Remote Work: Compensation Challenges

According to a survey of 100 companies with distributed workforces by global outplacement consultancy Challenger, Gray & Christmas, in a remote-work era, companies have to get creative about how to pay their employees fairly. In the survey, more than half of the companies reported that they're having trouble finding and retaining workers.

"Companies are struggling to find the right compensation package for their telecommuters and distributed employees," says Andrew Challenger, vice president of Challenger, Gray and Christmas. "Sixty-eight percent of companies said that it was becoming more difficult to figure out how to compensate their telecommuters and distributed employees, compared to just 50 percent last year."

Another example, Amazon considered moving Danielle DiMartino Booth, a vice president for the company, from Seattle to New York to head up its advertising business. However, after crunching the numbers, Amazon’s human resources department concluded that it would be too expensive: The company would have to pay Ms. Booth as much as $250,000 more a year to cover the additional costs of relocating her family and paying for a temporary apartment in New York while she looked for a permanent home. Instead, it hired a New Yorker.

Addressing these issues is not easy, and there is no one-size-fits-all solution. However, there are a few things companies can do to try to create a more equitable and sustainable remote-work compensation model.

First, they can look at the cost of living in different areas and adjust salaries accordingly. This is not always possible or practical, but it can help to level the playing field somewhat.

Second, they can try to create a more standardized compensation system that takes into account experience and job type. This can be difficult to do, but it can help to create a more equitable system.

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Third, they can provide additional benefits and perks to employees who work remotely. This can help to offset some of the costs associated with working from home, and it can also help to make the job more attractive.

Ultimately, there is no perfect solution to the problem of remote-work compensation. However, by considering the needs of employees and the challenges of the remote-work model, companies can try to create a system that is fair and sustainable.

Other relevant information:

Recruit Holdings: Spectacular execution, as HR revenue breaks the $6B barrier: The company has had a massive rebound after the pandemic, almost doubling revenue in HR in 2021. 

AIM Group report: Recruitment marketplaces: The Great Resignation to the Great Move Forward: The 2022 Recruitment Marketplace Annual from the AIM Group shows how artificial intelligence, applicant tracking systems, CVs and resumes, and programmatic advertising factor into the industry’s evolving terrain.