Make hay while the sun shines. A true shift to remote work, should it happen, spells the eventual end of insanely high SF FANMAG salaries. Market forces will soon close these opportunities.
My limited experience tells me people aren't prepared for homogenization of salaries across geographies:
South East England, outside London: 1x
London: 2x
New York: 3x
San Francisco: 6x
On making hay: A friend of mine is currently earning around 3-4x in Romania paying almost no tax.
> A true shift to remote work, should it happen, spells the eventual end of insanely high SF FANMAG salaries.
... and the beginning of a new wave of entrepreneurship. The best talent goes towards companies that are too big to take risks. If you're ultra-competent, and the fat juicy wages aren't there to tie your resources on maintaining the status quo at some giant tech firm, maybe taking a punt on your own product (or teaming up with a friend) might be a little more appealing.
You'd be surprised at how few people can do these jobs. An eye opening exercise is doing interviews and seeing how many people with years of college and/or experience can't code a for loop.
Demand exceeds supply and it's market forces not location that is the key driving factor here. Want a data point: London is roughly as expensive as NYC or SF yet the Big Tech total compensation is 30-40% less than SF/NYC.
I don't believe Big Tech will ever go fully remote. There are inherent advantages in physical colocation. I see this as a means of satisfying the ever-increasing demand. The Bay Area in particular is both largely exhausted in available talent and saturated in how many more people can be supported (given available housing and infrastructure).
Disclaimer: I work for Facebook and have gone remote.
Yep people who work remote from a low COL area will benefit now and will benefit possibly even more once market pressure would start ramping up.
Whilst everyone wants to get paid as much as possible getting paid period is even better.
If you have a competitive advantage that would increase the likelihood of them making you an offer by asking for less because your housing costs only 50-25% of what it would in SV you’ll use eventually.
And whilst yes in a perfect world everyone would understand that they are eventually playing themselves but this is essentially the prisoners dilemma on a bigger scale and someone will flinch eventually and then the race to the bottom will start.
Eventually we may bounce back again towards working from a centralized location and then history will just repeat itself.
Except that employers aren’t going to become less picky when switching to remote; likely, they will become even more picky and will want to improve their employee base since the supply has increased and that will be possible where it wasn’t before.
We have been in a global pandemic for one year now. Meanwhile, nothing has really shifted in terms of market value of world-class engineers. If a pandemic isn't enough to cause the "bubble" to burst, any reasonable person would struggle to say that doom and gloom is impending. Software is still eating the world (arguably even moreso as of late).
If companies are fighting for remote talent by showering them with the same kind of compensation packages as they would have gotten in San Francisco and New York, how is that the logical conclusion that can be drawn? Almost all of the remote engineers I know have successfully negotiated keeping their same salary (despite all of this hubbub about lower salaries elsewhere). Where is all of this hidden world-class engineering talent? I'm from the Midwest and could count on fingers how many people from my hometown even knew what C++ was. Out of all of those fortunate people, only one of them still lives there.
Can you imagine any American company contending with the Chinese government for hiring remote workers (let alone risking infosec -- the other top article on HN today is about a Chinese company breeching a US competitor)?
Can you imagine any IIT-caliber engineer wanting to work remote instead of move to the US? My Indian-American colleagues have described the abject starvation and poverty at home to me. I've also seen it myself first hand while traveling.
South Korean engineers have close-knit online communities for moving to the US for work in Silicon Valley (there's even a Korean government agency to facilitate this).
Pockets of talented engineers have also existed in Poland, Russia, Belarus, and Ukraine as well (look at the IOI rankings), but timezones make these remote workers hardly manageable. My previous company was almost entirely staffed from Eastern European immigrants who happily packed their bags and booked one way plane tickets to SFO. Those people have been through multiple periods of history aptly described as none other than sheer hell, with the literal climate to boot (I.e. hath frozen over).
Outside of these countries, you're no longer hiring the best of the best. Talent is still scarce, and nations that have the government, culture, population, and resources to foster it are numbered. If I had to guess, every single person I worked with while I was at FAANG had a 150+ IQ (top 0.1%ile). Many had PhDs (we called them "research scientists") or Ivy League caliber degrees.
> A true shift to remote work, should it happen, spells the eventual end of insanely high SF FANMAG salaries
On what grounds? People said the same thing about outsourcing. It didn't really change anything. Engineer salary has already been bimodal for quite some time. Trying to recruit for the upper tier hasn't gotten any easier.
