In the tech industry, there is an underlying fear that everything that happened last year is having an impact on tech salaries. The main fear is that salaries start going down because of the localized compensation strategy that many companies are implementing. Here is how remote working and the pandemic are having an impact.
The first thing that changed because of the Covid-19 pandemic was that the home office became the new normal. The tech industry had to make a massive transition to remote working for all the workers that could do their jobs from home. Right now, most tech companies continue to work remotely, some even with their whole team.
Because it is a relatively new modality for many companies, they still don’t know how to calculate salaries. What remote companies used to do before this year was to calculate salaries according to location, the national average, or the headquarters’ location. Now, companies like Facebook, Microsoft, and Google that are having a remote team for the first time are finding their own way through the remote modality.
But, how is working from home affecting salaries? There isn’t a clear answer, but remote workers do, on average, 8.3% more than non-remote workers if we look at this Payscale report. And in the tech sector, remote workers make 3.1% more. The question is if these numbers will continue when remote working is more normalized.
Another thing that happened during 2020 is that salaries stalled, which broke the previous years’ upward trend. Tech salaries were increasing from 7% to 10% each year, and it was something that many professionals expected. However, in 2020, salaries only grew by 0.08% on average. This means they grew nothing in comparison, but it doesn’t have to be a bad thing. At least in general, salaries weren’t negatively impacted by going down.
Another reason why salaries may have stalled is because of employee reluctance. To clarify, employees in the tech industry know their worth, and they know companies all around have a hard time retaining tech talent. That’s why they ask for a raise every year, which is why salaries continue rising. But during the pandemic, many workers felt reluctant to ask for a raise when they saw the difficult economic situation.
Employees didn’t want to take the risk of losing their job by asking for more. This same fear keeps them in their job when tech employees are used to job hoping. More web professionals staying put also contributed to less open positions and fewer job opportunities. And what is one of the reasons why people change jobs? Because they are generally offered more money, contributing to salaries going up.
What Are Tech Giants Doing?
As I already mentioned before, tech companies can calculate salaries according to the employee’s location, the national average, and headquarters’ location. Most tech giants have announced that employees who decide to work remotely full-time and relocate to other cities will receive an adjustment in salary according to the new location.
That was the case for Facebook and Microsoft. However, other tech companies said they wouldn’t adjust salaries at all and will continue to set pay according to where their headquarters is located. For example, if a company from Silicon Valley is hiring a software engineer from USA, they will still get a Silicon Valley salary.
Should You Still Choose a Tech Career?
With all that said, choosing a tech career can still be an excellent decision. Salaries until now haven’t gone down, and the industry will probably recuperate this year. We already see an end to the pandemic with the new vaccines. Thus, in the next few years, salaries in the tech industry will continue to rise.
Plus, you can still become a tech professional without a degree, which is one of the main pros of choosing a tech path. You can enroll in a coding bootcamp and have a certificate and a job in a matter of months. Check out Bootcamp Rankings to learn more.
Tech salaries haven’t been negatively impacted during the pandemic. They have only stalled this year but are slowly going up again. Remote working is unlikely to make salaries go down when, in fact, remote workers make more money on average. You should still choose a tech career if you were considering one before the pandemic.