It's more likely set up based on an untested (and easily falsified) conjecture about the relationship between local residential rent prices and local market wages in the industry.
"In developing the compensation formula above, we looked at the compensation of our team members which had been set in the past (without the formula), and found out that there was a statistically significant correlation between compensation and the factors that are now in the formula. We purposefully chose to look for correlations with metrics that are probably causal and definitely relevant in people's lives (the rent!). This also has the advantage of letting us work with data that is readily available publicly, as opposed to trying to scour the web for market compensation rates for all roles in all locations. Perhaps surprisingly, there was a stronger correlation between compensation and rent index than with the more general cost of living index available through Numbeo (or the cost of living with rent index, for that matter); and so we moved ahead with the Rent Index."
The immediate problem with the method of developing your formula that is described is that it assumed that the pay of your staff before you had a systematic formula already accurately reflected prevailing market wages in the locality of every employee.
And, for US locations, BLS data is readily available publicly. While that may not have been a suitable source for a worldwide formula, it would have at least been a suitable reality check on the validity of the formula you came up with to see if it reasonably approximated the variations in market rates within the US.
You are right that we used compensation from before we had the systematic formula. However, we then repeated the exercise (of finding linear correlations with various COL indices) when we had a larger cohort but before the formula had been implemented systematically, and it still pointed to the use of the Rent Index instead of another index.
You're also right that we need the calculator to work worldwide, and I suspect that that may be part of the reason here that the calculator works well on that scale and then not always as well as it should on more local scales. We'll continue to explore how to get better on both scales; the challenge is always that we want to keep things as simple as possible also.
I've made two issues based on your comment here and the one where you shared specific data for Sacramento (thanks for that!):
BTW, I know I've been kind of hard (fair, I think, but not gentle) on you guys in this thread, and I want you to know that I really appreciate how well you've taken it and how responsive you've been.
I won't quote it because I don't have the source in front of me but there is a quote elsewhere on this thread about Gitlab requiring that you tell them when you move so they can pay you less.
A) What's to stop me from getting hired in a 0.21 COL area and moving to San Francisco or Washington, DC? Are you going to fire me or pay me $20k a year because I moved?
B) My labor is not worth less and my work is not lower quality because I move to SE Asia or Eastern Europe. This is idiotic.
I applied for a position at Gitlab a week ago, and didn't even get a response. Probably because I am too expensive, too old, and live in an area with strong labour laws and staff protection. It's a shame, because it would have been decent to at least get a "sorry, not interested" reply, but no response at all is just not cool. They write on their hiring page: Always leave feedback, this will help everyone to understand what happened and how you came to your decision.
@mdekkers glad we saw your post. I tried searching for you in our ATS, but could not find any application under that name. Can you email me directly on jobs@gitlab.com? I'd really like to see what happened to your application and why we didn't respond.
