1、The state of remote work,return-to-office policies,and geographic pay strategies Get the results from Payscales 2023 employer survey on remote work to learn how HR leaders,compensation professionals,and executives are managing the impact of remote work and return-to-office mandates on talent strateg

2、y,and which pay strategies are most popular for managing remote and geographically distributed employees.2Executive summaryAccording to new research derived from Payscales online salary survey,47 percent of employees expect remote work opportunities to continue after the pandemic.In addition,the ina

3、bility to work remotely has been correlated with a 14 percent increase in intent to leave.These findings align with recent research from Gartner,which estimates that by the end of 2023,48 percent of knowledge workers around the world will work either fully remotely(9 percent)or in a hybrid arrangeme

4、nt (39 percent).Payscales survey of employers finds that 32 percent of office environments are already hybrid and 18 percent are either remote-first(employees choose where to work)or fully remote(there are no offices).The takeaway is that traditional office environments are shrinking and do not look

5、 to be coming back.While a large majority of organizations(91 percent)acknowledge that workplace flexibility is a critical benefit to talent strategy,43 percent dont survey their employees on their work-from-home preferences.Of organizations that have embraced remote work,the top reason is access to

6、 a broader talent pool.Of organizations demanding that employees return to offices at least some of the time,the most cited reason is to build culture and connection.Overall,more employers(89 percent)believe that carrots work better than sticks to persuade employees to return to office environments.

7、Most organizations(84 percent)believe that their executive leadership trusts employees working from home to be productive,but 24 percent say their executives fear remote work has(or will)decrease productivity.However,the decline in productivity in the United States from 2022 through early 2023 is th

8、ought to be more the result of high turnover and insufficient pay leading to decreased output and engagement than remote work.Unfortunately,most organizations dont measure or reward increased productivity.Pay strategies to accommodate the rise of remote work are in a state of transition.While most o

9、rganizations(86 percent)have not altered their pay methodology since early in the COVID-19 pandemic,a small shift is being seen from basing pay on headquarters to adopting a geographic pay strategy that takes the employees location into account.Geographic differentials are more attractive to larger

10、organizations with more distributed workforces.Payscale offers geographic pay data,compensation software,and managed services to help organizations explore and adopt pay strategies using geographic differentials as well as traditional methodologies using market pricing.Methodology:Payscales survey o

11、n remote work and return-to-office policies collected 980 employer responses between July and August 2023.Table of contents4Impact of remote work on TA&R 5Employee communications 6Workplace environments 7Reasons to return to office 8Reasons for remote work 9Carrots vs.sticks 10Trust in remote work 1

12、1Declines in productivity 12Measuring and rewarding productivity 13Employees slacking off 14Geographic pay strategies for remote work 17Segmentation of pay strategies by industry16Geo-differentials prevalent in distributed workforces15Segmentation of pay strategies by company size 18Methodology 20Pa

13、yscales geographic pay solutions 34Remote work continues to impact talent strategy.Unequivocally,employers recognize that remote work or at least workplace flexibility is here to stay.This impacts talent attraction and retention strategies(TA&R)as well as compensation management strategy.According t

14、o our survey,73 percent of organizations believe that remote work is impacting competition for talent.This percentage is much higher than whats reflected in Payscales Compensation Best Practices Survey(55 percent);however,organizations with challenges related to remote work are more likely to partic

15、ipate in a remote-work survey.Unsurprisingly,a whopping 91 percent of organizations consider workplace flexibility to be a critical benefit to offer when it comes to attracting talent.Although not shown in the charts,for managing employees outside of the U.S.,the importance of workplace flexibility

16、is only slightly reduced around 87 percent.It is highest for organizations managing employees in hyper-competitive pay markets,at 97 percent.Is remote work impacting how you compete for talent?Do you consider workplace flexibility to be a critical benefit in attracting talent?YesNoUnsure73%16%11%Yes

17、NoUnsure91%5%4%5Employee communications need to increase.Despite the critical importance of work-from-home policies,most organizations dont survey their employees on their preferences,and only 22 percent have done so recently.It is possible that organizations do not ask because leadership either doe

18、s not want to know or does not care what employees prefer.Communications to employees are lacking in other ways,too.We asked participants whether their workforce understands their pay practices when it comes to their location and/or their remote work status.While executives seem well informed,only 4

