All over the United States, hiring needs are surging as we emerge from the global pandemic. While the majority of jobs have returned to the labor market, qualified candidates have not. As a result, employers have an overwhelming need to fill jobs with qualified candidates, but with a smaller workforce to choose from resulting in a second war for talent. As a result, we are seeing an increase in wages and a greater prevalence of benefits once reserved for cutting-edge organizations being offered in even the most traditional Organizations, such as remote pay.
How Companies are Responding
Remote pay, a previously rare perk, has become commonplace and many employees have decided that the flexibility afforded to them through remote work is now a must-have. Companies with remote pay opportunities consistently see huge spikes in job applications. Zillow, for example, has seen applications surge by more than 50% since it announced that it would allow almost 90 percent of its 5,000 employees to work from home indefinitely.
Another example is Spotify: In February 2021, Spotify announced its Work from Anywhere (WFA) program, allowing “Spotifiers to work from wherever they do their best thinking and creating.” But here’s the golden ticket—Spotify is allowing employees to work from any geographic location at San Francisco or New York City salaries, helping them to attract and retain the best of the best when it comes to talent.
And Spotify’s reasoning for this? Here’s what they say:
- “Work isn’t something our people come to the office for, it’s something they do.”
- “Effectiveness can’t be measured by the number of hours people spend in an office. Instead, giving people the freedom to choose where they work will boost effectiveness.”
- “Giving our people more flexibility will support a better work-life balance and also help tap into new talent pools while keeping our existing band members.”
As a result of this flexibility, we have seen a large number of employees leaving high cost of living areas to relocate to more affordable parts of the country (or world) while retaining their highly paid roles in a remote pay situation. What does this mean to companies that have previously never had to compete with the behemoths from the Bay? Well… suffices to say, “Toto, our competitors aren’t from Kansas anymore.”
How to Keep a Competitive Edge in the World of Remote Pay
As employers recast the employee-employer relationship and workplace assumptions through remote work, employers must also “capture [the] competitive advantage from new talent scenarios,” to stay competitive.
According to Scott Engler, VP, Advisory of Gartner, “[i]n a reset talent landscape, the burning questions become: ‘What does differentiated talent look like? Where can we find it? And how do we put it together to gain competitive advantage?’”
To answer this, we must first decide how we want to be competitive. Most think that this means higher salaries. While high pay is one aspect of being an attractive workplace there are many non-compensatory factors that organizations can should consider to recruit, retain and engage talent. Here are a few considerations for organizations to consider, when they don’t have the same budget as the huge tech firms that are flush with cash:
- Understand that “talent is no longer geographically limited” and providing remote pay opportunities will make it easier to recruit hard to find talent
- Clearly define the reason why employees would want to work for your Organization. Whether it is culture, pay, flexibility, projects, or career opportunity – this must be well understood.
- Recognize that remote work and remote pay “enables flexibility, productivity and cost savings”
- Embrace contingent and gig workers to fill hard and soft skills gaps within your organization
- Create a “flexible workforce plan around both current and future skill needs [creating] a combination of build and buy strategies. Labor market analytics uncover key insights about the availability and cost of talent, which help identify an organization’s optimal locations and footprints for now and into the future.”
- Conduct research about your competitors and understand what they are paying for talent, today. Traditional salary surveys are anonymized and do not show data more recent than 90 days, this type of insight can be accomplished, easily, using a tool like Squirrel.
Adding programs like flexible work hours and remote pay opportunities will help companies attract, retain, and engage top talent, keeping that competitive edge. And, as Gartner’s Scott Engler said, “Organizations that can sense and seize on these new talent realities are going to secure a competitive advantage.”
Though non-compensatory benefits are key to developing a competitive Total Rewards program, wages & salaries remain a core component of the total rewards package. Employers with the most accurate and up to date salary and wage information are better enabled to recruit and retain talent. With options like Squirrel, and the Compensation Tool, you can tap into a user-friendly market pricing tool and with a huge amount of high detailed and timely data that is affordable without sacrificing functionality – or talent.