As companies like PNC, JPMorgan Chase and Paramount bring employees back to the office, the debate has focused on collaboration, culture and productivity. Missing from that conversation is the impact of remote work on paychecks. However, a recent study found that the majority of tech workers lose thousands annually in work-from-home arrangements.
JobLeads, a job-seeking platform, analyzed salary data across 42 standardized tech roles and found that 86% of positions pay less when they are performed remotely than when they are performed in the office. The average remote worker earns $7,703 less annually, according to the report, roughly a 6% cut. Senior and mid-level workers each lose approximately $10,000 per year going fully remote, and the researchers say not a single senior-level role in the study commanded a remote premium.
Workers have indicated they’re willing to pay that price. An analysis of 1,400 real job offer decisions by Harvard Business School found that tech workers would sacrifice roughly 25% of their total compensation to avoid commuting five days a week. “Based on the average annual pay of $239,000 for common industry positions, like software engineer, product manager and data scientist, workers would be willing to forgo almost $60,000 to work remotely,” according to Ana Elena Azpúrua, who wrote up the details for the analysis.
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Executive exception
There’s an exception for workers at the very top of the org chart, as every executive role that JobLeads analyzed paid more for remote work than office work. For example, VPs of engineering earned $39,141 more remotely than on-site and CTOs gained $18,288. Why is that? The report suggests that fully remote roles expand candidate pools nationally, pushing salaries down where labor supply is broad. The researchers say that executives, who negotiate individually based on specific expertise and relationships, are largely insulated from that pressure.
Impact on early-career workers
There may also be talent pipeline consequences when it comes to remote work. Based on a June analysis published by the Federal Reserve Bank of New York, unemployment among young college graduates rose during and after the pandemic. “One factor contributing to youth unemployment is the fourfold rise in remote work since the pandemic,” wrote Natalia Emanuel, a research economist at the Federal Reserve Bank of New York. They suggest this is largely because companies in distributed arrangements tend to favor experienced workers who need less mentorship, leaving early-career candidates sidelined.
However, despite the seemingly limited number of remote jobs for entry-level workers, there is evidence that the paycheck is solid. “Many job seekers assume that entry-level remote jobs don’t pay well, but the data shows the opposite,” said Nathan Soto, from Resume Genius.
His firm recently released an analysis of 78,158 remote job listings and found that the top-paying entry-level remote roles offer average earnings near or exceeding six figures, some with price tags as high as $200,000. “Roles that rely on digital tools, data or consultative skills don’t require the same kind of in-person onboarding that typical jobs do,” Soto said. “And new hires can earn competitive salaries without building years of in-office experience first.”
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