Experienced software and UX guy. Over 20 years making professional software. Lots of tech/tools/languages. Father of 7. Armchair philosopher. Currently focused on full stack dev with React, Node..
As a fellow remote employee, I feel ya. However, pay is often first and foremost determined by market rates. What could you get paid by other companies if you worked locally? That's the market rate for you.
Granted, nothing says a company has to follow that logic, but it kinda makes sense from a fiscal responsibility point of view.
Further, I think (and maybe more so hope) that our industry is waking up that people don't need to be local more and more. That will make the market rates more global, or at least national, so employers will have to compete across the board, not just based on locality.
And lastly, if you feel you are underpaid, go get another offer to prove it. I never met a company (who valued the employee) that is not willing to increase based on real market evidence they are paying too little. Unless they just can't afford it, of course. You could also just bring it up as a concern, first. Sometimes employees don't realize that just making their concerns known can change things.
I'm about as pro-free enterprise capitalism as they come. I have zero problem with private, consensual salary negotiations that result in unequal pay.
I have zero complaints if a company says something like "We like this person, and want to hire them. We have to be responsible with our capital, so here is an offer we think is fair that we also think they will accept"
It's quite another thing to say "This is what your skills are normally worth to us, and some of our engineers at your level who enjoy the wonderful city of San Jose get paid that. You however, live near poor people, for reasons we don't know or even care about, and we want to make sure you fit in with your neighbors, in the name of fairness." which is what a strict COL based pay policy says.
Experienced software and UX guy. Over 20 years making professional software. Lots of tech/tools/languages. Father of 7. Armchair philosopher. Currently focused on full stack dev with React, Node..
I agree with you, if COL adjustment is the company rationale. If your company is telling you that, then yep, they're off base. I would suspect they are just articulating the situation poorly.
I'm just speaking as a long-time hiring manager of many locations around the world. You hire at the local market rate.
Most companies I've worked for don't pay based on "value"; they pay based on what X role is paid in Y market. It really is supply-demand economics. This is why offshoring "works" (if I may use that term loosely).
I'm just speaking as a long-time hiring manager of many locations around the world. You hire at the local market rate.
I wonder what you, as a hiring manager, would say what my rate would be. (Not a challenge or anything, just as a thought exercise)
The position is Senior Ruby Developer for a company based in Colorado. They are looking for someone with 4 years experience with Ruby and anything Rails related.
I have 5 years experience with Ruby, and I have been a Senior Dev for 1.5 years. I studied CS in Germany, worked for GitLab for 2.5 years.
I live in Mexico City. What would be your first offer?
(I wonder how close, or not, you come to what Iām actually getting paid right now at my current job)
Experienced software and UX guy. Over 20 years making professional software. Lots of tech/tools/languages. Father of 7. Armchair philosopher. Currently focused on full stack dev with React, Node..
Hi Patricio, if I were hiring in Mexico City, I'd do my best to research prevailing market rates there. Barring anything else, job listings are not a bad place to start. In the U.S., there are research companies who find out directly from companies' HR how much they pay for X role. They collate this by various factors, including area, and some companies (one I have worked for) pay for this information--because it is more reliable than job listings and public salary surveys (which are also not terrible sources).
I have never hired in Mexico City, so I couldn't say what your role is worth. Sorry. If you're honestly wondering, you could do the research. Another good source is recruiters because they are placing people and get a commission, so they know what the going rates are in their areas usually.
P.S. I say "I" above, only in the context of working as a hiring manager for a company who did not have some other pay philosophy. I know there are definitely companies that pay the same no matter where you live, for instance. As we move towards more remote work, I think the notion of market rates expand to be more national/global, which is good for us.
P.P.S. I've also seen the inverse, where a company pays based on what they, regardless of market, think it is worth to them. What I saw then was it was below market, so for us, I think market-based pay (for the foreseeable future) works in our favor, over the idea of value-based pay.
I've done my research on this already. In my initial comment you can see the rates that I have come across. (between $800 and $2000 per month depending on experience).
