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The Covid-19 Era: Will Remote Work Change Tech Salaries?

The Covid-19 Era: Will Remote Work Change Tech Salaries?

There has been a lot of speculation about how remote working will affect tech salaries. But the truth is that it is still too soon to tell the definite outcome. Tech salaries have been increasing slowly each year, but the pandemic may have put a stop to that. Here are the possible factors that could impact salaries in the new coronavirus era. 


Localization is a methodology that many remote companies already apply. It means adjusting salaries depending on each employee’s location. It was already commonly used on fully remote companies. But during the pandemic, many companies had to turn to remote work without any preparation whatsoever. 

After months of this modality, most workers got used to it, and now that things are going back to normal, many have decided to continue working remotely. This is no problem for professionals in the tech industry where they can do their job from anywhere as long as they have a computer and an Internet connection. 

However, companies that are new to having most of their workforce being remote are just starting to realize the need for localizing compensations. Facebook already said they plan to have 50 percent of their workforce remote in the next decade, but with the catch, they will adjust the salaries to the location. 

The argument companies are using to justify localized salaries is that employees are moving to cheaper cities. However, according to Hired’s 2020 State of Salaries Report, 31 percent of tech workers will move to other cities to explore and have new experiences. The top options include New York, Seattle, and the San Francisco Bay Area, which are cities with high living costs. 

Cost of Living

One of the main concerns is that remote work will change tech salaries for the worst. But localized compensation doesn’t have to be a bad thing. You will be changing one benefit for others. For example, suppose you are a software engineer working in San Francisco, but you decide to work remotely permanently. Then, because San Francisco is an expensive city, you move to a smaller city, maybe closer to family, that has a lower cost of living. 

Your company then decides to adjust your salary according to your location. It will probably still be a high salary and the money you will be saving in the new location will be more than what the company cut. 

Also, you could choose to live in your dream location that is still cheaper than where you used to live. For example, you could choose to live in the Caribbean or Thailand. Not every company will allow a location like those, but the point is if you wanted to you could take a slight pay cut for the opportunity to live in a dreamy location. 

Broader Talent Pool

Another factor that will come into play when it comes to tech salaries is access to a broader talent pool. Remote work opens the door to professionals from all over the world. It means tech companies will not be limited anymore to hiring in the same city, state, or even country. This could greatly impact salaries if they start hiring from less developed countries where professionals aren’t used to the benefits and perks that companies offer in the US.

For example, suppose Facebook is looking for a remote computer scientist and they have a candidate from the US and one from the Philippines with the same qualifications and experience. The one from the US doesn’t want to accept a localized salary, but the one from the Philippines does. Facebook will probably go for the foreign worker. Overall, it will probably increase competition among tech professionals. 

Office-Remote Hybrid

Another possibility that will eliminate the threat of localized compensation is a hybrid office remote working modality. It is something that most tech workers would prefer because they will have the benefits of both modalities. It means working from home a few days out of the week or month. It depends on what each company decides moving forward. But it is the most likely outcome. 

In Summary 

The most likely scenario is that tech professionals that decide to work remotely permanently will receive a pay cut. The ones that want the benefits of both modalities can choose a hybrid modality. The factors that could change salaries when having remote positions are the cost of living in each city, and more competition for different positions. 

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