Should zip codes determine whether successful remote workers take a pay cut?
Companies and employees are at a crossroads. Nearly 18 months into the pandemic, return-to-office, remote, or hybrid plans are starting to solidify across the country. Many of these organizations have been productive and successful with remote employees. And employees, by and large, are demanding to remain at home, or at least in a hybrid environment.
In this position, several companies are considering ‘cost of living’ adjustment pay cuts for employees who decide to move to less expensive regions. VMware was one of the first companies to announce that they would reduce pay for those employees who left the San Francisco Bay area. Recently, both Google and Facebook also announced that employees could have their pay cut based on cost of living, should they decide to move to a less expensive city.
The pandemic moved nearly a quarter of Americans out of their homes last year – by choice or by force. Out of necessity, employees worked from home. Those who were successful and have maintained their work product effectively are demanding to work from home after proving their value to their organization.
The question is, why are many of these companies ready to cut the pay of their successful employees? Are they confident enough in their appeal as FAANG & Co., that they will easily find new employees should their current ones leave? There is a real risk of alienating employees who have successfully balanced work and home life during one of the largest crises in their lifetime.
Instead of paying employees what they are worth, they are effectively testing employee morale by assigning value to a zip code rather than skill. Cost of living adjustments aren’t unusual when you join an organization or move cities within a company. But these are expectations that have been set out and agreed upon from the get-go.
There is a real risk of demoralizing the very people who kept the organization going during the peak of pandemic chaos. Additionally, many companies are opting to reduce their physical office footprint; creating savings that they would not otherwise have if their employees were at the office full time.
While some of these large organizations may be confident in their ability to replace employees, there is a real threat to smaller companies who attempt to follow suit.
Additionally, while many low-tech workers might be willing to take a small pay cut to remain at home, the vast majority of IT professionals aren’t willing to take that cut – whether they physically change cities or not. According to ZDNet, more than 60% of software engineers, DevOps engineers, data scientists, and product managers wouldn’t be willing to take any form of pay cut because they opt to work from home.
Companies who are not considered the number one stop for top tier engineers need to carefully consider how they change compensation structures for their remote employees. Employees are aware that reduced office footprints and in-office perks are saving their company money. Is the cost of changing these salaries for productive & proven employees worth it? Is it worth experimenting with morale, the cost of lost employees and re-hiring for positions?
Furthermore – smaller organizations might be able to capitalize on recruiting top tier talent who decide that their big-company COLA pay cut isn’t worth it for the same work product output expected of them. If your organization is still unsure about how to address work from home plans, the Talener team can help advise you. By understanding how policy shifts like this affect your staffing and hiring processes, you can make more informed decisions. Please reach out to our team today for more information.
The highly anticipated Amazon HQ2 decision unleashed a myriad of personal opinions, economic analyses, and political responses. Emotions are running high in two metros where there is concern for overcrowding, employees leaving their current jobs for Amazon, and affordable housing – to name a few. Amazon’s decision to choose the DC & NYC metros means that staffing agencies and companies alike need to assess how this will impact their current and future talent.
Talener CEO, Michael Dsupin, sees a world of possibilities that will open to job seekers, both in and out of the tech industry. This is a moment for DC & NYC to dominate the narrative surrounding its tech talent capabilities which is traditionally centered around Silicon Valley & Seattle. The Long Island City and Crystal City HQs reinforce the notion that they can compete with a capable and experienced tech workforce. Both metros have been on the radar previously as two of the top 10 cities for tech talent.
The estimated 12,500 jobs that will be created by Amazon at each HQ bolsters the potential for new residents who may relocate to surrounding metros in Delaware, Maryland, Virginia, New Jersey, New York & Connecticut. Likewise, the jobs may bring other positive impacts to communities by enabling the circulation of money for housing, restaurants, transportation, and more. At this point, it is difficult to predict the scope that Amazon’s move will have on these communities.
Companies will need to assess how Amazon’s arrival will impact their own workforce. Will their talent be scooped up to work for the tech giant? How will companies be proactive to retain their employees and keep them engaged? The more competitive environment may force employers to consider increasing wages or providing better benefits packages to retain talent.
