Skip to content

How Remote Work Changes Remote Pay Standards

, , , | Oct 6, 2021 4:23:00 AM | By


Is your remote pay ready for the hybrid workforce? Find out if and how your policies need updating.


The collective workforce shift during the pandemic has transformed remote work from a perk to a necessity. While the practice was already on the rise before the pandemic, many say that at-home work is here to stay. That means employers have much more to do than just set up remote desktops. They must pay, recruit and retain new workers in fundamentally new ways—all of which starts with reassessing their compensation strategy.

While we’ve published an entire guide about how to navigate the shift to compensating a hybrid workforce, this blog provides a snapshot of the factors that may influence your remote pay. 

Compare Your Offers & Remote Pay With Your Peers

Before you can know how to pay, you need to know who to pay. Your remote pay strategy starts with knowing your talent market.

  • What are they looking for?
  • Where are they located?
  • What drives them to accept a role?

All these questions are part of a robust competitive analysis that is the crucial first step to creating remote pay guidelines that best suit your company.


Knowing your talent market relies on using the right compensation data. Unfortunately for many startups, the majority of comp data out there isn’t relevant to them. Today’s compensation data often compares public company compensation with startup compensation.


Pro tip: Use this checklist to find the right data for your growing business:

👉 Does the comp data include roles reflected in your organization?

👉 Is the compensation data from a reputable source?

👉 Is the comp data representative of the size/stage of your company?

👉Is the comp data current?

To learn more about getting compensation data the represents companies like yours, join our webinar: “What’s the Big Deal About Compensation Benchmarking?


Rethink Compensation Philosophy

With the workforce at home, opportunities for startups to showcase their culture—and offer perks to potential employees—have diminished. But workers still value the company culture an employer brings, even if they can only experience it from their home. That means it’s on the employer to reconfigure the way they express and communicate their culture, and compensation philosophy is a great way to do that. 


What is compensation philosophy? It determines your market position, pay mix, segmentation, and remote pay strategy.


Pro Tip: Ask questions like:

👉 What do I want to incentivize or de-incentive?

👉 How will I demonstrate pay equity?

👉 How do I want to be compared in the market?

In hybrid work, compensation is one of the best indicators of your company culture. So by redefining your company culture and remote pay, your compensation philosophy will follow. 


Rethink Geographic Differentials

Hybrid companies’ compensation standards can no longer rely on just the cost of living. But don’t throw the maps out yet, companies can still use geographical differentials to determine how to pay employees. At OpenComp, we believe the cost of labor should drive the compensation standards of a modern workforce. 


Pro tip: Aggregate cities and metropolitan areas into tiers, and then apply geographic differentials to different regions.


Revisit Your Remote Pay Framework

Defined and competitive salary ranges and equity ranges keep businesses efficient and ready to scale, and create trust between employers and employees. They ensure that your company is prepared to grow and informs where you can afford to bring on new team members.


If you’ve recently welcomed remote workers from other markets, it’s probably time to revisit your compensation framework. Recruiting for roles outside of your home base prompts an evaluation of salary ranges with your newly minted geographic differentials. Modeling your remote pay ranges will enable you to visualize the full costs and time to implement. 


Consider this: The compensation planning process should include:

👉 Compensation updates

👉 Pay guidelines

👉 Performance management


Strengthen Internal Communications About Compensation

With all these changes comes the need to communicate them, and it’s not a step you can skip. No matter the size of the team, simple and consistent and open communication about pay policies will reinforce to employees that compensation has been carefully evaluated against the market and updated for a hybrid workforce.

Keep in mind: When employees perceive a pay gap, regardless of whether the pay gap actually exists, it results in a 16 percent decrease in intent to stay.

To dive deeper into smart compensation planning, read “Navigating the Shift to Hybrid Work.” You can also start using compensation intelligence for free here: