Summary: 

A successful company thinks strategically. As remote work is getting common, leaders are thinking to optimize their compensation and benefits strategy based on location of work. This is a perfect opportunity to save costs. Employees belonging to more affordable locations expect compensation that’s competitive as per local labor costs. Leaders are also approaching newer ways of providing benefits that exclusively create value for work-from-home employees. But how do you optimize your strategy? The author presents a summary for employers to help them create a salary strategy and set benefits that best matches with company goals.

Remote work demands a shift in the traditional Human Resource. To compensate the ‘newly’ emerged remote workforce, leaders structure the salary around the location of these workers. Meanwhile, there’s a shift from traditional on-prem benefits to more home based perks that better aligns with the wellbeing of remote employees. 

This new compensation philosophy also makes it easy for remote workforce to accept pay packages and benefits that’s perceived competitive in their local market..

But how to create this new structure of compensation and benefits? Especially when there’s limited information about the local markets and labor expectations.

To guide employers looking to hire remote international employees, the author presents a guide to scale salaries and benefit packages based on geography. But first, do you know what’s the purpose of having compensation and benefits separately?

Overview

Compensation is an aggregate monetary figure that includes ‘basic pay’ (that pays for an employee service) as well as the costs as the result of doing the job. These additional costs include: living expenditure, computer cost, medical allowance etc..

The purpose of compensation is to rightfully pay an employee for the effort they put for the company. It’s a basic requirement a prospect seeks in any company.

Benefits, on the other hand, are non-monetary perks. Just like compensation, some benefits ease an employee’s task (such as flexible work schedules and childcare) while others offer additional value (such as through medical insurance, employee gifts and more).

The purpose of benefits is to attract and retain valuable talent in an organization.

Start here.

Know about the national pay scale. Before you hire a remote workforce, it’s important to consider whether the national pay in the target remote region is affordable for your business.

National pay gives you the idea of the minimum wage, as well as the additional compensation you would have to pay as an employer. In it, you can estimate the location pay and other compensation costs for a region.

Now, you may not limit yourself only to the public sector information. It’s also important to consider what the private sector in your industry pays to employees. If the private sector has better salary structures, you may lose talented employees at their hands. 

That’s why broaden your research by checking for competitor pay rates. This information is generally available via recruitment websites (such as PayScale and Glassdoor).

Another valuable source of information are your interviewees. When you ask them their salary expectations, it gives you an idea of the competitive salary rates for that region.

Save your time…

Researching market statistics (such as the above) is time taking and requires a systematic approach. But if you don’t have capacity to research in-house, recruitment agencies are another source of useful information. These are the third party organizations whose business is to help companies set salary and benefit packages for local labor.

Outline remote-exclusive benefits.

Remote exclusive benefits reflect a shift from traditional on-prem perks– such as childcare and gym membership, to alternative remote options– such as flexible schedules and in-door cycling subscription. 

These benefits are not just limited to the above. Health care, mental wellbeing, and skills development are also part of the remote benefits strategy. 

To outline benefits that align with your company goals, research the local law. Are there any benefits that are compulsory? 

Asking your employees is another way to discover competitive benefits. 

Remote work provides the opportunity to restructure salaries and benefits around affordable locations, saving investment costs for an employer. In the other, employees are also satisfied when they are compensated as per the costs in the local region. Use this opportunity, and follow the above guidelines to create an optimized salary and benefits strategy.