Author Topic: How much of a pay cut would you take for a super flexible work-from-home job?  (Read 4735 times)

Lagom

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Allow me to pose a theoretical. Let's say you could work in a career you found meaningful, with a hands-off but perfectly supportive boss who obviously valued you and who you personally enjoyed working with. You also would believe that the senior leadership was fairly competent and respectful and pursuing a mission you buy into. You would be 100% remote with a schedule so flexible that you could almost always handle any logistical complications life threw at you, run errands during the workday, workout, play "hooky" (as in make up work at odd hours), etc. You would almost never work more than 35-40 hours/week. Any work related mileage would be reimbursed

And yet, this theoretical job would also demand a very noticeable pay cut relative to comparable positions that required a normal commute and were based in a traditional office environment. To make things easier, let's say you are considering accepting two job offers. At one, you are in the office every day and commute 20-30 minutes, but are paid a competitive market rate. Culture, leadership, etc., are "average," whatever that means. At the other, you have the situation described above. How much of a pay cut would you accept (in absolute or % terms) to be happy with the second job?


Kaikou

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Since you don't need put in actual numbers I'll make mine up. Lol.

Regular job $100000 salary.
The lowest I would probably go for remote position s $50000. So a 50% pay cut. This is just general because I don't know how hard the actual job is. I will also note that I'm an introvert and my highest work value is independence/autonomy. So I'd probably take a bigger cut then most because my top value is fully being met.

Fishindude

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I would not like working from home.  Plenty do it, but it's not for me.  Too many distractions and other things that would get in the way of working effectively.

boarder42

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if it meant staying at my company i work for now which has all of the described things above minus working from home.  we are pretty flexible with life issues and flexing time.  but to add the work from home piece i'd take a 20% pay cut maybe even 30% to work from home.

erae

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I faced almost that exact dilemma about a year and a half ago. I held the first, lower-paying, mission-driven, better culture, working-with-incredible-people job and was offered a local government job with better opportunity to network locally but meh culture, a designated start and stop time each day, and nice but not all that impressive co-workers. The higher paying gig was offering 20% more and I stayed put in my lower-paying, pajama-wearing job. What $$ differential would have motivated me to take their offer? Probably around 50%, but each family's calculus would be different.

Jane

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This depends entirely on how much you dislike commuting and sitting in an office. And I'm sure you realize how expensive a 30 min commute is between gas and miles on a car, so that should be factored in the salary increase. The extra time is also worth something.


If would be a no brainier for me to take the telecommuting job. I hate being in an office with a passion so no salary makes it worth it to me.

FLBiker

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I'd say 20-30%, off the top of my head.  It also has to do with how close to FI I was.  If I was close, I'd take a bigger cut.

fattest_foot

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Probably about 40%, and only because I ran some quick math and that'd still allow me to max out a 401k and IRA, without changing my standard of living.

I could handle working that type of job indefinitely, but would still want to be out of the workforce within 15 or so years just because I don't like being tied to a job. Because despite the fact that this hypothetical job allows me complete control over my days, I can't just take off for a month or two without repercussions.

Schaefer Light

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Since I hate being stuck in an office all day, I'd probably take a 20-30% pay cut to have the ability to work remotely full time.  Having said that, I don't think anyone should have to take a pay cut to do the same amount/type of work remotely.  If you're doing the same work, you should get paid the same amount.

MissNancyPryor

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If I never had to see the my leadership peers and didn't have to travel, I would easily take 50% off and work from home.   

Spork

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Since I am FIRE'd... I'll say 100%.

JLee

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If I could work from anywhere in the world, or work remotely from home, near the office and clients/etc?

If I could work from anywhere in the world, I'd be really tempted at 50% (current around 100k in a HCOL area).

