[allcentury]

It took me a long time to realize that these weren't CoL adjustments.

Companies want to be competitive in your local market so they can retain you and so they can "hire the best".

Where this gets murky is now everyone is remote so is there really a local market?

[chubot]

Exactly, not sure why the article doesn't address this.

From the employer perspective, the strategy toward compensation has NEVER been "equal pay for equal work". I understand why that is intuitively fair to people, but it's not rooted in reality.

The strategy is "I want to pay as much as other employers in the area". That is, if you get a job in the same area and your pay drops 40-50%, then that's a BUG from Google's perspective. They were paying you too much.

They want to pay you an amount so your pay will drop 0% or 10% when you get another job. Or conversely, if someone local is going to Google, they should get 0-10% more, not a 40-50% increase.

-----

As you mention, a corollary of this is that if most programmers start working remotely AND most companies offer remote jobs, then Google will be forced to adapt. Basically if all companies start doing what Reddit does, then Google will have to do that too to stay competitive.

It's a market-based system. There are many instances where markets determining prices produces outcomes we view as unfair.

Though I guess you can argue that it shouldn't be purely market-based and it should take into account "company loyalty". As the article mentions, employees can also "quit in place", which changes the calculus a bit.

[chubot]

Actually I just searched for "cost of living" and Bob See (a recruiter I worked with!) answered:

https://www.quora.com/Do-companies-like-Microsoft-Google-Ama...

Companies like the ones you've listed typically base salaries on "Cost of Labor" (for a given role in a given market), not "Cost of Living" (i.e. the price of a bucket of goods in a market) .

So that is exactly the misunderstanding here. People think the goal is "equal pay for equal work", or they think it's "cost of living". But neither of those is true -- it's a "cost of labor" adjustment.

[durovo]

Most people who cry about CoL adjustments don't realize that the developers working in India are doing the same job for 1/5th the salary. In a remote-first world, there is going to be some averaging of pay as the pool of the talent accessible to companies increases.

[landemva]

'the developers working in India are doing the same job for 1/5th the salary.'

My experience is five of them could not replace me. They didnt have the skills. Maybe this has changed in the past year or so.

[algo_lover]

I'm from India and 5 of <insert your country here> devs can not replace me. Just kidding, I hope you understand that India is a huge country and you can find the entire spectrum of talent here.

Don't expect smart folks from India to work for $20 or even $50 an hour. You will get what you pay for.

My experience is that if you can pay 0.5 x <your salary> to an Indian developer I am sure you can find someone who can totally replace you.

Most of the times companies who want to "offshore to India" want to pay no more than 0.1 x <their local developer salary> and then cry when they can't deliver.

Indian tech companies are offering really competitive salaries nowadays. I have even started to see some Indian companies hire/outsource to Europe because it's cheaper.

[swat535]

This is exactly the case.

In my experience of looking for remote engineers, top talent costs the same pretty much everywhere and the great engineers in India (Russia, Poland,..) demand a pretty similar salary in USD when asked to perform the same tasks.

I think parent is under the impression that run of the mill engineers offshore SWEs can perform the same as a Googler.

[algo_lover]

I agree, but even great Indian software programmers are happy with much less. Getting half of what a similar American would get should make any talented dev extremely happy here.

I get around 1/3rd of what I would receive in the US, work with a globally distributed team, and I'm quite satisfied with my salary and the company quite satisfied with me.

[achow]

Probably you they cannot replace (taking your word for it). But that does not mean they cannot replace no one else from your company.

Also most of the big companies have their largest R&D centers in India (Microsoft, Google, Amazon, Adobe,..., Uber, etc.). It is ridiculous to say that those offices are doing any less work than their USA offices.

[durovo]

My main point was that salaries are based on the employee market that a company can utilize. So 'cost of living adjustments' are going to become a norm in a remote-first world.

Regarding the competencies of developers in India, I don't doubt your experience but I know that there are plenty of skilled developers working at Google, Linkedin, Amazon, Microsoft and countless budding startups in India.

[Jensson]

A developer earning 1/5 of an American silicon valley salary in India is really good, they could easily replace you. The problem isn't them, the problem are the developers earning 1/20 of your salary in India, they are as crap as the bad developers in USA, and they are what most companies trying to get cheap headcount in India go for when they outsource to there.

