Remote Pay Statistics You Should Know in 2022

4 min read
Feb 10, 2022 6:45:00 AM

Remote work is here to stay, with nine in 10 organizations planning to combine remote and on-site working post-pandemic. This is a big shift from the world of work we once knew, and it’s important to consider how it will impact your Total Rewards program.

These remote pay statistics provide some useful insights into current compensation trends and opportunities as we navigate the new normal.

81% of companies don’t have a remote compensation strategy

Two years after our plunge into remote work, 81 percent of organizations still don’t have a compensation strategy that encompasses remote employees. But organizations have certainly begun to think about what their strategy will be. 

Seventeen percent plan to determine pay based on employer location, 12 percent by employee location, nine percent by zones, and nine percent by national median. Twenty percent of organizations plan to use a mixed strategy, three percent don’t plan to have a strategy at all, and 30 percent are undecided on which strategy they will use.

Remote pay strategy preferences tend to vary by industry and number of locations. For example, organizations in the technology industry and global organizations generally adopt a compensation strategy based on employee location, while agencies and consultancies typically pay by employer location or national median.

41% of organizations with geographic pay policies use location factors

Forty four percent of organizations with geographic pay policies have modified or considered modifying their policies due to the increase of full-time remote work. Most notably, these organizations are expanding or consolidating pay differentials by geographic area. 

Forty one percent of organizations apply pay differentials as a premium or discount to either a jobs-based pay structure or to individual pay. And 33 percent create separate base pay structures for each different geographic location where team members are working.

Compensation was already complex before remote work allowed people the opportunity to work from anywhere. Location factors or zones can reduce some of the administrative burden of managing remote pay across many locations, but looking up each permutation will get you closer to precise local compensation. If you go this route, you’ll need to put some thought into which option will work best for your organization. 

50% say a pay adjustment would be influential in their decision to relocate

When asked if they would consider moving should they obtain a permanent remote work arrangement, nearly 65 percent of workers said that they would move or think about moving. In fact, 27 percent of workers have already relocated during the pandemic, with 40 percent of those moving to another state, and 13 percent to another country.

However, 50 percent said a pay adjustment would be very or extremely influential in their decision to voluntarily relocate. And 38 percent are stressed about the uncertainty of needing to take a pay cut to work remotely. So if you’re thinking about adopting a new remote pay strategy, it would be a good idea to let your team members know sooner rather than later. That way, they can factor it into their decisions. About one-third (32 percent) would still consider relocating with a paycut, if given the opportunity to work remotely as much as they would like.

61% would take a pay cut to work remotely

Remote work is so coveted that 61 percent of workers say they would take a pay cut just to maintain their remote work status. While some said they would take a 50 percent pay cut to avoid returning to the office, most agreed that they’d take a 10 percent drop in pay to maintain remote working status. Further, 70 percent would forfeit benefits—including health insurance, paid time off, and retirement accounts—to maintain their remote working status.

This doesn’t mean you should cut pay or benefits simply because a team member is now working remotely. But if your organization can’t pay top of market compensation, offering remote work could give you a leg up over a competitor that pays more but requires team members to work onsite.

69% of organizations do not plan to lower pay for remote employees

Most organizations (69 percent) don’t plan to lower pay for current employees that work permanently or mostly from home. But 8 percent are considering lowering pay for employees who live in locations with a lower cost of living, and 16 percent are undecided. 

This changes slightly for future hires: 62 percent of organizations don’t plan to lower pay for employees yet to be hired. And 14 percent of organizations say they’re considering lowering pay for future employees who live in locations with a lower cost of living.

So while employers seem largely hesitant to change compensation for existing team members, they’re more open to using a localized pay strategy for future remote workers. If you decide to take this approach, make a plan to manage it over time. For instance, will you red-circle tenured team members with salaries that are above-band for their location or will they always be paid as if they live near your office headquarters? Either way, this approach can be difficult to manage and administer at scale. It will be important to document exceptions you make to your new pay strategy for tenured team members so you have that visibility in the future. Compensation management software like Compaas can help.

Final thoughts on these remote pay statistics

Every organization and every team will have different needs and preferences, and it’s important to adopt remote pay practices that will work best for you. Nearly half of employers have surveyed their employees on their remote work preferences, which is a great way to collect feedback and develop policies that your team members will buy into. Compensation can be a tricky subject to navigate, but clear and open communication will always lead to better relationships with your team members.

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