He/Him/His
I'm a Software Engineer and a teacher.
There's no feeling quite like the one you get when you watch someone's eyes light up learning something they didn't know.
One consequence I foresee is based on indications that Facebook will be giving paycuts to remote employees who move to places with lower costs of living. I'm afraid this will set a precedence to other companies as well, and will incentivize lowering pay for all developers across the board.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
That precedent has been around for ages. I mean, if your familiar with the Federal government, they provide a base-pay and a locality-bump.
Also, because your retirement is based on your last few years' payroll, a lot of Federal employees try to get billeted to expensive locals a couple years before their retirement: if you retire out of a LA/NYC/Chicago/DC billet, your retirement check's fatter than if you retire out of a billet in, say, Nebraska. ...And then you can take that fatter retirement check and relocate to someplace cheap.
Even outside of the Federal government, there've already been remote-oriented IT companies that do locality-based pay-scaling.
Justified concern, that's the flip side of the "more opportunities regardless of location" coin ... question is if FB is actually going to do this (based on the huge pile of cash FB has there is no financial need really) but they might be tempted to start that "discussion".
He/Him/His
I'm a Software Engineer and a teacher.
There's no feeling quite like the one you get when you watch someone's eyes light up learning something they didn't know.
Of course! I look forward to the opportunities that will now be open to my many friends in rural areas far from the big tech hubs, I just wish companies would pay them what they're worth and not try to save a buck by making silly COL arguments.
I don't remember where I saw it, but it was from a FB employee who said it was a message from management.
One interesting result might be that the inflated housing/real estate/rental market in these "tech hubs" (SF, Bay Area, Silicon Valley and so on) may start to relax and get back to normal levels ... I think many San Francisco (etcetera) residents, especially the ones who don't work in the tech industry but who've been seeing rent and prices soar, will be welcoming this.
He/Him/His
I'm a Software Engineer and a teacher.
There's no feeling quite like the one you get when you watch someone's eyes light up learning something they didn't know.
Yeah, as someone who recently left Brooklyn so I could afford a house (not SF, but not too far behind lol) I'm really looking forward to that aspect of it!
He/Him/His
I'm a Software Engineer and a teacher.
There's no feeling quite like the one you get when you watch someone's eyes light up learning something they didn't know.
Does Facebook already have offices & employees outside of the USA, like for instance in India? If that's the case then it's safe to predict that the employees in (let's say) the India based offices receive lower wages (on average) than the ones in the Bay Area ... there's no way that they would be paying the same salary, because frankly it wouldn't make sense.
(not because the India devs or employees are in whichever way "less" than their US counterparts, but simply because of the huge gap with regards to cost of living)
In other words, I don't know if we should really be as "shocked" by this as we may think we should be ... this policy (or planned policy) might very well just be common sense.
I think its shocking because of the circumstances. We're in a global pandemic where lots of people went back to their parents houses and left NYC or the bay for what they thought would be temporary. Now its looking like this will be a while and Facebook is saying "we're cutting your pay unless you move back to SF even if its not safe".
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
I think the "shocking" part is that, by being remote, you're saving them money. It's significantly cheaper to furnish bandwidth than to rent/buy office-space, furnish it, climate-control it, clean it, etc.
And the whole "but where you're living is cheaper" thing is a crock to start with. I mean, as it stands, people working in the same building (in the same position) get paid based on their skills and experience, not on whether they live in an expensive part of town or commute 60mi each way so they can live someplace cheap. HR doesn't look at my ZIPcode and my teammate's ZIPcode and say "I'm giving you a CoL bump and I'm giving your teammate a CoL ding".
You've partially convinced me, however if FB's office is in an area (county, even state) where rent and other prices are totally through the roof, not in one zip code but virtually anywhere, then they HAVE to pay higher salaries don't they? Or people will simply be unable to make ends meet, no matter which city, town or neighborhood they live.
Apart from this "exceptional" scenario I would tend to say your logic is right.
