It feels like the proper arbitrage alternative: Go away your crowded metropolis for an even bigger place within the ‘burbs, however hold your massive metropolis wage.
However now, a new study by international advisory agency Willis Towers Watson reveals that many employers aren’t essentially planning to allow you to hold your full paycheck in the event you transfer. The survey of 344 employers in North America confirmed that almost 20% of employers are “setting pay ranges by first figuring out the market worth of an worker’s expertise after which making use of a geographic differential primarily based on the place the worker is situated.” Nevertheless six in 10 employers say they may proceed to pay distant workers the identical as in-office workers “regardless of the place they work.”
Whereas Twitter has been on the forefront of decentralizing it’s workforce (and paying them partially primarily based on the place they dwell), different tech firms have lately taken the same path. Facebook made headlines this spring when it introduced that beginning in January 2021, “worker compensation shall be adjusted primarily based on the price of residing within the places the place employees select to dwell. Facebook will ensure workers are sincere about their location by checking the place they log in to inner methods from,” in line with the New York Instances. Bloomberg reported in September that workers at VMWare who selected to maneuver might additionally count on pay cuts. “Workers who labored at VMware’s Palo Alto, California, headquarters and go to Denver, for instance, should settle for an 18% wage discount, folks acquainted with the matter stated. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay, stated the folks, who requested to not be recognized discussing inner insurance policies.”
However the motion in the direction of “pay localization” may be fraught as properly. As an example, what if an organization opened up jobs to employees unfold out across the nation, and girls or candidates of shade started to be employed at the next price? Would the corporate nonetheless pay its San Francisco-based workers extra, even when they have been disproportionately male or white?
Some additionally query whether or not the narrative about folks “fleeing cities for good” will maintain up as soon as the pandemic is underneath management or there’s a vaccine. Jonathan Miller, who writes a preferred e-newsletter about New York actual property told Fortune‘s John Jeff Roberts this summer that he thinks the flight from massive cities is actual—but it surely gained’t essentially stick. “He likens what’s taking place with COVID-19 to occasions just like the Lehman Brothers collapse in 2008 and the 9/11 assaults. These occasions likewise triggered a flight from New York, however solely a brief one; lots of those that left returned in a 12 months or two. Miller expects the same phenomenon to happen with the pandemic.”
That could be one motive many employers are nonetheless grappling with find out how to handle distant work insurance policies. The Willis Towers Watson survey discovered that 37% of firms “don’t but have a proper coverage or set of ideas to handle the preparations, though 60% of these at the moment with out formal insurance policies are planning or contemplating adopting a proper coverage by subsequent 12 months. Practically two-thirds (64%) of these with insurance policies are planning or contemplating revising them this 12 months or subsequent to adapt to the altering nature of the place work will get finished.”
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