Geography lessons: how to reward remote workers

In a work-from-anywhere world, how can employers ensure that the compensation packages they’re offering will attract the skilled candidates they need, no matter where they’re based?

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.”

If an employee feels undervalued, they have the option to seek higher salaries and fulfilment elsewhere

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.”

There must be a stronger focus on benefits that aren’t location-specific yet can still draw interest

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.”