This morning’s Boston Business Journal contained an article that caused me to pause. The headline read: Weight Loss app Lose It mulls 100% Remote Work in Exchange for Salary Cut. The story is behind a paywall, so let me summarize some of the critical points.
Last summer, in the middle of the work-from-home trend, the CEO, Patrick Wetherille, decided to renew a two-year lease in downtown Boston, where leases don’t come cheap. Today, the BBJ reported that Wetherille is thinking about a cost-cutting option:
Giving employees the chance to continue working 100% remotely in exchange for a salary cut. The CEO says he’s doing this to “be sure we’re giving people as many choices as we feel like the company can offer.” In exchange for employees choosing to opt-out of returning to the office two days a week and opting to go full-time remote, he’s giving people the choice to accept a pay reduction.
He’s basing this move on other companies allowing employees to work from anywhere and adjusting their salaries accordingly. The company’s president, Eric Puidokas came up with this brilliant idea of potentially cutting the pay of employees who want to stay remote.
The majority of employees who wish to remain remote are in technical roles, such as engineering and product development. These people will more than likely receive around a 15% pay cut. In the article, Puidokas is said to make it clear that the idea is not a way to avoid layoffs but actually to improve talent retention.
What?!? I’ve read some pretty insane things lately, but this takes the cake.
Several hours later, the U.S. Jobs report came out stating that we now have a record-breaking 8.1 million job openings. This number is the highest recorded since the government started tracking that metric in December of 2000.
Of course, we don’t know what kind of jobs these are, but one can bet with confidence that many of these positions are in tech. Research from CompTia (The Computing Technology Industry Association) has projected 245,500 net new tech jobs in 2021. In 2020, (the year of the pandemic), there were 3.9M employer job postings for tech job openings.
Let’s face it. It’s a glorious time to be a tech worker!
I’m sharing this story with you because I don’t want you to make the same mistake as Lose It.
Now is NOT the time to be cutting salaries!!!
Okay, some of you may be thinking, “Facebook is telling remote workers who move out of Silicon Valley that they’ll be taking a pay cut. Why shouldn’t we be doing the same?” Well, unless you’re a company like Facebook, where people would probably work there for free, this move isn’t for you. Here’s why.
People have plenty of options in terms of where they work. And money still matters, at least to the people who need money.
I’m seeing a significant uptick in the number of people posting about new job opportunities on LinkedIn. Have you seen this as well?
If you want to keep your talent, here are some steps worth taking.
- Now is an excellent time to do a salary survey to ensure you’re paying competitive wages. Nobody likes people messing with their salaries, so if you decide to do this, make sure you engage a reputable compensation consulting firm.
- Don’t back people into a corner with ultimatums. In this market, there’s a good chance you’ll come out on the losing end of things.
- Try to remain flexible. I get that you ideally may want everyone to return to the office on a specific date. Work with your people and listen intently, as they share why this may not be possible. Do your best to make accommodations wherever possible.
- Hold career conversations with everyone on your team so you have a clear understanding of where they’d like to be in the not-so-distant future. Then, do what you can to help them get there.
- Surprise people in a positive way! This may mean adding a few three-day weekends this summer so employees can recharge. Or providing unexpected bonuses for jobs that are well done.
Lastly, if you still decide to pull a move like Lose It, be smart about it.
Resist the temptation to share what you believe to be a brilliant idea in the paper. Now everyone knows Lose It is the company to call if you’re looking to poach tech talent.
P.S. If you’d like to receive a copy of my special report Poaching Talent: The Unauthorized Guide to Capturing Talent While Securing Your Own send me an email (Roberta@matusonconsulting.com). Tell me the biggest challenge you’re having in attracting and retaining talent and I’ll gladly send a copy your way.