New research from Payscale indicates that remote workers in various industries, including tech and finance, are earning more than their in-office peers. Payscale’s findings align with previous research demonstrating that individuals working from home tend to earn higher salaries. Remote workers are twice as likely to earn above the median pay for non-remote workers in the same industry and location, according to a study by Gusto. Another analysis of 30 remote-capable jobs by Ringover showed that remote workers, on average, earn $8,553 or 9.7% more annually than their in-office counterparts.
Payscale’s report, based on a survey of over 300,000 working U.S. adults from August 2021 to August 2023, reveals that the retail and customer service sector has the widest pay gap between remote and non-remote workers. Finance and insurance follow closely, with tech and manufacturing ranking third and fourth, respectively.
Ruth Thomas, a pay equity strategist at Payscale, suggests that the pay disparities are not indicative of discrimination but rather suggest that companies enforcing a return-to-office approach might be losing higher-paid employees. Companies reducing remote work offerings are more likely to lose valuable employees, according to a ZipRecruiter survey. On the other hand, companies offering remote jobs receive more applications, with remote positions garnering over three times as many applications as similar in-person jobs on ZipRecruiter.
Thomas cites several factors contributing to the wage gap, including lower overhead costs for remote workers and access to a broader pool of potential employers. Additionally, remote workers, often experienced professionals further along in their careers, have more leverage to negotiate flexible work arrangements.
While 86% of organizations surveyed by Payscale claim not to have changed their methodology for paying remote workers since the start of the pandemic, Thomas emphasizes the importance of creating transparent, equitable pay strategies between remote and non-remote employees in similar roles. This could involve paying remote employees the same as in-office workers or basing compensation on the market value of an employee’s skills and experience rather than their location. Flexibility and openness to employee feedback are key to the success of any pay structure.