19、5 percent of organizations felt that their policies were well-communicated to salaried employees and only 30 percent to hourly employees.As we will see,pay policies are extremely varied from organization to organization,suggesting a great need to improve pay communications across the board.Have you

20、surveyed employees on their remote work/work-from-home preferences?Do employees understand your pay practices and how their pay is impacted by their location and/or remote work status?Overall yes answers 22%29%43%6%Yes,recentlyNoYes,but not in the last yearUnsureExecutives90%Managers72%Recruiters69%

21、Hourly employees30%Salaried employees45%Split by job typeHybridRemote-firstTraditionalFully remote40%32%13%11%5%Traditional office environments are declining.We asked participants in our employer survey to describe their work environment.Only 11 percent described it as traditional,meaning that work

22、is primarily done onsite.Most organizations are either hybrid(32 percent)or split by job type(40 percent).However,18 percent describe their environment as either remote-first,meaning employees choose where to work,or fully remote,where the organization does not have offices at all.Traditional office

23、 environments are more common for organizations with a centralized workforce(22 percent),as well as those in certain industries like education(22 percent)and manufacturing(24 percent).Remote-first work environments are more common for technology organizations(32 percent).When comparing this survey t

24、o our 2023 Compensation Best Practices Survey,which was collected at this time last year,more organizations are now split by job type or remote-first.This trend suggests that there is no going back to traditional office environments.Remote work has been something that employees have been fighting fo

25、r since well before the pandemic.Return-to-office mandates,when necessary to address real issues experienced by the organization,need to be coupled with clear communications and data-backed rationale.6How would you describe your organizations work environment currently?18%7Returning to offices is mo

26、re about culture than productivity.In order to provide cogent communications to the workforce around return-to-office mandates,organizations first need to understand why in-office work matters to them.The most-cited reason to return to offices according to participants in our survey who require empl

27、oyees to come into the office at least some of the time is to build or maintain culture or connection,followed by facilitating collaboration.Increasing productivity was a distant third.However,its important for employers to note that work culture is not found in the walls and floors of a commercial

28、office building.Forcing employees to work at a desk in a physical space doesnt necessarily achieve the goal of building culture and connection,especially if employees are coming in on different days to log into virtual meetings.While in-person interaction may improve culture,organizations need to th

29、ink deeply about how interactions are facilitated and the value they bring to employees and the work they do.They also need to reflect on whether culture,collaboration,and connection can only be achieved in-person.Which of the following are the top reasons driving your organization to require employ

30、ees to work in offices at least some of the time?First reasonSecond reasonThird reasonBuilding or maintaining culture or connection52%24%12%Facilitating collaboration19%42%22%Investment in real estate8%2%2%Exerting power/control over workers3%2%1%Fear or expense of changing norms3%1%4%Distrust in em

31、ployees3%5%Training young(Gen Z)or new workers3%7%15%Fostering innovation2%16%5%Increasing productivity14%12%19%1%8The value of remote work is access to more talent.We also asked our participants who describe their organization as remote-first or fully remote about their strategic reasons.The top re

32、ason for embracing remote work is access to a broadened talent pool.The second reason is to offer a differentiating benefit to attract and retain talent.These are two sides of the same coin,with remote work being beneficial to both employers and employees.The shift to remote work means companies tha

33、t dont require workers to be physically present now have access to a wider,global talent pool.Even traditional and hybrid organizations suffering from talent shortages can benefit by expanding some jobs to allow for remote work.Meanwhile,organizations that do not allow remote work need to be confide

34、nt that they can continue to attract the best workers on site through their employer branding and their rewards packages.Which of the following are the strategic reasons your organization embraced remote-first or fully remote work?First reasonSecond reasonThird reasonBroadened talent poolDifferentia

35、ting benefit for attracting and retaining talentDiversity,equity,inclusion,and belonging(DEIB)Lower salaries24/7 availability of workersEnvironmental benefits(e.g.carbon footprint)Reduced costs from office equipment or real estateTo improve mental healthIncreased productivity11%28%41%18%30%29%9%9%7%

36、10%11%8%2%2%4%5%2%1%1%20%12%21%11%10%9Employers believe carrots work better than sticks.According to our survey,62 percent of organizations have experienced resistance from employees to return to offices.However,only 21 percent have reconsidered their policies due to this resistance.When it comes to

