Remote work may mean salary changes: experts – Waterloo Chronicle - Freelance Rack

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Sunday, June 21, 2020

Remote work may mean salary changes: experts – Waterloo Chronicle

“If you, for example decide, that you could do the majority of your work from well outside the Greater Toronto Area…and you want to buy a home in Guelph or in Hamilton, should we expect the base salary for those individuals might change? Yes, because your cost of living has changed and your expenses have changed.”

If companies calculate salaries properly, neither the business nor workers should feel their salary adjustments are unfair, Leblanc said.

However, figuring out what to pay staff transitioning to permanent remote work is tough, especially with a pandemic raging on and forcing some businesses to lay off workers or keep companies closed.

Owners have to consider what salaries will help them retain talent, but also how their costs will change if workers are at home.

Companies, for example, may be able to slash real estate costs because they don’t need as much — or any — office space, but may now have to cover higher taxes, pay for their workers to buy desks or supplies for their homes or offer a budget for them to use on renting spaces to meet clients.

“(Businesses) are looking at every line item on their on their income statement….because they want to make sure they can survive and thrive over the long-term,” said Jean McClellan, a partner at PricewaterhouseCoopers LLP’s Canadian consulting practice.

Companies like GitLab, an all-remote company in San Francisco focused on tools for software developers, may offer some clues about how Canadian companies opting for permanent remote work can tackle salaries.

When GitLab started offering permanent remote work years ago it built a compensation calculator combining a worker’s role and seniority with a rent index that correlates local market salaries with rent prices in the area.

Anyone can visit GitLab’s site and plug in a role, experience level and location to find a salary.

GitLab’s junior data engineers, for example, make between $50,936 and $68,913 if they live in Whitehorse, Yellowknife or Iqaluit, where the Canada Mortgage and Housing Corporation said the average rents for a two-bedroom home last October were $1,695, $1,100 and $2,678 respectively.

That salary shoots up to anywhere from $74,359 to $100,603 for those living in Toronto, Vancouver or Victoria, where CMHC reported the average rents for a two-bedroom home last October were $1,562, $1,748 and $1,448 respectively.

Leblanc warned that varying remote work salaries can create “a global competition for talent in an online world.”

People who apply for permanent remote jobs, he said, may find their fighting for the role against far more people than ever before because companies will be able to source talent living anywhere in the world.

The companies that don’t offer remote work at all could also find themselves at a disadvantage, if their industry starts to value flexibility and look less favourably at companies that don’t offer it.

GitLab settled on its model and calculator because the company said they offer transparency and eliminate biases around race, gender or disabilities.

Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed up because every time he hired someone, there was a conversation around reasonable compensation.

The negotiation would usually revolve around what the person made beforehand, which was dependent on what city they were in. Gitlab scrapped that model in favour of the calculator and also started letting workers know if they move their salary could change.

However, GitLab acknowledges that many people see paying someone less for the same work in the same role regardless of where they live as “harsh.” The company disagrees.

“We can’t remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do),” it says.

“We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable.”

This report by The Canadian Press was first published June 21, 2020.

Companies in this story: (TSX: SHOP, TSX:OTEX)

By Tara Deschamps, The Canadian Press



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