A year ago Google gave their employees access to a pay calculator that let them estimate how permanently working remotely would impact their salaries. For most workers it meant a reduction. Since then Facebook, Twitter, and Microsoft revealed similar policies. What is an employer’s justification for cutting pay if their employees work from home? Should you lower your expectations for compensation if it means you can work 100% remotely?
Employers Parry
Tech companies that have national and International workforces like Google, Facebook, and Microsoft revise an employee’s salary when the employee changes the location of their residence. For example, If the employee moves to a lower cost of living area, then their pay is reduced. Conversely, a few companies (e.g., Spotify, Reddit) raised the compensation of remote employees during the pandemic to match the salaries of their workforces that are based in New York and San Francisco. Google’s explanation for decreasing remote employee’s wages is that their compensation packages are always based on location since they pay employees top of the range for the market the employee lives in. Facebook said they had to adjust an employee’s salary to their location for accounting purposes and tax requirements. VMware and Gitlab also commented. Read more here. Companies cutting pay for working from home may be using it as a device to get employees back in the office. Maybe they think it signals a return to business as pre-pandemic usual. Maybe they feel if your manager doesn’t see you working, then you must not be. Maybe they believe physical presence boosts collaboration and innovation. These expectations need to be re-examined. We are living in a business as unusual, homing from work, videoconferencing our heads off era. Work-life integration advances both work and life.
Employees Counter-parry
Studies of productivity during the pandemic revealed that remote workers not only accomplished the same tasks as they did in the office, they also worked longer hours to do so. Employees feel like they should be paid for the work they do, not where they do it, but the majority of their managers disagree. Seventy-three percent of managers affirm that productivity was great. Their problem is, managing their remote workforce caused 69% of the managers to burnout. The study also indicates that 51% of company leaders believe employees want to return to an office and that incentives like free food and happy hours will lure them back. If employees are willing to give up promotions and wage increases to work from home, snacks are not enough of an incentive to return to an office. However, on-site childcare would be a good start.
Touché
This fencing match isn’t really about money. It’s about power. Employers have traditionally held all the power in the relationship. The pandemic gave employees a sense of agency and a means to prove they can handle it. A significant percentage of the workforce discovered that it does not make sense for them to stay in one place 9:00am-5:00pm Monday – Friday to do their jobs well. And so far nothing management has done to lure them back has changed their minds.
Would you accept a pay cut to work from home? Please share why or why not in the comments.