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My company has the headquarter in a country A with salary rate X. The company has the development center in another country B where the salary for the developers are with 20-25 % lower that in country A.

Given the fact that developers from both countries have the same skill level regarding software development, as an employee from the country B how can I ask for a salary from country A even if I work in country B?

Because the company is spending the same amount of money (gross salary). Indeed, they opened the office in country B to save some money and for the business is good, but it's not good for me.

So is there a middle solution to stay in the company and get the raise?

How would you approach this issue?

PS: It's not about being underpaid, it's about being paid the same as other devs from the other country that are doing the same job

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    Comments are not for extended discussion; this conversation has been moved to chat. – Jane S Feb 9 at 2:58

11 Answers 11

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Indeed, they opened the office in country B to save some money and for the business is good, but it's not good for me.

Actually it is good for you - if they hadn't opened the office there (to save themselves money) you wouldn't have a job with them.

Market rates for a given job with a given skill level vary wildly not only by country but often by region within that country, key factors in this include cost of living in the country (or region) and supply/demand for the skillset in question.

You can ask for a raise - but "because you pay X in Country A" isn't going to be a reason that gets you very far. Instead you need to come up with reasons why you deserve a raise as if the workers in country A didn't exist. You need to demonstrate why you bring value to the company that warrants it, cite your performance, cite where you've saved the company money or increased revenue. But don't cite that someone else in a different country earns more than you.

In the (highly unlikely) event that your arguments were convincing - and they came around to the notion that they should pay developers in B the same as those in A then what would be the incentive to have a separate office in B in the first place? Offices have overheads, different countries often have different timezones or language barriers that make collaboration more complex - they could save all that by just bringing it all in house in country A.

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    Yes, this answer is incredibly correct. "Because of country A..." is, as this answer says, absolutely NOT any part of your argument. – Fattie Feb 6 at 12:39
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    Exactly. In the UK we've got something I've heard called the "London subsidy" where for the same role you can be earning a good 25% more just due to the cost of trying to live and work in London. A lot of people actually commute long distances into (or stay during the week in) London to take those boosted wages and live a better life outside of London. The price they pay is in commuting times and costs, or being away from loved ones/their home during the working week. Point being there's always a downside that the increase in wage is making up for. – Philbo Feb 6 at 17:17
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    Taking all this into account I think the most likely way to get that raise is... by requesting a relocation to Country A with your company... – Orgmo Feb 7 at 17:05
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    @Orgmo And OP needs to realise that this may give him a higher wage, but at the same time overall higher cost as well. – gnasher729 Feb 8 at 12:45
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    @Philbo I worked out that for a 1 hour each way commute I would want around £10k more - this is allowing for the fact that you pay for transport after tax if anyone thinks that this is a lot – Neuromancer Feb 8 at 21:01
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You don't.

There's a variety of reasons why jobs have different salaries in different countries - general cost of living, taxes, cost of benefits, rental costs for the offices and supporting services, etc.

You can't really expect (for example) to live in India and ask for the same salary as someone who works in the USA. It would be nice, but economics just doesn't work that way.

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    Comments are not for extended discussion; this conversation has been moved to chat. – Snow Feb 7 at 6:51
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    Not to mention that differences in wage rate and property costs are the main driver of equalising those rates and costs. Companies move in because of the lower costs, and the more companies do this, the smaller the difference (after accounting for all costs, of course - e.g. taxes). The main reason the gaps are still so wide (and in many cases getting wider) is in a large part due to legislature and nationalism (remember India's prime minister promising not to nationalise foreign investment in ten or maybe even twenty years? :P). – Luaan Feb 8 at 8:42
  • . If someone in India wants California wages, how about also paying 28% Federal tax and 11.2% California tax and 6.7% FICA tax, out of the 54% remaining pay for health insurance and don't forget those student loans! Also 8.5% VAT on anything you buy. Not sure how that compares... But it sounds like someone wants to eat their cake and have it too. – Harper Feb 8 at 17:45
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You can ask but it's likely to be both unsuccessful and a bad career move. The reason they employ in your country is for cheaper labour. Paying you the same as a local negates their primary reason.

It is possible if you have a special skillset in some fashion that makes it a good business decision. But since you state the skillsets are equivalent it's more likely they'll just start looking at replacing you. Paying you extra would set a precedent with no offsetting benefits to the company.

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You're looking at this incorrectly.

It's common (at least in the US) for a company to pay on a different scale depending where the employee is based for the same position. An old employer of mine had four pay scales so a widget maker in Des Moines IA would have a smaller salary for the same job, skills and performance rating then in San Francisco. A transfer in location would get slotted to the salary of the location. Mostly this was due to cost of living in an area. $90k in Des Moines can go a lot farther the the $120k in San Fran.

They also had a different pay scale for India. Developers would rotate to the US for 18 months getting the US pay scale. Rotating back to India would they would go back to the Indian scale.

Your company is (hopefully) paying the market rate for the country the employee is located in.

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    As a programmer, I make much less than Silicon Valley wages where I live in Oklahoma. However, a salary that allows me to buy a house within 15 minutes commute time from say Google HQ would cost way more than Google would be willing to pay a software engineer. That extra money people in SV are paid doesn't really go to them, it goes to landowners bankers, oil companies, auto mechanics etc. – T.E.D. Feb 8 at 20:37
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I think your best bet is to ask for a relocation package to country A if you are interested in the salary in country A.

As others have mentioned, it is common for companies to make a cost of living adjustment to the salaries they offer in different countries or even in different areas of the same country (for example, an employee working in Chicago cannot ask for the same salary as their counterparts working in the San Francisco branch).

