Silicon Valley tech companies such as Google, Facebook, and Twitter announced early on that they would allow many employees work from home permanently.
That prompted an exodus of tech workers from the Bay Area, with many choosing to go to more affordable parts of California and to states where the cost of living was lower.
BUILDING A BETTER BAY AREA: Changing Workplace
But with many workers leaving the Bay Area, companies are reevaluating the salaries of remote workers and often times reducing their compensation to be more in line with the cost of living for where they have chosen to live.
While this is new for some, other companies have been doing this calculus for years.
San Francisco's GitLab is a perfect example.
RELATED: Would you leave the Bay Area and move to Oklahoma for $10,000? Hundreds of remote workers are trying to
It bills itself as the world's largest all remote company with no offices but more than 1100 people working from 65 countries.
Four years ago, GitLab developed a compensation calculator that factors in pay variations depending where the employee is working.
"We target at or above market rates in local markets, and then we also collect data based on candidate feedback and team member feedback to be able to make data driven iterations to the outputs of our calculator," explains Brittany Rohde.
The calculator is public so applicants and current employees can see how pay is determined.
RELATED: Some working parents consider leaving workforce amid pandemic -- here's how they might get paid leave
GitLab's calculator requires periodic review to reflect the job market. Its model is being studied by others.
"As part of this movement to remote work that they do become best practices and companies can start seeing what's successful, what's working," explained Rohde. "What's not working and be able to implement based on that for their own organizations."
Another San Francisco company, Mode Analytics, says the motivation behind employees working remotely is not to save money in a lower cost city.
"Generally people aren't choosing where they want to live based exclusively on saving money," says Bailey Douglass of Mode Analytics. "They're picking where do I have a community? Where am I going to be closer to my family?"
RELATED: COVID-19 commuting: Traffic getting closer to pre-shutdown levels, but peak periods are shifting
However, compensation will reflect the availability of qualified applicants in a specific job category in a city, not the cost of living.
Leaving San Francisco, for example, could mean a pay cut.
"With the people who have asked us about changes to compensation with remote work, every single person who asked has still chosen to relocate," says Douglass. "So you know, it actually ends up being better for them."
See more stories and videos about Building a Better Bay Area here.
If you have a question or comment about the coronavirus pandemic, submit yours via the form below or here.Get the latest news, information and videos about the novel coronavirus pandemic hereRELATED STORIES & VIDEOS:
- COVID-19 Help: Comprehensive list of resources, information
- Watch list: Counties where COVID-19 is getting worse
- MAP: Everything that's open, forced to close in Bay Area
- Everything to know about CA's confusing reopening plan, summer shutdown and what comes next
- From salons to dinner parties:Experts rate the risk of 12 activities
- Coronavirus origin: Where did COVID-19 come from?
- Life after COVID-19: Here's what restaurants, gyms will look like
- What is a COVID-19 genetic, antigen and antibody test?
- What will it take to get aCOVID-19 vaccine and how will it be made?
- What does COVID-19 do to your body and why does it spread so easily?
- Here's how shelter in place, stay at home orders can slow spread of COVID-19
- Coronavirus Timeline: Tracking major moments of COVID-19 pandemic in San Francisco Bay Area
- Experts compare face shield vs. face mask effectiveness
- COVID-19Diaries: Personal stories of Bay Area residents during novel coronavirus pandemic
- Coronavirus Doctor's Note: Dr. Alok Patel gives his insight into COVID-19 pandemic