I think you are overestimating suply of talented ppl. On my lvl there's 100 ppl per year in Poland. So it's 100 per 40M. Guess in other countries it's similar or less and here programming is quite popular.
What country is your friend's employer based in? I'm America living in Romania soon to apply for developer jobs and I see time zone and residency status as potential obstacles.
If you want to maximize earnings, I almost wonder if it would be cheaper to rent the cheapest possible place in a remote area with a higher COL/salary, and then just live in a cheap area.
FAANG caliber engineers can easily generate millions in profits for companies, and it’s not easy to find them. Downward pressure on salaries is not happening any time soon.
Is the justification for paying 6x more that those companies presume there's greater than a 6x increase in output due to network effects? I honestly haven't seen anybody try to justify the expenses over just trying to hire for the same qualities, but more dispersed.
PSA: When comparing US and EU salaries (or anywhere, really), use total cost to employer (excluding fixed office costs), or total benefit to employee (incl. taxes paid in their name and health/retirement costs).
US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
Please take note that Spotify pays sub-market salaries for these cities. The reason being that they do not offer RSUs but instead public stock options without any discount.
- Typical FAANG compensation: X base pay + Y RSUs + Z signing bonus
- Spotify: X base pay + Y stock options (public, so equivalent to you purchasing stocks really) + no signing bonus
This is making finding people for our (large but non tech) company (not in a high tech area) very difficult; we never paid those kind of salaries (cost of living here is much lower) but now you no longer need to be local to work for us, so we have to compete with these high paying companies which our company cannot afford to. It takes the location requirements out of the picture entirely. This is going to kill SF and to a lesser extant, NY, to no longer have these high tax paying employees, but also ruin the work environment elsewhere with now super affluent employees living in low cost but desirable locations.
> This is making finding people for our (large but non tech) company (not in a high tech area) very difficult; we never paid those kind of salaries (cost of living here is much lower) but now you no longer need to be local to work for us, so we have to compete with these high paying companies which our company cannot afford to
It is already happening in Mexico (in GDL where I live at least): The city has been a "tech hub" for a good 10 to 15 years with growing presence of technology firms (Oracle, IBM, HP, Tata, HCL, Cognizant, Intel, plus several small startups), paying roughly 1/3rd of the price per talent. In the last year, we have seen an increasing number of employees moving to remote jobs for American companies that decide to pay 1/2 the price per talent. This is a lot of money for locals and still a 50% saving for US companies.
The bad thing is that, the start-up culture that was being formed here is starting to disappear. I know several CTO or CEOs friends who lost developers because they cannot compete with those salaries (paying in USD) when they are charging in MXN.
My experience in Germany may not be typical. But with the EU's higher taxes, 80% indeed goes down to 50%. However if you have kids, the numbers climb up again because, at least in Germany, you get "Kindergeld" and "Elterngeld" and state-sponsored day-care (Kita) for your kid(s). Plus, 30-days a year vacation standard, you get walkable cities, very good public transportation (so, no car costs) AND you get to take inexpensive weekend trips to Greece, London, Prague, or wherever you want to go. It's up to you to compute that value.
No, a person making 120k$ in NY is not making 40kEUR in a western European city. Maybe half of that, sure. But not 40k (even if you account the EUR-USD diff)
Recruiting is proving insanely difficult right now. We are based just outside of London and have been offering "local remote" (1 day in week office generally) for about 4 years now. Candidates were always hard to attract (salary and office location) but offering remote work 4 days a week really helped. Now, that perk is now a norm so access to even remotely (no pun intended) skilled candidates is next to impossible.
Talent is still scarce, even remote. There is not nearly enough good developers out there to fill all the demand. Employers who try to tell you differently in order to cut pay for going remote cheat you out of the salary which a good dev deserves.
I still think that remote in general won't be that prevalent after covid. Remote with SF/NY salaries? I seriously doubt that they will keep this up long term or that many companies will do the same.
I find it absurd that wealthy Tech people are making decisions on where to live based on the financial value proposition.
People in Tech are rich enough to comfortably live anywhere. Surely, the lifestyle and character of a town/city/country plays a much larger role in where you choose to stay. Life in cheaper cities in the interior is very different from that in massive cities like SF/NY/London/etc. No amount of money can fix life in the wrong location.
