U.S. Professionals Confirm: The Work-From-Home Pay Cut is Real

In some high-flying industries, including technology and finance, salaries and total compensation might be coming down to earth.

About one in two professionals (46%) reported their companies had adjusted the pay of employees who moved outside of their metropolitan area, according to a survey of more than 4,000 verified professionals in the U.S. from the anonymous professional social network Blind.

The human resources policy came as no surprise to professionals at some of the largest technology companies.

“Google, [Facebook] and other tech Giants have always based pay on market rates. They can’t just switch over night,” said Blind user bupkisFb, a verified Facebook professional, in response to a discussion last month about Google’s internal work-from-home pay calculator.

Indeed, Blind found that tech giants, including Facebook, Google, LinkedIn, Twitter and VMware, made good on promises to reduce their workers’ pay if they moved to a location with a lower cost of living and worked from home full-time.

Adobe, Dropbox, LinkedIn, Salesforce, Square, Uber and Workday, have also adjusted their compensation packages, according to the verified professionals at each company who responded to the survey question: “Do you think your company will adjust the pay of employees who moved outside their metropolitan area?”

Another quarter of professionals see a pay cut coming.

Nearly one in four professionals (24%) said their companies have not yet adjusted the pay of relocating employees, but they believe they will do so soon.

Airbnb, Amazon, Apple, Bloomberg, Intel, NVIDIA, Oracle and JPMorgan Chase are among the companies whose remote workers may see a pay-rate change soon, according to Blind.

The remaining 30% of professionals believed their company would make no geography-based salary changes.

The “Great Resignation”

Workers across the country are becoming more comfortable with quitting their job. The national phenomenon dubbed the “Great Resignation” may bring record-shattering turnover and affect many industries.

While the decision to resign is typically complex, two factors make the calculus easier for some: Pay and working from home.

Many Americans moved during the COVID-19 pandemic, often from expensive cities to smaller cities or suburban and exurban areas with a lower cost of living.

And workers expect their typical salaries to come with them once they move.

More than two out of three professionals (68%) said they would think about leaving for another company if their company reduced their salary after a move to another metropolitan area.

“Cost of living shouldn’t be factored in the pay being offered. Your work is global and impact is global and the value you provide is the same,” said Blind user OkAy16, a verified professional at Google, in a discussion about Facebook’s pay cut policy.

“The hiring bar is identical whether it’s a low COL location or a high COL location,” the Google employee noted, referring to a location’s cost of living.

For some workers, it’s also a matter of fairness.

“I live in a low col area. I expect to [be] paid the same amount of money as someone who is living in NYC (also remote),” said Blind user dITs24, a verified professional at a financial services company.

The financial services professional adds: “I can somewhat buy an argument of a difference in pay for office vs remote, but differing salaries for remote people based on where they choose to live makes zero sense.”

Only one in eight professionals (12%) would stay put, even after a post-move salary tweak, the Blind survey found. The remaining 20% said they were not sure.

The bottom line

Employers might want to reconsider their compensation and total rewards packages, especially if there is a location-based component. Professionals are increasingly aware of the impact of geography on pay, and some do not believe the practice is fair.

A large majority of workers, including the highly compensated employees at Facebook, Google and others in the tech industry, will not hesitate to leave their jobs if they had their pay cut after a move, according to Blind.

Methodology

Blind conducted an online survey of 4,362 verified professionals in the U.S. from Sept. 22 to 24, 2021, on its platform. Percentages reported may not add up to 100 due to rounding.