What if they would give people a "base salary", which would be the same no matter locality or on site/remote, and which would be based on job title and years of experience and so on (so "merit based"), and on top of that people can get "subsidized" to cover specific costs (which they will have to prove by showing bills and so on) ?
That might be the basis for a more fair and transparent system of remuneration. I think that would be the way forward - whatever approach a company chooses, make it fair and make it transparent.
Yes you're absolutely right, the circumstances (COVID-19) make this very very shocking indeed - telling people "you need to come back to the office or you get a pay cut". But what about the news then recently that both Facebook and Twitter will allow their employees to WFH permanently?
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
At one point in time, Facebook (and others) decided "the value of the <POSITIONS> is worth $X/year compensation-outlay". If they weren't, they could have made the decision to move locations to where they could source for less. This strikes me as opportunistic. It also strikes me as a harbinger of a future where, "we now only want to pay $Y/year for your position: you probably want to move to someplace cheaper if you want to retain your earnings:CoL ratio" (and, ultimately, a harbinger of "we're just going to offshore since <FOREIGN MARKET>'s rates are significantly cheaper than even the lowest CoL-adjusted salary within this state/region/country would allow for").
Ultimately, it sort of strikes me as "double dipping" on such companies' parts: reduce the costs associated with facilitating workers' ability to produce (especially given that the costs of corporate facilities are likely going to have to go up to reflect newly-identified spacing, cleaning, HVAC and other requirements) and reduce the raw amount you're paying said workers ...all while retaining the full value of a given employee's output.
That they didn't previously simply outsource things says that there's (at least up to this decision-point) an intrinsic value to having workers within a given cultural-, language- or time-region doing the work. If so, the fair thing is to pay for the value of those factors.
Overall, if a company thinks that where an employee lives or works from changes the value of what they produce, then they should probably only hire employees that meet the associated cost/value relationship.
I mean lots of companies already pay low enough that employees need two jobs to make ends meet. In this case I'm assuming its just someone at Facebook decided to apply the usual Cost of Living calculation to remote workers. It seems like a cost saving measure for facebook. Ad spending is way down so they're trying to save.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
Which is fine. But be honest with me. Don't try to claim it's "fair" to cut my compensation simply because I moved — especially if me no longer sucking up cube-space already saves you money. Tell me "we need to either cut everyone's compensation or start laying people off because the income-landscape has changed and we're facing losses". Of course, such honesty also means that, for "fairness" sake, C-suite occupants and shareholders should be similarly-facing cuts.
That is a very valid concern. Facebook has so much influence, the way they handle the result of the pandemic will show other companies how to proceed. I hope they do the right thing but i'm confident they won't.
He/Him/His
I'm a Software Engineer and a teacher.
There's no feeling quite like the one you get when you watch someone's eyes light up learning something they didn't know.
Would that be a bad thing, though? I mean, besides smaller number < big number, more purchasing power means smaller salary gives you a better standard of living. Or the same standard.
What I'd worry about is a scummy place like Facebook using this opportunity to lower people's standard of living under the context of readjusting cost of living equations. But overall, being paid less when you're in a cheaper area doesn't inherently bother me. Seems rational and better for everyone involved.
I think location based pay is reasonable, but I feel like actually cutting pay because someone started working remotely (which saves the company money by not needing office space and whatever other amenities in office employees get) isn't great.
Adjusting pay according to the local market in all cases is fair to everyone. We can't remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do). We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable. It is a value we stand behind and take very seriously.
It intially feels wrong, and it is messy because large companies do affect the local pay that local industries are subject to. This doesn't eliminate the need for a well thought out policy though.
Another take is paying everyone the same number but their local currencies differ - thats not quite the same but is a good illustration imo.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
In any given job-region (i.e the total area described by the commute-radius from a given corporate work-center), there are expensive neighborhoods and cheaper neighborhoods. If they're not doing ZIP-by-ZIP adjustments then their "fairness" doctrine is a sham.
The work being done has a specific value. It's the value of the work that the pay should reflect, not whether one employee is more able to afford to take a lower compensation just because they live in a cheaper ZIPcode.
