Is Bay Area in a tipping point for tech talent?

It's funny that no one wants to admit that Covid-19 was the forcing function for shifting to remote wholesale. I have many peers who have been fighting for internal accessibility of working remotely, most of whom gave up and jumped ship. I even know a few people who left Stripe in 2019 due to their inflexible remote work policies.

So to now come out and say "look at all the remote hiring we're doing" sure leaves a bad taste in my mouth. Yeah, because you have no choice!

The talent has realized they have all the cards and bargaining power in terms of remote work right now. Anyone who is fighting to return to the office is missing the point. We should all be striving to unlock permanent mobility within our professions.

Expanding out of the Bay Area has been standard practice basically forever.

Unless a company has infinite budgets and plans to maintain small org sizes forever, keeping your entire workforce in the Bay Area doesn’t really scale.

The real question to ask is: Where are these new jobs? Remote? Satellite offices? New foreign offices? Remote is the hot topic, but I haven’t actually seen as many remote listings as I expected given all of the talk. For many of these companies, it could be as simple as opening new offices in other cities. If they’re opening offices in expensive locations like Seattle or NYC then it’s not really about cost of living.

On the other hand, if they really are embracing remote and hiring out of non-traditional locations then maybe it is more about cost of hiring. However, in that case I’ve personally experienced companies become eager to skip the US altogether and start hiring in even cheaper international locations with untapped talent. It’s complicated.

> Talent in the Bay Area are fetching astonishing pay ($600k for L6)

While it’s true that top Bay Area engineers can fetch $600K, it’s much more rare than it can look. Take a look at the median compensation for software engineers in the Bay Area some time. It’s a fraction of that number. Those ultra high paying FAANG jobs aren’t the typical software job, even in the Bay Area.

> A fried of mine refused to interview for position like that despite being very junior! She decided the cost of living is not worth it.

Top Bay Area compensation should be enough to offset the higher cost of living for someone living in an apartment. The cost of living for something like a 1 or even 2-bedroom apartment is negligible for someone who can get into a FAANG job in the Bay.

On the other hand, taking a median software job in the Bay Area is definitely not worth the cost of living increase, IMO, unless you’re using it as a pivot into a FAANG level job later.

COVID forcing remote work was that tipping point. I think it was a lot more tenuous beforehand than generally believed due to the cost of living. Great programmers can come from anywhere with the internet.

California has some of the most stringent COVID restrictions in the US, and also the highest costs of living when looking at Bay Area and LA. There's no point to bring people there, especially if they're just going to working from home for the foreseeable future anyways.

I've been remote for several years (pre-COVID). For $600k, they could hire 2 or 3 engineers where I live, still doubling or tripling the local tech pay, and give those engineers the opportunity to buy (or build) and pay off a house in a few years.

It's hard to say for sure but I think probably yes. It was essentially an accident that the bay area tech scene ever existed at all and other than nerds writing code and VC's getting rich I don't know how much residents of the area even liked it.

The way to make the bay sustainable is to build taller buildings for people to live in. However this isn't especially popular and even if it was, there is enough bureaucratic cover for a minority to stall it off indefinitely.

I think if you could do that in the next 20 years the bay could maintain it's hegemony. Seems exceedingly unlikely to me.

I suspect it will keep enough momentum to beat out most markets for some time to come, though already by a smaller margin and with a seemingly worse quality of life these days.

No one has yet brought up an essential issue: California bans non-competes. https://www.vox.com/new-money/2017/2/13/14580874/google-self.... As long as California does, and most other places allow them, we're going to continue to see surprisingly high levels of startup formation and company success in California, despite all the bad things being true.

How about we look at the numbers?: https://www.zumper.com/blog/rental-price-data/

Y/Y: It looks like NY, SJ have recovered (at least for the single bedroom) while the Bay Area is lagging. Some winners are Miami, San Diego, and Orlando. It seems that Florida has seen the highest rise in rental costs. Some losers are Newark, Virginia, St Louis. It seems the shittier cities have lost the most, and the sunnier/friendlier ones have won. In that sense, San Francisco has done averagely.

Based on that, I don't think SF/Bay Area is going downhill as people are imagining. They are doing much better than other places especially that they are already very expensive.

The "Open Secret" is there was always a "bunched distribution" at the top of the talent scale in SF/Bay Area that really only made it worth it for the FAANG-level orgs over the last decade or so. The top 10-20%? Absolutely better there in terms of talent than anywhere else in the country. Below that, you're just paying 500K when you could get an engineer of equal/better skill anywhere else for 120K. It makes sense for FAANG to lock up that top 20% with 500K salaries... it does not make sense for companies that aren't going to get one of those engineers to try and swim in that pond unless you're making a serious run at being in that level. It really hasn't for the last decade, COVID just made the music stop for a moment and forced everyone to reckon with that.

> out of the ordinary housing market in the Bay Area when you compare it to other cities in CA like San Diego and Los Angeles.

Many of the high-paying tech jobs in Los Angeles are consolidated in the Venice Beach area, so-called “Silicon Beach.” If you think you can get an affordable house in the desirable neighborhoods around there (Santa Monica, Manhattan Beach, Venice, Brentwood), you’re in for a shock.

