Will Relocating Engineers Embrace a Pay Cut?

Illustration of professional woman leaving with chunk of money
Illustration: iStockphoto

By: Tekla S. Perry

Back in May, as the tech workforce moved into the virtual world, Facebook announced that at least some employees could work from home permanently—and choose to relocate. There is a catch to that: Salaries, the company said, would be adjusted to reflect local costs of living. In June, job search firm Hired released a study that reported that only 32 percent of tech professionals around the world would be willing to take such a cut.

Now, just a few months later, as remote workers settle into their commute-less work life, the numbers of those willing to accept a pay cut seems to have grown. Blind, a company that operates private social networks for tech employees, surveyed 5,591 tech professionals and found that 44 percent would be willing to take a pay cut linked to a lower cost of living and 8 percent were indifferent; 48 percent would be opposed to such a cut.

The numbers vary by employer, with tech professionals working at SquareLyftFacebookVMware, and Dropbox the most willing to sacrifice salary for the ability to relocate, and ExpediaPayPalMicrosoft, and Oracle the least [see chart, below].

Comments from those willing to take a cut generally fell into the “what’s the big deal” category. One Facebook employee wrote: “I don’t understand all the fuss, are people demanding everyone around the world be paid the same? Let’s be real, your pay range is based on your location. People who feel they moved to a place that had 30-50 percent lower range [and] shouldn’t be paid like the local employees crack me up.”

Another respondent at Facebook wrote, “It makes sense. Your pay is always defined by market. When you move from Austin to Bay Area do you tell company to keep [the] same pay? No. You ask for hike for Bay Area market.”

A respondent at VMware wrote, “I’ll gladly do this. It’s only a reduction on base, and base makes up half of my [total compensation]. So a net 6.5 percent decrease in my total to move to a place where houses are 20 percent of the price and taxes alone make up the difference? Sign me up.”

Those who would not take such a cut argue that regional salary differences are inherently unfair.

Wrote a respondent at Hulu: "You guys aren’t getting it. It doesn’t matter that ‘pay is always based on location.’ That old way of thinking needs to die because it exploits labor. The employee’s labor provides the same value regardless of working location. Ask the company tough questions. ‘Is my value to the company less if I live in North Carolina or Colorado?’ If they won’t budge, quit."

A respondent at Splunk would go even further: “Honestly, the companies should give work-from-home employees pay raises, not cuts. Why? Because they aren't having to pay for a physical location to employ you anymore. If the company downsizes their offices, this saves the company a boatload. Also, the pay should be based on the job, not the location where you choose to live. If you thought I was worth 400k when living in San Francisco, how did my skills suddenly decrease when I live somewhere else?”

Are Tech Professionals Willing to Trade Pay and Location? - chart

This article originally appeared in IEEE Spectrum on 24 September 2020.