37、 motivating employees to return to offices,89 percent of employers believe that carrots work better than sticks.Examples of carrots provided by employers in the comments include team-building activities,stipends for commuting,free or subsidized meals,interesting speakers or other events,theme days,a

38、nd geographic pay differentials with pay communications to help employees understand the benefit.Some organizations involve employees in developing the policies and rewards.An example of a stick would be a mandated minimum number of days in the office.However,some organizations shared that these req

39、uirements resulted in resignations and that the mandates had to be rescinded.Have you experienced resistance or unwillingness from employees to return to offices?Which do you think is more effective for getting employees to work in offices?Carrots(incentives orreasons to come into the office)Sticks(

40、consequencesfor not cominginto the office)89%11%41%21%18%10%10%Yes,but it hasnt made enough of an impact to cause us to review our policies Yes,and the impact(on turnover,engagement,morale)has made us reconsider our policiesNo,we have not experienced notable resistance or unwillingness from employee

41、s to return to an office environmentNo,in fact,a hybrid office has slowed attrition or improved engagementUnsure10Most executives trust employees to work from home.Despite what has been prominent in the news,a large majority of organizations (84 percent)say that their executive leadership trusts emp

42、loyees working from home to be productive,with the majority(54 percent)extending this trust by and large across the company and a smaller minority(30 percent)trusting only select employees to be accountable away from the office.Equally reported in the news is the frustrating experience of job candid

43、ates being sold a remote work opportunity only to have that opportunity morph into a hybrid or traditional on-site work experience after they have accepted the offer.However,according to our survey,only 8 percent of participants report being aware of this happening in their organizations.Does your e

44、xecutive leadership trust employees working from home to be productive?Did your organization make promises to employees sometime in the last few years that remote work would continue to be an option and then renege on that promise?Yes,by and large across the company 54%Yes,for select employees 30%No

45、8%Unsure7%YesNoUnsure82%8%10%11According to the U.S.Bureau of Labor Statistics,productivity in the United States declined for five straight quarters through Q1 of 2023.This made headlines.However,that was when predictions of a recession were more prominent.In recent months,fear of a recession has re

46、ceded.Nevertheless,some executives have publicly blamed remote work for the decline in productivity.In our survey,we asked organizations if their executive leadership believes that productivity in their organization has (or would)decrease due to remote work.Only a minority of organizations(24 percen

47、t)answered in the affirmative.Does your leadership believe productivity in your organization has decreased(or would decrease)due to remote work?YesNoUnsure45%24%30%We also asked participants to rank which factors are having the most impact on productivity in their opinion.Remote work ranked second t

48、o last,just above anti-work sentiment.The primary culprits according to our audience of HR leaders are higher than average turnover and insufficient pay.It takes time to train workers,and the combination of increased stress and pay increases that dont exceed inflation can reduce engagement,which imp

49、acts productivity.Which factors are contributing the most to declining productivity in the United States?Productivity in the United States is defined as the measure of economic performance that compares the amount of goods and services produced(output)with the amount of inputs used to produce those

50、goods and services.Productivity is not declining because of remote work.4.27Remote work1-most impactful6-least impactfulHigh turnover2.882.97Insufficient pay3.13Mental health concerns3.43Supply and demand challenges4.31Anti-work sentiment123456Weighted ranking12Yes,productivity issomewhat measurable

51、 Yes,productivity ishighly quantifiable NoUnsure47%30%10%13%Most organizations dont measure or reward productivity.We asked participants in our survey if they measure and reward increased productivity.Presumably,this would be required in order to know whether or not remote work was having a negative

52、 impact.However,only 57 percent of organizations said they measure productivity,and only 10 percent do so tangibly.We also asked employers if they reward employees for increased productivity.Again,only 10 percent do so in a calculable manner that would motivate employees.Another 30 percent reward pe

53、rformance nebulously through the discretion of managers.This falls short of a majority,which begs the question:Why should employees work harder to produce more if there are no rewards for doing so?Do you have processes to measure productivity?Do you reward employees for increased productivity?Yes,bu

54、t in a nebulousway at the discretionof managers Yes,to the degree that employees cancalculate their rewards NoUnsure52%30%10%8%13Employees slacking off or working a second job are rare.Some news stories have highlighted the potential for employees to slack off when not physically monitored by manage