You might try heading inland to Inglewood or Culver City to save money, but you’ll be looking at $1.5M houses with bars on the windows. Prices have just gone insane over the last couple years.

Plus, if you’re hoping to escape the crime and addicts of the Tenderloin and Market Street, Venice won’t offer much relief.

Coinbase and Stripe are not startups. They are institutions.

The hacker houses here are still rammed to the gills.

I've always understood the alure to the bay area wasn't the talent but the talent with the correct mindset.

For example, getting software devs that are willing to work long hours to push out a new release. etc.

take this with a grain of salt as i've never been to the bay area.

When you can't address basic Maslow levels (food, housing, etc.) financially, you definitely are incapable to supporting top level Maslow levels which are central to innovation, creativity and improvement.

https://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

The SF Bay Area crossed over that boundary a fairly long time ago.

I finally gave up in 2016 after being born and raised in California and have decades of Tech career in the SF Bay Area. It's no longer viable for ACTUAL innovation there. For the most part there is no technology innovation happening in SF Bay Area Tech companies anymore. There is plenty of revolutionary political innovation but nothing in technology and the direction of that is distinct ANTI-innovative.

Innovation no longer requires being in the SF Bay Area to be achieved. My recent formation of a new Tech company (in 2016 in upstate NY) and sale/exit in 2018 proves it to me. YMMV of course.

> I am assuming that many positions that require the candidate to (eventually) relocate to the Bay Area are not getting a lot of traction. A fried of mine refused to interview for position like that despite being very junior! She decided the cost of living is not worth it.

Cost of living is high, but for a junior engineer I think it might be possible for a good case to be made that it is worth it assuming that the junior engineer has a fairly recent bachelor's degree from a good college.

One of the lessons you should have learned incidentally while getting your degree is that if your rent and utilities and much of your food are covered and you are busy enough that you don't have a ton of free time you can get by for at least 4 years without having much extra money.

The median household income in San Francisco is $112k per year. The average household size is 2.26 persons.

This means that half the households in San Francisco are getting by on less than $112k per year. That's for everything--rent/mortgage, food, utilities, insurance, transportation, clothes, entertainment.

I'd consider if I was a junior engineer taking the San Francisco job if it paid significantly more than $112k, and then for the next few years live like I lived in college. Live in the kind of housing that the people who are making under the median household income live in, and everything you make that doesn't go to living in that housing with a lifestyle similar to a college student put in in your 401k or other investments.

You already know from college that you can live this way for 4 years and come out OK. If you can just do that for a few more years, you can have some nice savings built up. Then you can figure out if you want to stay in San Francisco but upgrade your lifestyle, or move to someplace cheaper, but with a nice fat portfolio of savings and investments that will serve you very well later.

For Stripe/Coinbase, 74%/89% eng hiring out of Bay Area. Today, a lot of that hiring could be happening in other parts of the US. But before you cheer too much about that, consider that the shareholders of those companies are already looking for ways to hire outside US. After all, if your setup can accommodate someone from Kansas, how hard is it to onboard someone from Canada or Mexico?

A data point - my company is already hiring more than half of the new hires outside the USA. Or to paraphrase a politician, that whirring sound you are hearing is one of the last remaining sources of good jobs getting sucked out of the country.

Previous discussions: https://news.ycombinator.com/item?id=27696235 and https://news.ycombinator.com/item?id=29784222

I've been a part of two large companies that have made a conscious move away from hiring in the Bay Area. For both of these companies, the major drivers were that the market is so saturated there that it's harder to find people there.

A ton of companies outside FAANG are emerging as both 100% remote and async-first. Of course this doesn't make them perfect but they are succeeding both commercially and culturally. As soon as x number of Zapier's in the world who grew and attracted talent from all over, this will become the default way of working and building companies and the Bay Area will be way less relevant.

No.

Once the pandemic is over, startups that are in-office will be more productive and faster than bigger companies. The bigger companies will notice this, and force in-person/in-office as well and remote will quickly devolve.

Remote is survivable, mainly because of the pandemic, but it’s not preferable for business. In-office is much more efficient and it will be immediately evident once it is enforced.

How about taxes? In my East-European country I am paying about 10% net on taxes (including social and health, including expenses, excluding VAT). Nothing illegal or offshore, just normal accounting from local semi retired lady.

In Cali I would have to juggle with deferred stocks, exit taxes, local taxes, federal taxes etc.. And net salary would be about same.

I sure hope so, maybe my friends who grew up in the Bay Area who are not techies will be able to move back home if they want to.

I believe remote work has two futures.

The first is many companies will return to requiring a majority of time in the office. There are admittedly hard to measure reasons management will want back in the office, and the first is productivity (I don’t mean how much an IC produces, but how much revenue per employee a firm generates).

The second future is all our tech jobs get offshored, similar to what happened after the dotcom bubble burst.

I believe that companies will probably wind up going to future #1. Or at least companies that are heavily invested in R&D.

There will probably be more satellite offices and more geographically distributed tech startups.

But in the first future I believe SF and Silicon Valley will still serve as one of the largest tech employment hubs. For example NYC is still a major financial hub, despite major top-25 US banks being headquartered in places like Texas, Virginia and North Carolina.

Edited to comply with Dang’s reminder of site guidelines.