We’ve all been experiencing the global pandemic since early 2020 as it has changed the way we do almost everything and it has changed the face of business forever. For employees of 88% of businesses, worldwide, gone are the days of rushing out the door to get to the office every morning. The office is now our home offices, living rooms, kitchens, bedrooms, or maybe the local coffee shop (from which the words you are currently reading have been written.) This new normal was already a growing trend, and with COVID still lurking, it’s looking like we may never go back to the old days of “water cooler gossip” and a frustrating, always empty pot of communal office coffee. Statistically, 67% of all businesses now believe that remote work is here for the long haul. Even high profile companies like Zillow, Facebook, Twitter, Square, and Nationwide Insurance have announced that their employees will be working remotely indefinitely and it seems like most employees are pretty pleased with the change.
With remote work now becoming so predominant, there are other emerging trends and opportunities for employees and employers alike. One such burgeoning trend is relocation. Employees and businesses are each finding that their resources might be better used in an area with a lower cost of living and lower cost of doing business. Employees are no longer required to be within a short distance of their company headquarters and employers no longer need to stay within range of their current employees. In the near future, we may see the migration of anywhere between 14 and 23 million employees to areas away from their company headquarters, with over half of these employees searching for low cost areas and affordable housing. Fifty-four percent of these employees are relocating two or more hours from their business and 42% are going even further with a distance of four hours or more.
The migration of employees is also causing businesses to rethink their actual needs regarding a physical office building. Many companies are also taking this opportunity to relocate to lower cost areas and to downsize their office buildings. Tech companies such as Hewlett Packard, Palantir, and Oracle are packing their bags and leaving California for less expensive locations, such as Texas. The low cost of living, less rigid regulations, and lower business taxes make Texas ideal for business relocation.
All this migration does leave some unanswered questions like, will employees be paid the same rate if they move to an area with a lower cost of living? Although some companies have already addressed this question with reduced salaries or relocation bonuses and a salary reduction, these solutions are hardly across the board. The salary question has also brought up an interesting economic issue, which is the emergence of a new wage gap.
This modern wage gap is caused when a low cost area has an influx of migrant employees who are maintaining their current rate of pay; thus setting them up to be automatically better off than the average employee in their new location. The difference can be staggering as an employee making 50k per year in Cleveland, OH has the same purchasing power as an employee making $132,243 per year in New York City. Now imagine that New York employee relocating to Cleveland with no adjustment to their rate of pay.
Obviously, it’s not all bad news. Remote workers could potentially save 2.5-4k per year and employers could save 30 billion per year by allowing employees to stay remote. As companies are already making adjustments to pay or considering making them, it’s possible that this new wage gap will be gone as quickly as it came. In the meantime, if you happen to be one of those migrant workers and you’re now making more than you really need, it may be wise to save it for a rainy day.
Read next: How to find the jobs that pay the best and have the least competition (infographics)
With remote work now becoming so predominant, there are other emerging trends and opportunities for employees and employers alike. One such burgeoning trend is relocation. Employees and businesses are each finding that their resources might be better used in an area with a lower cost of living and lower cost of doing business. Employees are no longer required to be within a short distance of their company headquarters and employers no longer need to stay within range of their current employees. In the near future, we may see the migration of anywhere between 14 and 23 million employees to areas away from their company headquarters, with over half of these employees searching for low cost areas and affordable housing. Fifty-four percent of these employees are relocating two or more hours from their business and 42% are going even further with a distance of four hours or more.
The migration of employees is also causing businesses to rethink their actual needs regarding a physical office building. Many companies are also taking this opportunity to relocate to lower cost areas and to downsize their office buildings. Tech companies such as Hewlett Packard, Palantir, and Oracle are packing their bags and leaving California for less expensive locations, such as Texas. The low cost of living, less rigid regulations, and lower business taxes make Texas ideal for business relocation.
All this migration does leave some unanswered questions like, will employees be paid the same rate if they move to an area with a lower cost of living? Although some companies have already addressed this question with reduced salaries or relocation bonuses and a salary reduction, these solutions are hardly across the board. The salary question has also brought up an interesting economic issue, which is the emergence of a new wage gap.
This modern wage gap is caused when a low cost area has an influx of migrant employees who are maintaining their current rate of pay; thus setting them up to be automatically better off than the average employee in their new location. The difference can be staggering as an employee making 50k per year in Cleveland, OH has the same purchasing power as an employee making $132,243 per year in New York City. Now imagine that New York employee relocating to Cleveland with no adjustment to their rate of pay.
Obviously, it’s not all bad news. Remote workers could potentially save 2.5-4k per year and employers could save 30 billion per year by allowing employees to stay remote. As companies are already making adjustments to pay or considering making them, it’s possible that this new wage gap will be gone as quickly as it came. In the meantime, if you happen to be one of those migrant workers and you’re now making more than you really need, it may be wise to save it for a rainy day.
Read next: How to find the jobs that pay the best and have the least competition (infographics)
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