Fair cost of living-adjusted pay doesn't equate to living in whatever neighborhood you want, it is fair for the local region. Usually that is at the state level. To suggest that isn't fair enough because they aren't paying per-street corner is some type of disingenuous fallacy. You can be plenty fair with compensation without ZIP-by-ZIP adjustments.
I'll also add, work output value !== employee value. In a good fit, employee value > work output value.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
I live in the DC region. Within this region, there are several job-clusters with the average commute-radius for any given job-cluster of around the 25mi mark. If you placed a centroid at the Washington Monument to encompass most of the job-clusters and their average commute-radii, the overall average commute-radius is easily 45 miles (with some uber-commuters driving +60mi each way every day).
Using that 45mi radius circle, you're talking about an area of well over 6,000 square miles. even if you go with a more conservative radius, you're still over 3,000 square miles. Within whichever commute-area you wish to use, there are three different state-level jurisdictions. There are six county-level jurisdictions just within the inner-ring of suburbs. Even within a single, county-level economic territory, there are significant differences in cost of living that aren't accountable for simply by assuming "oh, you chose to live in an expensive neighborhood". Especially when you evaluate over time.
To illustrate, there's my case. Unlike many of my peers, I was conservative: I bought into a neighborhood that I was well within my "comfortably afford" envelope yet was still a sub 45-minute commute to the job-clusters I wanted to have access to. Between my 2002 purchase and the 2008 market-collapse, my house price more than doubled in value (and real estate taxes along with it). The post-collapse recovery means my initial purchase is now less than a third of its currently assessed value (which, again means my property taxes are 3x what they were when I first bought). Yet, four miles away — across a river as well as in a different state and county — a house of similar size and on a similarly-sized plot of land can be had for approximately half my current monthly outlay (though, at the time of my initial purchase, the delta was considerably lower). And while those arguing for the fairness of state- or region-wide pay-zones would say, "just move four miles," not only don't understand the economics of the region, they don't understand that moving four miles in that direction would add an average of 30 minutes to any existing commute (under normal traffic conditions). This is one of those areas where one measures commutes less by distance than by traffic-patterns.
So, no, greater-granularity in location-based salary-adjustments isn't a disingenuous argument if one is going to argue that it's reasonable for an employer to institute location-sensitive compensation.
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One consequence I foresee is based on indications that Facebook will be giving paycuts to remote employees who move to places with lower costs of living. I'm afraid this will set a precedence to other companies as well, and will incentivize lowering pay for all developers across the board.
That precedent has been around for ages. I mean, if your familiar with the Federal government, they provide a base-pay and a locality-bump.
Also, because your retirement is based on your last few years' payroll, a lot of Federal employees try to get billeted to expensive locals a couple years before their retirement: if you retire out of a LA/NYC/Chicago/DC billet, your retirement check's fatter than if you retire out of a billet in, say, Nebraska. ...And then you can take that fatter retirement check and relocate to someplace cheap.
Even outside of the Federal government, there've already been remote-oriented IT companies that do locality-based pay-scaling.
Justified concern, that's the flip side of the "more opportunities regardless of location" coin ... question is if FB is actually going to do this (based on the huge pile of cash FB has there is no financial need really) but they might be tempted to start that "discussion".
Of course! I look forward to the opportunities that will now be open to my many friends in rural areas far from the big tech hubs, I just wish companies would pay them what they're worth and not try to save a buck by making silly COL arguments.
I don't remember where I saw it, but it was from a FB employee who said it was a message from management.
One interesting result might be that the inflated housing/real estate/rental market in these "tech hubs" (SF, Bay Area, Silicon Valley and so on) may start to relax and get back to normal levels ... I think many San Francisco (etcetera) residents, especially the ones who don't work in the tech industry but who've been seeing rent and prices soar, will be welcoming this.
Yeah, as someone who recently left Brooklyn so I could afford a house (not SF, but not too far behind lol) I'm really looking forward to that aspect of it!