On HN, the Remote vs Local argument often ignores critical advantages of a local setup. Over 1 year of remote work, I haven't been able to replicate the magic of physical work a single time. This is while having an social workplace that has really tried to make people feel included.
This may sound like heresy to some but, if I am going to be spending 50% of my waking time with a dozen people, then I would want to be good friends with them, and remote work certainly doesn't make that easy.
____________
I also don't buy the flexibility argument of remote work. It requires a lot of discipline and deliberate action. All of my acquaintances (all single, wealthy and in tech) have increased their working hours during Covid, due to unclear expectations around remote work. None have used this freedom to travel or fulfill their 'live in a cabin' or 'digital nomad' dreams. (ofc, it is challenging to fulfill these during covid).
Now let be clear. I love the idea of companies letting their employees choose what's best from themselves. But, there is a feeling in the air that remote work will be the norm for effective teams after Covid. I have feeling these people will be in for a rude awakening.
Offices are most effectively leveraged by the 90-99th. Those who are doing productive work that needs focus, but not deliberately effective enough to make in the '1' Percentile. (don't read too strongly into the numbers). The structures lent by the office are most useful to these people. Those who are smart enough to use structures to improve, but not smart enough to not need them at all. The bottom 0-90 percentile are often in jobs that 'require' a physical presence (chefs) or ones that are mundane enough to be done from any location. (excel table filling)
What does it take to work for this kind of company though? I have about ten years experience, been focusing on frontend for the last few years. I have never worked at any of the big names and I have a bachelor degree that’s not in CS or mathematics but I’m a decent developer in my opinion: I write clean, testable code.
And yet the major tech players always reject me before even a screening call. Which makes me think I must be missing something in my CV or experience. But what? What are recruiters screening for at these companies?
I just hope the home office trend doesn't lead to an urbanization of the countryside. I'm from a charming village that was overtaken by ugly and expensive developements during the past 20 years because people from the nearest city realised it was within commutable distance.
I die a little inside every time I see someone oneline saying "I can't wait 'till X area has better internet so I can move there", understand "I can't wait 'till X area has better internet so 10k people can have the same idea as me and turn this rural community into a city".
Now in bigger countries (the US, France, Germany, etc.) there will always be cheap rural areas left (though the most desirable areas will probably urbanize and/or become completely unafordable for workers of the primary and secondary sector) but I'm very worried for smaller countries like mine where rural areas are already sought after as of now and it's only going to get worse.
This will just end very quickly. Soon every company will do what Gitlab did: pay average salary based on your geographical location and call it fair. Markets will always try to find a way for cheap labors, and this is no exception.
I wonder if this will make non-techies' life even harder. Right now, thanks to the relatively higher pay, techies are concentated in cities/urban areas. With rermote work possible on a permanent basis, all these relatively well-off techies moving to rural areas; and with their spending power, wouldn't they drive up prices?
I wonder what the mood was like when homo sapiens was transitioning - unbeknownst to many - from a hunter gathering nomadic lifestyle to a sedentary agricultural one.
I know the scales are different but sapiens is in another transition, again unbeknownst to many.
[+] [-] nly|5 years ago|reply
My limited experience tells me people aren't prepared for homogenization of salaries across geographies:
On making hay: A friend of mine is currently earning around 3-4x in Romania paying almost no tax.[+] [-] h0l0cube|5 years ago|reply
... and the beginning of a new wave of entrepreneurship. The best talent goes towards companies that are too big to take risks. If you're ultra-competent, and the fat juicy wages aren't there to tie your resources on maintaining the status quo at some giant tech firm, maybe taking a punt on your own product (or teaming up with a friend) might be a little more appealing.
[+] [-] cletus|5 years ago|reply
Demand exceeds supply and it's market forces not location that is the key driving factor here. Want a data point: London is roughly as expensive as NYC or SF yet the Big Tech total compensation is 30-40% less than SF/NYC.
I don't believe Big Tech will ever go fully remote. There are inherent advantages in physical colocation. I see this as a means of satisfying the ever-increasing demand. The Bay Area in particular is both largely exhausted in available talent and saturated in how many more people can be supported (given available housing and infrastructure).
Disclaimer: I work for Facebook and have gone remote.
[+] [-] headcanon|5 years ago|reply
As someone who works in the Midwest USA, I don't see anything but upside for people like myself.
