How Remote Work Will Be Compensated in 2024?‍

The health crisis brought by the pandemic has created the need for social distancing measures. Our daily routine had to be adapted to this new reality. For a few years, the concept of remote work was already a common practice in companies - especially in tech, and now the pandemic has accelerated its growth.

With these changes and the introduction of online workspaces, both companies and employees have had the opportunity to experience the benefits of not relying on physical office space. Everyone has started to appreciate the flexibility of this new way of working.

Table of Contents

1. What this means for newcomers?
2. Financial consequences
3. A matter of location
4. An overdue debate
5. Tech demand
6. Are tech jobs the future of 2022?

What This Means for Newcomers

It is widely known that salaries in tech are higher than in other industries. But, with the COVID-19 pandemic and what this has meant for the economy, aspiring tech professionals may be unsure of what future salaries in tech will look like.

While it is tough to predict exactly what will happen, tech employees have a positive outlook. A recent survey indicated that 66 percent of American companies are still planning to give bonuses, even those strongly hit by the economic crisis.

On top of that, during the catastrophic year of 2020, tech companies have still managed to report huge earnings. Giants like Apple, Amazon, Google, and Facebook are thriving despite the difficulties.

In short, while the COVID-19 pandemic has impacted many organizations negatively, it is safe to say that tech-related companies have thrived because of the flexibility to switch towards online workspaces.

Due to this, many people wish to make a career switch to the IT industry and are eager to learn the relevant skills through online coding bootcamps to stand out in the job market and land a lucrative job.

Financial Consequences

Remote work requires a very different setup from regular office work, and it might take a little getting used to for some people. However, this way of working has proved to be a financially smart move for companies, particularly in times like these, when very few industries are turning a profit.

For employees, remote work means less commuting and fewer expenses like eating out or spending money on clothes to wear to the office and looking presentable. For companies, it also translates into lower direct and indirect costs.

Companies are sticking to their usual strategies for the time being. Still, the big players are beginning to realize that salaries need to be reevaluated and changed according to the new circumstances.

Now, this brings two factors into the equation. Should employees be paid less because they don’t need allowance money for commuting, or should they be paid more to ensure they do not switch to another organization offering remote work and better pay?

Employee retention is a big issue nowadays because of the vast array of job opportunities. Hence, most organizations prefer to implement competitive salary packages rather than cut salaries, based on there being less of an expense to be handled by an employee.

A Matter of Location

Mark Zuckerberg of Facebook has said that remote work is here to stay. Other Silicon Valley leaders seem to share this opinion. Looking at the world right now, this is not surprising news. What’s interesting is how companies are approaching salaries in the future.

No longer constrained by the need to be present at work, it seems that tech employees are being encouraged to move out of the Bay Area. However, this could potentially mean a pay cut in the future. Some companies are even thinking of paying their employees according to the cost of living in their particular location.

To put a price on a person’s work depending on their location is very tricky, and is viewed by some as unjust and greedy. But this is just an idea at the moment, as companies try to adapt to the reality of remote work.

In the near future, we may begin to see how remote work salaries will not only be based on the experience and talent an individual brings to the table. Meaning, their geographical location will also be taken into consideration.

An Overdue Debate

The mass adoption of remote work has made people reconsider how it should be handled, but this debate should have happened before. The work-from-home setup has been on a steady rise for years. It would have been in everybody’s benefit to develop standards to guide us.

Companies are improvising as they go, engaging in trial-and-error while they figure out how to go from here. This situation has left employees wondering what their company will do in the future, as measures vary from employer to employer.

Tech Demand

The demand for tech employees is continuously rising. While some might suggest this demand would increase the salaries of tech employees, it isn’t the case. As the demand for tech employees increases, so does the supply. Almost everyone has considered a switch to the IT industry, and many have already made the switch.

How does a high demand for tech employees have a negative impact on their salaries? Well, here is an example. Let’s suppose a web developing company is in search of web developers. If the job market only had five developers available, any web development company would pay the highest dollar to have them on board.

However, if there are 500 developers out there, the pay would decrease because there are substitutes available. As the demand for IT services increases, so does the demand for IT employees and the supply chain. Hence, it is fair to say the salaries have been impacted negatively.

On the other hand, in occupations with lesser skilled employees available in the job market, the pay is higher and will continue to rise until more employees have that skill set to offer.

Are Tech Jobs the Future of 2022?

As technology advances, being in the tech sector is certainly a lucrative choice. However, while tech jobs may be the future of 2022, it doesn’t mean you should choose a career path based solely on that.

To have a fruitful career, one must consider the type of work they enjoy doing and what they are passionate about. Otherwise, even if you land the best job in the tech industry, you might still fail to grow and succeed in it.

Conclusion

The year 2021 has finally spotlighted the need to revisit remote work standards and conditions. This will be beneficial in the long run, as most workplaces have adopted these practices to some degree.

Led by tech companies, it appears that we are moving toward an average pay level and a standard practice for remote work. This is no surprise, considering that the tech industry is one of the few still making eye-popping profits during these times.

So, is remote work having a negative or positive impact on tech salaries? The answer is both. If you want to have a good shot in the tech field, keep an eye out on the job market trends, demands, and salaries. Also, work on your skills and knowledge so that you can stand out in the highly competitive tech market and land a solid job.