The right way to pay remote employees

Have you employed any remote workers yet? If not, there’s a good chance you have or will in the near future. The use of remote employees and contractors has many benefits, including the ability to expand globally with minimal overhead costs, the ability to recruit from a much wider skillset of talent, and the convenience of having employees in multiple time zones to manage projects around the clock. Multiple studies, including these highlighted in Working Mother Magazine have also shown that remote workers are more productive, which means companies earn greater revenues.


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According to the most recent statistics on remote work from Global Workplace Analytics, a San Diego based consulting and research firm, the use of remote employees has dramatically increased over the last decade. It’s estimated that in 2010, around 16 million people worked from home at least one day a week; currently, that number is around 25 million, representing a growth of nearly 80 percent since 2005, when telework first started to emerge as a legitimate work option.

Making the case for better compensation for remote employees

Some have argued that since remote employees work independently, they should accept that they might be offered less pay and benefits than their in-house counterparts. After all, they do get the perk of working from the convenience of their home office.

However, it’s not that simple. While it’s true that working from home can be beneficial and reduces some work-related costs (such as commuting, childcare, meals, etc.), it still doesn’t make sense that a company offer remote employees less compensation. In fact, companies should offer more.

Let me explain why.

A first-hand account

I’m a remote employee. In addition to being a freelance contributor for Payscale, I provide full-time services to a software company that hired me specifically to work on important projects that benefit the business and its clients. I dedicate 40 plus hours a week to these efforts, and while I do so from my home office, my company’s expectations of me are no different from its expectations of my onsite coworkers.

Many times, I have to work extra hard to stay connected via phone, email, and virtual meetings to get the work done well. I have to use special technology to access the company resources, which at times can be highly frustrating. While I don’t have to drive to work every day, I do have to fly there every few weeks and be away from my home and family for a week at a time.

To me, these are all worthy sacrifices, but if my employer decided to reduce my compensation or benefits because I work remotely, I would resign on the spot. It’s erroneous thinking that remote workers should not get paid as much as standard employees because we “have it better” than our colleagues. That’s not the case at all. We simply have a different set of challenges to overcome.

Remote workers able to stick with it for the long term are highly valuable to companies. They are adaptable, resourceful, skilled, and self-driven. You won’t find a remote employee whining about Mondays, worried about the latest office fashion crisis, or getting involved in the most recent work drama. Instead, remote workers are among some of the most loyal and hard working people ever hired. Therefore, remote workers should be compensated fairly and generously for their efforts.

Ways to compensate remote employees

Provide the best technology and resources possible to get the job done

Don’t expect remote employees to use their personal laptops and home phone and Internet service to conduct business tasks. Instead, offer a new computer, a mobile phone, and company-paid Wi-Fi to get the job done well. Also, consider virtual meeting software, such as video conferencing with live screen-sharing and whiteboard capabilities.

Provide generous health and wellness benefits

Oftentimes, because remote workers spend so much time working from home, they lack the opportunities to stay active in their daily lives. Encourage remote employees to stay healthy with affordable health insurance, and pay for a gym membership so they can get the exercise they need to remain strong and fit. Provide work/life balance by encouraging stress relief in the form of flexible time off, employee assistance programs, and alternative wellness services like meditation and massage therapy.

Give generous starting salaries and progressive pay raises

If you want to maintain a good working relationship with your remote workforce, then you need to give them incentive to stay loyal to your company objectives. Remote workers deserve fair salaries and perks as well as regular recognition and support to reach their career dreams. Make sure you give back what remote employees give to your company with great earning opportunities.

By using the above strategies, your remote employees can thrive and succeed, which ultimately benefits your company’s bottom line.


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4 Comments on "The right way to pay remote employees"

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karen narag
hi, I was a remote worker for a newswire based in Virginia. Early May, I had a family issue that needs to be attended to and askedy supervisor that I won’t be working temporarily. I also endorsed my duty to my coworker. I was supposed to go back after a week but I cannot do so since I have a baby and two older kids to take care of since we don’t have a nanny. Last week, I sent an email to the editor in chief about resigning because I cannot do my work anymore at the same time full… Read more »

You may want to consult a lawyer karen

Tori Smith
I work for an AZ business. All of our 4 employees are paid/taxed in AZ. We are hiring a new person for a sales position, but the person lives in Hawaii. All the sales work will be done via telephone/internet, and we will not have an office or equipment in Hawaii. The person will be occasionally (maybe 5-6 times a year) flying to AZ and other states to manage projects, which are all sold/taxed in AZ regardless of the event location. My question is: Do we need a Hawaii Tax Id, business licence, etc… or can we hire this person… Read more »

I wholehearted agree with your article in theory; in practice, is there “hard” salary data about what companies pay their remote workforce? And if so, has it been compared to similar “in office” jobs?