So people are paid according what they spend, not what they produce? That doesn't sound very sensible to me.

We thought about paying independent of location. If we pay everyone the same we would have either a huge burn rate or we could never hire great people from the Bay Area.

Another consideration is that people's costs are strongly related to where they live.

But I can also see the case for paying everyone the same. But I think other remote friendly companies are doing the same as us, this video shows how Travis CI thinks about it https://www.youtube.com/watch?v=N8u9H6JDAzo

> Another consideration is that people's costs are strongly related to where they live.

I think what's more important is that their competing offers from local companies will necessarily be higher, so assuming they're worth the higher price, you have to pay it.

From just above: "Interestingly, more and more of my colleagues (and myself included) are moving house to their favorite places to live."

How does pay vary with location changes? If I live in SF now, and get that pay, then move, do I wind up getting paid less? If I start in a small town with low expenses, does that mean I can never afford to move to SF?

That is indeed what is difficult. Any time you move metro regions we'll need to negotiate about the compensation. And if you're moving from an expensive to an affordable region your compensation will be lower.

This kind of removes a lot of the draw about being remote - you'll get a pay cut if you move?!

You get a pay cut if you move to a less expensive metro area. And you have to contact us before you move. But so far we have always been able to make it work. I think most of our team thinks it is great that you do not have to switch jobs when you need to move because of family, the job of your partner, or some other reason.

Have you considered open salaries (just the formula really would be all that was needed) like Buffer?

Yes, we're working on a global compensation framework. This is hinted at on https://about.gitlab.com/handbook/hiring/#hiring-processa-na... "The hiring manager can then make the actual offer to the applicant. This may change if/when we have a global compensation framework in place." and in the job description of the Director of People Operations https://about.gitlab.com/jobs/dir-or-vp-of-people-ops/ "Compensation guidelines that work worldwide but tailored to local markets, to the city level"

For now only are principles are detailed on https://about.gitlab.com/handbook/people-operations/#compens... one important one: "We pay on the lower end of market rates for engineering positions because we offer the benefit of working on open source (great workflow, peers, build reputation); most engineers take a pay cut to join."

Cool.

I look forward to seeing a blog post when you have that compensation framework completed. :)

I've seen/heard words like that meaning anything from a 10% paycut to a 55% paycut in practical terms, its too big a range for me to really take away an effective idea of GitLab's pay level which is why I was curious about the more concrete form.

A 10-15% haircut for a place as good as GitLab sounds on paper seems reasonable, a 50% haircut...not so much.

For sure we'll do a blog post about it. By the way if you want something now the Travis CI talk is really good https://www.youtube.com/watch?v=N8u9H6JDAzo

We don't have any hard data on this but I think we're in the reasonable range.

when it comes to deciding compensation levels, what metrics do you use? what companies in the area pay? real estate prices? a mix or something else?

there are places in the world where, say, the real estate is red-hot (obviously making higher salaries more desirable) but where local companies have not kept up with that (making cross-company surveys skew really low) so in that case what would you do?

Managing a distributed remote-friendly company definitely seems challenging, of course you're open source and have an awesome reputation, so salary is very likely not something prospective employees consider as much as they would otherwise when joining (which likely works in your favor in creating a very nice working environment full of engaged folks)

We're still in the early stages of this. Our current thinking is in https://docs.google.com/document/d/1TEHZTvg9jxlwvKvsc5fm2FvZ...

We will maybe end up with a mix of cost of living, cost of labour, and rent.

We address red-hot real estate by considering to add rent to the mix, but it is tricky since some team members might be living in rent-controlled apartments and we want to have a number that doesn't depend on personal circumstances.

thanks for the follow-up, it must be hard also because of say areas where the real estate is skyrocketing due to investment money coming in from abroad, but where rents aren't moving nearly as much (because local salaries aren't moving really), which makes compensation indexed on real estate skew very high, but compensation indexed on rents skew very low if one wants to be able to afford buying a house at some point

Thank you for being transparent. You've saved both of us some time.

Who decides what an SF rate is though? SF rates are highly variable, like in any other city.

We try to set rates per metro area so people can move in the metro area without renegotiating. We're still working on the framework, please see https://docs.google.com/document/d/1TEHZTvg9jxlwvKvsc5fm2FvZ...