Increase salary if employee moves to a country where living costs are higher?
An employee becomes a remote worker by moving to another country. Living costs there are higher. Do we increase her salary to accommodate for that?
6 comments
Should have been discussed and put in writing when the terms of employment changed to remote work - a whole bunch of things change in terms of taxes, liability, etc.
If you genuinely value the employee, and genuinely want to keep them, and the increase is not rediculous, then it's a perfectly reasonable request - especially if they only seem to be asking for the same standard of living and not gaming you for more spending cash. If you don't increase their pay - will they leave? What about paying for insurance and expenses for remote workers. Laptops, pcs, etc.
If you genuinely value the employee, and genuinely want to keep them, and the increase is not rediculous, then it's a perfectly reasonable request - especially if they only seem to be asking for the same standard of living and not gaming you for more spending cash. If you don't increase their pay - will they leave? What about paying for insurance and expenses for remote workers. Laptops, pcs, etc.
It depends -- did she ask for a raise? If she asks for a raise, then it really doesn't matter what the reason is, you just ask yourself do you want to give this person a raise.
If she didn't ask for a raise, then a 3rd option might be to give a "moving expense" bonus of some sort right now, and then reevaluate a raise at a later date, or whenever the next review/raise schedule is.
If she didn't ask for a raise, then a 3rd option might be to give a "moving expense" bonus of some sort right now, and then reevaluate a raise at a later date, or whenever the next review/raise schedule is.
Intel had a geographic cost of living salary adjustment when I worked there.
Depends on the employee, and why they moved.
1. If you really value the employee, and might lose them if you don't give them a raise, then give them a raise.
2. If the move was to a certain degree out of their hands (moving with a partner, etc), this would make me more likely to give them a raise.
3. If they moved of their own accord, then after committing to the move they ask for a raise because of living costs, this would leave a sour taste in my mouth - I don't like being painted into a corner.
1. If you really value the employee, and might lose them if you don't give them a raise, then give them a raise.
2. If the move was to a certain degree out of their hands (moving with a partner, etc), this would make me more likely to give them a raise.
3. If they moved of their own accord, then after committing to the move they ask for a raise because of living costs, this would leave a sour taste in my mouth - I don't like being painted into a corner.
If the value she brings to the company can justify the increase then I would consider it. If it's too much then u could meet her halfway or start looking for new talent.
I agree with @Artagra but as a businessman/entrepreneur
a) always look at your profit margin
b) if you are a big company, will you be interested to offer it to other employees as well, as you are setting a precedent
c) check for tax implications
d) if the employee is irreplaceable, consider converting the engagement to consultant
a) always look at your profit margin
b) if you are a big company, will you be interested to offer it to other employees as well, as you are setting a precedent
c) check for tax implications
d) if the employee is irreplaceable, consider converting the engagement to consultant