[00:00:00] . Welcome to another episode of Comp and Coffee excited to be here with Ruth and Amy,
[00:00:17] Ruth, where on the world is Ruth right now? I am in Las Vegas at HR Tech, always one of my favorite times of the year learning about
[00:00:26] everything that's hot in HR Tech, what are the key themes? Yeah, that's why I am this week.
[00:00:31] I'm Amy, what are you up to? Where are you in the world right now?
[00:00:34] I am currently in Seattle and we have definitely had a turn in weather this October where we are starting to see all of our
[00:00:42] fabled rain which I won't say is a bad change actually quite like the change to the fall weather when it comes around at this time of year by February.
[00:00:50] I'm a little sick of it but in October I think it's a nice change of pace.
[00:00:54] Well here in New England we also have things falling but it's the leaves so I break my yard this weekend,
[00:00:59] I do the lovely foliage all the little leaf peepers as we call them have come up and are looking at the level of the leaves and so it's a very nice time of year.
[00:01:05] And you know all three of us are remote right now able to communicate each other in real time and of course that means that that technology is sort of spread out
[00:01:14] and we all remote now as wherever we are in many of our jobs.
[00:01:17] And it's funny I was having a conversation with my daughter who's graduating college is coming spring right so this is their last year in college.
[00:01:24] And I was asking her like what kind of jobs you're hoping to get and she's like man she's soft for engineer right her and all of her classmates are really focused on remote work.
[00:01:34] So the upcoming generation right these are the kids that were remote for a couple years in high school or maybe remote for a couple years in college and they're like hey if I can do it and say I'm sorry,
[00:01:43] I'm like hey if I can do it in school, I can do it for work.
[00:01:46] But at the same time we're hearing all these conversations going on like maybe everybody should return to the office.
[00:01:51] Maybe we should all go back and certain companies are having these rules so we thought maybe we should find out what's actually happening and so here atayscale.
[00:02:00] We did a little bit of research in Amy can you tell us a little bit about why we decided to this report and what we're thinking about we tackled this idea of what's going on in remote work.
[00:02:07] Well you said it rust there have been no shortage of news stories in the media about remote work and return to office mandates we have been seeing that since the vaccines rolled out a few years ago but in 2023 it really ramped up to something special and every day I want to say I see another article making some kind of claim about remote work workers expectations versus what.
[00:02:35] CEOs and leadership teams are wanting and expecting when it comes to return to office mandates what they hope to get out of that so.
[00:02:44] Payscale like you said we noticed this was happening in the news and we decided that this was another good year to do a remote work report so the last time we did a remote work report was in 2021 we did not do one in 2022 there is a section in our compensation best practices report which tackled the remote work topic but.
[00:03:04] This year we are doing a dedicated report on remote work and there are two aspects of this reporter I should say to.
[00:03:12] Two sources of data that inform this report so we have our online salary survey which individuals take to learn what their peers are making what they have reported making in the job that they have for their location company all those factors that influence pay.
[00:03:28] And we gather some additional questions in that online survey including their remote work or telecommunication status and then we analyze that data and there's over 300,000 responses that we analyze between August 2021 and August 2023 on a series of questions that we utilize to then create some interesting pieces of research that we make available to the public.
[00:03:54] And at the same time we ran a survey to our network of HR leaders and compensation professionals asking them, poignant questions on remote work policies expectations as well as return to office policies and expectations and some of those questions are targeting at remote or organizations that have taken on remote first or remote work specifically and some are two traditional offices and hybrid companies and how they are.
[00:04:23] Adjusting and adapting to the shift in our environment and our working environment so that is what the report is on is at the fascinating read and if you haven't taken a look at it yet certainly we will encourage you to do that but part of this podcast is to dig into some of the highlights.
[00:04:40] I love the dive into this i'm really curious myself i've had a glance at it but I know you've been you know as always digging to the deep than the numbers and since we've heard so much in the media about all these mandates.
[00:04:50] I'm sure the very first thing you notice was that the report says there's an increase in our t o return office mandates and everybody's going back to the office right like that's what's happening right.
