How to Redefine Total Rewards for the Hybrid Workforce | Gartner

Workforce Trends

As remote and hybrid work continues to take hold in many organizations, employers are re-evaluating various talent policies and practices. One area in which remote and hybrid work has implications is total rewards. This article addresses how the benefits of hybrid work and location flexibility create challenges for total rewards leaders in four areas: 1) the relocation of existing employees, 2) perceptions of pay fairness, 3) recruiting from more diverse geographies, and 4) employee burnout. Regarding the relocation of existing employees, total rewards leaders continue to grapple with whether to adjust employee pay in line with any change in the cost of living. For example, while Meta, Twitter, Microsoft, and Google base pay on geographic location, smaller companies, including Reddit and Zillow, have shifted to location-agnostic pay models. Google even has a Work Location Tool that enables its workers to estimate how their salaries might decrease depending on location. The article notes that respondent organizations (a small sample of 26) have taken the following approaches when considering salary adjustments based on relocation: a) Case-by-case (46%), b) One-Time Pay Increase/Reduction (31%), c) No Adjustment (23%), and d) Gradual Adjustment of Merit Increases (8%)—where the rate of future pay increases are slowed down. What is your organization’s philosophy on location-based pay, and what tactics is it using to support this philosophy?