The question of how remote work and the pandemic will impact tech salaries is on everyone’s mind. But what most experts say is that it is too soon to tell what the real impact will be on the industry. Here are some things to consider to find an answer to this question.
Companies Transitioning Into Remote Work
When the pandemic started back in March, almost all tech companies switched to remote work because it was the only way to keep their operations going. Companies like Yahoo and Google were completely against remote work and they used to believe the best way to collaborate was to have the whole team in the same location. Now, they’ve seen the light.
Without everything that has happened this year, tech companies would probably have taken a lot more time to consider remote work. Now, they see the benefits of this way of working, which include fewer expenses on renting offices, less operating costs, and fewer salaries for maintenance and other types of staff.
Plus, remote work has made some employees happier because they have more time to spend with family and friends and because they feel like they can work when they are most productive. However, not everything is positive with remote work, at least for employees that work for companies that are implementing localization.
Localizing compensation is the way companies are adjusting to employees that decide to work remotely permanently and relocate to another city. In most cases, tech professionals are moving to smaller and cheaper towns to save money. Some tech companies then decide to adjust the salaries to the cost of living and taxes in the new location.
While many companies are doing localized compensation, others are keeping salaries the same whether the employee is remote or not. We will probably have to wait and see if next year it becomes more common in the industry.
More Jobs 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 from other countries. But this also works the other way around. Tech professionals will also have more job opportunities because they aren’t limited anymore to jobs in their city or state.
For example, data scientists before the pandemic probably had more job opportunities in a few selected cities around the country. Now that remote work has gone mainstream, they could literally find work anywhere in the world from the comfort of their couch. This applies to almost any profession in the industry.
There is always a positive and a negative side to any change. What makes the difference is accepting the negative to have the positive. If you want to be able to work from anywhere, then maybe a pay cut doesn’t sound so bad in exchange for having the lifestyle you desire.
Tech salaries have been increasing at a steady pace over the last few years. According to Hired, tech salaries experienced an annual growth of 3 to 10 percent in the last five years, depending on the city. But after the Covid-19 pandemic and an increase in remote work, this could change.
Salaries won’t necessarily go down. Instead, they could go stagnant in the foreseeable future. Part of the increase in salaries is due to workers asking for better compensations and rewards for their efforts and abilities. But most employees will abstain from asking for a raise when they feel like their company is going through a rough patch. A web developer could also be afraid of being let go when the company now has access to web developers from other countries that may accept lower salaries.
What could possibly happen in the future will be a hybrid modality that isn’t fully remote or in the office. Workers will be able to work in a mixed environment between their home and the company’s headquarters. That way, only the tech employees that decide to work fully remotely will receive a pay cut.
This year, we saw a massive transition to remote work in every industry. But the tech sector was one of the few that adapted effortlessly to this modality. That is probably why most companies have decided to offer their employees the choice to become fully remote workers.
However, employees could be at risk of suffering a pay cut in exchange. Another thing that will change is that employees will have access to more and maybe better job opportunities from all over the world. Many factors are at play, so we will have to wait and see how the industry adapts to the new normal.