[00:04:59] That's what the media would like you to think but when you actually look at the numbers that's not held out in what is actually going on so in our online salary survey like i mentioned we ask individual's what is your tele commute status now and then we compare that over time because we've been running this survey for many years and so we can see.
[00:05:19] And so we can see that in 2023 the number of people who are working remote all of the time or most of the time is higher than it has been in any other year, so it is not going down it is continuing to go up and 2015 you know well before the pandemic about 7% of employees said that they were from home.
[00:05:39] All or most of the time that number is now 28% wow and then we also asked our employers you know what kind of organization are you and 11% describe their office environment as traditional meeting that work has primarily done on site while most are saying if they are either hybrid at 32% or which is more common split by job type, which is 40% so some people can work from home but some people cannot.
[00:06:07] Overall 18% describe their environment as either remote first meaning employees choose where to work or fully remote which means the origin does not have offices there is nowhere that you can go into collaborate with your co workers because there is no office environment at all and we look at that data over time.
[00:06:27] We can see that there is a increase in the organizations that are either hybrid or remote first or fully remote compared to traditional offices when we look at the online salary survey of telecommunicating workers, we see that that is higher as well so we're definitely trending in the direction of workplace flexibility that is not in dispute and even when you're looking at working from home most of the time or all of the time that too is increasing.
[00:06:57] Wow that's amazing and it is surprising when you think about the kind of information we're hearing just out in general in the media and also when it seems like all these return office mandates get the headlines but in actuality most companies seem to be still embracing this concept of remote work or at least hybrid and flexible work so it does seem like it's continuing to go up like are we.
[00:07:17] Has it just been stronger since covid and it's still large but is it slowing down or do you think actually things are accelerating.
[00:07:23] Oh that is a really good question so we definitely saw a spike around covid as you would expect because in 2020 everyone was forced to work from home it went up you know up through 2022 and it's leveled off a little bit but is still higher in 2023 than it was in 2022 and the reasons for that or what I think is.
[00:07:45] How will we obviously the reason for that is that that's what employees want so even if you take the pandemic out of it more employees want to be able to have the flexibility to choose where they are working they want that autonomy and organizations are savvy to that so it does depend on occupation so we asked in our online salary survey do you expect employers to offer more remote work opportunities after the pandemic in a whopping 47% of people which is.
[00:08:14] Not a majority but as a significant chunk of the workforce if you are looking at all types of jobs 47% of them say yeah we expect for employers to continue to offer some kind of remote work offering through their employees and that that number is as high 75% for people in the computer and mathematics opulational group so if you're a tech organization.
[00:08:39] This question is particularly pertinent to your industry and that's why it's so surprising that there have been tech companies leading this return to office mandates and I think that's why the press covers it because it is a little bit shocking considering that 75% of workers want to continue to work from home and certain tech companies are saying we're not going to allow you to do that in waging this battle of wills to see who's going to win out in that particular argument.
[00:09:09] But when we asked our employers in our survey you know is workplace flexibility critical to attracting talent 91% said yes so it's not really industry they understand that employees can be autonomous adults and determine how and where to get their work done especially if they are long established experienced employees in the knowledge sector.
[00:09:33] But there are still challenges when it comes to working with leadership and working with employees who may be need more structure or who need some of that collaboration in office for a variety of reasons vote so one interesting statistics that we also looked at was are you experiencing resistance when requesting employees to return to office and this question was asked to organizations that had answered that they're either hybrid or traditional.
[00:10:01] They're acquiring employees to come back to the office at least some of the time i'm in 62% said that they were so this is something that a majority of organizations are struggling with and trying to figure out how to get employees to come back to the office what are the incentives what are the reasons that are as going to result in a quality experience for both the people who are working at the company and the leadership who is managing it.
[00:10:25] We asked the same question to organizations who have elected to go the opposite way that there are they have been society to embrace either being a remote first organization or having no offices at all remote only and we asked them you know what are the top reasons that you decided to do that and the biggest one unsurprisingly is that they want a broadened talent pool meeting the ability to hire talent from anywhere in the second most popular reason was to because remote work as a differentiating benefit to help attract.
