Amongst the changes introduced by the Covid 19 pandemic is the popular remote work feature which allows employers and employees to work across geographical barriers. This is an advantage for everyone regarding an increase in job search and talent recruitment options. For the African, there is the added advantage of earning in a foreign currency and thereby increasing his purchasing power. For instance, the average graphic design salary in 2022 in the U.S. is placed at $60,297 annually, and for a Nigerian that’s N24 Million Naira. With figures like this, it’s no wonder that every African seeking remote work wishes to work with foreign companies.
But these advantages could be limited by salary policies
These advantages could be limited by the salary policies utilized by foreign companies when employing workers in developing countries.
Companies favor various salary policies and it is this remote workers from developing countries should take note of to enjoy the financial benefits of remote work.
These are the salary policies remote workers should consider
Geography-based approach: In the geography-based approach the company pays employees equally regardless of geographical location. This means a worker from New York and Lagos earn the same figures despite New York being a more expensive place to live in. Geography location is supported by companies like Basecamp who argue that skills matter more than location and salaries should be based on that.
Location-based approach: Companies pay based on the cost of living in a given geographic location. This means a worker from New York and Lagos are paid according to how much it takes to live in these regions. This is great for the New Yorker but from the African perspective, it’s a letdown as workers are simply paid what’s obtainable in their region. Companies like Facebook in 2020 announced that they would be adopting this framework. Mark added” Those who wish to work remotely will be paid based on their location. “
Both salary policies have their advantages for companies and their workers. In the geography-based approach companies remain desirable to employees from regions outside theirs who want to be valued for their skills and not their locations. On the plus side, the location-based approach allows employees greater freedom to work from the places they desire.
Companies are aware that living standards aren’t the same everywhere and intend to use this to their advantage.
Global Companies like Amazon. IBM and Facebook look to Africa for talent recruitment and with a location-based approach pay workers in these regions half the salaries their European counterparts receive. Thus in Nigeria, software developers report earning $10,000 a year which is considerably less than what their European or American counterparts earn despite performing the same job with the same level of expertise.
For many the increase in purchasing power via earning in a foreign currency is an important factor. In order not to miss this intending remote workers in developing regions should consider what salary policies their prospective companies use and if this is to their financial taste.
