Insider

Spotify’s new remote-work plan ‘isn’t in response to the pandemic’ — it’s a bet on diversity

Summary List PlacementSpotify announced a plan last week that aims to let all employees work from an office, remotely, or at a coworking space that the company will pay a subscription for, while continuing to pay San Francisco or New York salaries, depending on job function. The news came as...

Spotify employees, spotify office

Summary List Placement

Spotify announced a plan last week that aims to let all employees work from an office, remotely, or at a coworking space that the company will pay a subscription for, while continuing to pay San Francisco or New York salaries, depending on job function.

The news came as other major companies roll out options for remote and hybrid working.

Facebook and Twitter have also announced remote-work options, but said they would cut employee salaries if they chose to relocate away from their offices in the San Francisco Bay Area.

Reddit, on the other hand, said it wouldn’t cut pay for employees who move from major cities.

Spotify’s move is part of a broader shift to permanent remote work ushered in by the pandemic. But there’s another factor at play. It’s a strategy to attract more applicants from underrepresented backgrounds, the company told Insider.

Research suggests that flexible work can help promote diversity, equity, and inclusion for employees from a variety of backgrounds. Spotify’s Travis Robinson, the head of diversity, inclusion, and belonging, said that the plan — called “Work from Anywhere” — was created for that purpose.

“Work From Anywhere isn’t in response to the pandemic,” he told Insider in an email. “We’ve long believed that globalization and digitalization are drivers for a more flexible workplace that is better for both the individual and the company.”

Flexible work advances inclusion for women and people with disabilities

Experts say hybrid-work programs can promote diversity and inclusion.

Matthias Doepke, a Northwestern University economics professor, previously told Insider that having the ability to work remotely helps retain women in the workforce, who disproportionately tend to be a household’s main caregiver. About 60% of the unpaid caregivers in the US are women, a report from AARP said.

The increased caregiving burden on women affects their careers. Some 275,000 women left the workforce in January alone, amid school and childcare closures.

“Let’s consider a scenario where you’re an existing employee that needs to become the primary caregiver for an ailing parent who lives in a different part of the country,” Spotify’s Robinson said. “Whatever the case, we embrace it.”

Remote work gives caregivers the ability to work at home while tending to children and older relatives. Research published in the Academy of Management Proceedings found that flexible remote-work options helped retain women workers.

Providing the option for remote work also encourages employees with disabilities to apply to jobs at Spotify, Robinson said. Flexible work reduces distractions, eliminates commutes, and allows employees with disabilities easier access to medications, the careers site Glassdoor reported. It also relives pressure on workers with disabilities who may not feel comfortable disclosing it to their employer.

Broadening the applicant pool

Giving employees the option to work from anywhere widens the talent pool to include people who can’t afford to live in the expensive cities where Spotify and other top tech companies are located. (The streaming service’s main offices are in New York, London, Stockholm, and Singapore.)

“We’ll be casting a much wider net, showing up in places we haven’t been before,” Robinson said. “The goal is to increase access to opportunity and growth for those who haven’t had that chance before.”

The median cost of a studio in New York in 2019, for example, was $2,700, according to the real-estate brokerage Douglas Elliman. Even with the pandemic it’s hard to find a studio for less than $1,600 a month, recent Zillow and Trulia searches showed.

London, Stockholm, and Singapore don’t offer much financial reprieve either. For many, the cost of living in these places is a nonstarter, a privilege that only the wealthy, or the children of wealthy parents, can afford.

Advancing pay equity

Travis Robinson, Spotify

The new program will also promote more equal pay, Robinson said.

“Black employees historically have been discriminated against when it comes to pay and growth opportunity,” Robinson said. One reason for this, Robinson said, is that the local market pay is lower in communities of color than in communities that are majority white.

For example, the market rate for an entry-level graphic designer in in New Haven, Connecticut, which is 33% Black, is $41,000. Meanwhile, the market rate for the same position in Greenwich, Connecticut, which is an hour away and 7% of Black, is $54,000, PayScale data showed.

To be sure, cost of living and taxes are higher in Greenwich, but it does provide an example of how market rates perpetuate economic differences between largely white and non-white areas.

A step in the right direction

Spotify still has progress to make on diversity.

Forty-one percent of Spotify’s workers are women, 7% are Latinx, and 5.7% are Black, according to its most recent diversity data, published in its 2019 “Sustainability & Social Impact” report. (Latinx is a gender-neutral or nonbinary alternative to Latino or Latina for describing people of Latin American descent.)

Of course a flexible work policy is not a substitute for a diversity-and-inclusion strategy. There are other meaningful things companies should be doing, experts say, including conducting pay-equity reports and remedying any discrepancies, investing in mentorship programs for employees of color, and hiring more talent from underrepresented backgrounds.

But Spotify’s new program could bring about meaningful progress.

“We want employees to come as they are, wherever they are, and whatever their circumstances are,” Robinson said. “At Spotify, we believe this new way of working will help us attract and retain the most diverse and innovative talent in the industry.”

SEE ALSO: The words and phrases you should stop using in job descriptions if you want to attract applicants from diverse backgrounds

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