> you either pay the market rate for the most expensive market or you price yourself out of that market.
There is absolutely nothing wrong with pricing yourself out of the most expensive market, unless attracting the most in-demand employees (who are concentrated in the most expensive markets) is an existential matter for your company. This actually would let you pay generously compared to tier-2 markets and attract employees that want to leave the most expensive market or who would not even consider relocating to that market.
It is worth noting that the requirements for successfully working remotely preclude most of the lowest cost-of-living locations. eg. it is hard to get decent broadband in the boonies of the desert southwest, or in rural Appalachia.
There is absolutely nothing wrong with pricing yourself out of the most expensive market, unless attracting the most in-demand employees (who are concentrated in the most expensive markets) is an existential matter for your company. This actually would let you pay generously compared to tier-2 markets and attract employees that want to leave the most expensive market or who would not even consider relocating to that market.
It is worth noting that the requirements for successfully working remotely preclude most of the lowest cost-of-living locations. eg. it is hard to get decent broadband in the boonies of the desert southwest, or in rural Appalachia.