We live in a world where things are constantly changing, and how we determine compensation is no different. Deciding what is fair when it comes to employee pay is tricky – especially when it comes to remote work. In the past, flexibility and work-from-home option were considered a bonus to base salary, which candidates and employers alike factored into the total compensation package. However, PayScale data on remote workers shows that that may not be the case anymore. For so many companies right now, remote work is not a nice-to-offer or even a reasonable expectation – it is just the reality of doing business.
Now, with most companies going remote-friendly (and, potentially, for the long term) many more factors play into determining compensation rates that are both competitive and fair. Here are a few compensation tips for you to consider in relation to remote work:
- Company Goals –Review your organizational goals and understand how the compensation strategy supports those goals. Here are some questions to think about for now and in the future:
a) When the pandemic is over, do you plan to have some people working in-office and others working from home? Will this be for the short-term or the long term?
b) Do people in-office have different benefits than their work-from-home colleagues?
c) What about other benefits? Will there be partial or full reimbursement for home office supplies, internet, and phone fees?
- Location – Align salaries based on the location of the company headquarters (or reporting office) and then use a cost of living approach to adjust the compensation up or down based on where the remote worker lives. When determining a fair base pay, remember your industry is also an important factor to consider, workers with the same job title or similar job title can expect different wages depending on what industry they are in. Do some research on your industry and consider the total compensation of the job and what incentives the employee will receive based on individual performance and the organization’s performance.
- National Average & Position – Set salaries in line with the national average and current market trends for the position in the location of the remote worker. Salary reports can be helpful when it comes to competitive compensation rates. These reports can provide insight to what your competitors are paying for the same position in the same location.
When it comes to determining the “right” compensation, there is not a one-size-fits-all solution, but considering the factors listed above will provide a helpful introduction into the process of determining a competitive compensation. Given the complexity of many organizations, it is possible that multiple compensation structures will be needed. If you need help determining competitive compensation for your vacancy or new hire, get in touch with Pinnacle and we’d be happy to provide a free salary report.
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