Choices

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Some of this depends on your current situation.
- Do you have debt?
- Have you saved enough for your kids' college if you plan to help with this?
- Is your retirement fully funded?
- Do you like working from home, or will you be lonely and have trouble actually getting any work done?
- Is your home environment conducive to actually working or are there kids/dogs/construction next door that make it difficult to focus or take calls?
- How much will you save on business clothes, gas, etc. by working from home?
- Are you also losing other benefits?

catccc

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I recently started one telecommute day a week recently, and I am still making the same salary.  I would have been pissed if they told me I could telecommute only if I took a slight pay cut.  So all other things being equal, I'd expect nearly the same pay for doing the same job, wherever I happened to be working from.  I would calculate the actual cost of commuting, and back that out as the pay cut I'd be willing to take.

MrsDinero

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

Spork

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

I agree with the sentiment.... but there are some extenuating circumstances.
* First off, if they're not paying for office space, they're saving money.  Possibly that means paying you more.
* And the other direction, if the office is in downtown San Francisco and you're working from home in LCoL midwest, there is not much likelihood they're going to pay you San Francisco cost of living salary.  (If you can swing it: more power to you.)

JLee

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

I agree with the sentiment.... but there are some extenuating circumstances.
* First off, if they're not paying for office space, they're saving money.  Possibly that means paying you more.
* And the other direction, if the office is in downtown San Francisco and you're working from home in LCoL midwest, there is not much likelihood they're going to pay you San Francisco cost of living salary.  (If you can swing it: more power to you.)

New life goal - obtain San Francisco job/salary and later negotiate remote work for the same pay...

Lagom

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Very interesting responses so far, thanks guys. I suppose I shouldn't be, but I was a bit surprised just how much the lower stress and greater autonomy seems to be worth to many of you, even if you are delaying FIRE in the process. Of course many factors do come into play, but I wanted to raise a more theoretical discussion than a case study.

To speak to MrsDinero, that should be true ostensibly, but it isn't always. For example, some careers have very few remote work opportunities simply for cultural reasons. Many nonprofit or government offices can be like this. The butt-in-chair culture is so entrenched that it doesn't matter how necessary your physical presence is. If you scored a remote opportunity in one of those fields, it might be unlikely you could find another (especially if you are geographically limited), so if the pay was also bad and they refused to raise it, you would be faced with this very dilemma. Or maybe the org is a small one without the budget to pay a competitive market rate, but otherwise has all of the advantages I listed. I know more than one person who has gone through something like this, including myself.

I too chose to stay in the lower paying position and I will say the quality of life benefits are awesome. That said, I am sometimes pretty annoyed at how below market my pay is (around 18-20%). Emotionally, I think my line is something like a 25% discount before I would be more upset by my low pay than happy at the other benefits the job provides. Then again, reading other people's thoughts makes me think I should let that go a bit and just be happy I have an opportunity that few others do.
« Last Edit: June 23, 2016, 04:43:00 PM by Lagom »

Fuzz

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Zero percent. To me, it's not that much of a perk. I've worked from home. I think you give up a lot more psychologically than you realize when you accept a below market rate for your labor. It also makes your next job negotiation extremely difficult, since you often have to move between organizations to get a raise and they will benchmark off your last salary (good luck hiding that info, btw). YMMV.

iluvzbeach

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For me, it would be more about quality of life than pay. If I could meet my financial requirements/goals and be happier in the work situation, I'd choose the WFH option hands down. I am lucky to WFH and draw a high salary, but I'd still choose this if the pay were lower. Don't tell my employer. :)
« Last Edit: June 23, 2016, 09:39:35 PM by iluvzbeach »

MrsDinero

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I have worked in those environments where if they don't see you they don't believe you are really working and I managed to bring telecommute to 2 of them (not the other 2).  It was a slow process but it was successful.  So it is possible.

Depending on where you are in your career should also be a determining factor on how much of a paycut you are willing to take.  How long are you planning to stay at this job?  How long will it take for you to get back to the salary you want?  You won't just be taking a paycut this year, it will be a paycut for many years to come.  Will it change your FIRE plans?

There are a lot of people on here who disagree with me but I stand by my statement.

Don't settle for less than what you are WORTH. 

chemistk

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While not possible in my field (Chemistry @ Home is not OSHA approved), supposing I were in the hypothetical situation with a career where I could WFH, I would gladly take a 25% pay cut so long as I was allowed to watch my child while on the clock. If I were, I would sell my car and my wife could work wherever she wanted. I would definitely okay with that route.

tobitonic

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

What she said. They aren't doing you a favor by letting you work from home; they're doing it because they think it'll make them more money than not in the long run.

boarder42

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

What she said. They aren't doing you a favor by letting you work from home; they're doing it because they think it'll make them more money than not in the long run.

I work for a consulting firm part of being in the office is new hires can come ask you questions. You aren't as available at home.

Lagom

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Zero percent. To me, it's not that much of a perk. I've worked from home. I think you give up a lot more psychologically than you realize when you accept a below market rate for your labor. It also makes your next job negotiation extremely difficult, since you often have to move between organizations to get a raise and they will benchmark off your last salary (good luck hiding that info, btw). YMMV.

This is indeed my fear, although I am comfortable enough negotiating to be confident I can demand a market rate salary if and when I decide to pursue a promotional opportunity at another organization. Of course, there may still be some room to grow in my current position so for me personally, I may be able to put off that decision, possibly even until FIRE. You may not get much from working from home, but I definitely feel it has a very substantial impact on my and my family's quality of life.

I have worked in those environments where if they don't see you they don't believe you are really working and I managed to bring telecommute to 2 of them (not the other 2).  It was a slow process but it was successful.  So it is possible.

Depending on where you are in your career should also be a determining factor on how much of a paycut you are willing to take.  How long are you planning to stay at this job?  How long will it take for you to get back to the salary you want?  You won't just be taking a paycut this year, it will be a paycut for many years to come.  Will it change your FIRE plans?

There are a lot of people on here who disagree with me but I stand by my statement.

Don't settle for less than what you are WORTH.

Totally agree with this advice in general, but that doesn't mean it's still not sometimes better to take less pay depending on other factors. In my own job, I am in the process of negotiating a raise that I am fairly confident will eventually get me to more like a 5-7% below market salary at worst, which is a trade-off I'll take any day for how much I love the job otherwise. You seem to think maximizing income is THE most important factor, but that's just your own preference. As this thread has indicated, many are willing to delay FIRE if they can find substantially greater sanity and satisfaction and freedom in their lives as an exchange.

I didn't really want to make this a case study, but I can tell you with confidence that there are extremely few opportunities in my own instance for me to move to a better paying position without losing the work from home perk. Could I get a better paying office job and eventually convince them to allow me to telecommute? Very possibly. But that would require taking a substantial risk by leaving a known work culture that I love and then resigning myself to at least a year or two of unpleasant commuting and substantially less flexibility. I have nevertheless considered the trade off many times, but for many people (perhaps not those like Fuzz), the benefits very well can outweigh the low pay.

Spork

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

What she said. They aren't doing you a favor by letting you work from home; they're doing it because they think it'll make them more money than not in the long run.

I work for a consulting firm part of being in the office is new hires can come ask you questions. You aren't as available at home.

I worked at an ISP.  Every single person had a chat client/telephone... and used it all day long.  There were hundreds of people I dealt with on a weekly basis and I never saw their faces.  There was no reason I needed to be sitting in a desk at work except days I needed physical access to lab or production equipment.

My point is: It isn't that hard to be totally available to new hires.

boarder42

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My pay reflects my experience, work ethic, and what I bring to the company.  Where I do the work from should not factor into my salary.

What she said. They aren't doing you a favor by letting you work from home; they're doing it because they think it'll make them more money than not in the long run.

I work for a consulting firm part of being in the office is new hires can come ask you questions. You aren't as available at home.

I worked at an ISP.  Every single person had a chat client/telephone... and used it all day long.  There were hundreds of people I dealt with on a weekly basis and I never saw their faces.  There was no reason I needed to be sitting in a desk at work except days I needed physical access to lab or production equipment.

My point is: It isn't that hard to be totally available to new hires.

at an engineering design firm where we work with employees in other offices alot there is really no subsitute to being in the same building.  its incredilby more efficient to be face to face than remote.  i'm sure management knows this and this is why we try to keep project teams all in one office if possible and why they dont allow telecommuting.  it isnt just the new hire thing.