re: Why (I think) "Cost of Living" pay for remote workers is BS. VIEW POST

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re: 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...

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 Iā€™m 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).

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 šŸ‘

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 šŸ˜Š

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