Google’s regional fee cut for employees who work from home could be reversed

Just now Google is betting $ 2 billion that its New York staff would return to the office. Although to encourage its employees to actually use more land and land investments, some say the tech behemoth uses sticks, not carrots: Google employees moving to less expensive parts of the country See their pay cuts. In June, the company launched a tool for employees that shows how little they will be paid – anywhere from 5 to 25 percent, according to Reuters – if they move from a place like the Bay Area or New York City to a cheaper location.

Many companies used to be estimated 13 percent of U.S. workers still working from home in anticipation of the pandemic open their offices back in January. Google is one of several well -known tech companies, including Facebook and Twitter, that have implemented controversial low -wage plans for remote workers moving from expensive areas where their headlines are located. But there are signs that policies could be reversed.

While the potential repercussions for cutting workers ’wages may not be immediate, people are easily swayed by loss of income – loss of pain is more painful than pleasant earnings – and the pay cuts can cause workers to leave or become upset with the company. Alienating your existing employee is always a bad idea, but it’s even worse when tech companies are already finding it difficult to find the workers they need.

Even if Google is a desirable employer, 53 percent of Google’s 230 verified employees said, in a survey for Recode conducted by community app in the area made Blind, that they will consider leaving the company if they move and have their salary reduced. That’s a little more than the 68 percent of all Blind professionals say, but it’s still high. Googlers are also more likely (30 percent) to have moved outside their metropolitan area since the pandemic began than professionals are for the most part (22 percent), and some Googlers have already shown their willingness to leave the so -called company. of some of them hypocritical remote employment policies.

Granted, there are other reasons that keeping people at tech companies like Google – reputation, innovation, salary so it doesn’t cause big pay cuts – but maybe it’s not enough.

So why aren’t these tech companies coming up with this idea?

Google, like many companies, says it’s always based on the wages of the people where they live. But one could argue that underpaid pay to employees was a lesser example before the pandemic, and that with the growing dispersal of workers doing the same work, pay-based the location has become a thing of the past. Thanks to remote work technology such as Zoom and Slack, employees have been successfully working remotely for more than a year and a half. At this time, Google is logged revenue recording. Instead, employees enjoy a more balanced work life, shorter commute, and potential living in areas where their wages could be further improved. Remote work has moved from an energy that they want to be paid to the expected benefit.

And most other companies get the memo: About 95 percent say they won’t pour compensation for completely remote workers, no matter where they live, according to a survey of 753 unions through the payment data company That’s because most know that cutting fees is bad for human behavior, production, and sustainability. That’s why tech companies are famous.

Beyond what these companies say, experts have some theories as to why they are so firmly established.

First of all is what companies know to do office work. Even if they see that their worker can be just as productive at working from anywhere in the short term, they are still unsure about the far-reaching effects of remote work innovation.

“If all you’re worried about is day-to-day creativity, then remote work is good,” Columbia Business School ethics and ethics professor Adam Galinsky told Recode. “But if you care about the long -term commitment of an organization and working with people, remote work is a problem.”

Pay cuts – or even the threat of pay cuts – could help maintain the status quo by barring people from moving to places where they can’t enter the office. But there is also the possibility of unwanted adverse consequences for commitment and collaboration, which is exactly what these companies are trying to maintain by getting people into the office.

“It’s especially funny because the whole reason why we want people to come back to the office is that they’re more educated, engaged, applied, collaborative members of the organization,” Galinsky said. “But if we force them out of office because of pay cuts, they’ll come, get angry, and maybe get angry.”

There is another reason for maintaining location -based payment policies: equity in compensation. For example, not paying the dock for a worker to move from San Francisco to Boise, Idaho, might seem unfair to the person in Idaho who is already in short supply.

“What do I have to do, pay the Boise man or pay you more?” Paul Rubenstein, chief people officer at Visier, helps companies make data -driven HR decisions.

Then there’s the economic rationale: Location -based pay models not only ensure a consistent rationale for paying tech workers in some areas less than others but also stand to save the company money. . Not paying Idaho or India -based workers less can end up being too costly for a global tech company.

“If you’re just starting out, that’s like getting inside a sweater: Why do we pay people less in other markets? Why don’t we pay people less anywhere? Should there be a world wage for everyone? ”Rubenstein said.

In fact, the pandemic caused timeless location pay, according to salary comparison company Payscale, which also found that most companies did not plan to lower salaries for remote employees.

“What we hope to see more broadly is the shift from owner-located payment strategies to payment strategies that are more receptive to a remote or distributed worker,” the Payscale CEO Scott Torrey at Recode.

That means instead of basing the salary where a company has a head office and fixing it down when people live elsewhere, many companies are adopting a national media for each position. .

Nothing happens faster than tech, according to Gabriel Luna-Ostaseski, co-founder of Braintrust, a user-owned talent platform that connects companies with technologists, which is far away.

“There is now a global market for their skills,” he said. “Businesses will pay the highest dollar no matter where the individuals are located.”

In addition, small technology companies can come in with more generous remote policies as a way of punching more than their weight.

That’s all to say that employees, especially those in tech companies, have a choice other than cutting their salary. And employee turnover is very expensive, costing a company about one-third of an employee’s salary, according to CEO Kent Plunkett. Add to that the fact that he says 50 per cent of workers – compared to the typical 25 per cent – are thinking of quitting their jobs, and as such it’s a bad move for companies to lower workers ’wages. .

Given the situation, as Google feels it has the power and motivation to keep as many people as possible close to its offices. However, a number of experts we spoke to are also not convinced that companies like Google will keep up with these changes in the long run, or can just use selective policy to get people to don’t like it.

“I don’t think that’s really what they’re going to do when it comes to keeping their peak wanting to move,” Plunkett told Recode. “You don’t let your most talented talent come out the door with more than $ 15,000 a year paying the difference.”

Even if Google told Recode that it regularly adjusts employees ’salaries based on location, the current employee morale damage could already be. “Just because you work in tech doesn’t mean you’re enlightened on management styles,” Rubenstein said.

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