Running a Compensation Cycle for a Hybrid Workforce

3 min read
Aug 31, 2022 7:00:00 AM

Three in four U.S. companies are using or plan to implement a permanent hybrid work model with a mix of in-office, remote, and hybrid workers. This is great news for workers everywhere, as 97% would like to work remotely, at least some of the time, for the rest of their careers. 

But a hybrid workforce model can be more difficult to manage than a fully remote or fully colocated workforce model. In a hybrid model, the office-based experience often becomes the default, and remote workers end up feeling isolated and excluded from their peers. We often see this reflected in compensation cycles, when remote workers tend to be left behind for promotions and raises.

Your compensation cycle is a time to reward your team members, not alienate them. Here are some tips to build a smoother compensation cycle for your hybrid workforce.

Give yourself more time

Most companies are still adapting to the hybrid workforce model and running review cycles for a distributed team. Build some extra time into your compensation cycle timeline to account for that.

Pulling compensation data to update salary bands or location factors for additional markets will take longer than pulling it for your usual number of markets. Stakeholders might have more questions, and won’t be able to tap you on the shoulder to ask if one of you is working remotely. Your compensation management software may not be equipped to handle remote workers, forcing you to do more of your work in spreadsheets. 

Plan for everything to take just a bit longer as your team adjusts to running compensation cycles a little differently.

Communicate with your team members 

It’s always important to communicate about your compensation cycle with your team, so they understand why they earn what they do and how they can earn more. 

If you’ve made changes to your remote compensation strategy, let employees know as soon as possible and remind them of those changes prior to your compensation cycle. This is particularly important if you plan to reduce salaries or red-circle team members if they relocate to an area with a lower cost of market.

Support your managers

Many of your managers are still relatively new to leading remote or hybrid teams, and will likely benefit from some additional support and guidance. Communicate early, and in multiple ways. 

Provide training around how to:

Make sure managers can access the information they need asynchronously, such a recording of your training sessions and written documentation of your process. But also be proactive about checking in with your remote managers, and let them know your team is available to answer questions if they come up.

Put your compensation data to work

Remote team members are often more likely to be overlooked for promotions and raises if they’re “out of sight, and out of mind.” Your team can use data to calibrate manager recommendations, and flag team members who might have been inadvertently left behind. 

Track promotion rates and promotion speed for office-based employees compared to remote employees. Similarly, compare compa-ratios and range penetration for these two groups to see if they differ widely. Dig in to any outliers to try to understand if they are justified, or if you need to make improvements to create a better experience for remote team members.

Use the right technologies and tools

The right technologies and tools can enable better collaboration, productivity, and satisfaction. For instance, project management software and instant messaging can help hybrid teams work together, even when they’re physically apart. 

The same holds true for compensation management software. The right solution can help all your stakeholders get on the same page, so you can provide fair compensation to employees—whether they work in the office or work remotely. If your solution isn’t set up to support your remote compensation strategy, evaluate some new options before your next review cycle.

Final thoughts on running a compensation cycle for a hybrid workforce

The world of work is fundamentally different in the wake of the pandemic. As companies adjust, there will be learning curves. But the organizations that put in the work to adapt and ensure a consistent employee experience for both office-based and remote team members will have happier, more engaged, and more productive teams.

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