Many companies provide a substantial one-time bonus to employees, but cut salaries to adjust for lower costs of living.
As remote work policies are extended during the pandemic, more workers are rethinking where they call home—and their companies may even be urging them to do so.
One company is even offering its employees a bonus if they move away from big cities like San Francisco, New York City, or Seattle. Stripe, an e-commerce and mobile payment tech firm that has 16 offices internationally and more than 2,800 employees, announced it would offer a $20,000 bonus to employees who moved away from the big cities. But that does come with a catch: Employees also will face a 10% pay cut.
Stripe has joined other technology companies that recently have announced they’ll issue pay cuts to workers who choose to relocate to less expensive cities. Facebook, Twitter, and enterprise software companies like VMware and ServiceNow have also announced such moves, Bloomberg reports. The pay cuts account for new cost-of-living expenses in the cities they move to. The companies say these pay adjustments are not new since the pandemic but have been in place for years.
But employees may not be so open to a pay cut for a chance to work remotely from a new city. Fifty-five percent of 2,300 tech workers recently surveyed by Hired, a job search marketplace, say they would not be willing to accept a reduced salary if their employer made work-from-home permanent. Ninety percent of those surveyed insist the same job should receive the same pay, even if you work remote.
Workers, however, are willing to entertain moving if remote work becomes permanent. More than half—or 53%–said they’d be “likely” or “very likely” to move to a city with a lower cost of living if allowed to work remotely permanently, the Hired survey showed.
Workers in Silicon Valley, New York City, or other tech hubs—among the nation’s priciest places to live—may opt to relocate to less expensive cities as remote work becomes permanent. But pay cuts are likely to follow. Workers with tech company VMware who relocate from Palo Alto to Denver, for example, could face a cost-of-living reduction of 18%, Fox Business reports.
“Through our Future of Work initiative, VMware is building a dynamic, global workforce of the future where our people have choice and flexibility to work from any location that accelerates their productivity to deliver the most innovative solutions for our customers,” the company said in a recent statement. “Our program is designed to empower our employees with the information to help them make decisions should they desire to relocate. VMware is dedicated to equitable pay for its workforce, not by only race and gender, but also work location or geography.”
Source: “Stripe Is Offering $20,000 Bonus to Employees Who Relocate to Less Expensive Cities, But It Comes With a Pay Reduction,” Forbes.com (Sept. 15, 2020) and “Why Silicon Valley Workers Who Relocate for Remote Work Face Pay Cuts,” FOX Business (Sept. 11, 2020)