“If a product manager in Sydney is delivering the same output as our product manager based in remote Queensland, why would we pay them differently?” asked Ben Thompson of unicorn software firm Employment Hero.
Thompson wasn’t alone in the tech crowd in perhaps seeing the issue as an opportunity to demonstrate to the nation’s techies, that they could be a better employer.
“Dangerous territory”
“While it’s understandable as to why this trend is happening, this is dangerous territory for tech founders,” says Ross McDonald, country manager of Perkbox Australia.
“Historically, pay packets take into consideration the circumstances of the worker. If you live in an expensive city, you are paid more to ensure your earnings do not go backwards.
“But, our latest borderless work study found that workers are increasingly likely to be mobile, global and work out of the office. To attract and crucially retain the best talent, companies will need to be flexible in how they work, and stop considering working away from the office as a perk that affects salary.”
It is also not clear whether Atlassian’s lower rate is higher than the flat rates at other companies or not, and Farquhar made the point that – regardless of comparisons to workers in Sydney – its regional workers will all be earning great salaries compared to their neighbours.
The fact of the matter is that we are living through a period of work where new rules and norms are being created.
It isn’t easy to say which approach is right or wrong. Tellingly, when journalists from the Financial Review reached out to the Industrial Relations Minister Tony Burke and the ACTU to see if they felt like having a swing on the topic, the “opportunity” was declined.
It is undeniable that pay has always varied by region in Australia, and it is likely that a company like Atlassian would ignore its own pay bands if it really wanted to secure a potential employee fielding multiple offers.
But it does also feel a bit olde worlde to be out there saying it is fine and dandy to pay people in the same market a different rate for doing the same knowledge-based task.
It is a topic that already caused significant debate in the US last year when Google was the most prominent example of a company offering employees the option to work from home full time, only to then chop the pay of those that moved too far from the CBD.
Workers moving too far away from its New York office into more rural or suburban surrounds took a 15 per cent pay cut, whereas more dramatic drops of up to 25 per cent were reported elsewhere.
Public sector leaders have an even bigger problem than those in the business world when it comes to hiring tech skills.
Like Atlassian, its leaders are crying out for talent, and are still often restrained by outdated demands that staff show up in Canberra, and even more vexingly, that new staff have to be Australian citizens, except for in “exceptional circumstances”.
Certainly in the tech market, employees still hold most of the cards, so you probably wouldn’t get too many people clamouring for new rules to enforce public sector style pay schemes, as most would back themselves to negotiate a good deal.
But it is worth thinking ahead, to consider how remote workers will be protected, or fight their corner in a future where their skills may be more abundant.
We have slowly come to accept that Australian companies will pay significantly lower rates to have tech and other process work conducted overseas under outsourcing models, so Australia’s remote techies will be keen to ensure they don’t end up as cost arbitrage.
