Do Remote Jobs Pay Less Money?
Today, more than ever, employees want the ability to work from home. Recent research reveals that more than 4 in 10 employees expect employers to offer their employees the ability to work remotely as the nation emerges from the pandemic.
The elimination of a commute, better work life balance, and lingering health concerns are the main reasons why many employees want to work remotely.
But what about the salaries of remote workers? Some think remote jobs pay less money. And that’s not necessarily true—except when it is. Let’s get into it.
Remote Roles May Pay More
The results of a study conducted by Payscale showed that employees who work remotely 100% of the time earn approximately 23% more than those who work 100% on site. Interestingly, those who split their time between working from home and being on-site earn the highest salaries.
It’s important to note, however, that it’s not necessarily because these employees work from home that they earn more money. Instead, it’s more since more white-collar workers have the ability to work from home more easily than blue-collar workers.
For example, an accountant for a major supermarket chain who earns $90,000 annually can do their job from home. However, the cashier who earns $33,000 annually can’t work remotely.
Furthermore, managers who earn high salaries may feel more pressure to go into the office one or two days per week, whereas individual contributors are better able to work remotely full time. So that may explain why hybrid workers are among the top earners.
After considering this research, it may be tempting to declare “Remote jobs do not pay less money than on-site jobs. In fact, they pay more. Case closed!”
But we all know that the issue of wages for workers in America is much more complex.
Employers are Looking to Reduce Salaries
The National Bureau of Economic Research published a paper that gave valuable insight into how many firms are approaching wages and remote work opportunities for their employees.
It turns out that on average, 4 in 10 employers plan to let more employees work from home—and use that that to curb future wage increases. Five in 10 larger firms (those with 10,000 employees or more) are embracing remote work to stem wage growth.
In other words, employers may not be blatantly telling employees, “You work from home so we’re playing you less.” But employers may be thinking, “We know you like working from home, so we may be able to pay you less in the future and still retain you.”
Location Impacts Salaries Too
Millions of workers who decided to switch to a fully remote work schedule also decided to move. Workers left cities such as San Francisco and New York in favor of locales where the cost-of-living wasn’t so high.
However, companies are already reducing salaries of employees who move. Companies argue that they are paying fair wages to the employee living in that particular area. In other words, the employee who moves from New York City to a suburb in Kentucky where the cost of living is lower would see their wages adjusted accordingly.
It may seem like a gamble for employers to take. After all, it’s still a hot job market. Who’s to say an employee won’t up and leave after having their salaries reduced?
Well, as it turns out, many employees are fine with the less pay for fully remote work trade off. ADP conducted a study that revealed 64% of employees would look for another job if their employers asked them to return to working in person 100% of the time.
Additionally, almost 40% of employees, would agree to a 5% reduction of salary if it meant they could continue to work from home at least 50% of the time.
Negotiate the Best Salary for Yourself
If you want a fully remote position, here are a few tips to help you negotiate the best salary for yourself as a remote worker:
- Do your homework. Before you enter salary negotiations, compare the salary ranges between your home location and the company’s headquarters. That should give you a good idea of a what a fair salary for the role is.
- Know your worth. If you’re a high performer, then you can make a strong argument for staying at your current salary, even if you’re moving to a lower cost-of-living area. Give specific examples of how you increased productivity, reduced costs, boosted sales, or anything.
- Show the win for the company. Go into negotiations with strong reasons why the company will benefit from you working remotely. Will you be more productive? If so, can you quantify your productivity levels? Maybe you’ll be closer to clients that you can visit more often in person.
- Consider your commuting expenses. Figure out what you’d spend on gas, tolls, lunch, public transportation, dry cleaning, and trips to Starbucks if you went into the office every day. It’s likely to add up to thousands of dollars every year. It may very well be that those savings will offset any cut in salary that you’d have to take.
- Be willing to go hybrid. Many employers are embracing the hybrid work model much more quickly than the fully remote model. Use that to your advantage. Agreeing to come into the office just one or two days a week may go a long way in gaining your employer’s trust and keeping your salary where you want it to be.
Remote Work Doesn’t Have to Mean Lower Pay
Do remote jobs pay less money? Well, sometimes they do and sometimes they don’t. The important thing to remember is that you know your worth as an employee, and this should be reflected in your professional resume with strong achievements. It doesn’t matter if you want to be 100% remote, 100% in-person, or a combination of both. You always have the power to negotiate to get the salary you deserve.