[00:10:55] So much in there, thank you for sharing all that and I think really particularly the ability to track talent from anywhere is clearly something big and i'm not really surprised at all you back to my story my daughter that computer science software engineering is in that group is like 75% yes please i'd like to work remote.
[00:11:10] Ruth and I love to jump into this kind of reports and really dig into the data i'm sure you've already been through this thing like three or four times with some of the favorite little factoids what's your favorite fact group you found out in there digging in.
[00:11:22] I think interestingly we took the opportunity to explore the issue around is productivity going down because of remote work that's what we said earlier you know we've seen in the headlines and we asked for the employers so that as Amy explain the employers that we surveyed.
[00:11:39] We asked them did they believe that their leadership thought productivity in their organization would decrease due to remote work and only 24% said they did so you know quarter of organizations thinking productivity is an issue that you need to be concerned about if you're moving to remote work environment so that's doesn't align with kind of the headlines that we're seeing.
[00:11:59] We did take the opportunity to ask them what were the factors that they thought we're having an impact on productivity because you know generally we've been seeing a decline in productivity quarter over quarter over the last few years and the primary culprits that according to our audience of HR leaders was higher than average turnover and insufficient pay.
[00:12:20] And again probably no surprise there to see how they would impact turnover so you know if you're churning employees and you lose some productivity as you've been new employees and bring them up to speed and then insufficient pay can obviously lead to that churn again which can and also can help to reduce engagement which also impacts productivity.
[00:12:40] I did find interesting though you know we a lot of organizations saying we're bringing people back to the office because we've had a drop in productivity but only 57% of organizations said they measure productivity and only 10% said that those measurements in a highly quantifiable format so if you're going to make a statement about productivity make sure you can actually back it up with some key facts and figures I would say.
[00:13:04] That's really the best thing because that is the number one reason I hear it's just people are more productive they're more communicative they're just you know as modic communication all those buzzwords we heard from back when the cubicles were a thing.
[00:13:15] So Amy I got asked you like so if productivity's not the reason and we all kind of know it for being honest with ourselves and then why are employers trying to get employees back into office I mean what's in it for them?
[00:13:28] That's a really great question so Lake Ruth mentioned there's been news about productivity in the US specifically at least in the headlines that I have read declining over five quarters between 2022 and 2023 in that created some of this.
[00:13:43] Panic and kerflethal to get people back into the office but as also mentioned a lot of organizations don't measure productivity or don't measure it in a way that's quantifiable so there has to be some other reason is to why they think that is important in our survey to employers we asked them you know here's here's a list of all the reasons that we've heard might be why you are insisting that people come back into the office in this new world that we are living in and while productivity was on the list and gets like a percentage of.
[00:14:12] The responses as like the first reason, but top sided reasons are building or maintaining culture or connection followed by facilitating collaboration so you are talking about getting your employees to work together getting the organization to pull a strategy together and I have to say like from personal perspective while both of those are very important to an organizing success.
[00:14:36] The question becomes whether for walls in a water cooler are instrumental to your building culture and facilitating collaboration the experience that I have heard from you know a variety of people this is more anecdotal than what we did research on was that these mandates are made to come back into the office to facilitate collaboration and culture building and what happens is employees go back into offices that are empty or missing the critical team members that they would need.
[00:15:06] To be collaborating with and there isn't really a cultural vibe that is very exciting for them to plug into so they go back to these offices that are largely empty or large swaths of them are empty and they log into zoom meetings to have meetings with other global team members that are across the country across the world are working from home or whatever it is.
[00:15:28] And I think what's really interesting about this is we see a lot of this conversation happening with organizations that may be powerhouses but are not like globally distributed companies because globally distributed companies have been dealing with these problems, so I mean problems dealing with the situation for decades and there are ways to go about it that have been laid down and in tracks by those organizations but for whatever reason we're not taking cues from those organizations that have already figured this out because
[00:15:58] it is a reality that since the internet was invented and it really seems homes were invented that this is a way that people can work in that organizations who take advantage of that technology and figure out how to build culture from a distance are going to be the companies that end up succeeding in this this reality that we live in today.