[+] [-] 2W2|5 years ago|reply
Why not double down and get two “full time” jobs. I’ve heard from my friend in BoA that he works less than 1 hour per day.
TC: 800k
[+] [-] dogma1138|5 years ago|reply
Whilst everyone wants to get paid as much as possible getting paid period is even better.
If you have a competitive advantage that would increase the likelihood of them making you an offer by asking for less because your housing costs only 50-25% of what it would in SV you’ll use eventually.
And whilst yes in a perfect world everyone would understand that they are eventually playing themselves but this is essentially the prisoners dilemma on a bigger scale and someone will flinch eventually and then the race to the bottom will start.
Eventually we may bounce back again towards working from a centralized location and then history will just repeat itself.
[+] [-] hahahahe|5 years ago|reply
[+] [-] ironmagma|5 years ago|reply
[+] [-] ownagefool|5 years ago|reply
The perm market here has always been silly.
[+] [-] Hydraulix989|5 years ago|reply
If companies are fighting for remote talent by showering them with the same kind of compensation packages as they would have gotten in San Francisco and New York, how is that the logical conclusion that can be drawn? Almost all of the remote engineers I know have successfully negotiated keeping their same salary (despite all of this hubbub about lower salaries elsewhere). Where is all of this hidden world-class engineering talent? I'm from the Midwest and could count on fingers how many people from my hometown even knew what C++ was. Out of all of those fortunate people, only one of them still lives there.
Can you imagine any American company contending with the Chinese government for hiring remote workers (let alone risking infosec -- the other top article on HN today is about a Chinese company breeching a US competitor)?
Can you imagine any IIT-caliber engineer wanting to work remote instead of move to the US? My Indian-American colleagues have described the abject starvation and poverty at home to me. I've also seen it myself first hand while traveling.
South Korean engineers have close-knit online communities for moving to the US for work in Silicon Valley (there's even a Korean government agency to facilitate this).
Pockets of talented engineers have also existed in Poland, Russia, Belarus, and Ukraine as well (look at the IOI rankings), but timezones make these remote workers hardly manageable. My previous company was almost entirely staffed from Eastern European immigrants who happily packed their bags and booked one way plane tickets to SFO. Those people have been through multiple periods of history aptly described as none other than sheer hell, with the literal climate to boot (I.e. hath frozen over).
Outside of these countries, you're no longer hiring the best of the best. Talent is still scarce, and nations that have the government, culture, population, and resources to foster it are numbered. If I had to guess, every single person I worked with while I was at FAANG had a 150+ IQ (top 0.1%ile). Many had PhDs (we called them "research scientists") or Ivy League caliber degrees.
[+] [-] yowlingcat|5 years ago|reply
On what grounds? People said the same thing about outsourcing. It didn't really change anything. Engineer salary has already been bimodal for quite some time. Trying to recruit for the upper tier hasn't gotten any easier.
[+] [-] lanevorockz|5 years ago|reply
[+] [-] machiaweliczny|5 years ago|reply
[+] [-] cko|5 years ago|reply
[+] [-] yhoneycomb|5 years ago|reply
[+] [-] rajacombinator|5 years ago|reply
[+] [-] 908B64B197|5 years ago|reply
It's the only way it will change.
[+] [-] andrewstuart2|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] senko|5 years ago|reply
US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
[+] [-] nassycheezy|5 years ago|reply
- Typical FAANG compensation: X base pay + Y RSUs + Z signing bonus
- Spotify: X base pay + Y stock options (public, so equivalent to you purchasing stocks really) + no signing bonus
[+] [-] coldcode|5 years ago|reply
[+] [-] 908B64B197|5 years ago|reply
It's simple: Pay more.
Maybe it's time for a new funding round.
[+] [-] Cthulhu_|5 years ago|reply
It comes across as classism to be honest, looking down your nose at people because they don't live in the most expensive areas of the country.
[+] [-] xtracto|5 years ago|reply
The bad thing is that, the start-up culture that was being formed here is starting to disappear. I know several CTO or CEOs friends who lost developers because they cannot compete with those salaries (paying in USD) when they are charging in MXN.
[+] [-] auiya|5 years ago|reply
Sounds like a simple market correction, since those two cities have been extreme outliers for quite some time.
[+] [-] xtat|5 years ago|reply
[+] [-] nivenkos|5 years ago|reply
Because European salaries are usually 1/3 of the US rate.
