The COVID-19 pandemic irrevocably changed how people work and their relationships with their jobs. In the post-pandemic era, 61% of employees are looking for jobs that offer a greater work-life balance, while 64% are looking for an increase in income or benefits. Much of this can be attributed to the rising cost of living that has been felt across the country. As a result, workers are turning to remote employment agencies to find remote jobs that enable them to seek a higher quality of life away from major metropolitan areas.
Across the United States, major cities are facing a huge problem–people don’t want to live in them. Of all US states, people are flocking from California and New York at unprecedented rates. Data shows that the highest number of people were moving from California to Texas and Arizona and from New York to Florida and New Jersey in 2022. Why?
Places like California, once the embodiment of the American Dream, have seen the price of living skyrocket in recent years. For example, while the median home cost in Los Angeles is $1 million, Las Vegas boasts much more affordable housing with the median cost at only $411,000. Plus, California also is home to 30% of the country’s homeless population–a growing issue that many people are looking to avoid.
People are looking to make the most out of the money by moving to cities that offer an affordable price of living. These “Zoom towns” experienced growth with the increased number of remote workers. No longer tied to an office, people began moving from these major cities to anywhere they wanted–as long as they had an internet connection. Often, the areas chosen are still in relative proximity to a larger city and offer amenities like shopping and dining or easy access to state and national parks.
Remote Work in 2024
While the number of remote workers is down from the height of the pandemic, 35% of employees with the option to work remotely choose to do so all the time. Another 41% work hybrid schedules, with 20% working from home the majority of the time.
During the pandemic, 80% of employers reported a successful shift to remote work with 40% also reporting an increase in productivity with a remote workforce. With fewer people in the office, companies were able to control office-related expenses. At the same time, many employers decided that a remote worker’s pay wouldn’t be significantly affected by the geographical region they chose. In fact, the increase in productivity has caused remote workers to enjoy increased wages, when compared to those not opting or unable to work through a remote employment agency.
How Remote Work is Changing Pay
As the number of remote workers continues to exceed the pre-pandemic levels, more employers are trying to define how this may change their pay structures. Here are three common scenarios:
- Location-Based: An increasing number of employers are looking to implement location-based pay structures. This may mean that employees living in lower-cost-of-living areas may have lower compensation than those living in areas with higher costs of living.
- Regional Zones: This approach generally means that employees will define various zones that determine pay. For example, high-cost-of-living areas like New York and California may constitute one zone, while smaller suburban areas may account for another.
- Single Rate: Other companies will define one rate for employees, typically based on the employer’s headquarters. This means that regardless of where an employee lives and works remotely from, they will be paid the same as their peers who go into the office.
For employers with location-based compensation for remote workers, sometimes the employer may allow the employee to keep their same level of compensation if they choose to move to a lower-cost location. However, the best option, especially for employees working for companies based in cities like Los Angeles or New York City, is the single rate. In this scenario, remote employees are compensated at the same rate as office employees, regardless of where they choose to live.
Beyond allowing employees to relocate from high-cost-of-living locations, it also allows employees from lower-cost locations to seek employment with a remote employment agency that may offer higher compensation than local jobs. As a result, this can level pay and employment opportunities across the United States.
Effectively Managing Remote Employees
While it’s easy to see why some employees prefer to work remotely, it can be a challenge for employers to keep up. For example, when an employee works in multiple different states, it introduces new HR challenges such as payroll and compliance. This could introduce new, unfamiliar jurisdictions in which compliance needs to be maintained.
To ensure this is done accurately, relying on a reputable and experienced HR outsourcer could be the right solution. When outsourcing HR functions like payroll or benefits administration, look for a partner that understands the compliance requirements for each jurisdiction in which you have employees. This ensures that you won’t be caught off guard by unexpected penalties for noncompliance.
When you choose a partner like Corban OneSource, our nearly three decades of experience enables us to ensure your HR needs are covered appropriately. We specialize in payroll administration, benefits administration, and HR administration for companies with between 75 and 6,000 employees.
Many of our clients have locations spanning multiple states, so our team is equipped with the most up-to-date knowledge of HR laws governing each state. For companies with employees working through a remote employment agency, this eliminates the risk of non-compliance, regardless of how many different states you have employees in. Plus, we offer coverage for all US time zones, with the exception of Alaska, which means you and your employees can receive support whenever you need it without worrying about communication delays. At the same time, you’ll be able to control HR costs and free up your HR department’s time to focus on its core competencies.
If you’re interested in learning more about how Corban OneSource can help you navigate HR administration for remote employees, contact our experienced team today.