55、rs in an office environment,or even to work more than one job to collect two paychecks.In our survey,we asked employers whether they had caught employees slacking off or working a second job.Only 22 percent of respondents said yes;however,in the comments,they elaborated that these occurrences can al

56、so happen with employees who work in traditional office environments.Some expressed concern that employees working from home were distracted by domestic responsibilities such as childcare.However,the general feeling is that performance issues are primarily due to factors outside of remote-work statu

57、s and can be resolved with better management and expectation-setting.Some specify that working from home is a privilege that can be revoked when performance issues arise.Has your organization caught employees slacking off or working a second job simultaneously while working remotely?YesNoUnsure43%22

58、%36%“Not meeting metric and/or job requirements.Those living near a physical office have been required to move from fully remote to a hybrid schedule until theyve corrected their performance.”“This is not the norm,and we immediately address it as we would any other performance issue.”“As long as the

59、yre getting the work done,which includes being in the meetings theyre supposed to be,were more interested in the result than a perception that theyre slacking off or have a second job.”“This is not the norm,and we immediately address it as we would any other performance issue.”“14Has your methodolog

60、y for paying remote employees changed since the pandemic?What best describes your pay methodology for remote employees?YesNoUnsure11%86%3%We base pay on where weare headquarteredWe base pay on the employeeslocation using market pricingWe base pay on a national median We use a mixed methodology We ba

61、se pay on the employees location using geo-differentials We use pay zones Before the pandemic202337%30%15%15%12%18%15%14%16%19%5%5%Pay strategies for remote work are in a transitional phase.Most organizations(86 percent)say they have not changed their methodology for paying remote workers since the

62、pandemic.There has been a notable shift from headquarter-focused pay strategies to various kinds of geographic pay strategies (37 percent to 30 percent);however,there is more room for growth as organizations reevaluate their talent approaches in relation to remote work and examine how compensation w

63、ill need to change to support these approaches.15Pay methodologies are varied depending on the organizations size.To help organizations evaluate which pay methodology is most appropriate for them,we segmented our data by company size,distribution of employees,international pay markets,and industry.W

64、e find varied approaches across all of these segments.However,we do see that geo-differentials and pay zones are more attractive for larger organizations.This makes sense as market pricing for each location can be challenging the more locations and roles an organization has.Pay methodology by compan

65、y size1 to 99100-1,4991,500-4,9995,000-9,99910,000-49,99950,000+We base pay on where we are headquartered 40%33%25%23%26%14%We base pay on the employees location using market pricing 24%22%10%4%7%6%We base pay on a national median 11%17%24%19%16%20%We use a mixed methodology 18%12%13%14%19%14%We bas

66、e pay on the employees location using geo-differentials 5%14%24%28%26%34%We use pay zones 2%3%5%12%6%11%Pay managedUSPay managedEUPay managedCANPay managedUKWe base pay on where we are headquartered 29%9%15%8%We base pay on the employees location using market pricing 14%12%19%16%We base pay on a nat

67、ional median 18%24%19%24%We use a mixed methodology 14%18%13%18%We base pay on the employees location using geo-differentials 19%28%28%28%We use pay zones 5%8%7%6%CenteredDistributedGlobalWe base pay on where we are headquartered 63%21%10%We base pay on the employees location using market pricing 12

68、%17%16%We base pay on a national median 7%21%22%We use a mixed methodology 11%15%17%We base pay on the employees location using geo-differentials 6%22%27%We use pay zones 1%5%8%Geo-differentials are more prevalent in distributed workforces.Geo-differentials are also more common for organizations wit

69、h a distributed or global workforce.They are especially prevalent in organizations that manage pay for employees outside of the U.S.16Pay methodology by employee distribution What best describes your pay methodology for remote or distributed employees in 2023?17Geo-differentials are more prevalent i

70、n technology companies.Different industries employ different methodologies when it comes to managing pay for remote workers.Industries more tethered to an on-site workforce,such as education and healthcare,are more likely to base pay according to their organizations headquarters or the location wher

71、e employees are going in to work.By contrast,the technology sector is least likely to base pay on headquarters and much more likely to base pay on a national median,geo-differentials,or pay zones to hire the best talent wherever they live.However,the best approach depends on your talent strategy.Wha

