are remote workers making less money?
The pandemic created a critical shift in the Canadian labour market — a dramatic increase in remote work. Before the pandemic, just 4% of Canadians worked from home. That number rose dramatically throughout 2020, and it's still high. In the spring of 2022, 46% of the workforce had a remote or hybrid work arrangement. If you're part of that group, it's natural to wonder how working from home could affect your salary.
There's good news; remote workers don't appear to be getting paid less. In July 2019, Statcan reported that the average weekly earnings for Canadians was $1,026.96. Nearly 2 years later in June 2022, that number increased to $1,159.01. Wages have continued to rise, and in September 2022, Canadian workers were making an average of $1,175,37 per week.
remote worker wages by industry
Salaries can vary considerably by industry, location and education level. Take the professional, scientific and technical services industry, for example. Statcan estimates that 85% of employees in the industry can work remotely. The Environics Institute for Survey Research found that in the spring of 2022, about 57% of industry employees were already doing so at least part of the time.
Despite the high level of remote workers, professional, scientific and technical services wages continue to rise. In 2019, employees made an average of $31.15 per hour. That rose to $31.29 in 2020 and $31.95 in 2021. By September 2022, industry workers were making $40.98 per hour on average — a 31.6% increase.
Information and culture is another industry with a high percentage of remote workers. According to the Canadian Chamber of Commerce, 58% of industry employees are working remote or hybrid jobs. And yet, hourly wages have risen from $28.60 per hour in 2019 to $37.05 in September 2022. That's a 29.5% increase.
Industries that aren't as conducive to remote work have not seen the same increases. In the accommodation and food services industry, just 1% of workers are fully remote, and an additional 12% have hybrid schedules. Hourly industry wages have increased, but only by 15.9%, from $16.26 in 2019 to $18.89 in September 2022. In the construction industry, the average hourly wage was $33.81 in 2019 and $33.79 in September 2022 — a decrease of .06%.
location as a factor in remote job wages
One of the benefits of a work from home job is the ability to do your job from anywhere. For people who are living in expensive cities, going remote can be an opportunity to relocate to a place with a lower cost of living — all while maintaining a city salary.
Since remote work became the standard, Canadian companies have been talking about tying salary to the employee's location. In 2021, 40% of employers were considering it. If they do, it would mean that people who live in affordable areas would make less money.
Location-based compensation has the potential to backfire. While it makes sense for on-site employees, it can create problems with remote workers. After all, why should two employees in identical remote positions be paid differently simply because one chooses to live in a more expensive location? The inevitable comparisons and friction are likely to lead to a drop in employee engagement and possibly a higher turnover rate. That's not something most employers can manage, particularly given the state of the labour market.
potential effects of the labour shortage on wages
Canadian employers are dealing with a massive labour shortage — 36.9% expect to have trouble hiring skilled workers. In the construction industry, this number rises to 49.5%; in manufacturing, it's 47.4%. Given those numbers, employers are actively looking for ways to attract high-performing workers.
What do employees want? It's simple: higher salaries. When creating the 2023 salary guide, we discovered that 62.5% of employees who quit do so because they want a higher salary; 34% say that they're looking for more flexible schedules. When workers are looking for new jobs, 71% say that an attractive salary and benefits are the most important factors.
Post-pandemic, employees may be less likely to settle for less in salary negotiations; 65% have reevaluated how work fits into their lives. What's more, they're frustrated with unreasonable expectations. As a result, 40% of workers say they're more burned out than they were last year. Others are looking for ways to prioritize mental health and stay motivated.
It seems clear that if employers want to improve hiring, they may need to improve salaries. And because nearly half of the workforce is out of the workplace at least part-time, those salary increases will need to include remote workers.
The pandemic has accelerated the shift to remote work. Fortunately for employees, that change doesn't seem to have had a negative impact on salaries.
For additional reading on remote jobs, check out these pertinent articles:
If you're interested in working from home, let Randstad help you find a remote job today.connect with a recruiter