After I left GitLab, I looked for a local job. While negotiating I had to be pretty aggressive to get an offer that is for less than half of what I make today. Both positions were very similar, Senior Ruby Dev, with similar experience necessary.
An acquaintance of mine is a recruiter (DonChambitas for those in the region). He works with a lot of companies and knows the market extremely well, not only in Mexico City, but in the entire country. He has worked with big companies as well as start ups. The overall pattern is that the market here in Mexico pays way too little for what the work is actually worth.
For the Spanish speakers here, you can see a survey performed by Software Guru magazine about tech salaries for 2017 here: sg.com.mx/buzz/reporte-salarios-y-...
This is only exacerbated by the fact that some of these companies (listed above like iTexico) are near-shore companies. This means that they do outsourcing work for US companies. They charge their customers regular US rates per developer, but then only pay the people doing the actual work lousy salaries and they make an obscene profit on that.
They are selling your work for what it's actually worth, but you are only getting market rates. This is why I hate the idea of basing salaries on local market rates.
Experienced software and UX guy. Over 20 years making professional software. Lots of tech/tools/languages. Father of 7. Armchair philosopher. Currently focused on full stack dev with React, Node..
FWIW, I don't think that's fair--particularly the imbalance between near-shoring rates vs. your local rates. It's odd, because it seems like the main reason to off/near shore is to save $$, so if they charge US rates, not sure why companies here would use them.
Anyhow, for the record, I would much prefer the same-rate-regardless-of-locale approach. My comments here are only to provide rationale for why companies don't do that, and why they're not likely to, until/if remote work becomes more of a norm (and thus the regional market becomes less of a thing).
And in general, I think developers, no matter where they live, are undervalued for what they do. It is one of the most highly-skilled, volatile-knowledge jobs in the world. But we're all up against market forces that work against being paid by value.
The near-shoring companies do charge a bit less, but the difference is negligible, specially compared to what the developer ends up getting. The major attraction factor these companies have is that they can supply you with experienced developers, located in your timezone that speak good english. So you can go from a team of 5 to a team of 25 in just a week, without having to vet the candidates yourself. That is why they can charge pretty close to what the 20 extra developers would cost them in net salary (they save in acquisition costs, training, hiring, etc. so the deal is still pretty sweet for them).
My comments here are only to provide rationale for why companies don't do that, and why they're not likely to, until/if remote work becomes more of a norm (and thus the regional market becomes less of a thing).
Thank you for the insights š
I think developers, no matter where they live, are undervalued for what they do. It is one of the most highly-skilled, volatile-knowledge jobs in the world. But we're all up against market forces that work against being paid by value.
That makes 2 of us š
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As a fellow remote employee, I feel ya. However, pay is often first and foremost determined by market rates. What could you get paid by other companies if you worked locally? That's the market rate for you.
Granted, nothing says a company has to follow that logic, but it kinda makes sense from a fiscal responsibility point of view.
Further, I think (and maybe more so hope) that our industry is waking up that people don't need to be local more and more. That will make the market rates more global, or at least national, so employers will have to compete across the board, not just based on locality.
And lastly, if you feel you are underpaid, go get another offer to prove it. I never met a company (who valued the employee) that is not willing to increase based on real market evidence they are paying too little. Unless they just can't afford it, of course. You could also just bring it up as a concern, first. Sometimes employees don't realize that just making their concerns known can change things.
I'm about as pro-free enterprise capitalism as they come. I have zero problem with private, consensual salary negotiations that result in unequal pay.
I have zero complaints if a company says something like "We like this person, and want to hire them. We have to be responsible with our capital, so here is an offer we think is fair that we also think they will accept"
It's quite another thing to say "This is what your skills are normally worth to us, and some of our engineers at your level who enjoy the wonderful city of San Jose get paid that. You however, live near poor people, for reasons we don't know or even care about, and we want to make sure you fit in with your neighbors, in the name of fairness." which is what a strict COL based pay policy says.
I agree with you, if COL adjustment is the company rationale. If your company is telling you that, then yep, they're off base. I would suspect they are just articulating the situation poorly.
I'm just speaking as a long-time hiring manager of many locations around the world. You hire at the local market rate.