Here, found one:
Right ... just one thing I was wondering about:
Does Facebook already have offices & employees outside of the USA, like for instance in India? If that's the case then it's safe to predict that the employees in (let's say) the India based offices receive lower wages (on average) than the ones in the Bay Area ... there's no way that they would be paying the same salary, because frankly it wouldn't make sense.
(not because the India devs or employees are in whichever way "less" than their US counterparts, but simply because of the huge gap with regards to cost of living)
In other words, I don't know if we should really be as "shocked" by this as we may think we should be ... this policy (or planned policy) might very well just be common sense.
I think its shocking because of the circumstances. We're in a global pandemic where lots of people went back to their parents houses and left NYC or the bay for what they thought would be temporary. Now its looking like this will be a while and Facebook is saying "we're cutting your pay unless you move back to SF even if its not safe".
I think the "shocking" part is that, by being remote, you're saving them money. It's significantly cheaper to furnish bandwidth than to rent/buy office-space, furnish it, climate-control it, clean it, etc.
And the whole "but where you're living is cheaper" thing is a crock to start with. I mean, as it stands, people working in the same building (in the same position) get paid based on their skills and experience, not on whether they live in an expensive part of town or commute 60mi each way so they can live someplace cheap. HR doesn't look at my ZIPcode and my teammate's ZIPcode and say "I'm giving you a CoL bump and I'm giving your teammate a CoL ding".
You've partially convinced me, however if FB's office is in an area (county, even state) where rent and other prices are totally through the roof, not in one zip code but virtually anywhere, then they HAVE to pay higher salaries don't they? Or people will simply be unable to make ends meet, no matter which city, town or neighborhood they live.
Apart from this "exceptional" scenario I would tend to say your logic is right.
What if they would give people a "base salary", which would be the same no matter locality or on site/remote, and which would be based on job title and years of experience and so on (so "merit based"), and on top of that people can get "subsidized" to cover specific costs (which they will have to prove by showing bills and so on) ?
That might be the basis for a more fair and transparent system of remuneration. I think that would be the way forward - whatever approach a company chooses, make it fair and make it transparent.
Yes you're absolutely right, the circumstances (COVID-19) make this very very shocking indeed - telling people "you need to come back to the office or you get a pay cut". But what about the news then recently that both Facebook and Twitter will allow their employees to WFH permanently?
At one point in time, Facebook (and others) decided "the value of the <POSITIONS> is worth $X/year compensation-outlay". If they weren't, they could have made the decision to move locations to where they could source for less. This strikes me as opportunistic. It also strikes me as a harbinger of a future where, "we now only want to pay $Y/year for your position: you probably want to move to someplace cheaper if you want to retain your earnings:CoL ratio" (and, ultimately, a harbinger of "we're just going to offshore since <FOREIGN MARKET>'s rates are significantly cheaper than even the lowest CoL-adjusted salary within this state/region/country would allow for").
Ultimately, it sort of strikes me as "double dipping" on such companies' parts: reduce the costs associated with facilitating workers' ability to produce (especially given that the costs of corporate facilities are likely going to have to go up to reflect newly-identified spacing, cleaning, HVAC and other requirements) and reduce the raw amount you're paying said workers ...all while retaining the full value of a given employee's output.
That they didn't previously simply outsource things says that there's (at least up to this decision-point) an intrinsic value to having workers within a given cultural-, language- or time-region doing the work. If so, the fair thing is to pay for the value of those factors.
Overall, if a company thinks that where an employee lives or works from changes the value of what they produce, then they should probably only hire employees that meet the associated cost/value relationship.
I mean lots of companies already pay low enough that employees need two jobs to make ends meet. In this case I'm assuming its just someone at Facebook decided to apply the usual Cost of Living calculation to remote workers. It seems like a cost saving measure for facebook. Ad spending is way down so they're trying to save.
Which is fine. But be honest with me. Don't try to claim it's "fair" to cut my compensation simply because I moved — especially if me no longer sucking up cube-space already saves you money. Tell me "we need to either cut everyone's compensation or start laying people off because the income-landscape has changed and we're facing losses". Of course, such honesty also means that, for "fairness" sake, C-suite occupants and shareholders should be similarly-facing cuts.
