Employees Paid Less for Working Remotely Would Quit

Over the past year-plus, full-time remote work has become the norm for many workers, and employees want to maintain this option post-pandemic — but they won’t tolerate being paid less for doing so, according to a new Salary.com survey.

More specifically, 83 percent of employees said they would leave their job if they are paid less for working remotely, and 94 of employees said they believe they should be compensated based on their skill set, not their location. Based on the Salary.com survey, employers and employees are aligned on this issue, as 95 percent of employers said they would not lower compensation for employees who either continue or transition to working remotely.

“Remote work translates into a more fluid, and potentially volatile, market for how employees move from company to company,” said Salary.com Senior Compensation Consultant David Cross in a press release. “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 recognize that rewards need to not only reflect and attract these skills into the business, but to retain those skills of their existing employees.”

Conducted in May 2021, the survey also found that 48 percent of employees want to be fully remote and 44 percent want a hybrid work model. But while the hybrid work model was supported by 51 percent of employers surveyed, only 5 percent of employers said fully remote work will be an option.

And when it comes to new hires, 34 percent of employers said they wouldn’t hire a fully remote employee in a different geographic market paid at the same rate as an on-site employee. When determining compensation for a fully remote new hire, employers said they would consider:

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

But taking different considerations into account when determining pay for fully remote new hires may have negative consequences, according to Cross. Doing so, he said in the press release, “could create a subtle class divide between new hires and existing employees. This move could have significant consequences on employee culture and retention.”

Jessica Mulholland, Managing Editor, CalChamber

CalChamber members can read more about Remote Workers/Telecommuters in the HR Library. Not a member? See how CalChamber can help you.

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