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You can ask exactly like you would ask for any rise.
You just need to keep in mind that there are many variable to why your salary is lower and why company chosen to start hiring in country B.
It would be nice if I would earn the same money my counterpart in Switzerland or USA make. But the bottom line is - I don't have a job at Country A. If I move to country A, get the job then I can ask for the same money.

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Your company did not open an office in your country because they liked the scenery, wanted to vacation there regularly, or even thought there was much of a market there. The primary reason they opened an office there was because they could get equally competent developers cheaper. So you can ask for a raise, but you won't get it, because it's completely contrary to their business model.

That said, as others have mentioned you could always work on getting transferred to the headquarter country. But likely they would have to sponsor you for a visa, and it's rare that any company would bother, you'd have to be priceless to them..

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Salaries depend on one thing and one thing alone: supply and demand. If companies in San Francisco could get away with paying it's engineers minimum wage, they'd be certainly happy to do so. The goal of a business is to earn as much revenue as possible while minimising the costs, rather than trying to be "fair" about what wages they pay out.

So is there a middle solution to stay in the company and get the raise?

Yes, the solution is to ask your company to transfer you internally to country A. This way you can get the increased salary without quitting the company. Whether or not this will pay off will strongly vary on your personal situation and the countries in question, so make sure to make a detailed calculation before you apply to be transferred.

You can check out a related post on Expats.SE on how to make salary comparisons when receiving relocation offers.

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This reminds me of a friend of mine who had an outsource for his work in India. The person he outsourced some of his work to complained that she wanted a raise. He pointed out the amount of hours she worked and what she was paid, and the hourly rate he paid her was 4x what she earned at her full-time job. The complaining ceased.

You feel like you should receive a payrise because compared to YOUR local market, you are getting paid below market rate just average? Sure, go ahead and approach your manager, specially if you have helped develop something particularly important recently.

You feel like you should receive a payrise because you continuously exceed expectations? Because you received an offer that was better somewhere else? Sure!

Asking for a raise because their employees in a different country are getting paid more is just silly...specially because as others mention, salary is comparable to your location, "supply and demand" (did you graduate with 1000 people in your calls and they live close to each other, or are there not that many developers in your area) everything is a factor.

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It could be argued that if developers at country A get X% of local median income and developers in country B get same X% of local median income then they are being rewarded equally for their work even if the absolute salaries are different. This would lead to suggesting that this absolute difference (but relative equality) is no good argument or motivation to request a salary rise.

But bear also in mind that most likely the company making Y% of the local median profit in country A is making (Y+Z)% of the local median profit in country B (with Z>>0). This is most certainly the case if products made/developed in country B are sold in country A. Even after factoring transport and other costs the company still gets more in relative terms from country B than from country A. Thus it is totally reasonable to expect that workers in B get a salary which is, relative to the local median income, higher than in nation A.

Until this difference in profit is nullified you have bargaining power and motivation to get a raise. Go for it.
But have a good look at other answers about how to go about it. Your managers like to pretend that it is fair if you get the same relative income but the company gets a higher relative profit. And they won't look favorably to people who are daring enough to point that out. Press for it, because you know they will eventually cave in since it is more profitable to keep you after the raise than to let go, but press for it playing the game they play.

  • Comparing to the median income is not too useful, a much better metric is to compare how much money you get to save after subtracting for inevitable expenses (taxes, housing, food). Making 3x the median income in India doesn't mean much if all you can save up is $10k per year, while your Swiss colleague saves up $50k per year. – JonathanReez Feb 8 at 17:44
  • @JonathanReez I agree with you. Though my point is rather about the profit the company makes. While that profit is higher the workers have leverage to earn better salary. So go for it. – Jose Antonio Dura Olmos Feb 8 at 18:38
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Contrary to some other responses, I had a stint working for a small but multinational US company that did not factor in its employees' location when calculating their salaries. In fact, living in a country with lower-than-American taxes would potentially earn you more money than it would if you lived in the US. So while relatively rare, "fair" employers are not completely unheard of.

That said, if your company is on the larger scale and already made a purposeful decision to discriminate you based on your location (which seems to be the case), asking for fairness and a higher salary will unlikely have the desired effect.

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    Discrimination and unfairness? Would you use the same qualifications if the company was based in cheaper country B and opened an office in more expensive country A, paying all their employees the "fair" salary from country B? If your cost of living is substantially lower than mine, I would feel it unfair if I got the same salary as you for the same job... – oerkelens Feb 7 at 6:25
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    -1 for the use of "discrimination". Not discriminatory to pay less in a different location. It is common practice to keep to cost of living, supply and demand on the area and other factors. – fireshark519 Feb 7 at 9:23
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    @undercat surely you don't understand what discrimination/inequality is. Both employees as far as we know are being paid equal wages according to circumstances. Using your theory then paying them both the same would be discriminatory to the ones that now are being paid more. As they will be getting paid the same even though their expenses are higher. They get paid the same amount of whatever currency it is, however that currency means a lot less to them than it does to the other ones. there is nothing unethical about opening an office in a country where labor is cheaper! Hiring children is... – fireshark519 Feb 7 at 10:30
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    This is only discrimination in the same way that paying a skilled engineer more than the person that cleans the office is. – Eric Nolan Feb 7 at 11:25
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    @undercat Agreed, it is quite discriminatory to pay the same engineer 200% of the local median income in country A and 100% of the local median income in country B. You don't compare income to some objective global standard (if you think that makes sense, I'm looking forward to your definition for poverty), but to their local circumstances. Basically it's not about how much money you make, but what you can buy with that money. – Voo Feb 7 at 12:40

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