Covid-19 has had an enormous impact on our society. We will not see the real consequences for a few years. In the tech industry, where most companies switched to remote work, one of the main concerns is how it will impact salaries. Here are some factors that could impact tech professionals.
Accessibility
One of the first things that will change in the industry with remote work is accessibility. Big tech companies before the pandemic limited themselves to hiring employees that were located where their headquarters were. This meant the best jobs were in tech hubs like the San Francisco Bay Area, Los Angeles, New York, or San Diego. But now, remote work is changing their recruiting strategies.
Tech giants can now hire employees from any state, city, and even from different countries. Facebook said they will have 50 percent of their workforce working remotely in the next five to ten years. Many other tech companies are following suit because they became aware of the benefits of having a remote team.
In the future, this reliance on remote work in the tech industry could mean more competition for open positions. Companies will have access to a wider talent pool, including people from other countries and people with disabilities that must remain home.
Cost of Living
But not everything is as perfect as it sounds. Tech giants aren’t just offering their employees the opportunity to work remotely permanently for free. The catch is localized compensations. In other words, companies will adjust salaries depending on each employee’s new location. Their argument is that salaries are partly based on the cost of living where the office is.
Some employees, however, argue that tech companies are already saving money on real estate and operation costs, so they shouldn’t have to cut salaries at all. Tech employees are divided in their opinion, and some have already accepted pay cuts for the opportunity to relocate permanently.
Each company is creating its own way of calculating salary adjustments according to location. Some employees have seen a reduction of between 10 and 18 percent. Other companies, like Reddit and Veeva Systems, already confirmed they wouldn’t adjust salaries and all employees will be paid the same no matter the location.
Here is an example to help you visualize the situation. A software engineer is working in San Francisco and decides to work remotely permanently. The company tells them they will receive a pay cut of 10 percent, but they move to a small town where the cost of living is 20 percent cheaper than San Francisco. At the end of the day, they are earning more money than when working at the office. It is a matter of analyzing how the localization will really impact your pay.
Is It Still Worth It?
Many people feel attracted by tech professions and salary is just one of the perks. If you are only doing it for the money, then it is best to rethink that decision. The tech industry offers incredible benefits on top of high salaries. Plus, you will have the opportunity to work on projects that will probably have a direct impact on society.
Another benefit of tech professions is that you can start your career without a bachelor’s degree. There are short courses that give you all the skills and knowledge you will need to enter the industry. It doesn’t matter whether you want to be a web designer or cybersecurity engineer—there is probably a course for you.
Thus, even if you have a salary that is less than what you were earning at the office, the complete package will still be worth it. It depends on what your priorities are. If making money is your only goal, you should choose a different path that best aligns with what you like to do.
In Summary
We could be seeing a slight reduction in salaries in the tech industry. But it is still too soon to tell. Some companies are using localized compensations and others aren’t. What we do know is that competition for open positions will probably increase because employers will have access to a wider talent pool. Also, if you receive a pay cut because you relocate to a smaller town or closer to the family you could be seeing an increase in salary instead of the other way around.
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