The COVID-19 pandemic dramatically changed the way we work, accelerating the existing trend towards remote work. As more employees moved out of corporate offices and began working from home, companies had to rethink their compensation and benefits packages. What does the growing remote workforce mean for pay, bonuses, and perks? Here we examine the key impacts.
Pay Cuts Averted...For Now
Many feared that the shift to remote work would enable across-the-board pay cuts, saving companies money previously spent on operating expensive corporate campuses. However, that hasn't come to fruition. In fact, one study found that 97% of businesses had no plans to decrease salaries for remote employees, although 53% admitted compensation may be lower for workers who relocate to less expensive areas.
With the labour market favouring skilled workers, most organisations realise large pay cuts would damage retention and hiring. However, as remote work matures, the decoupling of pay from geography could gain momentum.
Benefits Get More Flexible
With remote employees scattered across cities, states, and time zones, providing one-size-fits-all benefits packages became less tenable. Companies adapted by increasing benefit flexibility through credits, stipends, and allowances. For example, instead of traditional healthcare plans, some firms now offer a monthly wellness stipend usable for gym memberships, meditation apps, etc.
Allowing remote workers to customise their benefits aligns perks to individual needs and lifestyles. The trend promises to accelerate as organisations support dispersed workforces. As more companies embrace “work from anywhere,” benefits flexibility is now more important than ever.
Blurring the Lines of Work and Life
One upside of remote work is the ability to intermingle personal and professional activities more freely. Without commutes and set office hours, days stretch to accommodate family responsibilities, hobbies, and other aspects of regular life. However, the risk is that work encroaches too far, leading to burnout.
Forward-looking companies are actively establishing new boundaries while still supporting work-life integration. Flexible paid time off policies with minimal tracking are increasingly common. Company-wide recharge days give the entire organisation a break. Remote-first companies even encourage employees to work from relaxing locales or abroad to promote work-life balance. The new world of remote work is causing a healthy re-evaluation of how we integrate our jobs with the rest of our busy, mobile lives.
Rethinking Equitable Rewards
As companies adapted their rewards programs to remote environments, many found themselves addressing larger issues around pay equity. Location-based pay violated equal pay principles. Likewise, practices like tying bonuses solely to hours worked in the office drove inequities between remote and onsite staff.
By deprioritising previously standard compensation metrics like geography and physical presence, companies made strides towards more ethical and results-driven incentive structures. Outcomes and unique employee contributions are becoming bigger factors in rewards beyond where people happen to work. Rethinking compensation through the lens of remote work shed light on outdated practices while pointing toward more fair, equitable pay.
In light of these changes, there's a growing demand for professionals skilled in navigating this new landscape. For those interested in exploring career opportunities in this evolving field, a look at the latest compensation and benefits job vacancies can provide insight into the roles that are emerging as a result of these shifts.
The remote work revolution is clearly transforming compensation and benefits as companies compete for talent in a newly flexible job market. While predictions of sweeping pay cuts have yet to emerge, the decoupling of pay and location seems inevitable long term. Likewise, the standardisation of increased perks flexibility and emphasis on equitable, ethical rewards structures appear here to stay. With work-from-anywhere gaining steam, companies must reimagine pay and benefits to align with remote teams. The companies that get it right stand to win the war for talent and have a more equal, empowered workforce driving success.
