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Is it time to talk about location-based tech salaries?

Photo Credit: Photo by João Barbosa on Unsplash
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The explosion of remote work has led to some interesting developments in tech salaries, according to Hays Technology Recruitment. The Freelancer Informer covers how to prep for rate rise talks.

In September 2020, Bloomberg reported that Fintech company Stripe was offering a $20,000 bonus to employees who would opt to move out of San Francisco, New York or Seattle, but also cut their base salary by 10%. 

Facebook is also reportedly looking at a location-based pay approach, where a staff member’s compensation is based on the cost of where they live. 

Google has even developed a tool that will show remote workers how much it plans to shave off their salaries if they go the remote option and move somewhere with a lower cost of living, according to a CNET report.

Remote work options available to the legions of contractors that help these companies function are not so clear. That’s why it is good to get a grasp of their stance when it comes to their salaried employees, although that may be no indication of how they perceive contractors in a remote setting.

“When it comes down to our contractors and partners, I wouldn’t be able to speak on their behalf or how they would implement our policy,” an Amazon spokesperson told The Verge. Facebook provided a similar answer.

Facebook’s spokesperson did not respond to a request for a list of which agencies they used for contract labour so that The Verge could ask each company about its remote work policies, while Amazon declined to provide one citing “confidentiality reasons.”

A spokesperson with Google stated that temporary staff would likely be required to come in the same days as the teams of employees that oversee them, while the companies that employ its contingent “vendors” had already determined which jobs could or could not perform their work remotely. The same spokesperson was not able to provide an approximate percentage for how many of these vendors would have that benefit extended to them.

Microsoft, while it promotes remote working solutions as a product, may not be ready to practice what it preaches just yet when it comes to contractors working from home. However, it has caught on that the hybrid working model could be a boon for its business. So much in fact that this month it has entered into a definitive agreement to acquire RiskIQ, a global threat intelligence and attack surface management company, ideal for hybrid workforces.

Tim Cook, the CEO of Apple, told his global workforce of 137,000 employees that they’d have to return to the office beginning early September. It’s expected that employees will spend about three days a week at the office and the other two at home or remotely.  

Not everyone was happy with this decision. In an open letter to Cook, about 80 employees of Appleaccording to The Vergevoiced their displeasure in being told to return to work, stating, “We feel like the current policy is not sufficient in addressing many of our needs.” The letter pointed out that workers delivered “the same quality of products and services that Apple is known for, all while working almost completely remotely.” 

Other companies, such as Reddit and Zillow have informed their employees that they could work wherever they’d like and earn the same amount of money. Some of Reddit’s job opportunities are promoted as ‘remote’.

How can contractors prepare for location-based tech salary talks with their agencies and end clients?

Know your worth and just how much in demand your knowledge and experience is before you negotiate. If you have an idea which companies you would like to work for, then do your research on them. And arm yourself with the latest rates from The Hays UK Technology Contractor Day Rate Guide 2021. Here are some headline figures to refer to:

  • Tech rates have increased overall 0.8% over the past year (it was 2.6% in 2020)
  • Hiring companies in general are holding off upping day rates while workers are still working from home
  • Software developer day rates rose 2.6% on the previous year
  • Cloud-based techologies and AWS are in high demand
  • Java, Javascript, Python and full-stack developers in high demand
  • Day rates for data specialists up by 1.8% this year
  • Project and change manager day rates up as much as 10% as end hirers want expedited delivery

In a recent Freelance Informer report, Nick Woodward, founder of recruitment tech platform ETZ, said that as a free society employers can mandate conditions on employment, however, employees also are free to choose a better work-life balance by refusing to work in expensive cities, such as London, San Francisco or New York, for example.

“Ultimately, as long as employees are free to choose how they work, then the market will decide the outcome based on everyone’s free choice,” said Woodward.

Dave Chaplin, a former City IT Contractor, said that whilst there may be a vested interest by firms who own commercial property in convincing everyone to return to the old way of working, what ultimately happens will be driven by the “supply/demand curve, and those who can work from home, and want to work from home, and are in high demand, are likely to get what they want.”

Chaplin said that rates may level out across regions for remote workers, which contractors should be prepared for.

“Often the higher salaries are simply a function of the high cost of living in a capital. I’d expect to see different rates for remote and office-only,” he said.

However, for those freelancers that have always worked remotely, such as freelance marketing consultants and tech and business journalists, their rates could remain unchanged or even get a boost if staff cuts are still causing gaps in specialist talent and manpower.

🤔What’s your experience been lately on day rate expectations? 💬Share your comments…

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