Imagine interviewing with a company for a position, performing well on the interviews, and finally getting a call with your recruiter only to have the conversation go like this:
Recruiter: “Hi! I am calling because you did great during your interviews. Before we can continue, would you mind sharing with me what you currently pay in rent?”
You: “That is great! I’m not sure why this is relevant, but our apartment is $2400/mo. We have been there a while and it is rent controlled so our price hasn’t increased as quickly as the market.”
Recruiter: “That’s great. It sounds like you also have roommates. How many of you are living there?”
You: “What? I have two. How is this relevant?”
Recruiter: “I will explain momentarily, but first, do you split the rent evenly?”
You: “No. They have the master bedroom so I only pay $1100. I don’t see why we need to discuss this though.”
Recruiter: “Thank you! I am pleased to let you know that we want to extend you an offer, and based on your current rent we are willing to offer you a salary of $103k/yr. I simply needed your current rent to calculate the offer.”
You: “Wait, what? You calculated my offer based on my current rent? That doesn’t make any sense. How does that work?”
Recruiter: “That is correct. The formula we currently use to calculate an offer is $90k/yr plus the annual cost of rent.”
You: “What?! My salary is worse because I pay less in rent? That is insane!”
Recruiter: “I am sorry you feel that way, but we adjust all salaries based on your cost of living.”
You: “Does this mean that if I lived by myself and my rent was more, lets say $3200/mo, would you increase my offer?”
Recruiter: “That is correct. If that were the case I would be able to offer you $129k/yr.”
No sane company would do this for employees who work in their office, so why do they do this for remote employees?
The biggest contributor to the difference in cost of living between San Francisco and pretty much any other city is housing. By adjusting salaries based on cost of living you are essentially telling people that they should be punished for finding a cheaper place to live, and rewarded for spending more.
Stop screwing your remote employees by giving them a cost of living adjusted salary. There are thousands of reasons to adjust someone’s salary offer, but the cost of living difference is not one of them.