Cautious expectation: Future of tech compensation in a COVID world
In March, uncertainty due to COVID swept the world and disrupted business in a way we haven’t seen before. Since then, companies have managed to continue essential operations and now consider their return to work plan. We’ve come to a crossroads in our post-COVID world where businesses have determined if they are reopening their offices or making the conversion to go and stay distributed. One thing is certain, remote work is here to stay. As companies create a long-term return to work plan, how will work-from-anywhere affect salaries and companies’ compensation philosophy?
It seems that as companies deliberate and plan what business operations will look like in the midst of this global pandemic, tech candidates also seem to be in limbo. Upon surveying software engineers, product managers, DevOps engineers, designers, and data scientists for our 2020 State of Salaries, respondents let us know how COVID and going remote has impacted their work and compensation expectations moving forward.
Compensation expectations in line with pre-COVID offerings
In Part 1 of our 2020 State of Salaries report, we discuss how since there has been year-over-year growth in all major tech hubs so understandably, candidate compensation expectations are aligned and look upward. Candidates expect their salaries to maintain, if not increase, in the near future regardless of the conditions that we now work in. Further, in Part 2, tech employees share with us that despite the effects COVID has had on businesses, a majority (90%) believe that the same work deserves the same pay regardless of where employees may be physically located. It is widely agreed upon that while remote work may be the future of how we work, it seems that tech workers aren’t as open to the potential implications it would have on how they are paid to work. Only 32% of tech candidates surveyed would be willing to accept a lower salary to work remotely and less than 25% would be open to negotiate for other compensation options.
Relocation more appealing, but not immediate
The idea of relocation has sparked the interest of tech employees in light of remote work. Although there are various considerations that come into play. More than half of tech employees are neutral or against localized salaries based on where the employee resides and works from–only 40% of tech employees support it. Although, while most tech employees would stay in their current city for at least 3 more years (64%), the opportunity to work remotely has made the idea of moving to an area with lower cost of living more appealing. Following experiencing a new city (31%), cost of living (24%) or the idea of more job opportunities (21%) were top motivators for candidates’ desire to relocate. It would also seem that those who were open to relocation would be interested in other tech hubs outside of their own. Without the ties to a primary office and desk location in order to accomplish necessary work tasks and projects, tech workers are warming up to the idea of work-from-anywhere vs. just working from home, depending on what work requirements may look like as companies think through and update their remote work policies.
Uncertainty around job security
In the past few months, collectively we have had to accept that the only thing constant and promised is change. As smaller businesses struggle to stay afloat and larger businesses make hard decisions to undergo layoffs, there are various industries that have boomed in comparison where hiring has continued as normal. The above considerations around compensation and ability to work remotely are likely dependent on remaining in their current position or finding a new one with similar flexibility to what they may experience now.
Tech workers are divided on their job security and their ability to find new opportunities during this time. 42% of tech workers were concerned about getting laid off in the next 6 months and, conversely, 58% were not concerned. Only 39% of respondents actually wanted to leave their current job but are concerned about finding a new role.
Time will tell
As we navigate this remote-first world, time will tell what the right business decisions are and how companies can be successful during uncertain times. Despite the expectations of tech workers, companies will need to take the lead on how to maintain their businesses, how to continue essential operations, and how to best support their employees. In turn, companies will need to determine how remote work and COVID will impact their salary offerings and their overall compensation philosophy. For now, tech workers will look to companies who are taking a lead in the market to share how salary trends will continue moving forward.