Can Your Salary Vary with Permanent Remote Work Post – Pandemic? (Yes…)

Valerie is currently the CEO and owner of Valerie Martinelli Consulting, LLC. in which she offers Life, Leadership, and Career coaching for women as well as various Management and Human Resource consulting services such as program development, management, and evaluation, human resource audits, and employee handbook and other policy developments.

This COVID time has been a challenge for everyone, worldwide, on multiple levels, in a myriad of ways. Masks will continue to be a part of the lexicon for years to come, social distancing will certainly be added to the dictionary shortly, and for some travel has been relegated to staying home watching National Geographic. There are so many variables that surround the pandemic, and global social structure, which will continue to be a mystery moving forward.

Certainly, one of those variables is that a vast majority of workers are opting for flexible work from home schedules vs. working in brick-and-mortar locations. More specifically, what is this work-from-home lifestyle going to do to your paycheck? For many, work-from-home life was a blessing in disguise… save money on gas, daycare, lunch, etc. For others that live in larger cities… less sitting in traffic, a slower pace, and a comfortable and familiar space to put your head down and do actual work. For others, it’s sitting on that Zoom call seeming professional from the waist up with shorts and sandals from the waist down.

What was once only going to be a few weeks has turned into a permanent fixture in the workplace. One that businesses must account for. A granular variable but important nonetheless… will my salary change now that I am working from home? The answer is yes…… but it’s not all bad.

Companies have had to go from being flexible to really flexible with experts saying that many senior leaders plan on reducing office space by 30% as demand for downtown areas and public transportation may decline as an effect of fewer commuters. Large and more expensive cities have seen an exodus of sorts. San Francisco’s vacancy rate reached 16.7% by the end of 2020, a full 11 percentage points from 2019. Companies lobby for infrastructure when they choose places to input offices. If the employees aren’t there, neither are all the amenities that go along with having a bustling downtown.

Of 1,000 organizations participating in a survey by WorldatWork, 62% of those organizations have existing geographic pay policies in place with 44% of those considering modified policies due to the increase in full-time remote work. 80% of those companies noted a successful shift to work from home during the pandemic with nearly 40% reporting an increase in productivity. Those are vast numbers that carry a multitude of questions.

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A vast majority of workers are opting for flexible work from home schedules vs. working in brick-and-mortar locations.


So, should companies change their geographic-based salary structures? We hate to pick on San Francisco but being one of the most expensive cities in the US, it’s hard not to use them as an example. Data would suggest that a job that paid $100K in San Francisco would be paid 13% less in Puget Sound, Washington State. In fact, Silicon Valley may be one of those areas where you see the biggest change. Noted HR consultant, Tauseef Rahman, from Mercer in San Francisco, has gone on to say future “candidate pools will be less about city address and more about availability and capability.”

The bottom line for profits is never really at the bottom. Smart business dictates that companies pay wages based on the cost of living. If that cost of living is reduced, the wages in that area should and will reflect that and there are severe penalties for those that do not comply with those regulations. There are tax revenues and requirements to consider as well with new compliances and regulations sure to come to the forefront as the pandemic is ongoing.

The silver lining to all this is that the talent will remain the same, and competitive salaries will be used as a retention tool with larger companies that are able to absorb some of the costs with casting a wider net across the talent pool. Businesses will need to get creative. Take Stripe Inc, for example, they are implementing a policy for remote workers and offering them $20K+ in relocation assistance to employees moving from the Bay area of New York. They may be cutting some pay to parallel that policy and stay fair, but in the end, if you move somewhere that has a lower cost of living, you may be making money in the end.

And that is part of the goal, right? Being comfortable, providing for you or your family, and ensuring a fulfilling and happy workplace. Whether that is an actual business location, or at home is irrelevant. It’s nice to see organizations taking a hard look at how we work as a whole and allowing that flexibility to continue across the spectrum. There have been many terrible things associated with COVID-19 in the past 18 months, understanding and having the ability to change and adapt to fit the needs of your workforce has not been one of them.

While this may not be a situation where you can negotiate your salary,  it is an opportunity to learn what you value the most and enjoy the benefits of having a happy and fulfilling career.

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