Edit: The above numbers were 5 years ago, might be closer today, but still.

[s1artibartfast]

I know someone who made this exact decision. They looked at the cost of software engineers in the Bay Area, then hired a team of 5 for $20 an hour each ex-us.

[oikawa_tooru]

How did that go for them?

[s1artibartfast]

Great, they developed a functional product and were able to get the MVP to market. Because they went ex-us, they were able to self fund.

[rightbyte]

You get what you pay for even in LCOL places.

However the main difficulty with outsourcing is probably that the company want so save the hassle of recruiting and having employees and procures crappy programming sweatshops rather then having proper employer-employee relations.

If the goal was not to save "hassle" and cheaping out on already cheaper programmers hireing in LCOL countries would probably be a much different experience.

[Matthias247]

Not only India. It’s even Western Europe - which is generally not a low cost area. US salaries for senior/principal levels are 3-5x of what the rate is there.

[djmips]

And Canada. Just go 230 km between Seattle and Vancouver and see a 3x difference easily.

[Matthias247]

I'm actually in Vancouver (and moved from germany). It got a bit of a boost in the last years, and currently seems between the two. For the big tech companies I don't think 3x is true here, it's maybe somewhere between 1.6x and 2x. And it's easily more than 2x than what is paid in germany.

[908B64B197]

Quick question: Why don't they just... drive three hours south?

[seized]

Healthcare/insurance costs, work visa and related paperwork, family in Vancouver, similar reasons.... And just not wanting to.

On a work visa you can only live so long in the US before you have to leave for one full year or morr. Greencard is a lottery, you aren't entitled to one.

I'm a Vancouverite who has worked in the US (flying to customer sites) for 15 years now. A coworker moved to the US, didn't get the Greencard lottery, had to move back.

[908B64B197]

> On a work visa you can only live so long in the US before you have to leave for one full year or morr. Greencard is a lottery, you aren't entitled to one.

That's wrong.

[dunefox]

Even in Germany this is the case.

[908B64B197]

> the developers working in India are doing the same job for 1/5th the salary

The same job?

Sure.

Getting the same results? That's why every offshoring project I've seen was a complete success...

[lancesells]

I would guess in most cases whatever value the employees provided Google has not changed. Not only that, Google's costs are lower not having to provide a space for their workers.

Trillion dollar companies with their record quarterly profits cutting their employees pay is nonsense.

[hellisothers]

Is it though? How is lowering an existing employee’s pay who moved away different than laying them off and hiring what you perceive as the exact same skill level of employee in this remote location at a lower pay?

Ignoring the whole “well my company already knows I’m a great fit and hiring somebody new is a risk” argument as that is an issue with hiring & firing generally.

[fileeditview]

It's different because it may not be so easy to find an "equal" replacement. And they could pretty easily get into that situation. If enough developers quit after such a pay cut and find work at other employers that don't play this game then Google may have some trouble.

And then you have to ask: "was this worth it?". And my guess would be no.

[yao420]

Exactly these companies are ultra rich and can afford to pay for talent. Google has $160 billion in cash.

Im NYC, Google just spent $2.1 billion on a Hudson yards building, in addition to the $2.4 billion for the Chelsea market and $600 million for the milk building across the street two years ago.

They have the money, they just might not want to lose their real estate investments value.

[bravetraveler]

Funny to see this mentioned. A friend of mine started remote in the city where we lived, then moved to the sticks.

They tried to pull his chain on this, then realized he essentially was the market there.

Awkward exchange overall; felt very much like 'we want to dial the pressure of the thumb'.

Eventually they did a 180 on it and no adjustment happened. If it were me, it'd erode my trust. I'm thankful my employer only cares to know my location for tax/withholding purposes.

It's like you said... is there really a local market (with everyone remote?). Even then, this person was there just long enough to qualify for raises and already had several.

A bit like a slap in the face to have these rewards (presumably for your efforts) to be clawed back... because the employer essentially realized you didn't need as much anymore.

edit: To be clear, not Google - elsewhere.