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Comment by mynegation | Hacker News Reader

There is nothing petty about it. Everyone does it, but GitLab is just more transparent about it. It is up to you whether you accept the compensation level or not, GitLab is far from a monopoly on labour demand

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Everyone does not do this. I work remote and get a fair market rate (for the value I add, not based on where I live). Unfortunately I couldn't apply to Gitlab last time I was in the market for work because their salaries are both lower in general and lowered even further due to geo adjustment.

I'm fully a fan and believer of remote work, but you need to pay your employees just like any other top tier company would. It's actually even more important as you really want the best people for remote work since they need to be excellent communicators and more self-directed than in-house employees.

Out of curiosity, how long has your company been in existence for? This seems like something a more established company could do more easily.

It's a startup. I actually find it to be the case that early stage companies are more willing to do remote work. In part because it's a way for them to broaden their options.

Of course, but I think a large part of the incentive for startups to do that is so they can hire high-quality engineers who aren't in SF, so that they don't have to deal with the crazy cost of living expenses when paying salaries, and of course their own costs for living in SF and renting/owning office space there.

So I think I would expect most early-stage remote startups to pay salaries which account for an employee's cost of living (rather than paying a full SF salary whether you live in SF or Montana). But maybe I'm wrong.

> I work remote and get a fair market rate (for the value I add, not based on where I live)

Unfortunately there are two misconceptions here: 1) that companies pay based on added value and not on replacement cost, & 2) that "a fair market rate" does not vary with location, when in reality different locations have different labor markets.

The reason SV companies pay so much is because their candidates expect it, and part of why they expect it is the high cost of living in the area. A company that pays less than average will get worse/fewer candidates, thus a local labor market. For a remote company, paying an SV employee the same rate as a midwest employee is to effectively compensate the latter much higher, and what's fair about that?

Companies pay what you can negotiate with them. This is based on value add, and alternatives on both sides of the table. If you can pitch the value you create, you can get paid accordingly.

It's very hard to quantify the marginal business value given by a single employee, especially if they're just starting in the position.

Economics is driven by scarcity - supply and demand. Companies have no financial incentive to pay us any more than it would take to hire a replacement. They're in the business of making profit, which necessarily means paying people less than the business value they add, and if a company wants to be very profitable, the only way is to pay substantially less than the value received.

So even if you pitch based on value add, you're really just signaling that you have top skills which are in short supply, and they'd better pay you more or else some other company will. They have no obligation or incentive to pay commensurate with value add, only to pay just enough to keep getting the value add.

I work for ConvertKit. We’re fully remote and have public, standardized salaries regardless of where you live in the world. Pay is based on title. If you want more pay you need a new title and if you know someone’s title you know their pay. Not all employees share their title because it’s personal but it’s also not a secret.

It’s way more fair than what Gitlab does IMO.

Also our financials are public. We’re bootstrapped and profitable with no outside investment so saying standardized salaries hurt the company is a lazy cop out at best. https://convertkit.baremetrics.com/

Do you expect to scale up, and if so will you continue with this model? I took a look at your team page and you have 48 members, whereas GitLab is almost at 800.

We do plan on scaling to $100,000,000 in ARR. We are planning on keeping this model. We have actually purposely limited how many people we hire to fewer than 50. I'm curious what GitLabs ARR is. I know GitLab raised nearly $170MM whereas ConvertKit has raised $0. 52% of the profit is distributed twice a year to employees at our company retreats. We're on track to hit $20MM ARR by the end of this year. We have a 401k program with 4% match. We get a $1000 "Paid" Paid time off bonus once a year. GitLab is a "Unicorn" but they've cheated their employees to get there. A billion dollar company can't pay people the same based on their role? Sounds like SV venture sharks speaking under the guise of remote work.

https://convertkit.com/mission https://convertkit.com/careers

ConvertKit is an absolute rocketship of a bootstrapped company. What Nathan as done is nothing short of amazing, I'm saying that having followed your story for years. But that amazing MRR curve is the bootstrapped equivalent of a unicorn, which is what allows you to have those nice things. Taking them for granted or lamenting why other companies simply don't do the same is entirely unrealistic.

Look at any of the other companies on the Baremetrics open startups page https://baremetrics.com/open-startups (save maybe Buffer). Should Baremetrics itself hire a SF developer, blowing 25%+ of their annual ARR on it? They've been around for years, and are doing pretty well. Of course they should not, that would be crazy, and it has nothing to do with the company being cheap. They should keep hiring for reasonable salaries in anywhere-but-SF.

I do not take ConvertKit for granted. Every point I made is pointed directly at GitLab. GitLab isn't open or bootstrapped. I have nothing but respect for every company on the open startups page of Baremetrics, including and especially Baremetrics themselves.

I have worked for a few startups and I've been laid off from a couple of them. I would never believe a bootstrapped company could do what we're doing but we do and I'm lucky enough to be a part of it. We aren't unique either. Basecamp has been doing this for a lot longer than ConvertKit has.

https://m.signalvnoise.com/how-we-pay-people-at-basecamp/

Bootstrapped companies face many challenges that VC backed companies don't. GitLab isn't bootstrapped. I lament that companies with all this money don't treat their employees better when they definitely can afford it. If they say they can't then they are probably wasting money. @emilycook said in a comment below

> ...I was able to negotiate for a higher salary and they adjusted. If GitLab wants you badly enough then they'll do what every company does and try and make themselves competitive. You just have less leverage to negotiate in general because you're competing with international talent vs local talent.

So, they have the money to pay more but they are simply choosing not to.

The CEO of a VC backed company I worked for got a 40% pay raise immediately after a 60% workforce layoff. He was already the highest paid person in the company.

I stand corrected. Also their pay is quite high for markets where I expected it to be significantly lower than SF.

> Everyone does it

We don't. Obviously we're not at the scale of Gitlab but we do not care whether you live in France, Italy, Germany, Poland, NL, Canada, the United States or any other place. (But those are the places that our colleagues are in, and there are more on the way.)

So what kind of vacation/sick days plan does your company offer globally?

Our work is pretty intense so we offer 3 weeks 'on' 1 week 'off' as standard + 23 days of paid leave / year for salaried employees. Sick days are dependent on local conditions but in practice we have yet to encounter anything where this would matter, at a larger scale this will no doubt become more of an issue but it is an insurable risk for us so we will simply do whatever the law says we should do for a particular location and insure against the rest.

Most remote working colleagues have chosen to be freelancers though we do offer the option for them to become salaried employees. This is not always in the interest of the person so we do caution them against this, and for one person where putting them on the payroll from NL would be hard a local subsidiary was created which employs them.

Remote workers definitely add a layer of complexity with respect to employment law. But I've found that it is well worth it given the quality and diversity of the people we encounter.

Demand markets dominated by a single firm are monopsonies, not monopolies.

How do they handle a hire that lives in SF so he has to be paid the max who then moves somewhere else to drop his own cost of living?

https://about.gitlab.com/handbook/people-operations/global-c...

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