Telework and wage differences
More than a year ago, the workforce experienced one of the most dynamic and time-sensitive changes it has ever seen. 88% of companies required their workers to switch to teleworking in order to cope with the COVID-19 pandemic. Of these companies, more than 67% say so teleworking will be a permanent feature of their company outside the pandemic.
Leading companies such as Twitter, Facebook and Nationwide Insurance have already publicly stated that the transition from personal to teleworking will be a permanent element of their business model. This decision could have a lasting impact on the industry as a whole. If this is indeed the case with our business company moving forward, then based on this decision we will be able to see big differences and changes in employee behavior. One of the biggest changes will be the location.
Between fourteen and twenty-three million people will migrate across the United States if teleworking becomes permanent. Teleworking gives employees the flexibility to move wherever they want, and many employees want cheaper affordable living in other states. People will also tend to relocate to places that are outside of the traditional commute to work. 54% of people surveyed said they would be two or more hours away from the office, while 42% said they would be comfortable moving four or more hours away. Those living in cities are twice as likely to relocate if teleworking becomes permanent.
There are three main reasons why companies actually prefer teleworking to traditional personal work.
The first is the reduced need for real estate. With a minimum number of people personally attending office space, companies can waive some of their property leases and save money.
Second, they can also merge their offices into smaller spaces. This would reduce the high cost associated with large office buildings and help reduce some corporate costs.
Third, because employees can work anywhere, it is not necessary to have a central center or headquarters. This means that companies can be redistributed to cheaper industrial markets in order to maximize the money spent on real estate.
However, the benefits may not outweigh the losses. Industry leaders have announced they may pay remote employees less than those who enter the office. They can do this with a variable wage based on the cost of living in each city or they can subsidize relocation but then reduce the wage. This could result in unfair pay gaps for women and racial minorities. Women currently earn 82% of what a white person earns in the current market. An African American earns 87% of what a white man earns. Women and racial minorities may not be able to work remotely and as such may be unfairly biased.
However, this wage gap can be mitigated by the financial benefits that teleworking brings to everyone. Research reports that employees working from home could save an average of two thousand five hundred to four thousand dollars a year from working from home.
And there may be credibility that docking pays for remote work. Working from home is seen as an opportunity that allows people to increase their free time and reduce the need to take care of children and other expenses. Cutting salary based on location can also depend on the type of job you have.
If your job is in high demand or if you receive significant benefits and salary, you may actually be doing badly for your title by working at home. Therefore, it is within company law to make decisions based on your proposed productivity.
Businesses still value executives and the location of Silicon Valley, but they hope living-based wages will lure fresh talent from these more expensive areas to lower housing market prices. This could benefit the company directly because they can control where their talent is.
Cities like New York, San Francisco and Washington DC are 1.5 times more expensive than cities like Dallas and Cleveland. This means that purchasing power is the same, but the standard of living varies greatly. In order for companies to be able to persuade employees, they need to find a solution to this problem.