Keep reading for FREE
As businesses continue to grapple with the return to the office, companies that are allowing staff to choose their preferred long-term working models must decide how to handle pay for remote workers who have relocated away from offices.
Businesses are currently split on whether to adjust workers’ salaries based on where they live.
A school of thought says that pay shouldn’t be linked to location; rather, employees will receive the same wage regardless of their local cost of living, because their work can be done from anywhere, and cutting remote-worker pay could mean good staff leave.
For some employees, choosing to remain fully remote is about feeling comfortable and productive in set-ups they’ve cultivated for two years. But for others, it’s a necessity – because they’ve moved too far away from the office to commute.
In many instances, remote workers have left major cities for regions with a lower cost of living, such as rural areas, where they’ve been able to afford a home that would have been previously out of reach. Returning to the office would ultimately mean choosing between where they want to live and where they want to work.
Location has always been factored into wages.
Companies have the right to make a cost-of-living adjustment. It’s a practice that has been going on for decades and is a labour market issue: salaries today have a cost-of-living algorithm.
That’s the case for companies of all types, even early stage, fully remote start-ups: it still makes business sense to consider the cost of living when calculating salary for new hires.
If companies don’t reduce wages for employees in remote locations, then employees in the workplace are going to be upset. They’re going to pay higher rents, food and transport costs to live in Silicon Valley and come in for two or three days a week.
If an employee thinks they can save a lot of time and money by working fully remote, without suffering a pay cut, that will be attractive to them.
The embrace of location-based pay by Big Tech and other companies shows that they’re prioritising hybrid working for their businesses – and that they’ll incentivise workers to spend time in the office.
As the pandemic wanes, and companies look to bring workers back to the office on a hybrid basis, many will be wrangling with decisions like these. However, it’s unlikely that any plan will be fixed for good.
MORE LIKE THIS
Ready for the next level?
Read Like a Pro
Explore the World’s
Take Your Ideas
Just press play and we take care of the words.
No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.
2 Million Stashers
Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.
Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.
Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.
This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!
Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.
I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!
Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.
Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.
Read & Learn
Access to 200,000+ ideas
Access to the mobile app
Unlimited idea saving & library
Unlimited listening to ideas
Downloading & offline access
Claim Your Limited Offer
Get Deepstash Pro
75% OFF | 1-Year Pro Subscription