72、t best describes your pay methodology for remote or distributed employees in 2023?*Industries not shown didnt have enough responses to meet the requirements for statistical analysis.We base pay on where we are headquarteredWe base pay on the employees location using market pricingWe base pay on a na

73、tional medianWe use a mixed methodologyWe base pay on the employees location using geo-differentialsWe use pay zonesEducation63%13%10%13%0%0%Finance&Insurance25%13%24%14%21%4%Food,Beverage,&Hospitality19%19%19%16%25%3%Healthcare&Social Services49%7%12%9%18%5%Manufacturing26%26%18%11%18%1%Nonprofit62

74、%4%11%6%13%4%Technology8%17%27%16%26%6%Other22%15%18%17%21%8%18Where does your organization manage pay for employees?Which of the following best describes your workforce?Which best describes your function in your organization?HRCompensationExecutive LeadershipRecruitingOtherConsultingFinanceMarketin

75、gOperationsTechnologyLegalSales42%39%10%2%2%1%1%1%1%1%0%0%United StatesCanadaUnited KingdomEuropean UnionOther95%18%13%11%10%centered27%We are concentrated primarily in one location(state or country)distributed51%We have offices and/or employees in multiple(a few)states,provinces,countries,or time z

76、onesglobal23%We have a global workforce with employees distributed throughout the worldMethodology The 2023 State of Remote Work,return-to-office policies,and geographic pay strategies report includes data from an employer survey that gathered 980 responses between July and August 2023.19Other(pleas

77、e specify)Technology(including software)Finance&InsuranceHealthcare&Social ServicesManufacturingNonprofitEducationEnergy&UtilitiesFood,Beverage,&HospitalityAgencies&ConsultanciesConstructionEngineering&ScienceGovernmentReal Estate,Rental,&LeasingArts,Entertainment,&Recreation21%14%12%12%12%5%4%4%4%3

78、%3%3%2%2%1%How many full-time employees are in your organization?Which of these best describes your industry?Are you headquartered in a hyper-competitive pay market(e.g.Silicon Valley,Washington,D.C.,New York City,etc.)?YesNoNo,but we have employees in hyper-competitive pay markets53%28%19%1-99100-1

79、,4991,500-4,9995,000-9,99910,000-49,99950,000+14%37%20%10%14%5%Build location-based pay strategies with Payscale Remote work and pay transparency are changing the way companies manage compensation.Organizations need to be able to explain to employees their remote work policy and pay philosophy.There

80、 is a lot to consider when it comes to paying by location and every business should determine the right strategy for their unique situation and needs.Whichever strategy you choose to employ,its critical that you use timely data,build equitable structures,and communicate your pay philosophy to your w

81、orkforce.Payscale can help you with all of the above in order to better manage pay for remote and distributed workers.The Payscale Solution to Location-based pay strategies Develop an equitable pay philosophy you can stand behind Activate your compensation strategy consistently throughout your busin

82、ess Effectively communicate so that employees understand their pay Professional services Execute your location-based pay strategy quickly and thoughtfully with experienced compensation services designed to help you develop your compensation philosophy,strategy,and policies and activate through marke

83、t pricing,structure development,and manager training.Reliable location data:Payscale delivers a variety of sources of timely market data applying two different methodologies:Employee-reported,and HR-reported,including Employee-Reported Data,HR Market Analysis,and Peer.We also provide geo-differentia

84、ls based on these data methodologies.Compensation technology that activates strategies:Leverage Payscales compensation management software to bring your location-based pay strategy to life by developing smart,equitable and,scalable salary structures and effectively communicating pay to your workforc

85、e.Payfactors:Our compensation platform allows you to activate your location-based pay strategy through sandbox scenarios,customizable market pricing,salary structures to drive strategy,and reports that deliver insights.Total Rewards Statements:Communicate pay to your employees so that they recognize

86、 your organizations policy on location-based pay and understand what they are paid and why.Ask for a demo20About PayscaleAs the industry leader in compensation management,Payscale is on a mission to help job seekers,employees,and businesses get pay right and to make sustainable fair pay a reality.Em

87、powering more than 50%of the Fortune 500 in 198 countries,Payscale provides a combination of diverse and dynamic data sources,experienced compensation services,and scalable software to enable organizations such as Angel City Football Club,Target,Gainsight,and eBay to make fair and appropriate pay decisions.Pay is powerfulTo learn more,visit .