How location-based pay can backfire - Deepstash
How location-based pay can backfire

How location-based pay can backfire

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How location-based pay can backfire

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Location-Based Pay

As more companies decide to remain fully remote or adopt a hybrid work model, many are adopting location- or geo-based salaries to account for the varying cost of living expenses among remote employees.

Companies that implement a location-based salary policy essentially raise or reduce employee salaries based on where the employees have personally decided to live and work. It’s an approach that’s particularly impactful for employees who live and work in a big city as opposed to a smaller one, such as New York City vs. Des Moines, Iowa. 

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A Few Pros and Cons Of Location Based Pay

Pros:

  • Fair" from a practical cost of living standpoint.
  • It's international-friendly.
  • Allows employers more flexibility in their compensation approach.
  • Helps keep employees happy and discourages them from leaving for a job in a different city.

Cons:

  • Does not align with the values of the Employer Diversity and Inclusion (DEI).
  • Exploits workers and increases profits.
  • Leads to comparison and unhappy employees.
  • It’s costly, financially and administratively.
  • It doesn’t work in the long term.

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