The question of how remote work and the pandemic will affect tech salaries is on everyone’s mind. Most experts say it’s too soon to tell what the real impact of remote work on tech salaries will be. However, there are some factors to consider that can help give us an idea.
Companies Transitioning to Remote Work
At the start of the pandemic, almost all tech companies switched to remote work. This was the only way to stay in operation. Previously, companies like Yahoo and Google were completely against remote work. They believed that the best way to collaborate was to have the whole team in the same location. Now, however, they’ve seen the light.
Without everything that has happened this year, tech companies would have likely needed more time before they even considered remote work. Now, though, they’ve experienced the benefits of this way of working. Such benefits include lower costs for renting offices, reduced operating expenses, and (in some cases) a smaller workforce. Plus, remote work has meant many employees are happier — they have more time to spend with family and friends and they can create a flexible schedule to work when they are most productive.
However, not everything about remote work is positive — especially not for employees who work at companies that are implementing localization. Many tech professionals who want to work remotely on a permanent basis are moving to smaller towns where living is cheaper. Localization is the practice of adjusting the salaries of these employees to the cost of living and taxes in the new location. Not all companies are using localized compensation, though. Others are keeping salaries the same no matter if the employee is remote. It is unlikely to become clear whether this practice will be commonplace in the industry until next year.
Many companies may not allow employees to relocate, especially if they want to use a hybrid model of work. This means employees are neither fully remote nor always in the office. Instead, they work at times in their homes and at times in the office. In these situations, only tech employees who decide to work fully remote will receive a pay cut.
More Job Opportunities
Some people are worried that the adoption of remote work will mean more competition for certain positions. Employers will have access to a wider talent pool that could even include professionals in other countries. However, this works both ways: tech professionals will also have more job opportunities because they are no longer limited to jobs within their local area.
For example, before the pandemic, the majority of job opportunities for data scientists were in a few select cities around the country. Now that remote work has become mainstream, data scientists can find work almost anywhere in the world. Many other jobs in the tech industry are in exactly the same position.
Tech salaries have been increasing at a steady pace over the last few years. In fact, they have experienced an annual growth of 3 to 10 percent in the last five years (the exact amount of growth depends on the city). But after the Covid-19 pandemic and an increase in remote work, this could change.
Salaries won’t necessarily decrease, but they may stagnate in the foreseeable future. One reason for the increase in salaries up until now has been workers asking for higher compensation. But employees may start to abstain from asking for raises. For example, a web developer may be afraid of being made redundant now that the company has access to web developers from other countries who may accept lower salaries.
This year, we saw a massive transition to remote work in every industry, and the tech sector was one of the few that adapted effortlessly. Although employees could be at risk of pay cuts in exchange for this flexibility, they will have access to more (and perhaps better) job opportunities from all over the world. In other words, there are both positives and negatives to this change. We still need to wait to see the full impact of remote work on tech salaries.
Beyond finding a job with a decent salary, you need to be sure that your job is secure. Check out what jobs are the most secure during the Covid-19 pandemic, along with jobs that will never go out of demand.