Overall, there will always be talent that is eager for jobs. Companies will have the opportunity to hire people who are new to the industry and train them fresh out of school or certifications. Additionally, not everyone will stay at Amazon forever. Markets are constantly changing, and with that, come new job seekers. Existing tech talent will return to the market for new jobs.
The eCommerce space in particular could see the most influx with current talent leaving for new Amazon opportunities. Applicants with eCommerce experience have a leg up on other talent being recruited for Amazon.
Until we know for sure how and when Amazon will open their second headquarters, the best course of action that companies can take is to develop a strategy that is both proactive and flexible – one that is adaptable to increased market competition.
Over the past 6 months, Talener has taken significant steps to close the wage gap across its offices. In addition to holding itself to the standard of creating a more inclusive work environment, it also helped to prepare the Talener New York City office for the NYC Salary History Inquiry Ban. This law took effect in October 2017; prohibiting employers, staffing agencies, or anyone representing a job in NYC from asking about or requiring disclosure of compensation history. By eliminating compensation history, employers should no longer rely on previous compensation to determine future pay.
On January 1st, 2018, California will join New York City with an amendment to its Equal Pay Act; eliminating compensation / salary history as a factor for hiring. Compliance to both acts are similar, but there are a few key differences that can cause headaches for organizations with offices in California and New York City. Next year will also introduce these types of laws in Oregon, Massachusetts, San Francisco, and more.
What are the key differences between the California and NYC policies?
The New York City Law expressly allows asking about desired or expected salary. Likewise, asking about measurements of production, including sales revenue generated, are permitted. Plus, the NYC law addresses deferred compensation and unvested equity as a subject that is OK to initiate with potential candidates. The California law does not expressly prohibit or allow these conversations.
Candidates / applicants in California are entitled to a pay scale for a position, under reasonable request.
California will prohibit employers from using prior compensation as the sole means to justify salary, an offer, or in the decision making process to hire someone.
What kind of steps has Talener taken to be compliant with these laws?
Removing compensation questions from any digital and print forms or applications
Requiring employees to agree to a policy which bars them from asking about, using, seeking out, or sharing compensation
Educating candidates and clients about the changes
Creating a time / date stamped feature in the applicant tracking system that documents when / if compensation has voluntarily been disclosed and how it occurred
Committing to not using or sharing already-known compensation information with clients
On-going staff training
To see more steps and to learn more about our compliance policy, read more here.
If you have questions about how the laws might affect you and what steps you should consider, feel free to reach out to firstname.lastname@example.org or pick up a brochure in one of our offices today.
Our eyes open. We reach for the alarm – and for many, this means the first contact with the connected world. Messages, breaking news & alerts inundate our day before we’ve even rolled back the blankets. In this world of the 24-hour news cycle and never-ending social media, everyone has an opinion, a cause, or a pitch.
We’re all searching for, waiting for, or trying the next ‘big thing’. This hyper-connected world we live in spills over as we make our way from our personal lives to our professional ones. It influences how we perceive culture, social justice, and life in the workplace.
But what happens when our perception of the right thing doesn’t align with the easiest thing in the workplace?
In 19 years of technology staffing, I’ve talked with thousands of hiring managers and have worked just as many jobs. From California to Chicago, Boston to New York, the sentiment from them is the same from hiring managers: make hiring easy for me.
It’s true; my job is to make theirs easier. They all want the best person for the job; the person who is the most skilled, the most experienced, and who will make the greatest immediate impact in the business. They aren’t consciously searching for diversity.
“I want a self-starter; someone who needs little guidance and seeks out problems on their own. Our environment is very challenging because of… I don’t have time or bandwidth to train anyone.” This feeling from hiring managers has been repeated over the years. It boils down to this: Diverse is hard. Different is hard.
From a logical perspective, we know that diversity and inclusion practices are good for business. Studies, including one by MIT, illustrate the benefits of diversity in the workplace as it pertains to productivity and the bottom line. Human resources and talent acquisition teams understand and promote the benefits of diversity. But from a practical perspective, hiring managers have an immediate need for talent and work piling up. It’s easy to want easy.
