[ratsbane]

Should you expect a pay cut if you transition from on-site to remote?

Someone proposed something like that to me recently, arguing that if the cost of living in my home city is less than in the office city then I shouldn't be paid as much. I'm thinking pay should be based on productivity and value to the company instead of value to me.

[jerguismi]

"I'm thinking pay should be based on productivity and value to the company instead of value to me."

Value produced is the upper cap of the pay, the lower cap is dictated by how much competition there is on the market. The employer can look at it like buying any other kind of service. If you work remotely, you compete with all the freelancers/contractors around the world. If the company values local employees, and you can work locally at the office, there is much less competition for that kind of position.

[bitexploder]

Cost of living adjusted pay is a fact of life and you will struggle to find a firm that does not do it. GitLab the company has a cool salary calculator so you can at least see exactly how they do it. No one wants to be paid less for the same work, but if you take a small pay cut and are putting more money in the bank every month, is it a pay cut? :)

[emilecantin]

I've been on the receiving end of Gitlab's calculator. The pay cut isn't small at all; I was offered less than half the equivalent SF salary. And I live in North America, just not in SF.

[bitexploder]

Their calculator can be a little harsh for sure, I just appreciate how up front it is. Still, rent in SF is crazy if you compare it to anywhere that isn’t near a coast. I wonder do you think the pay cut was unfair based on other offers? I am biased because we only do genuinely minor comp adjustments for location.

[emilecantin]

Yeah, I appreciated the transparency of it too. The offer I got was okay compared to market rates here, so I do think it's pretty fair.

I guess I just find it a bit weird that your value to the company is so dependent on location that it can vary from 100% down to ~20% of the base SF salary. People living in SF _chose_ to live there despite the absurd rents, and it's not like that changes anything for a remote company.

[yblu]

Yes, but if they don't pay enough, they won't be able to hire those people to start with. On the flip side, considering if they starting hiring people from other countries and reducing your salary because you choose to live in a high cost country.

[ratsbane]

That's a good point, but looking at the other way, if a remote worker employed by a company in San Francisco moves from, say, Pecos, Texas to Manhattan, should he or she expect a significant salary increase?

(edit: moving for reasons unrelated to employment with the San Francisco company)

[bitexploder]

I think so. That can be hard for smaller businesses to manage, but it should average out for a larger one. It might also mean the business can’t support you (afford to pay you a SF rate). So that is always a factor.

[thecrash]

Why would a boss want to pay you more because you live somewhere expensive, unless living in that place is part of the job description? The only reason I can think of is they believe that you might quit in favor of a local job which pays more, and so they need to raise your pay to remain competitive.

But if they know you're committed to remote work, this wouldn't seem to be a consideration. And presumably the possibility of taking a remote position at a company in a high-cost area exists no matter where you live, so by the same logic you'd think that a boss would want to always pay a rate that's competitive in expensive markets.

I guess the reality is that physical location is still enough of a determiner of job options that it influences what a boss understands your realistic pay range to be. But I wonder how this will change as more tech work becomes remote.

[ratsbane]

Why would a boss want to pay you more because you live somewhere expensive

Exactly. So why should a boss want to pay you less because you live somewhere cheap.

[whttheuuu]

As with all things in employee/employer relationship it is about leverage.

Why should you get paid less for doing the same amount of work? What does it matter to the employer?

The question is, how much will it cost your employer to replace you? Presumably, they will be hiring your replacement locally so your salary should be compared to local wages.

The trick, is to make yourself indispensable (or at least very, very expensive to do so). Focus on being the sole owner of crucial products and knowledge (we are after all, knowledge workers). If you find yourself in a position where redundancy is being put in place (i.e hiring someone to shadow you, etc. then it's time to move up the knowledge chain or to a different product).

[BerislavLopac]

> Cost of living adjusted pay is a fact of life

So is most companies' unwillingness to allow full-time remote work. If it is possible to alter the mindset about the latter, it should certainly be so about the former.

[bitexploder]

Hey, I am with you. We (my company) are a remote first company that trends to merit based pay with minor COL adjustments at most. We have bands for each role and generally stick with them. Still, the idea isn’t bad. You want people to afford a certain quality of life and operate the business effectively. If everyone is happy with the arrangement the business and its employees win. If the business is doing it for a profit motive it shows up in employee satisfaction.

[gwbas1c]

> Should you expect a pay cut if you transition from on-site to remote?

No, but you need to realize that you're being paid based on your value to the company.