Payscale: most employers do not have a compensation strategy for remote workers

Dive brief:

  • Eighty-one percent of organizations told Payscale they do not have a compensation strategy that encompasses or is specific to remote employees, report finds released on September 14. Most organizations are torn between basing compensation on factors such as employer location, employee location or a mixed strategy, and 30% of employers are undecided. The report is based on a field survey of 682 respondents.
  • Employers in the survey tended to be reluctant to lower wages for employees who work from home – 69% said they did not plan to lower wages for remote workers. Likewise, 62% said they would not lower the wages of the remote workers they hire in the future.
  • The details of the remote payment strategies appeared to be influenced by the industry. Employers in the tech industry have looked at compensation based on employee location, for example, while consulting firms have reported payment plans based on employer’s location or the median national. Global organizations more frequently base compensation on the location of employees, Payscale said. These organizations have many locations to consider, but they typically have large compensation teams to help refine their approach, according to the report.

Dive overview:

When employers first sent workers home in early spring 2020, there was a question in everyone’s mind: is remote working here to stay? As the pandemic spread and workers adjusted to the new arrangement, the answer became clear.

Remote work is now an expectation of any work that makes configuration possible. In reality, workers say they won’t consider an opportunity that doesn’t include flexible work options.

But as employees squat down to work from home for the long haul, employers are left with a few questions, the most pressing of which is pay. Facebook, which has said large swathes of its workforce will work from home, will adjust workers’ pay based on their location. The company reduce someone’s salary if they are moving from the San Francisco Bay Area to Kalamazoo, Michigan, for example.

As the Payscale survey indicates, not all employers take this route. “There are many appropriate ways to structure compensation strategies to accommodate remote working and increased flexibility in the workplace, but the right solution will be unique to differentiate the organization in the search for talent,” said Shelly Holt, CEO of Payscale. “What really matters is that compensation programs are competitive, consistent and fair.”

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