The future of talent will remain global: Here’s how to navigate it

The workplace is more global, diverse, and distributed now than ever before. And the ongoing debate on whether remote, hybrid, and in-office employees should be looked at through the same lens has been top of mind for employers – should employees across modes of work have the same benefits, flexibility, career progression, and more pertinently, should they be paid equally? Compensation is a key component of the employee experience, and hence, needs to be addressed in a way that is inclusive and competitive, as well as equitable.

With an impending recession and the war for talent heating up, organizations will need to do more with less resources. But it is equally important that they tailor their approach to attract, engage, and retain their biggest asset – talent – across all modes of work.

Focus on pay equity, not equality

When employees within an organization are as diverse as they are today – across cultures, genders, races, ethnicities, and now, modes of work – having the same measure for compensation and benefits is a limited approach. The conversation needs to definitively shift from paying employees equally to paying them equitably, i.e., measuring the impact of their work on business, organizational goals and growth in a way that recognizes and appreciates the nuances of incongruity among different employee groups.

We saw many companies change their approach to compensation during the pandemic. Mark Zuckerberg announced location-based salary adjustments for fully remote employees at Meta. Google followed a similar approach and went so far as to say that employees’ pay may be reduced if their new remote location has a lower cost of living.

These instances from tech giants emphasize the importance of having location as a key consideration for determining compensation, and organizations need to evolve with the changing times. With so much diversity in organizations and multiple modes of work, there is no longer a cookie-cutter approach to compensation and benefits. Hence, the focus should be on achieving equity in pay, not equality.

The recent New York pay transparency law that mandates employers include the salary range for job listings has been a huge contributor to this ongoing discussion. Such laws, which are also emerging in other states like California, Colorado, and Connecticut, should be seen as an opportunity for organizations to build trust in the talent market, strengthen their employer brand as an equal opportunity employer, and promote a performance-driven culture. Pay transparency will also increase visibility of the talent market for job seekers. Prospective employees will gain a better understanding and this transparency will help remove ambiguity from the components that determine the salary for a role and empower them to negotiate their pay in a well-informed manner. Creating a transparent and equitable workplace environment will pave the way for higher employee engagement and retention rates.

Pay transparency is a step in the journey towards achieving equity in pay. And this crucial step needs to be addressed intentionally and implemented like any change management process – deliberately and systematically.

The first step is to baseline different factors that influence compensation across modes of work, including:

• Skills: Having a skills-first approach ensures merit and prioritizes expertise and business outcomes, far greater than educational degrees or work experience. Clearly defining the skills required for different roles will help set the right expectations, both internally and externally, as per market demand and competitive benchmarks.

• Contribution at the organization level: It is important to measure how employees collaborate, the impact they have on team development, culture, and the overall business function. Employee contributions are sometimes intangible, but that needs to be considered.

• Ability to drive outcomes: How employees effectively and efficiently achieve goals, meet targets, and upsell directly influences business performance.

Companies, then, need to identify the components within each factor that varies for remote, hybrid, or in-office employees and create an allowance for different scenarios. For example, key considerations for an in-office employee include commuting and living costs, while a fully remote employee would need a stipend for their at-home workstation. Recognizing the costs associated with remote or in-office employees helps achieve pay equity as the needs of different groups are catered to in a personalized manner. It ensures fairness and keeps the total rewards philosophy universal and consistent, while localizing its implementation.

Flexibility is here to stay

Employees will continue to have the flexibility of choosing how they work. And it isn’t just about giving employees the freedom of working from home – it’s more nuanced.

Organizations need to go deeper and integrate flexibility across layers. Every major company is leveraging global talent today, and that comes with varying time zones and cultures. After-hours meetings will be inevitable, so companies need to make it as conducive as possible for everyone involved. According to a Great Place to Work survey, employees with full schedule flexibility have 29% higher productivity and 53% greater ability to focus than those without. Empowering employees to work in a way that enables greater results is crucial for the overall success of the company.

The workplace is and will continue to be a combination of in-office and remote employees co-existing. We call it the Modern Workforce Model:

Shifting to working remotely during COVID-19 boosted worker productivity by 6%, according to the same survey. At the same time, many studies show that teams collaborate better when they are in office. Hence, it’s critical to recognize the nuance within each mode of work and include it when considering performance, compensation, and benefits

Clarity is critical for employee retention

As the modes of work continue to evolve and expand, solving workforce challenges like attrition and retention will be imperative. And clarity is at the center. According to a Glint survey, employees who have clarity about their work are 4.5 times as likely to say that they are happy at their current organization and 7.1 times likely to say they rarely think about looking for a new job. Hence, effective communication is not only vital, but is table stakes. In fact, synchronous communication helps resolve issues faster. So, apart from text messages and emails, virtual calls or in-person meetings should be strongly encouraged. Use of technology solutions like digital work hubs and having in-office spaces that encourage collaboration are practice solutions for employee engagement and retention that target different employee groups in a customized way.

Read more: How hybrid works best: Developing 4 key workplace personas

In a multi-modal work environment, it is critical to ensure a uniform employee experience across hybrid, remote, and in-office settings. Delivering a consistent and uniform experience must be a recurring exercise for HR across industries, which will play a key role in helping organizations win the persistent Talent Wars.

Nilesh Thakker, Managing Partner at Zinnov