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Going remote? Expect 'downward pressure on cash compensation'

WFH culture will be a reset moment for compensation, says one senior tech recruiter, who predicts pay cuts of up to 15%.

Golden Gate Bridge

"The whole play … is to get people out of the high-cost zones," said Stephen Sterett, managing partner at executive search firm Austin McGregor.

Photo: Joshua Sortino/Unsplash

When Mark Zuckerberg told Facebook employees that a significant proportion of them could work remotely, it sounded like the start of a liberation for a tech industry tied to Silicon Valley. Then he said salaries would be adjusted for cost-of-living — and the reality of those changes started to become clear.

"The whole play … is to get people out of the high-cost zones," said Stephen Sterett, managing partner at executive search firm Austin McGregor. Sterett, who focuses on filling senior roles at tech startups, told Protocol that he thinks employees leaving the Bay Area should expect significant salary cuts, while tech workers in the rest of the country may soon find that far more opportunities are open to them.

A VP of marketing at a growth-stage tech company would make around $225,000 in the Bay Area, Sterett said. That same role could be filled in Austin, Chicago or Atlanta for 8% to 15% less, he thinks. And it's not just salaries that take a hit: People outside the Bay Area "aren't as savvy when it comes to equity," Sterett said, and so they ask for less. While a marketing VP might get 1% to 2% equity participation in the Bay Area, Sterett said, that would be more like 0.5% to 1% in other parts of the U.S.

Some tech companies have already started to hire remotely. "A plethora of [Bay Area] clients of mine … have already made plans to move," Sterett said. "And they're hiring a ton of remote workers."

Sterett now thinks "there is going to be some downward pressure on cash compensation, for sure, on the West Coast." Bay Area engineers may find they have little option but to accept that: If they go out into the market, "they're going to find that the compensation at other places is going to be adjusted downward as well." Soaring unemployment won't help matters, either, as it tends to push salaries down.

Some jobs could leave the country altogether. Sterett said there was already a trend for companies offshoring certain product development and engineering roles, and the pandemic will lead to that happening "at an accelerated rate."

Still, one thing that isn't set to change, according to Sterett, is the pay gap between Big Tech companies like Facebook and Google, and everyone else. "They overpay because they want to get the best talent," he says. "That's just what they do, they buy people."

Does Elon Musk make Tesla tech?

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You know what's not tech and is a car company? Volkswagen.

Image: Tesla/Protocol

From disagreements about what "Autopilot" should mean and SolarCity lawsuits to space colonization and Boring Company tunnels, extremely online Tesla CEO Elon Musk and his company stay firmly in the news, giving us all plenty of opportunities to consider whether the company that made electric cars cool counts as tech.

The massive valuation definitely screams tech, as does the company's investment in self-driving software and battery development. But at the end of the day, this might not be enough to convince skeptics that Tesla is anything other than a car company that uses tech. It also raises questions about the role that timeliness plays in calling something tech. In a potential future where EVs are the norm and many run on Tesla's own software — which is well within the realm of possibility — will Tesla lose its claim to a tech pedigree?

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Becca Evans
Becca Evans is a copy editor and producer at Protocol. Previously she edited Carrie Ann Conversations, a wellness and lifestyle publication founded by Carrie Ann Inaba. She's also written for STYLECASTER. Becca lives in Los Angeles.

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Protocol | Workplace

Apple isn’t the only tech company spooked by the delta variant

Spooked by rising cases of COVID-19, many tech companies delay their office reopening.

Apple and at least two other Silicon Valley companies have decided to delay their reopenings in response to rising COVID-19 case counts.

Photo: Luis Alvarez via Getty

Apple grabbed headlines this week when it told employees it would delay its office reopening until October or later. But the iPhone maker wasn't alone: At least two other Silicon Valley companies decided to delay their reopenings last week in response to rising COVID-19 case counts.

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Protocol | Workplace

Half of working parents have felt discriminated against during COVID

A new survey found that working parents at the VP level are more likely to say they've faced discrimination at work than their lower-level counterparts.

A new survey looks at discrimination faced by working parents during the pandemic.

Photo: d3sign/Getty Images

The toll COVID-19 has taken on working parents — particularly working moms — is, by now, well-documented. The impact for parents in low-wage jobs has been particularly devastating.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

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