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The rise of remote work creates new challenges for employers regarding their approaches on how to set salaries for employees in locations with different costs of living, while remaining competitive in attracting top talent. Candidates need to understand these methods so they can negotiate the best offers.

Different approaches

There are three common ways that companies set pay ranges according to Brie Reynolds, AS’04, a FlexJobs employee for 12 years.

• One method is based on the salaries and cost of living of the company’s main office, regardless of where the remote employee is located.
• The second way is adjusting salaries to reflect the cost of living of the worker’s location, with the goal of offering competitive salaries and benefits for that location and employment market.
• A third approach is to set salaries for job roles based on general market trends, regardless of location.

Ultimately, employers in competitive industries, who want to attract top tier talent, need to offer salaries that are as good or better than both local companies and other remote organizations.

Research salary ranges

So how should remote candidates approach salary negotiations? By using salary research sites such as PayScale and Salary.com, research the salary ranges for each job title using:

1. The company’s main office or branch locations (this advice is based on US employers, so be aware that global companies may have additional considerations for fairness and how they determine pay).
2. Your home location (note that for employees in competitive fields, national markets will probably move closer to higher paying cities, as long as demand for employees continues to exceed supply).
3. No location, so that you get a national average.

Now you have three approximate salary ranges for each potential remote job, so you will be prepared regardless of which method a particular employer uses. When evaluating an offer take into account the total benefits and compensation package along with opportunities for advancement. Lastly, make sure to assess your value in the current market as employers are likely to pay more for special skills, accomplishments and experience.

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