Strategies HUMAN RESOURCES
The challenges of remote worker pay Time to review your pay rates, job descriptions AS SOME EMPLOYERS transition their employees back to the office environment, management needs to determine which jobs are essential to be on-site versus which jobs can operate effectively in a remote environment. When interviewing for new roles, offering a remote-work option may be helpful in attracting more candidates. However, there are downsides to having all employees work remotely. Lack of employee engagement, poor or ineffective communication, understanding of culture and promotional opportunities – these are all impacted if the employee is not physically in the workplace. In addition, the geographical location of where an employee works could directly impact the rate a new candidate is paid. For those roles where you have determined remote work is an option, does it really matter if the new employee lives in the same city where your company resides? What about existing staff? Now that your employees can live anywhere, log in and continue to work for you, do you need to pay them the same “big-city” rate? You want to pay your employees fairly for the job they are performing. But it may come down to why would a company pay a much higher salary than is competitive for a certain job? For example, if your company is in New York City and one employee is working out of their home in Des Moines, do you need to pay them at the
premium New York rate? Take some time now to review your employee pay rates. Time is of the essence since the market is moving quickly. You would hate to lose key employees just because you have not assessed their pay compared to market rates. All components of compensation should be considered when doing a market analysis. Base pay is just the starting point. Base, incentive pay, commissions, benefits and perks all need to be considered when comparing an employee’s compensation to market rates of pay. Employees who work a hybrid of at-home and on-site should continue to be paid consistently with the location they report, even if only a few days each week. Those employees who rarely, if ever, are expected to come into the office are in a different situation. Remote workers may not be affected by cost of living in a major metropolitan area. Items such as high apartment rent, food/restaurants, transportation and parking are all additional costs for those living in a large metro area. If the employee chooses to work in a rural or suburban area, these additional costs are not as dramatic. Alternatively, if the employee lives and works in a community with a high cost of living, higher than where the main office is located, they should be paid according to the local market where they reside. Most organizations have not made the decision to reduce pay for existing employees if they work remotely. However, many organizations are giving consideration to paying new employees at the market rate of pay of where they live. It just makes sense. Unless you require the employee to come into the office on a regular basis, why would you pay them at bigcity rates if they are working at home in small town USA? A thorough review of current job descriptions is in order. Your employees have gone through a significant shift over the past 18 months. If your company experienced layoffs, those job duties normally would have been reassigned to others. Additionally, if some of the staff is working in the office and some staff is working from home, can you assume that the person working from
home is doing the same level of work remotely? I’m just saying, an assessment of responsibilities needs to be performed. Both the remote worker and the office worker may, in fact, be doing exactly the same job and the market analysis should reflect that. However, there may be dramatic difference in cost of living if the remote employee does not need to pay high rent, transportation, parking, etc. This is also a good time to review your employees’ pay compared to each other. A diversity review of employee pay, both compared to market and their peers, will allow your management team to ensure fairness across the board. Bottom line: It is imperative for you and your company to be proactive in the salary review process in this highly competitive job market. n
NICOLE SCHMIDT Nicole Schmidt is a human resources consultant and the owner of Reward Strategies LLC (hrrewardstrategies.net). Previously, she was a global compensation manager for A.O. Smith. She can be reached at rewardstrategies@yahoo.net. biztimes.com / 37
