Tech Workers Take Much Lower Pay to Ditch the Office

Offers of remote work far more valuable to job seekers than employers seem to understand

U.S. tech workers are rejecting in-office job offers in favor of much less lucrative remote positions at other companies, according to research published by the American Economic Association. The findings suggest job seekers in the U.S. tech sector are willing to accept an average 25.6% less in pay for partly or fully remote jobs, a discount three to five times bigger than previous studies estimated.

However, it appears many employers don’t see remote work as a serious employee benefit, the study continues. In a sample of tech jobs, remote positions paid on average slightly more than those for identical in-office positions, according to findings by Harvard’s Zoe B. Cullen, UCLA Anderson’s Ricardo Perez-Truglia and Brown’s Bobak Pakzad-Hurson.

The research team says the study’s methodology is likely responsible for its more surprising findings. Unlike most research in the field, this study relies on the choices tech workers made when faced with real job offers. A more common approach involves surveying workers about how much of a pay cut they would hypothetically accept to work remotely. 

Identifying Factors That Affect Job Offer Acceptance 

The study taps a sample of 1,396 workers who reported details about the job offers they just received. The research was conducted in collaboration with levels.fyi, a popular site for comparing pay and benefits for specific positions at various companies. 

Each worker in the sample had received at least two job offers — an average 2.4 offers for the set — and ultimately accepted one of them. Data on each offer includes details about salary, including bonuses and equity compensation, and whether the job was remote, hybrid or in-office. Some 18.3% of the offers in the sample were for fully in-person work, while 81.7% are for at least partially remote roles. 

In a tentative finding, more seasoned workers appeared to accept much larger discounts on salaries to get remote work than those with less than six years’ experience. The researchers speculate that junior workers may worry that they will miss useful in-office mentoring or that remote work could limit their promotion potential. However, the authors caution that the finding is not statistically significant.

The researchers used a model to help separate the value of remote work from other factors that candidates often consider in job searches. They incorporated data, for example, on an employer’s common benefits and whether it was a startup or a publicly traded company. They measured whether the location of the potential job matched the candidate’s current workplace, as well as the location’s cost of living and quality of life.

None of the variables the study tested carried as much weight with job seekers as the availability of remote work, according to the findings. Fully remote work appeared only slightly more attractive than hybrid jobs.

Glassdoor ratings, which intend to reflect how much current and former employees like working for a particular company, appeared quite important to job candidates, too. Quality of life at the company’s location (city or region) and the employer’s ownership status (public or not) were notable considerations but not nearly as important.

Considering the large appeal of remote work, the researchers were surprised to find employers offering more pay for these jobs — 1.1% more on average in the study — than full-time office jobs. The findings come from comparisons of salaries within tightly defined groups of jobs with similar characteristics.

Comparing Apples to Apples

Each of the 4,352 groups the researchers created included jobs identical in four ways: company, job title, experience level and location (i.e., San Francisco Bay Area or Boston). With this method, they avoided comparing, for example, a Google job with one at HubSpot. All groups included at least one remote and one in-person job.

Tech workers, the authors note, are among the most highly paid professionals in the country. In the sample, average job offers were worth about $239,000 a year, including bonus and equity compensation. Software engineers, product managers and data scientists were among the most common titles, and Google, Meta and Apple were popular employers.