You may have heard lots of arguments regarding the pros and cons of working remotely. During this recent pandemic, several companies have decided on embracing the work-from-home model. However, this decision has resulted in another issue in the corporate world.
Why?
These remote workers have thought of moving to relocate to more economical cities. They know that they can continue their work from any place. But, this relocation has forced their employers to rethink their monthly salary. Should remote workers that relocate be paid less? There are contradictory views related to this issue.
Some business owners think that a company needs to adjust salaries based on the employees’ location. They think that market factors can make a difference in salaries. There are variations in housing, parking, and transportation costs in different geographical locations. Thus, the geographic marketplace is one of the significant factors causing variations in salaries.
Employers who hire from the local market mostly focus on the prevailing wage rate. However, while hiring international candidates, they feel the pressure of providing higher wages.
Remote Employees and Productivity
In some cases, you can see that a remote team is more productive than in-office workers. The reason for it is that they do not need to spend the commute time. They can reduce the number of sick leave and increase their concentration on work. Should remote workers that relocate be paid less? In this case, it doesn’t justify th change.
While analyzing the productivity of remote workers and office workers, the issue of value comes up. When your remote team is more productive, should you pay more to them? You may not find an easy answer to this question. The remote working trend will continue growing in the future years. Most importantly, skill sets and knowledge are the relevant factors to make a final decision.
Cost of Labor
Most companies focus on the cost of labor to decide on the local compensation rates. The supply and demand for labor are factors making a difference in the cost of labor. However, some professionals have claimed that paying employees by location never mean that a remote team will get low wages.
It’s important to keep in mind that the cost of labor is not equivalent by location. An expat will often spend more to live in the same location as a local while fluctuations in price don’t compensate for someone living overseas.
Finding Value in Your Workers
When employers make a statement that they will change compensation by location, it also states that there is not value in the productivity or human resource, but instead in the desire to work individual’s like machines. The message this sends to employees can become negative and highlight that employers do not care for the lifestyle or well-being of their employees. More important, it states that there is little value in their work.
Making sure that compensation matches the value that is offered with those who are working with you is essential in your decision making process. Should remote workers that relocate be paid less? Consider the message and the ideals this brings before making the decision.