The tech industry was an early advocate of remote working. Its very nature supported the idea by developing the tools to make it possible. Tech teams were dispersed long before any other sector.
Thanks to the coronavirus pandemic, remote working has become more normal and more popular, with many opting to remain ‘remote’ as restrictions lift. Some tech companies have listened to their staff and have completely re-drafted their working arrangements in response.
Big tech in particular has remained committed to working-from-home policies as we emerge from state-sanctioned regulations.
Twitter has declared that its employees may work from home “forever” if they so desire. Facebook quickly echoed this sentiment, saying it expected up to half of its workforce would take up remote working in the next 5-10 years.
Generally, the story reads that where the giants tread, the rest follow. So are we to expect the rest of the tech industry to follow suit?
The changes to remote vs. office-based work will affect the tech industry in many ways. Will we be more or less productive? How will we collaborate? How will remote working affect innovation and creativity? And what will this mean for the traditional office space?
All of these are interesting and important conversations, but we have another question; how will remote working affect tech salaries?
Historically, remuneration is dependent upon location, with the major city and capital salaries far exceeding regional counterparts. Statistics tell us that the mean average technology salary in Greater London is 12% higher than the rest of the UK. At the other end of the scale, tech workers in Northern Ireland can expect to earn 18% less than the average UK tech salary.
Will remote work lead to salary adjustments?
The quick answer is yes. It’s bound to. Successful and solvent companies keep the bottom line front and centre. It makes sense that if an employee’s cost of living declines, so too will salaries. Arguably a remote worker does not have the same outgoings as a city working commuter, and organisations will consider this when offering remote working salaries.
How will remote working affect salary?
Perhaps regional salary variations have been because the HQs of many organisations lie in the capital. HQs typically home the big earners. Skilled graduates and top candidates flock to the capital to fill these highly skilled roles which command impressive salaries.
Remote working will explode this practice. Organisations relying on regionality to manage costs will end up paying top dollar for top talent no matter where they work and live.
On the other hand, some thinkers are of the belief that the large salaries are because of the location itself, not just as remuneration for the skills and the skilled employees that work there. For example, pay in the capital is often weighted because of high travel, accommodation, and living costs.
As work becomes more remote, could remuneration for even the highly skilled take on other forms? Budgets used for higher salaries and other benefits – subsidised breakfasts or lunches – could become redeployed and become local gym memberships, for example.
In other words, could tech businesses provide employees with a more diverse and tailored benefits package to better remunerate remote workers?
A moral dilemma.
The idea of regional salary disparity raises other questions too. Not least, is it ethically correct to scale pay based on location? Should two workers with the same ability, skill, and competence be remunerated differently depending on where they sit geographically?
Setting different pay scales for different regions of the country is complex and makes it difficult for tech businesses to demonstrate fairness and transparency.
The future of remote vs. city tech salary could come down to organisation size.
Large tech companies can afford to maintain pre-pandemic compensation levels despite geography, even after the pandemic. The battles for talent will remain, with the big hitters being able to maintain their hiring dominance by offering attractive salaries. Competitive rates will be used as both a hiring and retention tool, ensuring that larger companies will have the edge amid the new landscape.
A structural shift.
Some theorists have commented that the increase in remote working will lead to a shift in how we grade pay entirely. Currently, most tech organisations map job catalogues onto grading structures to establish pay.
Instead, organisations would introduce “skills registers” to guide pay structures leading to the elimination of jobs in the traditional sense.
Using skills registers, project leaders would bring combinations of relevant skills into teams and pay for them based on the number of time units they require, rather than on a daily, monthly, or annual salary basis.
In this model, permanent staff would feel like they’re working in the contract market, but will still get benefits like holiday pay, training, and career progression. Workers would be assigned to projects rather than have regular hours and would be paid like contractors. They would be paid according to the number of units of time they have worked each month the value they provide.
A call to re-evaluate and readjust.
The shift to remote work is a call to action for business leaders and HR professionals.
Successful implementation of this new working model will require an entire cultural review. Re-evaluating policies, guidelines, salaries, and practices will be key when determining how teams function moving forward.
The regional salary debate was raging pre-covid, and now that remote working has been thrown into the mix, it has just become more complicated.
One thing is for sure. There is never a one size fits all approach when it comes to people management.