> 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.
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.