Dec 8, 2021 - Economy

Remote pay cuts likely to vanish in 2022

Photo: Daniel Acker/Bloomberg via Getty Images

Photo: Daniel Acker/Bloomberg via Getty Images

Pay cuts for remote workers who move to less expensive areas: We hardly knew ye.

Why it matters: Because of the scramble for top employees, the local cost of living may become less of a factor in setting wages.

Flashback: When the pandemic supercharged remote work, employers like Facebook and Twitter said they'd cut the pay of workers who moved to lower-cost areas.

But that strategy appears short-lived amid intense competition for talent. Aggressive employers are poaching remote workers with offers of higher compensation.

  • In 2022, "more employers (especially in tech) will walk back or reduce location-based pay adjustments," according to a Glassdoor report.
  • As a result, more workers may move away from headquarters in pricey cities.

Reddit and Spotify have already said they’ll pay workers the same no matter where they live.

The bottom line: "Just being able to announce that you're keeping everybody's pay the same is a powerful draw," Glassdoor senior economist Daniel Zhao tells Axios. "I suspect we will see [pay] gaps shrink between markets."

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