Feedback is very often simply, “Just not a fit for my team.” Homogeny of gender, race, experiences, etc. make the workplace more comfortable; but does it mean that those people share your company’s core vision or are the most engaged? Diversity and inclusion bring new ideas, new experiences, and those people who share the values and vision that make up an inspired – and ultimately more productive team.
Technology moves fast. The gap between qualified workers and open jobs grows daily. Taking time to hire someone based on who they can be versus who they have been, is a challenge. But if you truly want to build a diverse team, then training is required. A view through a different lens doesn’t mean that the employee is more difficult. But it means consciously training teams on how to accept and embrace a diverse and inclusive environment as well as address conflict resolution in a productive way.
While great strides have been made in diversity hiring, we have a long way to go. Without realizing it, we try to make hiring easy on ourselves through our own lens. Retention in technology jobs are at an all-time low and even Fortune 500 companies are seeing shorter and shorter tenures. So many companies are reading a resume and providing this kind of feedback…
“We want people from top-tier universities.”
“We want people coming from Google, Amazon and Facebook.”
“We only hire people that have XYZ on their resume.”
Our individual lens narrows the diversity and inclusive possibilities before the first interview. I credit companies and individuals for bringing a greater sense of awareness to the global need for diversity in technology. But are we all practicing what we preach? To go from an environment where diversity and inclusion are truly created, rather than just promoted, this thought process will need to be realigned.
Traditionally, the tech industry has been tolerant of engineers and developers who move from one position to another in a short period of time. Unemployment in software engineering and development stays steadily below the national average; allowing employees to move from role-to-role, in what would be traditionally long-term positions. But the tides are turning. Alicia Scully, Director of Talener New York, explains that a shift is on the horizon: job-hopping tolerance in tech is waning.
Nap rooms, gourmet coffee bars & in-house massages don’t top the list of perks that keep engineering employees happy and engaged. Scully regularly receives feedback from her candidates – and the echo is resounding: skills & purpose. There is a strong desire to do something meaningful and to be challenged through their tech skills. This includes learning new technologies on-the-job. Tech advances occur so rapidly that it is very easy to fall behind peers if skills are not being mastered and then adapted to the next technology. A stagnant tech stack leads to lack of challenge, lack of learning, and ultimately the opportunity for employees to find a reason to go elsewhere.
“All else equal: salary, perks, location – potential employees will choose the position with the best, or potentially best technology stack for them,” says Scully. “Being challenged, staying technologically relevant, and doing purposeful work are good indicators of employee engagement.”
She explains that sometimes the job-jumping can be explained when an engineer moves from one contract position to another. This has been commonplace in tech organizations; but companies that are just starting to build out internal technology teams may hesitate to hire these types of candidates for permanent positions.
“I’ve been receiving more and more push back from hiring managers about candidates with ‘jumpy’ backgrounds. They are not as open to hire someone with short stints at their jobs,” articulates Scully. To sharpen their skills, an employee needs to feel as if they are learning and producing something useful to them in the short and long-term. All of the unlimited snacks in the world won’t keep an engineer from leaving their role if it doesn’t further their professional skill set.
This shift towards wanting stable employees had spurred increased contract and contract-to-hire positions. By turning the tables, organizations can hire employees without the burdens of a permanent role. And, when they leave their contract – there is no negative ripple effect that occurs with a layoff or termination. Both parties get to test the waters, and there is no obligation on either end to extend the relationship.
In 2016, the Bureau of Labor & Statistics estimated that tenure in professions such as legal, engineering & management was approximately 5.1 years. However, permanent roles can inhibit those who are driven to keep up on new technologies. Companies with legacy software or systems that require maintenance rather than new development may find it hard to retain engineers who thrive on learning new skillsets.
“Only time will really tell if this trend continues,” says Scully. “But the shift towards more contract-based employment seems to be creating a balance that both sides are seeking.”