Most companies I've worked for don't pay based on "value"; they pay based on what X role is paid in Y market. It really is supply-demand economics. This is why offshoring "works" (if I may use that term loosely).
I wonder what you, as a hiring manager, would say what my rate would be. (Not a challenge or anything, just as a thought exercise)
The position is Senior Ruby Developer for a company based in Colorado. They are looking for someone with 4 years experience with Ruby and anything Rails related.
I have 5 years experience with Ruby, and I have been a Senior Dev for 1.5 years. I studied CS in Germany, worked for GitLab for 2.5 years.
I live in Mexico City. What would be your first offer?
(I wonder how close, or not, you come to what Iām actually getting paid right now at my current job)
Hi Patricio, if I were hiring in Mexico City, I'd do my best to research prevailing market rates there. Barring anything else, job listings are not a bad place to start. In the U.S., there are research companies who find out directly from companies' HR how much they pay for X role. They collate this by various factors, including area, and some companies (one I have worked for) pay for this information--because it is more reliable than job listings and public salary surveys (which are also not terrible sources).
I have never hired in Mexico City, so I couldn't say what your role is worth. Sorry. If you're honestly wondering, you could do the research. Another good source is recruiters because they are placing people and get a commission, so they know what the going rates are in their areas usually.
P.S. I say "I" above, only in the context of working as a hiring manager for a company who did not have some other pay philosophy. I know there are definitely companies that pay the same no matter where you live, for instance. As we move towards more remote work, I think the notion of market rates expand to be more national/global, which is good for us.
P.P.S. I've also seen the inverse, where a company pays based on what they, regardless of market, think it is worth to them. What I saw then was it was below market, so for us, I think market-based pay (for the foreseeable future) works in our favor, over the idea of value-based pay.
I've done my research on this already. In my initial comment you can see the rates that I have come across. (between $800 and $2000 per month depending on experience).
After I left GitLab, I looked for a local job. While negotiating I had to be pretty aggressive to get an offer that is for less than half of what I make today. Both positions were very similar, Senior Ruby Dev, with similar experience necessary.
An acquaintance of mine is a recruiter (DonChambitas for those in the region). He works with a lot of companies and knows the market extremely well, not only in Mexico City, but in the entire country. He has worked with big companies as well as start ups. The overall pattern is that the market here in Mexico pays way too little for what the work is actually worth.
For the Spanish speakers here, you can see a survey performed by Software Guru magazine about tech salaries for 2017 here: sg.com.mx/buzz/reporte-salarios-y-...
This is only exacerbated by the fact that some of these companies (listed above like iTexico) are near-shore companies. This means that they do outsourcing work for US companies. They charge their customers regular US rates per developer, but then only pay the people doing the actual work lousy salaries and they make an obscene profit on that.
They are selling your work for what it's actually worth, but you are only getting market rates. This is why I hate the idea of basing salaries on local market rates.
Sorry, I did not see your other post.
FWIW, I don't think that's fair--particularly the imbalance between near-shoring rates vs. your local rates. It's odd, because it seems like the main reason to off/near shore is to save $$, so if they charge US rates, not sure why companies here would use them.
Anyhow, for the record, I would much prefer the same-rate-regardless-of-locale approach. My comments here are only to provide rationale for why companies don't do that, and why they're not likely to, until/if remote work becomes more of a norm (and thus the regional market becomes less of a thing).
And in general, I think developers, no matter where they live, are undervalued for what they do. It is one of the most highly-skilled, volatile-knowledge jobs in the world. But we're all up against market forces that work against being paid by value.
The near-shoring companies do charge a bit less, but the difference is negligible, specially compared to what the developer ends up getting. The major attraction factor these companies have is that they can supply you with experienced developers, located in your timezone that speak good english. So you can go from a team of 5 to a team of 25 in just a week, without having to vet the candidates yourself. That is why they can charge pretty close to what the 20 extra developers would cost them in net salary (they save in acquisition costs, training, hiring, etc. so the deal is still pretty sweet for them).
Thank you for the insights š
That makes 2 of us š