> Edit: A bunch of people are saying "why not remote". I think they are in fact mostly remote, but they still have to compete with SV wages because really good people command those wages whether they are here or not.
This doesn't make sense. In the case of remote workers it's the San Francisco workers that have to compete with global offer/demand because nobody cares how much you are paying for housing.
It doesn't make sense but it is true. If you're really good, someone will make you an offer for an SV salary, and now everyone needs to compete with that. Besides, it's only fair. Your value shouldn't be tied to where you live per se. It's true that people in some areas make less because they have fewer options in their area, but for a high caliber person, they have plenty of options whether they move their physical location or not.
I'm pretty sure we're going to see a trend as remote work becomes more popular where there will be a much smaller delta because of location of the employee.
People who are near the top of the skill curve, and can present a business case for being paid like it, don't make $75K in Omaha for that job. (They may make $9K in Phuket, but there are additional factors on top of that.)
If I left Boston today, I'd still make what I make here. I have considered doing exactly that.
That really depends on very much more than your skill as an engineer, and the ability to "present a business case for being paid like it" simply does not apply to the majority of employment negotiation scenarios--even ones involving the very best of the best engineers. Most, in fact almost all employers have fixed salary schedules for their positions and they simply will not deviate from these as a rule, nor will they entertain negotiation around them.
> Most, in fact almost all employers have fixed salary schedules for their positions and they simply will not deviate from these as a rule, nor will they entertain negotiation around them.
Most employers will happily tell you that this is the case. That does not mean that it is so. If you rate it, those doors will, at many companies, open. But you have to rate doing something that is Not Normal, and you have to be able to communicate why you rate having the people dealing with your hiring stick their neck out and do something that is Not Normal. This is hard. Few people (not just engineers) can do that. But it can be done.
I've worked at 20k+ employee companies where these are split into entire separate decision-making structures. Salaries are set by HR and approved far up the chain, and hiring decisions are made by people who do not share supervisors until you're a level below the CEO.
When you're hiring a "Programmer II" in a company like that, the salary is not going to change. You might be able to negotiate work-from-home a day or two a week, or an extra week of vacation or something, but you're simply not going to make more than the upper bound of that schedule, and being at the upper bound of that schedule will negatively impact raises until you get promoted.
The CEO or COO or CIO is not going to approve a $100k salary for a Programmer II when the band is $60-75k. It just won't happen.
On an extremely related note, there is zero ambition and very little technical skill at that company. The vast majority of folks with skill and ambition leave after 2-3 years.
It means exactly that it is so for almost all cases. There are always going to be exceptions, but those are just that: exceptions. There's a reason they're called "exceptions." Edit: the people who set compensation are very rarely the people that decide whether to hire you. The latter may communicate the salary HR dictates to them, but they almost never have negotiation power within their own employers' structure.
It doesn't have to apply to the majority of employment negotiation scenarios. It just has to apply to enough of a particular class of worker to set the market price.
I would also suggest your understanding of how often exceptions are made is very unlikely to be based on good data. Employers have ways of hiding that they are paying somebody more than their traditional salary structure when they need to make an exception. And a very strong incentive to do that hiding.
Yes, and the same reasoning would apply to folks suggesting that employers routinely are open to negotiation. On the other hand we have a plethora of anecdotal data (e.g. through Glassdoor and other self reporting places) and BLS salary data by region and classification (https://www.bls.gov/oes/current/oessrcma.htm). The means and medians in these data are quite close. It'd be nice to see upper and lower extremes, modes and other information to gauge the actual distribution, but it strikes me as an extraordinary to claim successfully negotiating higher-than-average wages is typical.
> Yes, and the same reasoning would apply to folks suggesting that employers routinely are open to negotiation.
No, it wouldn't, because employers have a strong incentive to hide salary band violations, while employees have a strong incentive to discover when negotiations are possible.
> it strikes me as an extraordinary to claim successfully negotiating higher-than-average wages is typical.
Then you should probably go talk to somebody who made that claim. But it's a nonsensical claim, so my guess is not many would be making it.
I've never been a typical employee in my life. I have, however, been the highest-paid non-manager (or so I was told; this might have been an attempt to shame me into working more for free) in a hundred-person development group, well out of band, because I brought capabilities and skills to the table that they needed more than they needed to Maintain The Integrity Of The Salary Band.
So if your point wasn't that employers routinely deviate from their prescribed bands ("as a rule") why did you respond to my comment? What I see is an anonymous Internet Person bragging without context (for all I know your non-typical experience could have been with 99 developers who were seriously below average).
They won't routinely deviate from prescribed bands for your typical engineer. There are many, many engineers who are atypical, whether because of skill set or skill level; before I went into consulting I was able to command top-of-market salaries because I am pretty good--not the best, but pretty good--and actively went into areas of technology that others didn't. I was then able to communicate to potential employers why this mattered and how I would be able to help them, because I have enough of a business background to be able to make the case for myself. And while whatever "talent" is involved may be innate--I don't think it is, but whatever--the rest is eminently learnable.
I'm sure that's true. The world is not a technical problem. It just happens that the folks I know in that position more than deserve it from a technical perspective.
I have direct experience with getting offers in an area with cost of living similar to Omaha. With no negotiation, the pay was the same as in the high cost of living area where I chose to live.
I don't have direct experience with Phuket, but I've heard of friends who get paid US level contract rates in similar areas.
Yes what is and, according to the parent what should be, diverge.
What this really tells me is that workers in Omaha and Phuket ought to demand more, and that they are selling themselves for far less than the value they create, or else that they aren't actually doing "the same job." Likely both are true.
In most cases, it is at least partially tied to how much value someone can extract from you, which really has to do with how much value they bring in the market.
It's less about the 'value I create' and more about the 'value company X is able to create using my skills'. And... in some measure, you're going to be tied to how good the company itself is. I could give the same deliverable to two companies, and one may be able to make 20x more than the other, owing to other factors like network, sales, marketing, image, etc. In that case, they could probably pay me more as well, because they're earning more, but that then gets in to business vision and politics - do they see the software/tech as a cost-center or a profit-center?
Agree with this. Some in south India make 100K USD for the job that would make 140 to 180K in USA. But not everyone though and like other post mentioned it is about the companies perception of your value and most of the Fortune 500 companies have some base setup for each title irrespective of where you live.
I think it has a lot more to do with being a good negotiator and being good at leveraging your skills than being "really good" in a general. People don't get what they deserve. They get what they negotiate.
I believe that the wage pressure moves in the other direction: most Silicon Valley firms prefer local engineers, but they're a limited resource. If you're paying $2000+ in rent, you're incentivized to seek unusually high wages -- and, as a local engineer in Silicon Valley, you're in a position to do so. Employers are competing for /you/.
(Of course, we shouldn't dismiss the less market-determined psychological factors at play: if you're an executive at a startup flooded with easy money in a culture that doesn't particularly value corporate fiscal responsibility, you may want to pay better-than-market for the pure gratification of doing so.)
Most startups, including funded startups, seem to pay significantly lower than established tech companies in this area. My anecdotal experience certainly fits that. The last time I was job searching the highest offer I got from a startup was $130k plus a hiring bonus and laughable equity with poor benefits, while the young company (IPO within the previous four years) I accepted an offer from came in at well over 20% more than that all-in.
I think startups undercompensate and more or less target lottery-equity chasers.
This doesn't make sense. In the case of remote workers it's the San Francisco workers that have to compete with global offer/demand because nobody cares how much you are paying for housing.