Geography lessons: how to reward remote workers

The rise of remote work­ing has enabled com­pa­nies to cast their recruit­ment nets wider than ever. It means that some­one can con­ceiv­ably hold down a Sil­i­con Val­ley job, yet live in Salt Lake City – or even St Albans.

New research into tech salaries by online job mar­ket­place Hired indi­cates that employ­ers are hir­ing across a grow­ing num­ber of ter­ri­to­ries and time zones. At the same time, there is an increas­ing pref­er­ence among can­di­dates for remote-only jobs. Near­ly two-thirds (32%) of all active job­seek­ers are open to such roles, com­pared with 18% at the start of the year.

But this presents its own chal­lenges. Abakar Saidov is CEO at Beam­ery, which han­dles recruit­ment for the likes of Accen­ture, Ama­zon, Uber and UBS. He reports that, as much as com­pa­nies would like to pro­vide work-from-any­where poli­cies, they are restrict­ed by the com­plex­i­ties of com­pli­ance with mul­ti­ple employ­ment laws and tax reg­u­la­tions.

“Com­pa­nies may see increas­es in pro­duc­tiv­i­ty brought about by flex­i­ble work­ing, but it is also crit­i­cal to assess poten­tial dif­fi­cul­ties that may arise through main­tain­ing the right infra­struc­ture and hav­ing an over­sight of the work­force to iden­ti­fy indi­vid­u­als’ needs for sup­port,” Saidov stress­es.

There is also the hot top­ic of salary expec­ta­tions in rela­tion to the cost of liv­ing. Face­book announced in 2020 that, while it would allow remote work­ing, each employee’s com­pen­sa­tion would be adjust­ed accord­ing to their loca­tion. Under­stand­ably, its deci­sion sparked much debate in the busi­ness world. 

Should pay be adjusted?

A key attrac­tion of remote work­ing is receiv­ing the type of pay tra­di­tion­al­ly asso­ci­at­ed with a big-city job, yet enjoy­ing low­er liv­ing costs, says Michael Bar­ring­ton-Hib­bert, CEO of exec­u­tive search firm Bar­ring­ton Hib­bert Asso­ciates. Com­pa­nies are there­fore hav­ing to re-eval­u­ate their com­pen­sa­tion plans for dis­trib­uted work­forces.

“Organ­i­sa­tions are also hav­ing to rethink their cul­ture,” he says. “Tra­di­tion­al­ly, on-site ben­e­fits includ­ing gyms, doc­tors and cater­ing were often used as incen­tives. Such perks inevitably lose their appeal when com­pa­nies have dis­trib­uted work­forces.

There must be a stronger focus on ben­e­fits that aren’t loca­tion-spe­cif­ic yet can still draw inter­est. These could include more focused pro­fes­sion­al devel­op­ment oppor­tu­ni­ties, mem­ber­ship of cowork­ing spaces or gen­er­ous hol­i­day allowances, for instance.”

The shift to a dis­trib­uted work­force is also hav­ing an impor­tant eco­nom­ic impact. It used to be that Lon­don would attract the most tal­ent­ed peo­ple because it tend­ed to be where the best-reward­ed jobs were on offer. The rise of remote work­ing since Covid’s arrival has meant that can­di­dates can afford to shop around for the best jobs with­out hav­ing to move to Lon­don to fast-track their careers. This is one of the key rea­sons for the ris­ing pop­u­lar­i­ty of Man­ches­ter, which is becom­ing more eco­nom­i­cal­ly impor­tant to the coun­try.

Sec­tors such as tech­nol­o­gy are bur­geon­ing in the city. Indeed, the tech indus­try is fore­cast to add more than £2.7bn to the local econ­o­my by 2025. Yet that doesn’t nec­es­sar­i­ly give Man­ches­ter the edge when it comes to recruit­ment, as salaries here still don’t com­pare to those on offer in the cap­i­tal.

To com­pete in the expand­ed recruit­ment mar­ket, employ­ers in cities such as Man­ches­ter, Leeds and New­cas­tle would be well advised to intro­duce a range of ben­e­fits that will help to attract and retain the tal­ent they need, accord­ing to Bar­ring­ton-Hib­bert.

“Renewed invest­ment in strate­gic work­force plan­ning such as hybrid work­ing mod­els needs to be embed­ded in com­pa­ny cul­ture if firms wish to stay ahead of those in oth­er cities,” he says. “Cou­pled with this, a renewed focus on struc­tured career pro­gres­sion and employ­ment val­ue propo­si­tion is nec­es­sary to retain tal­ent. If an employ­ee feels under­val­ued, they have the option to seek high­er salaries and ful­fil­ment else­where.”

Keeping remote workers engaged

The key chal­lenge for employ­ers, then, is to ensure that their reward pack­ages are attrac­tive to remote work­ers no mat­ter where they’re based. One way of doing this is to com­pen­sate work­ers fair­ly – and be seen to be doing so. 

Adri­an Adair, COO at Mor­son Group, a multi­na­tion­al recruiter based in Man­ches­ter, argues that salary bench­mark­ing by sec­tor is cru­cial to ensur­ing that employ­ers are both com­pet­i­tive and trans­par­ent.

“Some com­pa­nies set a min­i­mum glob­al base­line linked to cost of liv­ing and indus­try-stan­dard pay rates, and a new trend has seen some glob­al busi­ness­es set geo­graph­i­cal pay dif­fer­en­tials to estab­lish com­pen­sa­tion ranges,” he says. “In this way, employ­ers can demon­strate that they’re com­pet­i­tive, while under­tak­ing reg­u­lar reviews to ensure that they’re stay­ing in line with mar­ket trends.”

But the chal­lenges of attract­ing and retain­ing tal­ent go beyond expec­ta­tions about pay and ben­e­fits, Adair adds. Recruiters will have to take oth­er fac­tors into con­sid­er­a­tion.

“Employ­ee val­ue propo­si­tions and the employ­er brand are also more crit­i­cal than ever,” he says. “Less social inter­ac­tion in the work­place means that shared val­ues and a com­mon pur­pose are cen­tral to con­nect­ing peo­ple across the remote work­space. Com­pa­nies are being chal­lenged to demon­strate their vision and val­ues, inspir­ing, moti­vat­ing and engag­ing can­di­dates to build employ­er brand val­ue.”

Yet, despite all the talk of remote work­ing enabling British recruiters to look over­seas for tal­ent, Adair reports that we haven’t quite reached that point.

“In real­i­ty”, he says, “time-zone con­straints and the desire from both employ­ers and employ­ees for some in-per­son work­ing – even if it’s only one day a month – means that we aren’t see­ing a step change to inter­na­tion­al recruit­ment as yet.”