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If they could hire someone locally at their desired level of pay, they wouldn't. But while a legitimate talent shortage (at any price) may exist for super elite

If they could hire someone locally at their desired level of pay, they wouldn't. But while a legitimate talent shortage (at any price) may exist for super elite, specialist roles, there are plenty of citizens who can do typical engineering or IT work. Companies that don't pay enough will have a hard time with hiring though, thus perceiving a shortage. Employers know it's harder for them to switch jobs so they have leverage. They can't complain or do much if management requires they be on-call in the evening or work late. This makes the H-1B worker more attractive to management at the same salary level, since they'll do more work and won't rock the boat. I've also seen H-1Bs receive the same base salary offer, but over time their variable compensation/RSUs (large portion of TC at many tech jobs) and salary progression are much worse. I don't think it's unreasonable to limit H-1Bs to exceptional talent, or at least review their total compensation more thoroughly to ensure they aren't putting excessive downward pressure on the wages of ordinary middle-class citizens.

doh 7y ago
Each company treats their employees differently but we don’t. Our compensation is equal and based on position (so two people that do the same job are paid the same). We do differentiate options but only based on the current state of 409a (so person joining earlier gets more). We pay the best we can. It’s completely open and transparent to all our employees. But there is no way to compete with $400k salaries paid to selected workers by few companies. So what should we do? Close?
- mrchicity 7y ago
  That's great that you don't do that. Sorry if this is blunt: Paying low 100s + de minimis equity for distributed systems and DSP engineers in a super high COL city like LA is going to be a hard sell for most. People with real experience in those fields will be older, can't reasonably support a family there on that salary, and have a lot of options. The type of inexperienced employee who could pick these things up quickly is already being courted by FANGs on campus, for more money. To get someone to work for that salary, the equity needs to be meaningful, or the startup needs to be the next Facebook or Google, not a niche product. If I'm thinking of working for you, at the max equity you list, the rosiest picture I could paint myself is an exit 4 years from now for $500mm, after which I'd get $500k assuming no dilution = $125k a year. And that's assuming all the stars align to make that happen. I don't think you should close, since you have a cool product, but maybe consider moving to a lower COL area? I'm sure you could find plenty of people in a place like Huntsville, AL. Lots of defense contractors have engineers with the skills you need and I bet working for a fun startup would be more exciting than what they're doing now.
  - belltaco 7y ago
    Or he can set up a sister office in Vancouver, and hire people from all over the world(including Huntsville, Alabama). In person conferences can happen in LA or Vancouver with tourist visas. And have the same time zone. More and more companies are doing this, that's why the article mentions Toronto.
    - DiogenesKynikos 7y ago
      This is why over the long-term, restrictive immigration laws will cause tech jobs to move abroad. There is no fundamental reason why the global tech industry has to be so concentrated in Silicon Valley. The workforce - which is heavily international - is there at the moment, but if American immigration policies restrict the workforce, the companies will eventually move operations to wherever their workers are.
      - Amezarak 7y ago
        I don't see a problem with this. GDP uber alles is a losing proposition that destroys communities and cultures. Silicon Valley as the tech hub doesn't seem to have done us much good. I don't think it's even sensible from a business perspective. There is a concentration of talent in SV, but that very concentration led to very high labor costs and skyrocketing housing prices. There is plenty of great talent elsewhere in the country for more affordable prices. There's no reason a startup with < 100 employees should be avoiding flyover country or the east coast, aside from Silicon Valley hype. Yes, if you grow large enough, it will be more difficult to find talent...so open offices elsewhere. At the same time, if the companies export their labor to exploitative countries, their goods and services can be tariffed.
        belltaco 7y ago
        The problem with flyover countries and other places inside the US is the same fickle immigration rules apply. And how many people around the US want to migrate to Alabama or Mississippi? >At the same time, if the companies export their labor to exploitative countries, their goods and services can be tariffed. This isn't manufacturing. I really doubt local techies in Canada or India are being exploited.
- masonic 7y ago
  L.A. is a particularly expensive area to locate while disallowing remote work.

doh 7y ago

Each company treats their employees differently but we don’t. Our compensation is equal and based on position (so two people that do the same job are paid the same). We do differentiate options but only based on the current state of 409a (so person joining earlier gets more). We pay the best we can. It’s completely open and transparent to all our employees. But there is no way to compete with $400k salaries paid to selected workers by few companies. So what should we do? Close?

mrchicity 7y ago
That's great that you don't do that. Sorry if this is blunt: Paying low 100s + de minimis equity for distributed systems and DSP engineers in a super high COL city like LA is going to be a hard sell for most. People with real experience in those fields will be older, can't reasonably support a family there on that salary, and have a lot of options. The type of inexperienced employee who could pick these things up quickly is already being courted by FANGs on campus, for more money. To get someone to work for that salary, the equity needs to be meaningful, or the startup needs to be the next Facebook or Google, not a niche product. If I'm thinking of working for you, at the max equity you list, the rosiest picture I could paint myself is an exit 4 years from now for $500mm, after which I'd get $500k assuming no dilution = $125k a year. And that's assuming all the stars align to make that happen. I don't think you should close, since you have a cool product, but maybe consider moving to a lower COL area? I'm sure you could find plenty of people in a place like Huntsville, AL. Lots of defense contractors have engineers with the skills you need and I bet working for a fun startup would be more exciting than what they're doing now.
- belltaco 7y ago
  Or he can set up a sister office in Vancouver, and hire people from all over the world(including Huntsville, Alabama). In person conferences can happen in LA or Vancouver with tourist visas. And have the same time zone. More and more companies are doing this, that's why the article mentions Toronto.
  - DiogenesKynikos 7y ago
    This is why over the long-term, restrictive immigration laws will cause tech jobs to move abroad. There is no fundamental reason why the global tech industry has to be so concentrated in Silicon Valley. The workforce - which is heavily international - is there at the moment, but if American immigration policies restrict the workforce, the companies will eventually move operations to wherever their workers are.
    - Amezarak 7y ago
      I don't see a problem with this. GDP uber alles is a losing proposition that destroys communities and cultures. Silicon Valley as the tech hub doesn't seem to have done us much good. I don't think it's even sensible from a business perspective. There is a concentration of talent in SV, but that very concentration led to very high labor costs and skyrocketing housing prices. There is plenty of great talent elsewhere in the country for more affordable prices. There's no reason a startup with < 100 employees should be avoiding flyover country or the east coast, aside from Silicon Valley hype. Yes, if you grow large enough, it will be more difficult to find talent...so open offices elsewhere. At the same time, if the companies export their labor to exploitative countries, their goods and services can be tariffed.
      - belltaco 7y ago
        The problem with flyover countries and other places inside the US is the same fickle immigration rules apply. And how many people around the US want to migrate to Alabama or Mississippi? >At the same time, if the companies export their labor to exploitative countries, their goods and services can be tariffed. This isn't manufacturing. I really doubt local techies in Canada or India are being exploited.
masonic 7y ago
L.A. is a particularly expensive area to locate while disallowing remote work.