6 Factors That Determine How Much to Pay Remote Workers

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You have successfully brought in a remote employee. now what? Not surprisingly, one of the first things to decide is how much you will pay this new member of the team. Not enough and retention will be an issue; Too much and you will spend more than you expected.

So what is the right salary? From my experience of over a decade working with a remote team based outside the US, I’ve found that there really isn’t a single specific answer to this question, but there are things you can do that will help determine the correct figure. will help to

1. Cost of Living and Industry Standards

The cost of living in your remote employee’s area is an important component in determining the pay rate. The right amount will be fair, equitable and unique for every field, role and individual. That’s why it’s also important to consider industry standards (look online for average salaries), the requirements of the position, and just what you can afford.

2. Experience, expertise and company culture fit

The more experiential and ability hash an employee has, the more value they will bring to a company and the more you should pay them, but the right salary isn’t the end of the essential considerations. The selection process is also about finding the right balance between company and employee needs, which includes ensuring that the culture is one where a potential hire can fit in and be both productive and happy. You want remote workers to feel like they’re part of something bigger, not just another number on a spreadsheet or an extra pair of hands on the assembly line.

And while it may seem unfair to pay an employee less than what you’d get in a traditional office setting, you need to consider what you’re getting in return. The flexibility offered by working remotely is often worth it for employees because they can choose where and when to commit their hours.

related: 3 Reasons Why You’re Not Getting the Most Out of Your Team

3. Role Responsibilities and Requirements

When considering the salary sweet spot, the most important thing you need to think about is what this person will be doing on a day-to-day basis. What skills are needed and how much training will they need? Does the job require specific equipment? You will also want to consider whether the role has any specific requirements regarding working hours (nights, weekends, etc.).

4. Company Size and Structure

These factors play an important role in determining the salary. If you have a small team, you can often be offered a lower salary, but if the company is large, you may have to pay more to attract the best talent.

5. Budget and Benefits

Of course, budget is fundamental in determining salary. While you may be able to negotiate, there is also a limit to how much you can pay without exceeding your budget and causing problems with the rest of the staff working in the office.

And although salary is certainly one of the main factors in employee attractiveness and retention, it’s not the only one: Benefits such as health care and retirement programs are often important to a remote worker. If you want to attract and retain the best talent, make sure you are offering a competitive package.

6. Accident Rate and Voluntary Turnover

Attrition refers to those employees who have left the company on their own volition, whereas voluntary turnover refers to leaving the company due to dissatisfaction with their role. Both types can be expensive, and are even more common in remote work arrangements – all the more reason to choose with care.

related: 5 Ways to Turn Employee Turnover into Opportunity

While it’s challenging, establishing a fair salary for remote workers isn’t difficult—there’s usually a winning balance between frugality and generosity.