[00:16:17] That's a great point. There's a whole industry around building really fancy video conference rooms so there is something going on there.
[00:16:23] Ruth will ask you this I like Amy's point in there though that you know hey there is value getting people together certainly value with face time there's certainly something happens with team building camaraderie and all that there must be some benefits for getting people together right I mean there's got to be something hiding in there what do you think.
[00:16:39] Absolutely but I think you know what we have to think about is being very intentional about when those moments happen you can't just shift to remote hybrid work strategy for all your employees are a segment of your employees without really reviewing all your talent processes and seeing how they need to be adapted for that new environment.
[00:16:59] Same as Amy you know I've been talking to a few people known we were going to do this podcast and talking to someone who worked for a law firm in the UK and they have regional offices around the UK and their RTO mandate is that one day a week they can go into any of the regional offices that they have to check in once a week.
[00:17:16] And I was like so when you go in are you meeting other people are you talking to them it's like no I go in and I sit and I'm you know talking to my colleagues online just as if I would be at home you know that doesn't seem to make a lot of sense.
[00:17:27] And so you know I think one of the things you can really do is listen to your employees and interestingly as I mentioned earlier I'm at HR tech and Amy Coleman who's the corporate vice president for HR at Microsoft she did a session first thing this morning on remote work.
[00:17:44] And they've been doing some great things there she talked about a lot of active and ambient listening they're doing to really understand what their employees want from remote and hybrid work and you know you won't always get clear messages back from the Microsoft workforce huge workforce when they surveyed them 70% of them say they wanted to stay flexible which probably aligned Amy with that figure that you gave earlier I think it was 74% for tech wasn't it yeah.
[00:18:10] 65% said they wanted in person time for social interaction so you know they seem to somewhat contradict but you know I think you really just need to focus on really listening to your employees and thinking about how you adapt talent processes to really make sure that those two things that you know they that are the people survey said were important you know it's about really creating building culture and facilitating collaboration.
[00:18:38] You have to think and be intentional about how you do that yeah that's really interesting I'm interesting live data from life.
[00:18:45] Live data yeah and I wonder you know Amy thinking about all this remote work and the fact that it looks like it's here to stay right I remember very clearly watching as companies move to remote during COVID and we were trying to figure out like what is this due to pay strategy what is this due to compensation you know once you start hiring from anywhere what does that mean do we cover this in the report all do we have an update on something.
[00:19:08] These things or we are pay scale so we absolutely covered pay strategies as part of this report I think that we are in a period of transition when it comes to how methodologies are shifting to accommodate this because as Ruth just went over the main reason that people are trying to get folks back into offices or to utilize remote only workforce environments is strategic and those strategies have to be in place first and implemented and succeeding.
[00:19:38] And then organizations start thinking well how does this impact our talent strategy how does it impact our pay methodology for our workforce obviously you would like that to happen at the same time but because there's so much experimentation going on and trying to figure out how do we create culture within this new environment those are really the priorities of HR teams are tackling and the comp function is.
[00:20:01] Thinking about how do we you know how do we accommodate this new world but unless there's been a huge shift in the organization like they've gotten rid of all of their offices and are adopting a whole new strategy for how to hire talent it's on the back burner until those things are worked out so what we saw from our survey is that 86% of organizations have not dramatically changed their pay methodology because of remote work at least not yet and that's not so.
[00:20:31] It's surprising because the majority of organizations are still either traditional hybrid or split by job type meeting they are still hiring people for within a commutable distance to their offices and even if they have a very generous work from home workplace flexibility program.
[00:20:49] So people that they're hiring working from home could come into an office if a switch is made where they are suddenly required to do so which we have seen some organizations take up in the last few quarters so we are not seeing that change in methodology impact the majority yet however we are seeing some micro changes around this so there has been a notable shift from headquarter focused pay strategies to various different kinds of geographic pay strategies that number.
