Social media king Mark Zuckerberg announced last week that Facebook would allow most of its workforce to work remotely….forever. This was a meaningful step for the Silicon Valley darling, as this week a new report found that 2 out of 3 Bay Area residents would move if their job allowed them to work remotely full-time. This remained true even with a pay cut.
Which brings us back to Mr. Zuck. His announcement included an employee guideline which states that those who wish to work remotely need to notify the company before January 2021, as the company plans to lower salaries for those moving to less expensive regions.
We have thoughts. Many thoughts.
The Biz Perspective
Facebook isn’t the only company to go the “‘local compensation” route. Many, if not most, businesses evaluate salary based on location, and most choose to expand talent in less expensive regions. This is especially true if those costs require warehouse operations and hourly wages. The cost of moving to a smaller city or suburban area also attracts talent looking for some reprieve from the demands of highly populated urban areas. After all, there’s a reason why the Silicon Valley real estate market exploded the way it did. The early ‘dot com-ers’ flocked to the (then) inexpensive, beautiful streets of San Francisco under the promise of better cost of living, in an idyllic, quaint environment. Fast forward to 2020 and SF’s now one of the most expensive cities in the world.
The Talent Perspective
Living in a densely populated urban setting past your ‘entry-job’ years is exhausting. To those who think otherwise, we applaud you. For most of us, the commute times, rental costs, and polluted streets start to weigh on our desire to keep crushing it at work. Our desire to flee grows, and so we seek out expensive getaways or pursue F.I.R.E”(financially independent, retire early) which usually leaves us with a stronger urge to overspend the moment we hit “freedom.”
If one good thing comes from COVID-19, it’s the realization that there can be another way of doing business. With Big Tech leading the way, industries across the board are realizing that many of their workers can be just as productive from home. The catch? You might be paid a little less for the same job. Which makes us wonder; would that be the end of the world?
Let’s consider the fixed expenses in SF versus a non-urban area, like Sun Valley, Idaho.
This change shakes out. Using myself as an example, my partner and I decided to move to Sun Valley from SF about a year and a half ago to pursue a healthier lifestyle, open spaces, and an opportunity to focus on our passions (art, writing, real estate… to name a few). My Bay Area salary was cushy, but between the cost of rent, groceries, dining, and endless coffee runs, there wasn’t much leftover for variable expenses, let alone savings. Since moving to the beautiful Idaho mountains, we exceeded our emergency fund goals, purchased land that appreciated almost immediately, and spend most of our free time (to which we have much more of) exploring the beauty of mountain-living. We did all that with the less money overall. While his salary remained the same, I have yet to pay myself a wage while co-founding Nav.it.
Sure, a pay cut might not be what we had in mind at the onset of this ‘new normal’ of remote working. But if your salary still meets fixed expenses, gives you a cushion to put aside, and leaves you with some daily “play” money, all while living in a place that fosters your mental and physical well-being, it can be worth it.
Think of all the things you could do without a commute. You could start a side-hustle, embrace a new exercise routine, master a new craft, or simply spend more time with those you love. Any of these new opportunities can foster your financial wellness. They can strengthen financial outcomes as you embrace a new, more balanced state of mind that’s clear to take on new challenges, or give you the freedom to invest in opportunities that truly excite you.
Whether you’re like me and want to run up mountains a few times a week, or you’re ready to live a little closer to your #squad, being able to work from anywhere gives us access to places that bring us lasting peace long into our later years.
We’re changing the narrative around money but change can’t happen with a one-sided conversation. That’s why we’re excited to bring different voices and experts to share their wisdom. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools like a salary negotiator and budget tracking.