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Why localized compensation in a work-anywhere world isn’t so simple

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Why localized compensation in a work-anywhere world isn’t so simple

Last Thursday, Mark Zuckerberg advised Facebook’s 48,000 staff that he expects upwards of 50% of the corporate can be working remotely inside 10 years. After outlining most of the benefits that distant work confers — together with to “probably unfold extra financial alternative across the nation and probably around the globe” — he added that those that select to maneuver to different locations within the U.S. or elsewhere can be paid primarily based on the place they dwell.

“We’ll localize all people’s comp on January 1,” Zuckerberg mentioned. “They can do no matter they need by way of the remainder of the 12 months, however by the tip of the 12 months they need to both come again to the Bay Area or they should inform us the place they’re.”

Facebook isn’t pioneering one thing completely new. The idea of localized compensation has been round for a while, and it’s utilized by tech firms like GitHub which have primarily distributed workforces. Still, questions on whether or not it’s truthful to pay staff primarily based on their location are certain to develop as extra outfits undertake remote-work insurance policies.

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Despite Facebook’s uncharacteristic transparency about its pondering, not everybody thinks the tactic is sensible.

One longtime Bay Area recruiter who sometimes focuses on govt searches calls “disparate pay for a similar work” a “harmful place to be.” Explains the recruiter, Jon Holman, “Even in case you invoke the geographic disparity arithmetic primarily based virtually completely on housing prices, what if a brand new openness to telecommuting implies that extra ladies or individuals of colour can aspire to a few of these jobs? Are you going to pay them lower than the largely white and Asian-American engineers within the Bay Area? I doubt it.”

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