[+] [-] rightbyte|5 years ago|reply
I looked out my window and laugthed abit reading that. They can't compare Stockholm with London amd NY like that ...
Spotify in Stockholm does not pay NY wages today atleast.
[+] [-] javajosh|5 years ago|reply
[+] [-] eloisant|5 years ago|reply
You'll get a higher salary in northern Europe (Germany, UK, Netherlands, etc.) than in southern Europe (Spain, Italy, France).
Also you'll get a higher salary in a tech hub like London or Berlin and a lower one in the country side.
There are variations in US too, although probably not as big as between European countries.
[+] [-] magnusmundus|5 years ago|reply
[+] [-] raverbashing|5 years ago|reply
No, a person making 120k$ in NY is not making 40kEUR in a western European city. Maybe half of that, sure. But not 40k (even if you account the EUR-USD diff)
[+] [-] xtracto|5 years ago|reply
[+] [-] akmarinov|5 years ago|reply
[+] [-] m4tthumphrey|5 years ago|reply
[+] [-] dustinmoris|5 years ago|reply
Talent is still scarce, even remote. There is not nearly enough good developers out there to fill all the demand. Employers who try to tell you differently in order to cut pay for going remote cheat you out of the salary which a good dev deserves.
I’ve explained it in great detail here:
https://dusted.codes/equal-pay-for-equal-work
[+] [-] jobvandervoort|5 years ago|reply
Probably a strong selection bias to the types of companies that choose to work with us.
[0]: I'm the CEO of remote.com
[+] [-] superbcarrot|5 years ago|reply
[+] [-] screye|5 years ago|reply
People in Tech are rich enough to comfortably live anywhere. Surely, the lifestyle and character of a town/city/country plays a much larger role in where you choose to stay. Life in cheaper cities in the interior is very different from that in massive cities like SF/NY/London/etc. No amount of money can fix life in the wrong location.
On HN, the Remote vs Local argument often ignores critical advantages of a local setup. Over 1 year of remote work, I haven't been able to replicate the magic of physical work a single time. This is while having an social workplace that has really tried to make people feel included.
This may sound like heresy to some but, if I am going to be spending 50% of my waking time with a dozen people, then I would want to be good friends with them, and remote work certainly doesn't make that easy.
____________
I also don't buy the flexibility argument of remote work. It requires a lot of discipline and deliberate action. All of my acquaintances (all single, wealthy and in tech) have increased their working hours during Covid, due to unclear expectations around remote work. None have used this freedom to travel or fulfill their 'live in a cabin' or 'digital nomad' dreams. (ofc, it is challenging to fulfill these during covid).
Now let be clear. I love the idea of companies letting their employees choose what's best from themselves. But, there is a feeling in the air that remote work will be the norm for effective teams after Covid. I have feeling these people will be in for a rude awakening.
Offices are most effectively leveraged by the 90-99th. Those who are doing productive work that needs focus, but not deliberately effective enough to make in the '1' Percentile. (don't read too strongly into the numbers). The structures lent by the office are most useful to these people. Those who are smart enough to use structures to improve, but not smart enough to not need them at all. The bottom 0-90 percentile are often in jobs that 'require' a physical presence (chefs) or ones that are mundane enough to be done from any location. (excel table filling)
[+] [-] ornornor|5 years ago|reply
And yet the major tech players always reject me before even a screening call. Which makes me think I must be missing something in my CV or experience. But what? What are recruiters screening for at these companies?
[+] [-] dd_roger|5 years ago|reply
I die a little inside every time I see someone oneline saying "I can't wait 'till X area has better internet so I can move there", understand "I can't wait 'till X area has better internet so 10k people can have the same idea as me and turn this rural community into a city".
Now in bigger countries (the US, France, Germany, etc.) there will always be cheap rural areas left (though the most desirable areas will probably urbanize and/or become completely unafordable for workers of the primary and secondary sector) but I'm very worried for smaller countries like mine where rural areas are already sought after as of now and it's only going to get worse.
[+] [-] timvisee|5 years ago|reply
[+] [-] robinhood|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] penguin_booze|5 years ago|reply
[+] [-] ThePadawan|5 years ago|reply
Does anyone have more details?
[+] [-] JackPoach|5 years ago|reply
[+] [-] komuW|5 years ago|reply
I know the scales are different but sapiens is in another transition, again unbeknownst to many.