Startup Life/Analysis/

40% of UK employers admit to paying remote tech workers less

The pay gap between remote and office workers is widening, with many employers keen to preserve “the old ways of working”.

By Riddhi Kanetkar

Credit: Leon via Unsplash

After 18 months of working from home, many employees are now accustomed to their newfound routines. But new data shows they might be losing out by staying at home. 

Despite over 53% of firms saving on costs due to employees working remotely, 39% of employers in the UK have admitted to singling out fully remote workers for pay reductions, according to data from CIPHR’s survey. 

“There are generally two core themes as to why companies want to get back into the office — protection over ‘culture’, or a simple stubbornness to revert to the old ways of working,” says Mark Chaffey, cofounder and CEO of hackajob, a UK tech job marketplace.

Sifted analysed data provided by hackajob to uncover the gap between salaries for on-site and remote/hybrid tech jobs. Here’s the breakdown, from average salaries to hires across locations, in data.

The gap between remote and office pay is widening even if average salaries are increasing

 

 

The average salary for remote/hybrid roles is £67.25k, compared to £69k for office-based roles. Overall, remote/hybrid salaries have fluctuated over the last few months; the lowest was in January, when people typically took a new job, with the average salary at £63k, compared to £63.5k for an office-based role.

 

 

On average, remote workers earned less than those working in office roles, for the same position. Office-based data engineers had the highest average salary of £75k — compared to remote data engineers’ average salary of £71.5k. The average salary also increased by 19.2%, from £57.75k to £68.8k, across these roles between January 2020 and August 2021. 

But overall, the average annual salary in London increased; pay rose from £65.5k per year in January, to £70k by August. This tracks with other data showing tech salaries in Europe on the rise amid an increasingly intense war for talent. 

 

Hybrid roles are increasing

The number of hybrid roles increased month-on-month, with 358 active hybrid roles in August 2021. In March 2020, just 4% of roles were remote, compared to 28% in August 2021, according to hackajob. However, when hackajob surveyed 2k respondents based in the UK and Europe about the benefits they want from a job, more than seven in ten (72%) recruits said remote working was preferable — while just 55% agree with employers on a hybrid working model. 

 

Tech hubs outside of London attracting talent

Although London is still the dominant hub for talent, data shows that other geographies are gaining ground. The percentage of total hires based in London decreased from 67% in January 2021, to 50% in August 2021. The Midlands and North West saw the largest increase, with a 54% and 58% rise in the same period, respectively. 

 

The data shows how firms are now increasingly attracting people outside of tech city hubs like London. Remote working has also made it easier for employees to work outside of London. With an average salary increase of around 20% in 16 months, “companies are fighting a battle of increasing their existing salary bandings to keep up [with the level of talent],” says Chaffey. 

Startups are already stepping in to support the shift in talent. Patch, a startup building coworking spaces in small towns and suburbs, raised $1.1m in seed funding in September from investors including LocalGlobe cofounder Robin Klein and Entrepreneur First cofounder Matt Clifford. 

Riddhi Kanetkar is an editorial intern at Sifted. She tweets from @r1ddhi.

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