Compensation in a Reinvented Work Environment
The notion of a “typical” workplace is evolving before our very eyes, and with it, remote work sales compensation plans. As quickly as the pandemic drove offices to remote work, major cities in the U.S. are seeing community Covid numbers go down. Therefore, many organizations are eager to bring their employees back into the office, sourdough sandwiches in tow and all. As Dr. Fauci stated at the end of April, the ‘pandemic phase’ is over and we are moving into a ‘transitional phase.’ Around the beginning of the pandemic, the Bureau of Labor Statistics reported that a full 57% of professionals worked at some capacity through “telework.” The latest BLS March 2022 report indicated that, since then, that number of people utilizing “telework” is down to 18%. However, within this subgroup, some occupations such as those in the information technology sector are still working remotely at a rate of 37%.
Will remote work become just a relic of the pandemic, where companies were forced to quickly cobble together a remote work strategy just to keep the lights on? Now, companies are facing a fork in the road when it comes to remote work and remote work compensation plans. Working remotely can largely be viewed in two camps. The former group will look at it as purely an accommodation and perquisite. The latter group will view it is as a window into the new work landscape. Those in the first camp may see the road forward as a focus on minimizing any damage done, as well as managing unrealistic expectations created when Covid gave even untraditional roles the opportunity to work from home. The second camp looks towards an entirely new work landscape, left after those blistering days of the pandemic, as a sliver of light shining from Narnia’s door, providing new opportunities to create global teams who can quickly activate, share ideas, and share and shift resources as they meet their client needs.
Adjusting to the New Work Environment
Remote working technology, the acceptance of these platforms to conduct work, and the pervasiveness of technology in our personal lives all increased dramatically during the pandemic. Fortune Magazine reported recently that 80%+ Millennials and Generation Z reported (video) gaming weekly, and often times, daily. The convergence of new technology development, the ubiquity of virtual reality technologies in the lives of Millennials and Gen Z, and the fluidity of technology across our work and personal lives lay the groundwork for a portion of the “workplace of the future” to be constructed without brick-and-mortar. Given this convergence, how ready are organizations to have employees report to their metaverse office space?
To support the new remote and digital workplace transformed by the pandemic, the world of remote work requires its own supporting human resources infrastructure, as well as new norms.
The world of remote work is certainly not new. Employees frequently worked from home for their convenience or to meet business needs prior to the pandemic. With more employees having experienced remote work because of the pandemic and vast improvements to technology, organizations looking to return to the “pre-pandemic” normal will find that a very different landscape has emerged. Organizations that are merely accommodating remote work will likely apply existing programs that were developed for the traditional brick-and-mortar workplace to the new workplace. This misalignment will likely lead to negative impacts on retention, productivity and attracting a world class workforce.
As an example, last summer, a number of large tech companies such as Google, Facebook, and Twitter announced plans to adjust and reduce pay for remote employees who moved to less expensive cities, applying the traditional approach of geographically influenced pay levels to a new, evolving workplace. Employees who made the move during the pandemic from expensive metropolitan areas would be paid at levels aligned to the less expensive cities they now lived in. From a consistency of applying similar pay practices across employees located in the same office, there would be no dispute as to the importance of ensuring pay was administered equitably. However, while treating employees equally based on geographically developed pay rates, the negative fell on employee morale and productivity, which likely was not intended. Leaning into remote working to support new business models will require a new Human Resources framework to optimize the opportunities and address challenges inherent to remote working and remote work compensation plans.
Developing a Framework for Remote Work
Organizations developing a framework to scaffold remote work will provide managers who are redesigning their organizations tools to reach markets and to create scalable organizational structures that attract and retain top talent. Organizations can benefit from a roadmap for remote workers in many ways, including:
- Supporting visualization for organizational redesigns. A remote work HR framework establishes a roadmap for functional and business leaders to visualize how their employees can work in a new way, by specifically addressing common needs and challenges of remote workers. This enables organizations to scale work processes to include a remote workplace. In this tight labor market, using remote workers helps to engage shared staff functions and resources, as well as enables the organization to quickly activate groups of employees during times of peak or overflow demand.
- Harmonization and consistency across the organization. The HR framework provides a basis for harmonization across business lines and supports movement across the organization for remote workers.
- Improved employee communication for remote and non-remote workers. A common framework offers realistic job previews to new candidates and helps to manage expectations for employees and their managers who are exploring options to create remote workspaces. Non-remote workers working closely with remote workers may gain a clearer understanding of the expectations of the remote environment and integrate their processes accordingly.
Organizations designing a remote work framework will want to provide a comprehensive work experience similar to that of a traditional brick-and-mortar office. These framework focus areas should consider including specific designs for:
- Salary structures and ranges.
- Pay mix and incentive opportunity and payment frequency.
- Remote work environment and culture.
- Norms, expectations, and communication.
It is a good time to take another look at those human capital systems that were designed for brick-and-mortar spaces and to rethink them for the new workplace. One remote work program may not fit all, but organizations need an updated framework to leverage the opportunities provided from remote work. What challenges are you facing around remote workers? What type of framework has your organization put in place or planned to address remote workers?
SalesGlobe is a leading sales effectiveness and data-driven creative problem-solving firm. We specialize in helping Global 1000 companies solve their toughest growth challenges and helping them think in new ways to develop more effective solutions in the areas of sales strategy, sales organization, sales process, sales compensation, and quotas. We wrote the books on sales innovation with The Innovative Sale, What Your CEO Needs to Know About Sales Compensation, and Quotas! Design Thinking to Solve Your Biggest Sales Challenge.
Pay Benchmarking Practice Lead
Tina is a business leader with over 25 years of experience in human resources operations and consulting from a variety of industries at various stages of organizational growth.
