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Telecommuting: Boon or Bust?

Flexible work arrangements are on the rise, but do they come at a cost to workers?

Do workers who telecommute part- or full-time earn less than their colleagues? As flexible work arrangements become more and more common, understanding their effect on compensation becomes increasingly important. So, does the comfortable benefit of being able to work remotely cut into pay? Surprisingly, PayScale’s data show that telecommuters actually earn more than their physical commuter counterparts. Why would such a great perk increase pay? In this piece, we explore how many jobs exhibit this trend, what types of jobs get the telecommute boost, and why.

Finding the Telecommute Boost

We used nearly 1 million responses to PayScale’s salary survey to identify jobs in which telecommuters earn more than their non-telecommuting colleagues (see Notes for more details). In keeping with our general observation, telecommuters in 133 of the 246 jobs (54.1%) earned significantly more than non-telecommuters. Conversely, we observed significantly lower pay among telecommuters in only one job (sorry, Executive Directors).

Most interestingly, the jobs with the largest pay gaps are jobs where remote work is structurally feasible and performance is heavily rewarded. For instance, Account Executives have one of the largest differences in pay. They conduct most of their business via phone or computer and communicate most frequently with other businesses, so their job is particularly conducive to remote work. It is also a job where skill and experience affect performance directly, meaning experienced employees can be trusted to work as effectively with less oversight.

The following table shows the jobs with the 10 largest and 10 smallest differences between telecommuters and non-telecommuters. As we can see, telecommuters earn more in jobs that are conducted digitally and in which performance is rewarded.

Do You Know What You're Worth?

Rank Telecommuters earn more Non-telecommuters earn more
1 Clinical Research Associate (CRA) President and CEO
2 Senior Account Executive Mental Health Therapist
3 Sales Consultant Social Media Manager
4 Territory Sales Representative Executive Director, Non-Profit Organization
5 Key Account Manager Sr. Project Manager, Operations
6 Loan Underwriter, Mortgage Personal Care Attendant (PCA)
7 Training & Development Specialist Creative Director
8 Account Executive Tax Manager
9 Field Sales Engineer Proposal Manager
10 Consultant, Education/Training Database Architect

Telecommuters Might Have Something Extra

It seems unlikely that anyone would be paid more because they work remotely, so there must be some unaccounted-for factor that correlates with both telecommuting and pay. We have two potential explanations for this phenomenon. First, companies that allow telecommuting are generally more progressive in their managerial practices and offer relatively high pay. Many tech companies would fit into this category. If most people who can telecommute work at these companies, we would expect their pay to be higher. Second, allowing an employee to telecommute requires a certain amount of trust. Telecommuters are more experienced or more skilled at their jobs, and therefore more valuable to their organization, resulting in a highly paid cohort of telecommuters.

Aspiring telecommuters may not need to take a pay cut

The phenomenon of telecommuters earning more holds for a broad set of jobs. There is a class of in-demand jobs that are easily performed by remote workers and that have a wide range of employee performance levels. If you work in one these jobs (or at a particularly forward-thinking company), there’s a chance you won’t need to take a pay cut to avoid having to commute every day.

METHODOLOGY

Our definition of people who can telecommute excludes people who can work remotely only for life events like furniture deliveries. We restricted to only jobs with at least 45 commuters, 45 non-telecommuters, and 10% of respondents reporting the option to telecommute, leaving 246 jobs in the final sample. Within each of these 246 jobs, we tested whether or not the distribution of pay among telecommuters is significantly greater than among non-telecommuters. We used a two-sample, one-sided Kolmogorov-Smirnov test to compare these two distributions. Roughly speaking, this statistic tells us how “far apart” two samples are when they are at their absolute farthest. The significance of this statistic is tested by assuming that the distances come from a Kolmogorov distribution. A “significant” result from this test means that we are confident that the two pay distributions were not sampled from the same underlying distribution.


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