The Need for Equitable Location-Based Compensation

Most employers in the US are familiar with the concept of location-based pay, which is loosely related to COLA (cost of living adjustment). This issue rose to the forefront in tech during the pandemic when their employees went fully remote with many choosing to leave costly coastal cities for the suburbs of the midwest and south. Some of the large tech companies responded by creating a compensation strategy which effectively decreased salaries for their remote distributed workers. The premise being that $200,000 USD in New York City or San Francisco is not the same as $200,000 USD in Kansas City or Austin. By contrast, many smaller companies chose not to adjust salaries, reasoning that they would have a better chance of attracting (and retaining) quality talent.

During this period US companies also got more aggressive in looking beyond the 50 states for talent that could meet their needs at even more reduced costs. Due to its proximity to the US, favorable time zone, and strong pool of talented technology professionals, Latin America (LATAM) has become one such hotspot. Even in the face of the 2022 ‘“tech crash” and persistent inflation worries, LATAM tech talent remains in demand. That’s the good news. The less talked about bad news is that while US companies are effectively reducing costs, the LATAM tech talent are rarely seeing meaningful increases in compensation and therefore benefiting from the wealth generation potential of innovation.

Separating the Signal from the Noise

The value of skills and experience in today's global job market is influenced by a variety of evolving factors–all of which are typically opaque to workers. Against this backdrop, people often rely on online searches or take other simple approaches to gauge a “reasonable” compensation. Unfortunately these approaches return unreliable and out of date data that rarely accounts for how experience, titles, salaries, and other employment factors come into play across industries, companies, and geographies. Enter Arriva. Built on a proprietary compensation calculator that analyzes hundreds of thousands of data points, Arriva accounts for all these factors and puts the knowledge (and power!) squarely in the hands of the talent.

Positioning for Success

Competition for technology talent is fierce and issues around pay equity must be addressed. Arriva’s compensation calculator delivers a fast, scalable, granular, and nuanced solution.

Discover the value of your tech skills in the US job market. Register here today!