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Why bursting the tech salary bubble is a good thing

Why bursting the tech salary bubble is a good thing
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In recent months, tech giants like Twitter, Shopify and Facebook have been announcing permanent remote work options for their staff, whether the COVID-19 pandemic subsides or not. It appears that the tech world and its CEOs are realizing the numerous benefits that come from giving workers more flexibility over their geographic location. According to recent surveys, 19 percent of employees want to work from home on a permanent basis after the health crisis is over.

But with Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergFacebook, Twitter CEOs to testify before Senate Judiciary Committee on Nov. 17 Hillicon Valley: Five takeaways on new election interference from Iran, Russia | Schumer says briefing on Iranian election interference didn't convince him effort was meant to hurt Trump | Republicans on Senate panel subpoena Facebook, Twitter CEOs | Republicans on Senate panel subpoena Facebook, Twitter CEOs MORE’s announcement came what many see as a “catch” — those Facebook employees that work remotely will have their salaries adjusted according to their location.

While this may sound unfair to some — not least considering tech giants’ hefty profit margins — this could be the much-needed salary reform that will make the tech world more accessible to workers. Going remote and adjusting wages accordingly can actually result in a more diverse tech scene, increased inclusivity in the workplace, and a change in how companies value and hold onto their workers. Here’s how.

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Diversity will improve

Building a diverse workforce should be a non-negotiable priority for today’s businesses. We are painfully aware of the need to collectively move towards a fairer and more just society, and the role of US companies includes embracing workplace diversity and equality of opportunity. By bursting the tech salary bubble, the industry can further break the mold of its predictable tech hires.

In allowing people to apply for a job no matter where they’re based, Facebook and other companies will now be able to attract more diverse talent by sheer force of numbers. Statistics show that minorities are likely to be most affected by the financial restrictions of living in overpriced cities like San Francisco: In 2018, 1 in 5 black people residing in the United States lived below the poverty line, compared to 1 in 12 white people. Qualified candidates across the country who a few months ago would not even have been able to consider applying for a job in big tech will now come forward.

That single mom from rural Ohio who can create groundbreaking AI-powered marketing tools but doesn’t have the time or money to commute to big city offices will now be able to join your talent pool. A physically disabled tech graduate who couldn’t find an accessible job now has his pick of any workplace, and he’ll likely choose a business that has always valued diversity and inclusion.

It’s worth considering that the top ten computer science schools in the United States include universities in non-traditional tech hubs like Texas, Georgia, and New Jersey. Hopefully, remote hiring will allow those skilled graduates to apply for tech jobs without uprooting from home states or hometowns.

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Having a workforce that is representative of the U.S. population — that includes people of color, people with disabilities, and those from low-income backgrounds — inevitably leads to a better understanding of the challenges facing the country at large, beyond the confines of big tech cities. This will better inform companies as they develop their product, penetrate new market segments, and weed out the prominent problem of technology bias. Not to mention that diversity has a proven correlation to financial performance and innovation — qualities that all companies hoping to survive the recession can’t do without.

Work environments become more inclusive

While allowing employees to work remotely will no doubt see much of the workforce move out of tech hubs like Silicon Valley, many offices will remain open. The bursting tech bubble means that even employees who do work from the office should experience less exclusive environments due to a more accessible cost of living in traditional tech bubbles.

As fewer tech workers are drawn to the big tech locations to earn inflated salaries, the cost of living will fall. In fact, rental website Zumper recorded a record drop in San Francisco rent prices, with both one-bedroom and two-bedroom rents down 11 percent from last year. That’s in line with a wider trend of falling prices over the course of the pandemic. Reduced costs gives employees more equal access to opportunities and resources in big tech cities, making them less exclusive.

Those who take the remote opportunity to leave big cities should also benefit from more inclusive and harmonious work lives. Tech cities harbor multiple issues that induce stress and can affect workers’ mental wellbeing and productivity. Residents of San Francisco are antagonized by the housing crisis and excessive traffic, and a recent survey of local tech workers revealed that one third would leave the area if they could work remotely, even if it meant taking a pay cut.

Ultimately, leaving overpriced and overcrowded cities will result in a higher quality of life and better mental health and well-being for employees, even if their $300,000-a-year salary is reduced by 25 percent.

What the critics of Facebook’s policy don’t consider is that in the long term, the flexibility and trust created by remote work between employees and their companies will soon drown out concerns over salary shifts.

Companies will value their workers more

As the country becomes one big hiring pool for all tech companies alike, in the long run competition for the best talent will grow. And as tech salary bubbles dissipate, employers will have to attract candidates using more than just the promise of a hefty paycheck. Remote tech workers will have a broad pick of businesses seeking their expertise, and their demands will focus more on non-monetary benefits.

Tech companies will need to demonstrate how they will provide opportunities such as career progression, especially to minority communities who have historically been faced with fewer chances for advancement in STEM jobs. They should also offer wellness programs and employee benefit schemes as the world acknowledges the importance of ensuring the well-being of a remote workforce.

All of this will force employers to see their team members through a different lens: one which paints them as individuals with individual needs, not as human machines that work harder the more they’re paid. Company culture will become more centered around the non-salary-related rewards of working as part of a team, and those that are attracted to the role simply as a means to earn a big paycheck will likely be steered elsewhere.

And of course, by allowing employees to go remote, tech companies will save money on wages, office space and operational costs. This money can then be reinvested into furthering diversity and inclusion and well-being initiatives to staff.

If we do this right, the remote revolution promises to improve work culture across the board. Our productivity and mental health will improve while our carbon footprints fall. By going one step further and bursting the tech salary bubble, companies big and small will be more empowered to foster necessarily diverse and inclusive teams, in which workers feel significantly more valued as individuals.

Rachel Sheppard is the director of global marketing at global pre-seed accelerator Founder Institute and co-founder of the Female Founder Initiative, a program launched in 2016 as a means of offering support, funding, and visibility to female founders.