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Pay for web workers: How much should location matter?

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Business is all about the bottom line — ironing out inefficiencies, increasing productivity, finding ways to get or make things cheaply that you can sell high — and web work offers new ways to bolster that bottom line.

By allowing managers to source talent from just about anywhere, technology makes it easy to take advantage of disparities in pay and cost of living to get the same services for cheaper. Just look at the trend of rural-sourcing, where companies are looking for skilled workers in unusual, less settled locales. It’s a boost to struggling rural communities and allows firms to save a few bucks too. What could be bad?

But not everyone sees paying according to the prevailing local wages as without its moral complexities, especially when companies begin to look overseas for additional help. Blog Freelance Switch recently ran a post on the issue, with writer Thursday Bram (who also writes for WWD) musing on her compunctions about paying significantly less for the same services from providers based overseas:

More than a few freelancers have a sore spot about how hard it can be to get paid what we’re worth by clients who see freelancers as a way to get cheap labor. When you turn that around, it’s easy to draw comparisons between what a freelancer might hate when a client does it to her and what she’s willing to do to a sub-contractor based overseas. It’s going to be a personal decision, no matter what. Your priorities decide whether or not you’re willing to pay a sub-contractor more.

For me, the personal decision comes down to what the person I’m working with is actually worth. I know plenty of people who live in places like Thailand and charge rates on par with what folks living in the U.K. might (with no problem getting those rates). If someone comes to me and tells me that’s what they’re worth, I have no problem paying it.

But if the person I’m working with needs training, requires extra explanation or simplified English and generally can’t finish a project without hand holding, I’m going to pay a lot less… I have worked with a virtual assistant based in the Philippines and paid him about $270 a month for his work. I don’t have a problem with doing so — he was doing fairly basic work and didn’t have a skill set that I’d be willing to pay more for.

Bram identifies the key factors in deciding how much to pay someone, including their skill level and your level of comfort with the arrangement. Perhaps added to that should be the cost of living where the web worker is based. After all, $270 probably goes much further in Manila than in Mountain View, just like a salary that barely covers the basics in New York might comfortably provide for a family of four in a more rural area.

How do you weigh location, skills and personal compunction when deciding what to pay web workers in various locales?   

Photo courtesy of Flickr user Infusionsoft

One Response to “Pay for web workers: How much should location matter?”

  1. Eric Safstrom

    Companies hiring in-office positions factor in cost of living to figure out wages to pay. some even offer a bonus to cover such differences. Why would the same not apply to remote workers?