All of us have heard about this fascinating place called the Silicone Valley, specially those who work in, or are wanting to work in the technical sector, Silicone Valley is a hub for all things technology.
But all things good come with a price, in this case, an enormous cost of living.This relatively high cost of living provided the employees access to state-of-the-art remote-work tools. The COVID-19 pandemic has been the reason for the companies to reconsider traditional working modes and formulating future plans with decentralized staff i.e, the work from home culture.
Up until the pandemic, the employees in Silicon Valley have been privileged with amenities ranging from free food going up until in house yoga studios if not beyond. Then why the pay cut you ask? It is a standard practice to change wages based on the local cost of living and other factors, say the companies. This seems pretty logical as the people who live in The Valley itself face a much higher cost of living as compared to those who don’t. Also, you can’t possibly find a job paying the same high wages as Bay Area anywhere in the small cities.
But all this comes with consequences. Cutting salaries of people who want to live in a cheaper area might lead to unhappy employees and increase the chances of quitting. A survey by Blind for the month of September stated that over 48% weren’t in favor of pay cut if moving to a city with a lower cost of living, while 44% said they would be. Twitter Inc., was notably the first one to announce it would allow remote working permanently. They also said that they might resort to a competitive approach to pay localization.
In May, Facebook Inc. also announced a shift toward a substantially remote workspace over the next decade. It had also stated that the work location would mean a shift in salaries. Facebook has asked its employees to report the company of relocation plans by Jan. 1. Last week, Microsoft announced its ‘hybrid workplace’ through a blog post. It also said that the salaries enjoyed by the employees will vary as per their location and the company’s geopay scale. These are just a few names, companies like Stripe Inc., VMware Inc. and a few more have also taken the same approach. Valid or not? The results will tell over the years.
Image Credit: Economic Times/Google