It isn’t easy to fully understand the total impact of coronavirus in the world. This virus has been responsible for much chaos and financial problems. The pandemic has generated economic losses in many countries, but the most important thing is human lives. 2020 was a challenging year for everyone. Millions of workers went from having stable salaries to losing their jobs in a second.
Changing wages was one of the most popular actions in the pandemic. This measure is taken because the confinement prevents average production in the companies, so the bosses do not receive money to pay their workers. In this case, the owners and managers have two options: reduce the salary or fire the employee; complicated options for anyone.
No company has been immune to the effects of Covid-19. The tech industry, for example, was one of the economic sectors that had more stability in 2020. However, remote work has unexpectedly altered some industry wages. Here we are going to reveal four secrets that explain what is happening with these salaries.
1. Effort Reduction
For many tech companies, remote work is not a 100 percent efficient method. There are many reasons why worker performance is lower with these platforms. Among the most common problems are lack of communication and poor coordination.
The Reddit company has made several criticisms about remote work, especially during Covid-19. In an interview with Quora, Yishan Wong, CEO of Reddit, said that this work style was not adequate for coordination while it performed well for the company. “Sometimes you need to walk around a bit, tap the employee on the shoulder, and discuss a complex issue seriously and right away,” Wong said.
Although this method is preferred for safe work, many tech companies hope to return to the offices as soon as possible. Do you think that remote work does not require the same effort as traditional work? Should companies pay less to remote workers? These are ever-present questions in many industries today.
2. A Globalization Problem
For many years we have heard that globalization will be the most used method by companies for work and economic growth. But did you know that this issue has affected many salaries in the tech industry? Working from anywhere in the world sounds good, but what do some companies think about getting the same pay wherever you are? Let’s take a look at the Facebook case. In mid-2020, Mark Zuckerberg, Facebook CEO, said his company would cut salaries if employees moved to cheaper cities to do remote work.
This threat seems somewhat strange, but it makes perfect sense if we analyze it from the beginning. Facebook, and many other tech companies, are based in places called “tech hubs”, which are the capitals of technology. In the United States, there are several tech hubs, including San Francisco, Seattle, and New York. There you will not only see a lot of innovative tech companies. You will also realize that the lifestyle is costly. In these cities, the costs of essential services, fuel, food, and housing rentals can be twice as expensive as in other towns in America.
The cost of living is a concept that companies take into account to establish a salary. For that reason, Facebook’s wages are higher since living in San Francisco Bay requires a lot of money. So, the remote work due to the coronavirus was the excuse for many employees to temporarily return to their home towns or cheaper cities. However, they encountered a stop sign.
3. More Work, More Money
It’s not all bad news for tech workers. In 2020, the demand for technology services grew amazingly. A Statista report said that in 2020, more than 60 percent of US adults were subscribed to a streaming service. Other platforms such as Zoom, Google Classroom, and social networks such as TikTok had positive figures, explaining why these companies had job stability.
The more demand for tech services, the more need there will be for tech talent. That is why remote work was not an obstacle for many companies, since the profits were enough to cover employees’ payroll and make new investments.
The “new normal” is a lifestyle that we are still assuming. Unemployment or wage cuts may have affected millions, but the main focus is innovation. All these circumstances can help us know how to combat and overcome the new obstacles in the future so that everyone’s effect is minimal.