Total Rewards Leaders, Don’t Lose Sight of These 4 Critical Components in Your Hybrid Work Strategy

In short:

• Hybrid work is here to stay, and flexible work impacts whether employees will remain at their current organization.
• To reap the full benefits of hybrid work, your total rewards (TR) function must address four areas: relocation of existing employees, perceptions of pay fairness, recruiting from diverse geographies, and burnout.
• Each of these is essential to meet employee and candidate needs in today’s increasingly tight labor market. 

These past two years have demonstrated that location flexibility is no longer a nice-to-have for employers — it’s table-stakes.  

Gartner research shows 55% of employees agree that whether or not they can work flexibly would impact whether they stay at their current organization. And, 43% of them would only consider a role that offers some degree of location flexibility, should they look for a new job.

“While hybrid work continues to grow in popularity, and has numerous benefits for both employees and employers, it also creates challenges for total rewards leaders,” says Brent Cassell, VP, Advisory at Gartner. “To meet the needs of an increasingly hybrid workforce and to stay ahead of today’s competition for talent, leaders must ensure their total rewards strategies address employees’ current challenges and work preferences.”

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To be successful in the new future of work, address these four areas to capture the full benefits of the hybrid work model. 

1. Relocation of existing employees

In a recent Gartner survey, 39% of employees say they will consider relocation if their organization allows them to work from home permanently, with an additional 9% of employees reporting they already relocated within the past 12 months.

With more employees relocating, consider whether to adjust employee pay in accordance with any change in cost of living. 

For example, when federal employees in the U.S. decide to relocate, their compensation automatically adjusts to their new market. Meanwhile, in the private sector, some organizations have responded by placing all remote employees on a single, national salary scale. 

Looking ahead, balance the pros and cons of your approach to mitigate unwanted attrition. Will your employees leave if compensation changes? Or will you risk exacerbating existing pay equity issues?  

Download now: Maximize the Impact of Rewards and Recognition on Employee Performance

2. Perceptions of pay fairness

Despite organizations' considerable investments in manager training and increasingly transparent pay communications, employees still feel underpaid. 

According to the 2021 Gartner Employee Pay Perceptions Survey of 3,668 employees, 6% say they thought their base pay was lower than others in their position at their organization, and 19% think it’s lower than those in their position at other organizations.

To combat employee concerns about pay fairness, continue to rely on traditional pay communication strategies, such as total rewards statements, and training managers to more nuanced pay calculations.

“Still, organizations must not overlook the impact of today’s increasingly tight labor market on emerging pay inequities,” says Cassell. “Since many employers feel the need to overpay for top talent, they inadvertently create pay inequities with current employees in their organization.” 

Learn more: The Future of Work Reinvented

Moving forward, organizations must rethink their compensation strategies and prepare managers for how to address difficult conversations involving pay. 

3. Recruiting from more diverse geographies 

Hybrid and remote work make it easier to recruit talent from more geographically diverse candidate pools. Gartner research shows since the start of the pandemic, 37% of companies are now offering remote work or location flexibility in a large percentage of their open positions. 

While this allows for significant advancements to diversity, equity and inclusion goals, it could also unearth a patchwork of laws and regulations regarding benefits. For instance, in the U.S. paid sick leave is mandated in some states and cities, but not others. 

To benefit from diverse recruiting, create different policies for different geographies or instigate universal policies that meet the highest applicable regulatory standards. 

4. Employee burnout 

Many employees continue to be at risk for burnout. Gartner research shows only half of employees who work in hybrid or fully remote environments agree they can maintain a work-life balance.

Without the signals of a commute or in the in-office work experience, employees who work from home find it difficult to set boundaries.

To mitigate burnout, some companies are designating “meeting-free” days or “quiet hours." Other organizations offer free one-on-one online tutoring for their employees’ children or behavioral specialists to help employees cope with disruptions, like new COVID-19 variants. 

But take note of the underuse of your well-being offerings. “One total rewards leader told us she was canceling her organization’s membership with a backup childcare service because only 12 out of 5,000 employees use it,” says Cassell. “Organizations need to consider new and innovative ways to increase the use of offerings and close the participation gap.”