That is a very valid concern. Facebook has so much influence, the way they handle the result of the pandemic will show other companies how to proceed. I hope they do the right thing but i'm confident they won't.
Sadly, that sums up my opinion of Facebook pretty well too... 😔
Ahah you said it all.
Would that be a bad thing, though? I mean, besides smaller number < big number, more purchasing power means smaller salary gives you a better standard of living. Or the same standard.
What I'd worry about is a scummy place like Facebook using this opportunity to lower people's standard of living under the context of readjusting cost of living equations. But overall, being paid less when you're in a cheaper area doesn't inherently bother me. Seems rational and better for everyone involved.
I was looking at Gitlab's reasoning, for example, and I can't argue against any of it - about.gitlab.com/handbook/total-re....
Edit: this coming from someone in northern Virginia where all the houses start at 800k.
I think location based pay is reasonable, but I feel like actually cutting pay because someone started working remotely (which saves the company money by not needing office space and whatever other amenities in office employees get) isn't great.
I agree with GitLab. Here's a nice excerpt.
It intially feels wrong, and it is messy because large companies do affect the local pay that local industries are subject to. This doesn't eliminate the need for a well thought out policy though.
Another take is paying everyone the same number but their local currencies differ - thats not quite the same but is a good illustration imo.
In any given job-region (i.e the total area described by the commute-radius from a given corporate work-center), there are expensive neighborhoods and cheaper neighborhoods. If they're not doing ZIP-by-ZIP adjustments then their "fairness" doctrine is a sham.
The work being done has a specific value. It's the value of the work that the pay should reflect, not whether one employee is more able to afford to take a lower compensation just because they live in a cheaper ZIPcode.
Fair cost of living-adjusted pay doesn't equate to living in whatever neighborhood you want, it is fair for the local region. Usually that is at the state level. To suggest that isn't fair enough because they aren't paying per-street corner is some type of disingenuous fallacy. You can be plenty fair with compensation without ZIP-by-ZIP adjustments.
I'll also add, work output value !== employee value. In a good fit, employee value > work output value.
I live in the DC region. Within this region, there are several job-clusters with the average commute-radius for any given job-cluster of around the 25mi mark. If you placed a centroid at the Washington Monument to encompass most of the job-clusters and their average commute-radii, the overall average commute-radius is easily 45 miles (with some uber-commuters driving +60mi each way every day).
Using that 45mi radius circle, you're talking about an area of well over 6,000 square miles. even if you go with a more conservative radius, you're still over 3,000 square miles. Within whichever commute-area you wish to use, there are three different state-level jurisdictions. There are six county-level jurisdictions just within the inner-ring of suburbs. Even within a single, county-level economic territory, there are significant differences in cost of living that aren't accountable for simply by assuming "oh, you chose to live in an expensive neighborhood". Especially when you evaluate over time.
To illustrate, there's my case. Unlike many of my peers, I was conservative: I bought into a neighborhood that I was well within my "comfortably afford" envelope yet was still a sub 45-minute commute to the job-clusters I wanted to have access to. Between my 2002 purchase and the 2008 market-collapse, my house price more than doubled in value (and real estate taxes along with it). The post-collapse recovery means my initial purchase is now less than a third of its currently assessed value (which, again means my property taxes are 3x what they were when I first bought). Yet, four miles away — across a river as well as in a different state and county — a house of similar size and on a similarly-sized plot of land can be had for approximately half my current monthly outlay (though, at the time of my initial purchase, the delta was considerably lower). And while those arguing for the fairness of state- or region-wide pay-zones would say, "just move four miles," not only don't understand the economics of the region, they don't understand that moving four miles in that direction would add an average of 30 minutes to any existing commute (under normal traffic conditions). This is one of those areas where one measures commutes less by distance than by traffic-patterns.
So, no, greater-granularity in location-based salary-adjustments isn't a disingenuous argument if one is going to argue that it's reasonable for an employer to institute location-sensitive compensation.