As businesses continue to grapple with the return to office, companies who are allowing staff to choose their preferred long-term working models must decide how to handle pay for remote workers who have relocated away from offices. For employees who work productively from home, is it right that their wages are cut? Or is dictating that pay should be in line with people’s proximity to the office a fairer approach?
Salary minus geography
Some companies have decided to take location out of the salary equation
- For example, online real-estate marketplace Zillow pays the same wage to employees who move away from its Seattle headquarters to anywhere in the US
- Such benefits not only extend to the worker – it also means that firms now have a deeper talent pool to operate from and a greater chance of keeping staff amid the Great Resignation
Why location-based pay can work
Tsedal Neeley, professor of business administration at Harvard Business School, says although it’s unfair that some workers will be eventually paid less for doing the same job – especially when their work takes up significant space in their homes – location has always been factored into wages.
Businesses are worried that large-scale remote working could end the hybrid workplace before it’s even begun
Unless remote positions are priced at a lower rate, businesses could begin losing the hybrid workers they need on site.
- The embrace of location-based pay by Big Tech and other companies shows that they’re prioritizing hybrid working for their businesses – and that they’ll incentivize workers to spend time in the office.
