top of page

Remote Work Shakes Up Cost of Living

When companies set pay rates, the two contributing factors are: 1) cost of labor and 2) cost of living. Salary is then adjusted for both inputs. The pandemic has shaken up a lot of factors when it comes to employment, including working from home. Companies are also seeing more employees moving to locations that afford more space and less mortgage. Whether you are a project manager looking for employment or employed by a company who has already announced their plans for work-from-home, we find ourselves in a paradigm shift where employers may be rethinking cost of living adjustments as a contributing factor to salary structure.

I took to the LinkedIn community to get their thoughts on the matter. Majority (92%) of voters said that remote workers should NOT see their pay reduced if they relocate to an area with a lower cost of living, while only 8% said pay should be reduced to account for it.

While I tend to agree with the majority, I also sympathize with employers who are challenged with this conundrum. How do you measure an employee's worth? If the employee is working the same amount of hours, contributing the same value to the company, yet happen to be living somewhere other than where their original salary was calculated, how is this accounted for? More importantly, SHOULD it be accounted for?

Perhaps as a part of this paradigm shift is consideration of a national salary average to create compensation packages. According to Zip Recruiter, the national salary average as of December 2020 is $74,378 a year. This equates to $6,198/month. It is then up to the employee to determine their expectations for living and if the salary can support it. Whatever ends up becoming the norm, what employers still want to strive for is the best possible offer to recruit the best employee for the company, no matter where they choose to live.

12 views0 comments


bottom of page