When the Covid-19 pandemic intensified earlier in 2020, remote work was experimented on and has proven to be successful with several tech companies choosing to make it permanent post-pandemic. However, many surveys have revealed that there are significant implications for individuals and organizations. Is the remote work decision ideal? What effects will it have on the wages of tech workers?

Tech Workers Vs. Tech Companies

So many factors complicate the decision to work remotely. Before it was implemented, several managers believed that the home may pose too many productivity-sapping distractions and time-wasting temptations. It was assumed that workers will slack off on duty and the company will bear the brunt.

According to a survey conducted on employees, the fears of the managers are unfounded as remote work has only recorded 1% productivity loss. Others say they were able to work better than when they stayed in the office. This sort of self-reporting is suspicious because it is like asking a teen how much schoolwork they have done in the absence of their parents.

However, the employee reports are not exactly inaccurate because they mirror the vote of confidence by executives who oversee loosening remote work policies and reviewing operational results. The test run of remote work in the second quarter of the year has made more companies see it as a financially beneficial arrangement.

Companies have now begun to reevaluate their real estate footprint because the office workforce has shrunk. For instance, a company leasing a million sq. ft. at $50/ sq foot will save around $12.5 million every year.

Will Remote Work Affect Tech Worker's Salaries?

When Facebook announced that it was making remote work permanent, other tech companies joined. The condition was that the workers would have to relocate elsewhere as recommended by the company. Forbes also reported that 44% of workers opted for a 10% pay cut to be able to work from home on a permanent basis.

An annual survey of Stack Exchange found that remote developers like full stack engineers earn up to 40% more than what others in the office earn. How did the companies come up with the formula for setting the standards? Some factors are considered when generating salary formulas, such as education, skills, expertise, location, and demand.

Online data sets provide benchmarks for different positions as well as for the industry. However, setting one amount is not enough as the companies must also balance it out and not overpay or underpay to retain their hires. When remote work is factored in for either contract staff or employees, things can be a bit confusing.

Also, the location factor may not be general among all companies. Should location matter? Some people believe it does not make sense. However, some employers consider it because they want to ensure that the new staff can afford all the necessities of life. For instance, staff living in New York or Los Angeles will need to spend more than those living in Kansas City or Knoxville.

While this is a reasonable consideration, total focus on location instead of skills can translate to forgoing value. For instance, is a product manager or programmer living in Kansas less capable than another in San Francisco? When both workers work remotely and their salaries are calculated based on location, it shows that the indicator of compensation is problematic.

What if the Kansas product manager is more productive and has a higher quality of work with the same credentials? Many argue that an office environment is still the best since humans are social animals. Others believe that remote work should not result in pay cuts.

Conclusion

The pandemic ushered in a new system of remote work in many industries. Tech companies assimilated the idea quickly and chose to make it permanent even post Covid-19. Facebook and Twitter among others quickly announced that all their staff will work from home henceforth. While this was welcomed by many, it came with pay cuts and some moving arrangements.

The tech industry is one of the highest paying in the world, and even though there has been some economic downtime, they have managed it well. Software engineers and other tech workers still earn considerably higher than their counterparts in other industries. Will it remain sustainable?