Tech salaries have been increasing each year, but that could change with the Covid-19 pandemic. The transition to remote work is creating a new way of working and tech companies are still adjusting. This could mean a negative impact, or the opposite, because of the high demand for technology in all aspects of society. Here are some aspects that could impact tech salaries.Â
Remote Work
When the Covid-19 pandemic hit, the first thing tech companies did was to send all their workers to work remotely. Before, remote work wasn’t that common in the tech industry, especially in big corporations. Only a few tech companies were fully remote. Big companies like Yahoo even banned telecommuting in the years before. They believed that having the whole team at the office was the best option to encourage collaboration.
With the pandemic, tech companies had a chance to understand the benefits of remote working. They save money on real estate and other operational costs, and the team can be even more efficient working from home. The concern they had about remote work is a problem for collaboration was proved wrong.
After this year, remote work will probably stay as a popular modality in tech professions. Almost all tech professions—like software development, data science, or product management—can do their jobs remotely. It won’t be a problem to adapt to the new modality at all.
Increasingly, too, remote work is facilitating an increase in “digital nomads” in the tech industry: individuals who choose to work in different locations or even countries, whether temporarily or permanently. Some companies (like the web hosting platform GoDaddy, for example) are open to this new way of working, but it often requires the use of an employer of record service from a company like Remote to ease the process of hiring overseas.
Tech Companies’ Answer
Tech companies have embraced remote work. Companies like Facebook and Microsoft already said they will allow their workers to continue full-time remote work if they want. But this benefit doesn’t come without consequences. Tech companies are considering implementing localized compensation for the workers that choose the remote modality.
Localized compensation is when companies adjust salaries to the worker’s location. They say part of a tech professional salary is for the cost of living in expensive tech hubs. So, if a worker chooses to work remotely and they relocate to cheaper cities, their salary should adjust to that. Thus, tech workers could see a pay cut because of remote work.
However, it is still unclear how that will affect tech salaries around the country. Some tech employees are against receiving a pay cut. Companies are already saving money on operational costs so workers shouldn’t be subjected to pay cuts, especially when tech companies are some of the most lucrative businesses out there.
Considering only this factor, tech workers who go back to the office shouldn’t be affected by the policy. However, it can happen that tech companies start choosing remote workers over in-person ones to save money on salaries. But all these are hypotheses and we will have to wait more time to get the whole picture.
More Competition
Another factor that could influence tech salaries is that remote work opens the door for more competition. Now companies can hire tech professionals from many cities, states, and even countries. The competition for open positions will increase and tech companies could choose remote workers that do accept their salary terms over local professionals that don’t.
Not everything about remote work is bad. The same thing can be applied to tech employees. If you are a tech professional, you now will have more opportunities than ever. You also aren’t limited to your location anymore. You can find job opportunities around the world that are better than what you can find in your home country.
Is a Tech Career Still Worth Pursuing?
If the only reason why you were thinking to choose a tech career was the salary, then you were wrong from the start. It is true that tech careers have great salaries, higher than many professions, but you should choose it for other reasons like having a job with a purpose or that you like programming.
Tech professions are still a great choice even if the salaries are impacted negatively because of the pandemic. You can still become a tech professional without a degree and the companies offer crazy benefits and perks.
In Summary
Tech salaries will probably be affected by the new normal, but, for better or worse, is still unclear. Remote work is changing how tech companies work and it could mean a slight reduction in salary for tech workers. In addition, competition is increasing because companies have access to a wider talent pool. All these factors could influence salaries from now on.
