2. Stagnate vs inflation, until salaries track mid-market cities (Denver, Austin) instead of San Francisco / NYC. A bout of high national inflation would make this easier.
3. This works well, but only for a while. To be easily productive remotely you should be a Sr Engineer. Juniors will have a harder time. So will managers. Companies focus (even more!) on only hiring experienced devs. Increased competition drives more work outside of the USA.
4. With lots of remote opportunity, there's even more mobility for individual employees. One company is functionally like any other... all of them take place out of the same room in your house, and only differ by who is on the video chat this week. The "shared culture", both company culture (we're all in this mission together!) and regional culture (east coast / west coast) starts to fade. Fading culture amplifies communication overhead, which slows velocity. A very few companies will overcome this with incredible levels of intentionality, but most will fail to do so.
5. To try to solve the culture problem, companies open smaller landing-zone offices in a couple of hub locations. Remote folks fly in once in a while to get excited and pick up a free tshirt. These smaller hub areas become a good place to onboard Jr employees (making hiring easier), and provide a nice environment for executives to meet with customers.
6. Living physically close to the hub office provides greater executive visibility, and greater promotability for folks who care about that. This reinforces the HCOL compensation premium for leadership only. Jr folks (generally young) are happy to scrape by in the city as always because "dating is the killer app for cities." But they move out as they gain seniority / age / start a family, depressing housing costs for ~10-15 years until population growth catches up again.
7. Startups are primarily founded 2 ways: Senior/stable founders launch distributed companies with their former co-workers around the country. Nobody wants to move. Juniors/new grads launch out of the city of their university, with people they met in school.
8. Weirdly, this means that it becomes somewhat efficient for super-tiny startups to locate just outside of major cities, because if you only have a few people it's probably cheaper to live there than buying tons of plane tickets to visit VCs in those areas. Have to raise that next round! But as soon as the company hits mid-size they are quick to move out to cheaper areas.
9. Given all the above, we'll see an averaging of salaries for all areas, with the exception of executive leadership. Vibrant HCOL downtowns will fade and hollow out, suburban hub offices will be more common. Cities with strong tech universities will do best, as always, since they provide the flow of new-grad startups and academic partnerships.
1. Scale all salaries to expensive markets
2. Stagnate vs inflation, until salaries track mid-market cities (Denver, Austin) instead of San Francisco / NYC. A bout of high national inflation would make this easier.
3. This works well, but only for a while. To be easily productive remotely you should be a Sr Engineer. Juniors will have a harder time. So will managers. Companies focus (even more!) on only hiring experienced devs. Increased competition drives more work outside of the USA.
4. With lots of remote opportunity, there's even more mobility for individual employees. One company is functionally like any other... all of them take place out of the same room in your house, and only differ by who is on the video chat this week. The "shared culture", both company culture (we're all in this mission together!) and regional culture (east coast / west coast) starts to fade. Fading culture amplifies communication overhead, which slows velocity. A very few companies will overcome this with incredible levels of intentionality, but most will fail to do so.
5. To try to solve the culture problem, companies open smaller landing-zone offices in a couple of hub locations. Remote folks fly in once in a while to get excited and pick up a free tshirt. These smaller hub areas become a good place to onboard Jr employees (making hiring easier), and provide a nice environment for executives to meet with customers.
6. Living physically close to the hub office provides greater executive visibility, and greater promotability for folks who care about that. This reinforces the HCOL compensation premium for leadership only. Jr folks (generally young) are happy to scrape by in the city as always because "dating is the killer app for cities." But they move out as they gain seniority / age / start a family, depressing housing costs for ~10-15 years until population growth catches up again.
7. Startups are primarily founded 2 ways: Senior/stable founders launch distributed companies with their former co-workers around the country. Nobody wants to move. Juniors/new grads launch out of the city of their university, with people they met in school.
8. Weirdly, this means that it becomes somewhat efficient for super-tiny startups to locate just outside of major cities, because if you only have a few people it's probably cheaper to live there than buying tons of plane tickets to visit VCs in those areas. Have to raise that next round! But as soon as the company hits mid-size they are quick to move out to cheaper areas.
9. Given all the above, we'll see an averaging of salaries for all areas, with the exception of executive leadership. Vibrant HCOL downtowns will fade and hollow out, suburban hub offices will be more common. Cities with strong tech universities will do best, as always, since they provide the flow of new-grad startups and academic partnerships.