Well done. Personally, as a remote developer, I always make a point of billing at my "Bay Area Rate", even though I've never lived there.
There was a point, early in my guy-on-the-beach-with-a-laptop era where I would cut my bill rate in half while working from the beach with a laptop. Clients were happy about that, and it more than paid for beers and thatch huts. Then one time I tried not cutting my bill rate in half on a proposal. Nobody but me seemed to notice. So now I don't do that anymore.
As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
It's true that living costs are less in other places. It makes a lot more sense for that difference to be captured by me rather than somebody else's company.
Glad to see these guys stepping up and setting an example from the employer side.
Basecamp is selling all over the world. What should their salary level be like? Bay Area because that’s where a lot of the larger tech companies are situated? Washington State (Microsoft, Amazon)? Copenhagen (where one founder, DHH is from)? Sudney where one major competitor, Jira, is from? I’d say whatever the market is that they hire in. If you wanna pay above market rate, by all means do that. If you can attract employees in Chicago for less than Copenhagen or Bay Area salaries, then by all means, feel free to do that. Employees are free to leave.
What I don’t see is why all companies should follow Bay Area salaries.
People often tell me, "Yeah the Bay Area is expensive but the tech salaries make up for it."
By being able to get a Bay Area salary (e.g. $150k/year) while working from anywhere in the world (e.g. any city where $40k/year is considered comfortable living and $80k/year is considered "well off"), the incentive to continue saturating the area with local talent decreases.
Same salary, lower cost of living, AND the ability to be a homeowner in the foreseeable future? That's a hard deal to beat.
Arbitrarily high salaries are often more of a retention play for existing employees than anything else. Note how strong the disclaimer was at the end that they're <b>not hiring.</b>
How much is your/the "Bay Area Rate"? Thinking about internationalization of my consultancy and have no real insight into hourly rates for devs in the US. Don't want to leave too much money on the table because I haven't done my research.
It goes like this -- as you are waiting for webpack to rebuild your modules, you gaze into the crystal blue water, see someone getting a massage for five bucks, and realize that you're the only one without a beer. Webpack finally finishes up, but you don't notice, and for good reason. Nothing else gets done the whole day.
Imagine the work currently being done in a cubicle. Now remove the two external monitors and fill the bottom third of the cube with sand.
That's pretty much the only difference. Lots of guys try dividing their bill rate by four, but as I said above, that's just personal preference. (And also diminshes the perceived value of what you do.)
He's probably exaggerating, but I can see the allure of remote work. You may be working on a laptop in a cheap room in a hot country, but when 5PM comes, you'll be a few steps away from the surf.
And depending on the client's timezone, you could start work later during the day...
I live in the SF Bay. My "onsite" day rate is much higher than my "remote" rate.
All of my local clients accept a compromise; meet in-person once per sprint (every 2-4 weeks). Otherwise all work is done remotely.
My remote employees and contractors are not required to commute or work onsite, therefore the remote rate applies.
Kudos to Basecamp for committing to standard salary levels, but I believe geographic cost-of-living adjustments are more accurately assessed through periodic bonuses.
Just up the beach from my $6/night bungalow in Thailand there was a resort that costs $1,500/night. The work I'd do from there would be functionally equivalent from my employers' perspective.
So as long as we're covering expenses, I'd prefer they cover mine at that second place. The fact that I might actually be living cheaper is none of their concern.
Given a situation with two developers working remotely with exactly the same skills, experience and knowledge on the same project, but one works in India, the other one works in the Bay area.
Can you give me one valid reason why the developer in India should get a penny less than the developer in the Bay area?
And that the cost of living is less in India than in SF is not, in my opinion, a valid reason.
You pay your developers, or any staff come to that, what they're worth to you.
No, it's a market-clearing rate like everything else. It is for the work and only for the work. Otherwise you get the bad old days where unmarried employees were paid less than married ones, and so on.
The idea to match salary to cost of living is economically ridiculous, but I want to share a couple of personal experiences and ideas.
> As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
First of all, a remote employee is not worth the same as one in the office. For 2 engineers of the same capacity, any employer or coworker would rather have the engineer physically near than physically afar. How much that discount is extremely hard to guess, but there should be one in the general case.