[00:21:19] There has grown to 37% from 30%. But there's more room for growth there there's more room for organizations to reevaluate their talent strategy and their approach to paying talent and there are certainly pros and cons with the different types of pay strategies that you can embrace and it does vary a lot by organization and kind of what they are trying to do as an organization when it comes to their workforce.
[00:21:46] I really think the biggest thing when it comes to these strategies is how you communicate it makes sense to your employees for.
[00:21:54] Hey are paying everyone the same because we pay everyone according to our headquarters regardless of where you live or if you're saying we're adopting geographic pay strategies to give some people a premium based on their location versus where the head companies headquarters is being crystal clear about sure why as well as the data that informs that is the most critical thing that I think organizations can.
[00:22:16] Do because there are quite a different variety of ways to jinks are your pace around it together depending on what your objectives are.
[00:22:24] A great point I think it's really critical to a great data there but also really critical to be able to message.
[00:22:28] Hickory very clear pay strategy and then message it clearly to your employees.
[00:22:32] Ruth, what are you hearing about how our customers are tackling this these pay challenges?
[00:22:37] Well same as we saw in the survey really you know they are split in terms of whether they're going for location agnostic or location specific jumping on something Amy said you know that being crystal clear of why you're doing this so I think you really need to think about the philosophy led approach.
[00:22:55] If you are thinking about changing these pay strategies and I think that's probably where a lot of organizations are at the moment if you think you know prior to covid I was involved in conversations which was saying you know does it matter what.
[00:23:07] Where you're based and there were organizations that were saying from an equity perspective you shouldn't be paid differently and I think you really have to think about your own talent requirements i've said this about lots of things before.
[00:23:18] There's no cookie cutter approach anymore to how you set pay and how you manage pay so don't follow the herd think about you know where are you getting talent from where do you need to attract talent what sort of talent do you need and that may actually drive the approach that you ultimately end up doing.
[00:23:34] From a specific spaces we are seeing those that are using geosomes generally are reducing the number of zones so they're simplifying their pay strategies as workers have shifted location.
[00:23:46] And some of the differentials are definitely converging between the different locations that yeah note that you know people are still not settling on one strategy or the other just yet.
[00:23:55] We got it all makes sense and still figuring things out Amy did you see any given that the practices are short uniform do we notice in the service any evidence of differences in pay between.
[00:24:07] remote office workers.
[00:24:08] That's a fascinating question I think one that the media last onto in 2020 and so we have tracked it over time to see how that has shifted so back in 2015 you know pre covid when only 7% of workers were working remote.
[00:24:25] The median pay for those workers according to our online salary survey was 57 thousand dollars 57 thousand 100 you know dollars that is.
[00:24:35] A lower amount than what the average worker remote worker makes now so today when 28% of people are working remote the average pay is 78 thousand dollars but this is not indicative of remote workers being paid more because they work remote what it's showing is that pay has gone up over time.
[00:24:55] Since 2015 and that a higher percentage of workers are able to work for home and taking advantage of work from home flexibility which is especially knowledge workers who tend to make higher salaries than workers who have to go on site so it's not like.
[00:25:12] I work from home and then I get like a premium because I work from home that that that that's not what is happening when it comes to the pay.
[00:25:20] But you could make the argument and we don't have firm data on this but you could make the argument that before remote work was normalized there were pockets of employees who would be penalized for the desire to work from home and I think that that we would see that higher for women who say gosh I can take this job but I have to do it from home and the employer saying well it's because you're going to be distracted with all of the.
[00:25:44] You know real or imaginary children you have or might have one day and penalize that employee for that situation I hope and expect to see that where there are pockets of that happening that it will stop happening with the normalization of remote work we did measure the gender pay gap in the report to give some some data in context around that phenomenon which I'll let Ruth feed to is our our pay equity expert strategist yeah what did you think about that I mean.
[00:26:13] I really interesting point there Amy around you know maybe it's just that higher paying job families are now able to be remote right says part of the shift but then also I really thought about it could be sort of like well back in the day working remote was a benefit so I can pay you less because you're working remote with this benefit.
