Like many employers during the coronavirus pandemic continues, your accounting and finance team may be working remotely. This trend is expected to continue even after the pandemic subsides. The increased flexibility with fewer distractions is attractive to employees. The increased productivity and wider candidate pool is attractive to employers.
If your team will remain completely remote, you may be wondering whether your employees’ pay will be impacted. There are many factors to consider when making this determination.
Consider the following to determine whether your employees’ pay rates should be impacted if your team stays remote.
Geographic or Industry Scope
One best practice is to base compensation on your geographic or industry scope that best fits your candidate pool.
- Traditional compensation considers geographic location as a factor when developing pay levels.
- Large metro areas tend to have higher pay levels than rural or smaller areas.
- These location differences may be minimized or not considered for remote work.
Remote jobs let you expand your candidate pool.
- You need to develop a pay strategy that fits your expanded geographic range for recruitment.
- Jobs usually are priced based on the recruitment area, which could be all of Canada.
You may want to base pay levels for completely remote jobs on national market pricing rather than the new hire’s location.
Highly Specialized Skills
Jobs that require niche skills typically are hard to fill. This is why they should be exempt from geographic cost differences. Instead, your pricing for these specialized jobs should be driven by the availability of talent.
- A limited talent pool means pricing should be reflective of the scarcity of skilled candidates.
- Drawing from broadly scattered candidates provides additional hiring options.
Hybrid Work Model
If you are hiring for jobs that are partly remote and partly onsite, the pay rate should be equitable to similar jobs that are completely onsite. This helps you avoid the creation of class system.
- You may use site location as a baseline to determine the pay level.
- You could apply a reasonable discount or premium for employees in different locations.
Determination of fair, equitable pay for remote, hybrid, or onsite jobs has additional complexities. You should take into consideration the following when determining compensation:
- Pay for remote jobs should be based on the role, required skills, and availability of candidates. Less emphasis should be on the employee’s location.
- Pay for onsite jobs should be impacted by location pricing because most employees live locally.
- Stay current on new ideas as work arrangements and methods to determine pay continue to evolve.
- Talk with your employees, other managers, and industry peers about ideas to implement changes without adversely impacting operations.
- Create a transparent, easily communicated compensation plan.
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