Way back in the dark ages of 2019, it was pretty obvious how you should pay people, and location was a big part of that decision calculus. Everyone understood that if you lived and worked in Silicon Valley, your salary would be higher than if you lived and worked in the Red River Valley (Minnesota, if you’re wondering).
Then in 2020, many people took their work home, and some moved from California to Kentucky.
But their job didn’t change, and the pandemic continued for too long, and now, no one wants to come back to the office. Just what do you do about salaries now that the employee can choose their own cost of living?
Since salary is top of mind for many active and potential jobseekers, it’s an important discussion.
To keep reading, click here: Salary based on location versus pay for value: which is better?
I think the answer to this question of salary should be addressed in terms of the type of job–if your job can be done in WFH settings, then the company can pay all employees a salary based on job performance ability alone since they don’t need the in-house presence to get the job needed to be done. But if the job requires in-house performance and there’s a commute involved, then there should be compensation for that commute in some form because that’s a cost that WFH employees will not have added to their cost of living. This way there’s no geographic location standard requirement if all employees are WFH but just a standard pay across the board in all WFH jobs that don’t require in-person requirements just performance of the job required. Any job that requires in-person work should be paying more as an incentive to meet that requirement, especially when their employees have long commutes. This probably will apply to most jobs that require a hand-on approach versus using technology only (internet access).
And then you get what is happening where I live. The job is worth 200,000 and people flood to Idaho (yes that has where I live) because it has internet which is all that is required, and now I cannot afford to live here myself. The locals are left with service jobs that cannot support the new median home price of 600,000.