Also, being hired as a remote engineer from the get go is not the same commitment as being hired to be in the office. There is no personal or professional relationship yet. This means that being hired as a remote worker, you will generally be assigned remote work, and if they want collaborative, product and team roles, will hire someone to be in the office. The processes of hiring and working relationship are different.
Now, to my personal experiences: I worked remotely my first few years, and then as an in-office employee for a couple of years to a SF startup. After that, I left the US and worked remotely for the same company for 2 years. There was a minimal adjustment to salary: and then I had the incentive to study the finances of what was going on.
The company paid less payroll taxes, and I did not receive any benefits: no 401k matching, no free food, no snacking, no coffee expenditures, etc. The benefits lost my have compensated a chunk of the remote-ness productivity loss in the long run. But there was a cost to productivty and I could compare it solidly between my two periods: it took longer cycles to get some projects finished, and issues of importance sometimes had time-zone differences that made them more inconvenient to resolve.
But then I also saw why talk about cost of living. Working in the same company, I had seldom talked about salary with co-workers (and my personal policy is to disclose mine immediately, even if they dont disclose theirs). But after turning remote I got asked about my salary by a considerable amount of people, even from ex-coworkers!
I dont think people have a right to be upset about it, but they do feel upset about such a thing. They perceive it unfair, because the costs are there for them, and maybe their job or their manager wont allow them to be remote.
I don't agree with your premise of "remote workers being worth less (even if slightly) because there's less efficient collaboration".
The last part is only true because most of today's organizations and processes are organized this way. Objectively, there's very little (outside of the individuals ability/willingness to work) that can't be optimized for remote work using modern technology.
I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
Worked in tel aviv for a few weeks in "remote work for a customer , from a nice environment". Here's your schedule : walk along the beach to go and pick up your breakfast, back to your place or stay at the terrasse for some work, then grab a sandwich at lunch, go for a swim. Work a few hours again, then swim before the sun goes down.
It's a very addictive schedule. The only downside is that you'll be alone pretty much all day because not a lot of people can work like that.
Jealousy factor can't be beat. But beyond making your friends/acquaintances drool on social media, yes the ergonomics stink for classic development.
However, I think variety is nice. Just like in an office situation, sometimes a breakthrough idea comes when sitting alone in an uncomfortable meeting room (and without secondary monitors). At home, I do some work on my back deck (partially remote worker here) but it's only when I'm in that mental place where I need to crawl out of a box and get a fresh look on things. It's also nice during meetings, so long as you prevent outdoor audio from distracting the conference call.
I think some people have this image that Basecamp and DHH is some scrappy bootstrapper fighting the establishment. But really he is living the life that even most successful "exited" venture fueled founders wouldn't be able to attain, and he's just saying there's another (perhaps even easier) way.
As I build my company, DHH + Basecamp, Jan Koum + WhatsApp, are my role models. Maximize the revenue per employee, not the number of employees (cough Twitter).
But then he counted his money again, bought a house in the hills of Malibu, a couple of mad cars (family car is a Rolls-Royce Phantom), starting being a race car driver (Le Mans),...
Never believe ANYONE who says money isn't the a key to happiness. Not the sole reason, but just take a look at his Insta again.
Money isn't the key to happiness, however it lets you get rid of a lot of the bullshit of life. And that bullshit of life is what's making the majority of unhappy people unhappy.
Yeah if you hate your spouse, don't have friends, don't have hobbies, etc, adding a few zeros to your bank account won't change that. But there are plenty of people who are unhappy largely because of the stress around the financial side of their lives.
I don't see what happiness you get from his Instagram. I get that he doesn't need to worry about money, but so..? He might be super-miserable for all we know.
Instagram bragging is so incredibly cliche at this point that it actually makes me sad for those who engage in or with it. It's like a race to see who can appear more desperate for the approval of strangers.
People with money have nice things. I don't think anybody is surprised by this. DHH is also someone that people want to follow, whether for Rails, or business, or whatever. It's not necessarily bragging. I don't know much of anything about DHH's personality, so maybe it is, maybe it isn't.
But come on, the dude is loaded. Is he supposed to move his desk to the other side of the room so that people don't carp on him for "bragging?"
> (And before you ask, sorry, we’re actually not hiring. That’s part of the restraint bit. We have a team of fifty five of the most kind, wonderful, and capable people I’ve ever had the pleasure of working with. That’s all we need at the moment to do what we want to do.)
