More than half of reward strategies not fit for remote workforces, survey suggests

Experts urge HR to decide how to make the most of more agile teams, as poll finds businesses are largely unprepared for increased flexibility

Companies acknowledge that they need to adapt their pay and progression strategies in light of the increase in home working caused by the pandemic, a poll of employers has found.

The survey, conducted by Willis Towers Watson, found more than half of employers did not believe their current rewards strategy was fit for a more remote workforce. And despite many organisations expecting high levels of remote working to continue in the future, fewer than half (45 per cent) thought their current job architecture was suitable for a flexible workforce.

A similar proportion (43 per cent) said their job-levelling processes were suitable for developing flexible and agile workforces, while just over a quarter (28 per cent) said they still didn’t have policies in place to manage flexible working.

Hazel Rees, senior director at Willis Towers Watson, said that while employers were recognising many of the working practices forced by the pandemic were here to stay, “the way work is structured and pay is managed is still based on roles being fulfilled onsite within geographically organised teams”.

“The good news is that the trend in many organisations was moving in the direction of a more flexible approach anyway and the pandemic has just turbo-charged the speed of change. But employers now need to take a step back and examine the future state of their organisation overall and decide how they can make the most of their new agile workforce.” she said.

However, the survey findings dispelled fears that an increase in remote working could lead to lower wages, at least in the short term. Nearly three-quarters (73 per cent) of employers polled said they intended to continue fully paying remote workers the same rates as in-office staff next year – although 57 per cent said, going forward, new work requirements would require a hybrid approach to pay and reward.

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Similarly, businesses were not planning to offshore roles to territories where wage costs are lower. On average, employers expected just 3 per cent of roles would be offshored in the next three years, while almost half of respondents (47 per cent) said they did not expect to offshore any roles.

As such, pay spend is unlikely to change significantly because of the increase in remote working, the poll found. However, employers were expecting to reduce their real estate costs, with 37 per cent expecting to cut their real estate bill by 60 per cent over the next three years. More than half (53 per cent) were also expecting some savings next year from a reduction in expenses for travel and transport.

However, some of this would be offset by increased expenses for equipment to facilitate working from home, including computers and home office furniture.

The research polled 168 UK employers, who collectively employ 2.5 million workers, in September and October this year.

It found that the levels of home working nearly quadrupled between 2019 and 2020 – from just 20 per cent to 73 per cent – because of the pandemic. And while employers anticipated levels of remote working to drop slightly in the first quarter of 2021, they predicted it would remain as high as 64 per cent of employees.

In the longer term, companies anticipated that in three years there would be a more even balance of onsite and remote workers – 43 per cent and 37 per cent respectively – although it notes that the level of remote working would still be seven times higher than it was three years ago, when just 5 per cent of employees worked remotely.

“The rapid shift to employees working from home or remotely is likely to become a permanent fixture for many employers,” said Rees.

“While most employers are providing flexible work arrangements for safety reasons today, they also recognise that offering remote or flexi-time arrangements can play a significant role in retaining talent, supporting diversity and keeping workers engaged and productive as we move beyond this pandemic.”