Majority of staff would leave job if employers pay them less for working remotely, study finds

Around 83% of employees would leave their current job if they get compensated less for working remotely, according to a new survey. 

Employees want to maintain the option to work remotely post-pandemic; and will not tolerate being compensated less for remote work, according to a new survey from Salary.com. The study also revealed that the majority of companies have no formal practice in place for determining remote pay. 

The Remote Work & Compensation Pulse Survey of both employees and employers, found that 48% of employees want to be fully remote; and 44% want a hybrid work model. The hybrid work model has support among 51% of employers surveyed, though there is a big divide when it comes to fully remote work; with only 5% of employers saying that will be an option. Another red flag is that 92% of employers have no formal practice in place for determining pay for partially remote employees. And 72% have no formal practice in place for determining pay for fully remote employees.

PAY ADJUSTMENTS FOR REMOTE WORKERS

While generally there has been speculation that employers would decrease pay for fully remote employees going forward, Salary.com’s data shows otherwise. An overwhelming majority (95%) of employers said they would not lower compensation for employees who continue, or transition to, working remotely. This is a critical point, given that 83% of employees said they would leave their job if compensated less for working remotely. The vast majority of employees (94%) believe their compensation should be based on their skill set; not their location.

The same applies to partially remote employees, with 97% of employers indicating they will not lower an employee’s compensation if they continue, or transition to, working partially remote. For those that would adjust compensation, 21% would adjust salary with employee contribution, geographic location and concerns about culture as contributing factors.

“Remote work translates into a more fluid, and potentially volatile, market for how employees move from company to company,” stated David Cross, Senior Compensation Consultant for Salary.com. “This double-edged sword not only means that there’s a broader selection of talent from which to hire, but that there is also an increased retention risk to the current workforce. Employers recognise that rewards need to not only reflect and attract these skills into the business, but to retain those skills of their existing employees.”

COMPENSATION FOR NEW REMOTE HIRES

That said, compensation strategy is shifting for new hires. When employers were asked if they would hire a fully remote employee in a different geographic market at the same rate as an on-site employee, 34% of employers said ‘No’. For their pay decisions, they would take into account: 

• Geographic differentials (58%) 
• External competitiveness (67%) 
• Cost of living (43%) 

“One-quarter of employers indicated they will take different considerations into account when determining fully remote pay for new hires; which could create a subtle class divide between new hires and existing employees,” said Cross. “This move could have significant consequences on employee culture and retention.” 

RETURN TO WORK TIMETABLE

The survey also revealed that 51% of employers are planning to bring employees back to the workplace in Q2, particularly, those organisations with less than 500 staff. Around 37% planning to make the shift in Q3; most prevalent with companies with 5,000+ employees. The remaining organisations are planning to make the shift later this year in Q4; predominantly organisations staff with 1,000+ staff.

However, the majority of workers in the US still have some anxiety about returning to work; with women more anxious about it than men. Click here to read more.