[00:26:30] But now it's just like standard operating procedures so many ways but you raise a good point Amy like is there just one gender worker more frequently and is that paid last and Ruth would you I'm sure you dove into this like what did you see
[00:26:41] in terms of gender pay gap when it came to what we saw in this report.
[00:26:44] Of course we look to this rust you know we were very lucky at the beginning before we did this research Amy and I sat down and said well all the things would really like to know about remote work that's one of the joys of being able to do the amazing research we do hear that pay scale and it just kind of always a huge opportunity and privilege to be able to get hold of this information but yes we did look at the young gender pay gap so this is the uncontrolled pay gap we were not looking at equal pay gaps we were looking at average.
[00:27:11] Pay gaps and we found that for women who work from home they make 70 cents for every dollar amount works for a man who works remotely comparing men and women working remotely and then for men and women who work in person the difference is 89 cents so that's 10% kind of difference.
[00:27:29] Now one of the things I love about uncontrolled pay gaps is they tell you lots of different stories and we can probably deduce you know some of the reasons why that gap is existing and Amy's alluded to some of that already so if you think about the people that are working in the office those workers normally are more likely to be hourly blue collar or low wage positions where they have things controlling their pay and differences in pay like minimum wages and unions you know union negotiated pay scales and things like that when you have a lot of money.
[00:27:58] And then I think when it comes to those that are now working being able to no work either remote or hybrid as we said I think it's you know previously.
[00:28:08] A lot of that work was done by women performing lower paid jobs where they potentially got a you know the money and then we can't do that because we're not working in the office and then I think when it comes to those that are now working being able to no work either remote or hybrid as we said I think it's you know previously.
[00:28:25] So we've got a lot of paid jobs where they potentially got a you know discounted wage for the benefit of being able to work from home now you've got a lot more white collar workers in specialized roles potentially who have been shifted to remote work and a lot of those are a lot higher paid and that's why I think we're seeing that bigger gap there.
[00:28:44] Amy is there anything else you want to add that just that we did look at the controlled gap and if you are comparing job title to job title for workers who are working from home versus those who are not it's 99 cents across the board so a small gap but no different than the overall controlled gap for employees.
[00:29:02] So I really think it has to do with the types of jobs that women can get especially if they are required a requirement to work from home based on gender norms and socialization which men may feel they don't have like this that same imperative.
[00:29:17] But if you're an employer it's an interesting lens to look at and if you've been doing pay gap amount I would encourage you to do that look at those are working remotely or hybrid and look at those are in the office and see what gaps there see if it just you know it brings up potentially you know any issues that you might want to think about fixing you know as you look at those issues.
[00:29:37] Yeah for sure that's really interesting stuff you guys and we were at a time Amy thank you so much for joining us and and sharing this report and thank you Ruth for your analysis and Amy any closing thoughts here before we say goodbye but more importantly how do our listeners get a hold of this report.
[00:29:51] Yeah two great questions the first one the summary is that it's less to do with whether you're hybrid or remote or how many days in the office workers are required to go in and more about giving your employees autonomy and how they do their jobs.
[00:30:07] And even if that is requiring people to come in have a good reason for it if it's allowed them to work from home make sure that they are trusted in the work that they do and of course there are always going to be poor performers that you have to you know monitor and see that they're not pulling their weight but by enlarge workers want to do good work we feel better as humans when we are producing and when we are.
[00:30:30] Making a difference in the world and so having that expectation that your workers regardless of where they work are going to do a good job is a good way to approach things as far as where can you find the report on it is on payscale.com website so if you go to the website and you navigate to our research and insights section of the website it is tagged in that location it's a few of the full URL i'm sure we have a ways to share that in connection with the podcast but it's not difficult to find.
[00:31:00] It's at slash remote work for the listing of research reports that we have there awesome well thank you so much Amy yes and we'll make sure we put the link to the report in the show notes so you can click that and check it out and that's what we think about some of the insights in that report what do you think down on the report check it out and let us know you can send us an email.
[00:31:18] To you coffee at payscale.com we'd love to hear from you and get your thoughts as well thanks for listening to comp and coffee.
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