Assessing Covid-19’s Influence On Tech Salaries
Covid-19 has impacted every aspect of society. The tech industry didn’t escape unscathed either. But whether that impact was negative or positive is still unclear. The pandemic is still raging and it can be hard to determine the definite impact on salaries. Here are some things that could change tech salaries.
Tech Employees Are Still in High Demand
Something that hasn’t change with the Covid-19 pandemic is the high demand for tech professionals. The demand has actually increased, which is no surprise given that almost every aspect of our lives moved to digital platforms. Many companies had to continue their operations remotely and this way of work had a lot of security and system implications.
Companies had to suddenly improve their digital tools like management systems, video calling, collaboration, and more. This also includes all the new needs people had being home more often than normal, such as platforms for entertainment and for connecting with friends and family. Overall, it meant a surge in demand like never seen before.
Technology has rapidly taken over our world but the pandemic only accelerated the pace even more. Thus, the real impact of the pandemic on tech salaries is still unclear. Some people believe that it will have a negative impact on salaries because of the increase in remote work, but we will have to wait a little more to see the statistics.
A Wider Talent Pool Doesn’t Equal Easier Retention
Another thing that has changed is that tech companies now have access to a wider talent pool. This means they aren’t limited anymore by city, state, or even country. Instead, they can hire tech employees no matter their location. This also increases the competition between tech workers.
The tech industry has suffered from a lack of qualified professionals almost from the start. So having access to a wider pool could potentially improve this issue. But, finding the right professional for each position isn’t the only problem; they have problems keeping them too. And even though employees are having a better time working remotely this doesn’t mean it will automatically translate to more retention.
Tech companies have to keep in mind that, as they have access to more talent, other companies around the world have the same access too. So, they will be competing with international businesses instead of just local. It will probably be just as hard to find and retain the right data scientist, project manager, or any other tech professional.
Adjusting Salaries to Location
Another factor that could have an impact on tech salaries is localized compensation. Most tech companies didn’t consider having a completely remote team until this year when they were forced to make the transition. At first, it was supposed to be a temporary solution. But over the next few months, after the virus became a pandemic, they realized the advantages of this way of working.
One of these advantages is that employees feel more comfortable, happy, and relaxed with remote work. The bigger advantage is saving on operation costs like real estate ad services. But now that they are considering allowing employees to work remotely permanently, they also saw an opportunity for cutting costs.
Part of the tech salary includes the cost of living in expensive tech hubs and other factors like taxes. Thus, companies are offering to adjust their salary if the employee decides to relocate when working remotely full-time. It isn’t a crazy idea to think that a software engineer could accept a pay cut for the opportunity to work from anywhere they want. It depends on what each employee considers more important.
All these are mostly guesses because it hasn’t elapsed enough time to know the real statistics. What will probably occur is that companies and employees start adopting a hybrid working model, working a few days a week or month from home and the rest in the office. According to Hired’s report, half of the tech workers want to return to the office only a few days a week.
What hasn’t changed during the pandemic is that tech professionals are still in high demand. In some cases, the demand even increased because of the virus. Thus, a lack of opportunity won’t affect tech salaries. Also, the increase in remote work is enabling access to more professionals from other locations.
Finally, what could potentially have a huge impact is adjusting salaries if employees choose remote work permanently and relocate to different cities. Companies like Facebook and Microsoft have already talked about adjusting salaries, so it is not a farfetched idea.