> Making Bay Area offers to rural candidates is giving them 4-5x their next best option, which is characteristic of either a) the devil, or b) rich people making expressive displays rather than business transactions.
No? If you budget to hire two employees at Bay Area salaries and don't care where they work, you should pay them Bay Area salaries regardless of where they work.
Plenty of companies do this. It's fine. I don't see anything devilish or expressive about paying all your staff the same wages.
> I will add that if you think calibrating an offer based on the worker’s alternatives is crass
I think you're foolish if you don't expect a worker's alternative might be in the Bay Area salary range in the year 2022.
> Even a mediocre SWE salary is way too high.
It's not. The dollar-value delivered by a mediocre SWE has been significantly high for a long time, often orders of magnitude the salary.
If employers stop getting the candidates they want with location-based offers, they will go away. Right now people may grumble, but they sign. Like OP did.
Making a Bay Area offer when you could just as well have closed the candidate with a locally competitive offer doesn't make business sense. It is exactly an expression of the company's values: that it thinks paying people the same is inherently, morally good. Which is not an uncommon set of values in tech! If you can find a company like that, more power to you. But whether it's sustainable to be paying more than necessary for some of the staff depends on the company's economic conditions. If the company ever needs to trim its sails, then reverting to location-based pay would be a natural step.
> If employers stop getting the candidates they want with location-based offers, they will go away. Right now people may grumble, but they sign. Like OP did.
Yes, which is why I recommend not accepting location-based pay. It works!
> Making a Bay Area offer when you could just as well have closed the candidate with a locally competitive offer doesn't make business sense.
Sure it does. If your revenue isn't locale dependent then it makes perfect business sense. Obviously if you're selling local McRuralTown widgets for McRuralTown denizens and the cost of living in McRuralTown is peanuts then this won't work for you, but you're probably going to have a hard time hiring smart software people.
> If the company ever needs to trim its sails, then reverting to location-based pay would be a natural step.
Typically this is a non-reversible policy. Reverting to locale-based pay is a suicide pill unless you're churning your entire workforce, in which case the pill is likely already between your teeth.
>If your revenue isn't locale dependent then it makes perfect business sense.
The delta between the wage needed to get & keep the candidate vs. the wage you're actually paying them is essentially a charitable donation here. Of course businesses regularly do philanthropy, nothing wrong with that. Their own upper-middle-class employees are a weird choice of beneficiary though.
Business sense would be to keep the money and put it towards its most productive use, like hiring another employee or procuring labor-saving technology.
> The delta between the wage needed to get & keep the candidate vs. the wage you're actually paying them is essentially a charitable donation here
If you are doing location-based pay, the difference between the wage you are paying in inflated regions and the wage for a similar candidate in the least expensive region from which a candidate is available is a charitable donation.
Location-based pay means systematically overpaying for labor unless you are taking your own location-based pay schedule into account when hiring and preferentially selecting candidates from low xost regions unless the quality of the candidates from the high cost region makes up for it. But that's just a roundabout way to get to the equivalent of location-neutral value-based pay.
>for a similar candidate in the least expensive region
Right, if you can find them. But the distribution of talent isn't random: bright ambitious people were responding to incentives to migrate to tech hubs at least up until the pandemic. People grew from intern to senior working in the industry's most respected engineering shops there, learning from the best. And that includes global talent: H1Bs are everywhere. There's a case to be made that this cohort is overrated or overpriced and you don't need them - fine. But if you want to hire them in numbers, you're going to have to pay wages that are competitive where they live.
I agree you wouldn't want to hire very junior or unimpressive candidates from the Bay Area/New York/Seattle for remote work, when you can get similar candidates for much cheaper in LCOL regions or countries. But if you're looking to hire from the top end, and your offers aren't competitive there, you're going to miss a lot of great options.
> But the distribution of talent isn't random: bright ambitious people were responding to incentives to migrate to tech hubs at least up until the pandemic.
Right, so pay-by-value will probably end up paying higher wages, on average, in tech hubs, without any resort to pay-by-location.
No? If you budget to hire two employees at Bay Area salaries and don't care where they work, you should pay them Bay Area salaries regardless of where they work.
Plenty of companies do this. It's fine. I don't see anything devilish or expressive about paying all your staff the same wages.
> I will add that if you think calibrating an offer based on the worker’s alternatives is crass
I think you're foolish if you don't expect a worker's alternative might be in the Bay Area salary range in the year 2022.
> Even a mediocre SWE salary is way too high.
It's not. The dollar-value delivered by a mediocre SWE has been significantly high for a long time, often orders of magnitude the salary.