Fast Hiring at that salary level is probably why SV startups burn through money so quickly.
I doubt they will see major performance boosts with the salary increase. If they don't, it indicates the team is already working optimally OR salary increases don't always translate to increased performance. If they do, do they then start asking themselves why performance was so average (relatively)?
Or they stop seeing a bunch of their employees interviewing with Bay Area companies. For a team of 55, losing 5 key people to higher Bay Area salaries could cost tens of millions of dollars in lost opportunity. In that context, bumping everyone’s salaries even 30% (say on average 60k*55 = 3.3 million) is not such a big deal. Especially if revenue and income over the past year grew a lot more than that.
They need to pay those salaries to keep the talent and attract new one. Sign of a very hot market, "remote" does not mean not able to move to SF at any time and command those salaries.
You lose one or two key people to AGfA and you start shitting your pants.
Great to see such initiative by Basecamp. This is good for devs around the world. GitLab sits on the other extreme with their "open salaries": https://news.ycombinator.com/item?id=10924957
>This is not how companies normally do their thing. I’ve been listening to Adam Smith’s 1776 classic on the Wealth of Nations, and just passed through the chapter on how the market is set by masters trying to get away with paying the least possible, and workers trying to press for the maximum possible. An antagonistic struggle, surely.
Sounds exactly like Jeff Bezos, who owns part of Basecamp.
Good to see this. I think that hiring remotely and paying Bay Area salaries (or very close to it) does indeed open up access to talent that might be harder to reach otherwise. Especially, if hiring globally remote.
Readit News
There was a point, early in my guy-on-the-beach-with-a-laptop era where I would cut my bill rate in half while working from the beach with a laptop. Clients were happy about that, and it more than paid for beers and thatch huts. Then one time I tried not cutting my bill rate in half on a proposal. Nobody but me seemed to notice. So now I don't do that anymore.
As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
It's true that living costs are less in other places. It makes a lot more sense for that difference to be captured by me rather than somebody else's company.
Glad to see these guys stepping up and setting an example from the employer side.
What I don’t see is why all companies should follow Bay Area salaries.
By being able to get a Bay Area salary (e.g. $150k/year) while working from anywhere in the world (e.g. any city where $40k/year is considered comfortable living and $80k/year is considered "well off"), the incentive to continue saturating the area with local talent decreases.
Same salary, lower cost of living, AND the ability to be a homeowner in the foreseeable future? That's a hard deal to beat.
Did anyone suggest they should?
Deleted Comment
Dead Comment
ORIGINAL: I believe it should be about 100 USD/hour for skilled consultant, but maybe someone with more experience can correct that.
That's pretty much the only difference. Lots of guys try dividing their bill rate by four, but as I said above, that's just personal preference. (And also diminshes the perceived value of what you do.)
And depending on the client's timezone, you could start work later during the day...
All of my local clients accept a compromise; meet in-person once per sprint (every 2-4 weeks). Otherwise all work is done remotely.
My remote employees and contractors are not required to commute or work onsite, therefore the remote rate applies.
Kudos to Basecamp for committing to standard salary levels, but I believe geographic cost-of-living adjustments are more accurately assessed through periodic bonuses.
How many employees/subs do you have?
But the "bay pay" isn't for your work. It's so you can work - i.e. cover your expenses associated with working at that particular place.
So as long as we're covering expenses, I'd prefer they cover mine at that second place. The fact that I might actually be living cheaper is none of their concern.
Given a situation with two developers working remotely with exactly the same skills, experience and knowledge on the same project, but one works in India, the other one works in the Bay area.
Can you give me one valid reason why the developer in India should get a penny less than the developer in the Bay area?
And that the cost of living is less in India than in SF is not, in my opinion, a valid reason.
You pay your developers, or any staff come to that, what they're worth to you.
The work is not worth more just because you happen to live in the bay area.
> As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
First of all, a remote employee is not worth the same as one in the office. For 2 engineers of the same capacity, any employer or coworker would rather have the engineer physically near than physically afar. How much that discount is extremely hard to guess, but there should be one in the general case.
Also, being hired as a remote engineer from the get go is not the same commitment as being hired to be in the office. There is no personal or professional relationship yet. This means that being hired as a remote worker, you will generally be assigned remote work, and if they want collaborative, product and team roles, will hire someone to be in the office. The processes of hiring and working relationship are different.
