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OOO: Tracking Compensation And Careers For Remote Workers

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December 2, 2020


Changes in where and how employees work will shape career development, pay and the leadership skills necessary to thrive going forward — speeding up a workforce evolution already in motion.

A large number of employees who have been forced to work remotely after their offices were shuttered during the pandemic are likely to make that shift permanent. According to an August 2020 Aon pulse survey of HR leaders, 72 percent of organizations are actively identifying functions and roles that can best operate remotely going forward.

Meanwhile, other workers might find themselves working four-day weeks or coming to the office on staggered schedules as employers try to implement social distancing in the workplace. The COVID-19 pandemic has accelerated a trend that was already developing: A large number of office workers had already embraced permanent remote-working arrangements long before the pandemic.

“Many companies have realized that, beyond safety reasons, remote work can work, and the arrangement can bring benefits for the organization and employees,” says Hannah Kenney, director, Rewards Solutions at Aon. “Now that the initial pandemic transition has settled, companies see that this shift warrants a more robust remote work strategy.”

In Depth

According to the recent global Aon pulse survey, 84 percent of responding HR leaders view workforce agility — the ability to quickly move employees into new roles or areas of the organization to support changing business needs — as either very important or extremely important to the future success of their organizations, but only 39 percent consider their workforces very or extremely agile.

The sudden mass shift to remote working has come at a time when companies have recognized the importance of workforce agility and are grappling with how to get it — and reward their people for it, wherever they’re located.

Reimagining Career Progression

In Aon’s pulse survey, 73 percent of employers responding said employees’ ability to move vertically and laterally throughout the organization is either extremely important or very important to meeting the organization’s future goals.

“Companies have recognized it’s time we offer and foster awareness of more than the one-dimensional, upward career paths,” says John McLaughlin, chief commercial officer for Aon’s talent assessment practice. “There’s a new creative option called an ‘open market career journey,’ where employees can decide where they want to go. Employees need to explore lateral career moves, try out career ideas and match the skills and competencies they have with other roles that they and their line managers may have never thought about.”

Finding — and then making sure you’re being considered for — new internal opportunities may be trickier when you’re working from home, but it’s a key part of building modern career paths, McLaughlin says. Remote workers may be less visible than their in-office counterparts, and employees’ leadership skills, ability to collaborate and attitude might be less obvious when they’re working remotely.

In this changing work environment, employees working both in the office and remotely need to be shown the same possibilities and encouraged to pursue their own career paths, says McLaughlin. Talent leaders need to understand how careers are changing and how to bring remote workers into the conversation.

Regardless of role, there are core traits that predict higher likelihood of employee success in agile environments, says Tarandeep Singh, head of Assessment Solutions for Asia Pacific and Middle East at Aon. “Our research points to learnability, agility and curiosity as top indicators,” Singh says. “And these are traits that leaders can identify through workforce assessments.”

The Changing Role of People Managers

Managers were once viewed as the gatekeepers for employees’ development. In a remote environment and an employee-driven career model, managers’ roles and necessary skills also change. “Managers have become more of a sounding board and coach than a fount of career knowledge,” says McLaughlin. “This shift has to become part of managers’ career development too.”

“Being a manager in a virtual environment is very different than an in-office manager,” says Suzanne Courtney, strategic growth director, Human Capital Solutions, Aon. “It takes strong communication skills to get certain information from reports when you’re not co-located. Managers also have to be able to pick up on employees’ strengths from more abstract situations.”

A virtual environment will also require managers to create and lead through change. “Remote working requires different structures and policies for best results,” says McLaughlin. “Managers of a remote workforce should be ready to introduce, and help employees navigate, process and structure changes to offset obstacles to creativity and collaboration.”

As employees explore their new career opportunities, managers need to offer perspectives on the options available. Managers also shouldn’t expect their feedback to be the only input for an employee’s potential and performance.

“Roles are evolving rapidly, so managers are now orchestrators of cross-functional teams,” says Singh. “The growing diversity of skills and expertise across a team means that manager feedback becomes one input regarding future readiness, rather than the whole view.”

HR and talent leaders should take steps to make sure that career progression and succession planning becomes more objective by focusing on talent assessments that level the playing field for employees, regardless of where they’re working. “You have to think about how you enable that visibility in a remote environment,” says Kenney. “Are there tools? Are there technologies that we can use to connect people?”

Compensation for Remote Roles

As businesses move more toward remote or hybrid working arrangements, they face questions about how to pay workers appropriately. The location of an organization’s offices, once a major factor in determining compensation, may apply less when some roles can be done from anywhere.

“It’s worth it for companies to think through the compensation aspect and develop a location strategy rather than just saying ‘in five years, 50 percent of our workforce will be remote,’ ” says Kenney. “Companies should be thinking about fair and equitable compensation across geographies.”

While geography-based pay structures aren’t new, Kenney says it’s becoming more common in the current environment for employees to move from major markets to smaller ones, or places without a company presence. Policies don’t always address these changes.

Kenney says a good geographic and remote pay strategy considers the following:

  • Assessing cost of living and cost of labor
  • Identifying and setting high pay standards for roles at risk for competitor “poaching”
  • Determining which key roles to pay above average
  • Developing a transition strategy for employee migration

Whatever their strategy, companies should be transparent in communicating with employees about their approaches to compensation and remote working.

“There’s been a war for talent for the past five to 10 years in a booming economy,” Kenney says. “And with remote work, that competition heats up. You have a workforce that’s trained — if you have people you like and trust, you want to keep them.”

McLaughlin points out that remote work also opens up a wider talent pool. “The flexibility to work from anywhere can help drive diversity, equity and inclusion goals, and provides more options to keep employees engaged after life-changing events,” he says.

As Workplaces Change, Strategies Must Keep Pace

The workplace changes businesses were forced to rapidly adopt this year could be helping to accelerate changes in career progression and workforce agility. As a result, organizations should be thinking through strategies for adapting to the new shape of business and what it means for employees’ development and compensation.

Kenney says it starts with adjustments for the current workforce and can be broadened into a true, future-focused location strategy, and it means asking questions such as:

  • What roles need an office setting, and how much flexibility for individual preference can we provide?
  • How do different environments drive performance and innovation? This is so necessary in today’s fast-paced world.
  • How do location and workforce structure affect diversity?
  • What risks come with a dispersed workplace that we want to minimize, manage or address?

“In March, many companies had to figure out a remote-working policy in one week,” says Kenney. “Now it’s about making thoughtful, longer-term decisions around how you’re going to develop and pay employees, and make this flexibility part of your culture.”

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