TORONTO — When Mark Zuckerberg hosted a townhall in late May with Facebook’s 48,000 employees, some were tuning in from new cities they had scrambled to move to as the pandemic hit.
Zuckerberg had a clear message for them: if you plan to stay, expect a change to your pay.
“That means if you live in a location where the cost of living is dramatically lower, or the cost of labour is lower, then salaries do tend to be somewhat lower in those places,” he said on the video conference, where he announced more employees would be allowed to work remotely permanently.
Zuckerberg gave Canadian and American workers until Jan. 1, 2021 to inform the company about their location, so it can properly complete taxes and accounting and use virtual private network checks to confirm staff are where they claim.
The demand is part of a new reality Canadian workers are being confronted with as employers try to quell the spread of COVID-19 and increasingly consider making remote work permanent.
The shift means many companies are having to rethink salaries and compensation, while grappling with the logistics of a new work model.
Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did pre-pandemic, while one-in-five say they will remain primarily at home, according to a June study from the Angus Reid Institute.
Like Facebook, Canadian technology companies Shopify Inc. and Open Text Corp. have already announced more employees will soon have the option to permanently work remotely.
Both declined interviews with The Canadian Press, but Richard Leblanc, a professor of governance, law and ethics at York University, said he wouldn’t be surprised if their staff that relocate will see their pay change.
“It’s inevitable because the cost and expense structure of work has changed,” he said.
“If you, for example decide, that you could do the majority of your work from well outside the Greater Toronto Area…and you want to buy a home in Guelph or in Hamilton, should we expect the base salary for those individuals might change? Yes, because your cost of living has changed and your expenses have changed.”
If companies calculate salaries properly, neither the business nor workers should feel their salary adjustments are unfair, Leblanc said.
However, figuring out what to pay staff transitioning to permanent remote work is tough, especially with a pandemic raging on and forcing some businesses to lay off workers or keep companies closed.
Owners have to consider what salaries will help them retain talent, but also how their costs will change if workers are at home.
Companies, for example, may be able to slash real estate costs because they don’t need as much — or any — office space, but may now have to cover higher taxes, pay for their workers to buy desks or supplies for their homes or offer a budget for them to use on renting spaces to meet clients.
“(Businesses) are looking at every line item on their on their income statement….because they want to make sure they can survive and thrive over the long-term,” said Jean McClellan, a partner at PricewaterhouseCoopers LLP’s Canadian consulting practice.
Companies like GitLab, an all-remote company in San Francisco focused on tools for software developers, may offer some clues about how Canadian companies opting for permanent remote work can tackle salaries.
When GitLab started offering permanent remote work years ago it built a compensation calculator combining a worker’s role and seniority with a rent index that correlates local market salaries with rent prices in the area.
Anyone can visit GitLab’s site and plug in a role, experience level and location to find a salary.
GitLab’s junior data engineers, for example, make between $50,936 and $68,913 if they live in Whitehorse, Yellowknife or Iqaluit, where the Canada Mortgage and Housing Corporation said the average rents for a two-bedroom home last October were $1,695, $1,100 and $2,678 respectively.
That salary shoots up to anywhere from $74,359 to $100,603 for those living in Toronto, Vancouver or Victoria, where CMHC reported the average rents for a two-bedroom home last October were $1,562, $1,748 and $1,448 respectively.
Leblanc warned that varying remote work salaries can create “a global competition for talent in an online world.”
People who apply for permanent remote jobs, he said, may find their fighting for the role against far more people than ever before because companies will be able to source talent living anywhere in the world.
The companies that don’t offer remote work at all could also find themselves at a disadvantage, if their industry starts to value flexibility and look less favourably at companies that don’t offer it.
GitLab settled on its model and calculator because the company said they offer transparency and eliminate biases around race, gender or disabilities.
Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed up because every time he hired someone, there was a conversation around reasonable compensation.
The negotiation would usually revolve around what the person made beforehand, which was dependent on what city they were in. Gitlab scrapped that model in favour of the calculator and also started letting workers know if they move their salary could change.
However, GitLab acknowledges that many people see paying someone less for the same work in the same role regardless of where they live as “harsh.” The company disagrees.
“We can’t remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do),” it says.
“We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable.”
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