Now, to my personal experiences: I worked remotely my first few years, and then as an in-office employee for a couple of years to a SF startup. After that, I left the US and worked remotely for the same company for 2 years. There was a minimal adjustment to salary: and then I had the incentive to study the finances of what was going on.
The company paid less payroll taxes, and I did not receive any benefits: no 401k matching, no free food, no snacking, no coffee expenditures, etc. The benefits lost my have compensated a chunk of the remote-ness productivity loss in the long run. But there was a cost to productivty and I could compare it solidly between my two periods: it took longer cycles to get some projects finished, and issues of importance sometimes had time-zone differences that made them more inconvenient to resolve.
But then I also saw why talk about cost of living. Working in the same company, I had seldom talked about salary with co-workers (and my personal policy is to disclose mine immediately, even if they dont disclose theirs). But after turning remote I got asked about my salary by a considerable amount of people, even from ex-coworkers! I dont think people have a right to be upset about it, but they do feel upset about such a thing. They perceive it unfair, because the costs are there for them, and maybe their job or their manager wont allow them to be remote.
The last part is only true because most of today's organizations and processes are organized this way. Objectively, there's very little (outside of the individuals ability/willingness to work) that can't be optimized for remote work using modern technology.
I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
This is a good way to ensure unhappy employees stick around due to being paid a lot more than what they’d earn otherwise.
Think Google/Facebook total comp if you need a number to plug into your mental model. Software is a nice gig.
Too much light, sand, and heat to be able to concentrate
Even if you're working in a coastal hut, nothing beats good ergonomics of a real office
It's a very addictive schedule. The only downside is that you'll be alone pretty much all day because not a lot of people can work like that.
Jealousy factor can't be beat. But beyond making your friends/acquaintances drool on social media, yes the ergonomics stink for classic development.
However, I think variety is nice. Just like in an office situation, sometimes a breakthrough idea comes when sitting alone in an uncomfortable meeting room (and without secondary monitors). At home, I do some work on my back deck (partially remote worker here) but it's only when I'm in that mental place where I need to crawl out of a box and get a fresh look on things. It's also nice during meetings, so long as you prevent outdoor audio from distracting the conference call.
I find it relaxing and easier to concentrate. Probably related to how I stare out the window when thinking about a problem.
I think some people have this image that Basecamp and DHH is some scrappy bootstrapper fighting the establishment. But really he is living the life that even most successful "exited" venture fueled founders wouldn't be able to attain, and he's just saying there's another (perhaps even easier) way.
As I build my company, DHH + Basecamp, Jan Koum + WhatsApp, are my role models. Maximize the revenue per employee, not the number of employees (cough Twitter).
But then he counted his money again, bought a house in the hills of Malibu, a couple of mad cars (family car is a Rolls-Royce Phantom), starting being a race car driver (Le Mans),...
Never believe ANYONE who says money isn't the a key to happiness. Not the sole reason, but just take a look at his Insta again.
Kudos.
Yeah if you hate your spouse, don't have friends, don't have hobbies, etc, adding a few zeros to your bank account won't change that. But there are plenty of people who are unhappy largely because of the stress around the financial side of their lives.
I'm looking. I see a guy who really likes Rolexes and cars and flaunting his wealth to strangers on the Internet. What am I supposed to be seeing?
But come on, the dude is loaded. Is he supposed to move his desk to the other side of the room so that people don't carp on him for "bragging?"
Did the author just pull a "Cartmanland"? :-)
http://southpark.cc.com/clips/152804/cartmanland-commercial
Anecdotal mention: https://open.buffer.com/layoffs-and-moving-forward/
Fast Hiring at that salary level is probably why SV startups burn through money so quickly.
I doubt they will see major performance boosts with the salary increase. If they don't, it indicates the team is already working optimally OR salary increases don't always translate to increased performance. If they do, do they then start asking themselves why performance was so average (relatively)?
They need to pay those salaries to keep the talent and attract new one. Sign of a very hot market, "remote" does not mean not able to move to SF at any time and command those salaries.
You lose one or two key people to AGfA and you start shitting your pants.
Sounds exactly like Jeff Bezos, who owns part of Basecamp.
Win-win for everyone involved.