, or even, pretend as though it’s not happening (check out this entry from our handbook “Having pets, children, significant others, friends, and family visible during video chats is encouraged. If they are human, ask them to wave at your remote team member to say "Hi"”: https://about.gitlab.com/handbook/communication/#video-calls. Being able to focus on my family AND my career at the same time? That’s kind of priceless.
I’m guessing people that are splitting time between the US and Europe are probably having their entire salary/paychecks deposited into an account in one country or the other to make the tax situation more bearable at the end of the year.
If I’m working remote it’s because I don’t want to be bound to a certain location, and whether or not I move is none of the companies’s business as long as I fulfill my duties.
Now I'm sure if you were interviewing at GitLab, you'd know about this policy in advance (because it's public) and could plan accordingly. Or ...hey... ask your manager to be if they'd have any problem with you being a digital nomad on the job. The policy basically says you only need approval... so you could ask.
Mozilla is another one, should be bigger than any of the above.
- employee motivation
- regulatory differences between jurisdictions
- contractor v employee
those seem to be the big 5 people have raised (outside of just not liking it)
if so, how do you know if a candidate lives in London (expensive) vs Sunderland (cheap as hell)?