What will remote working mean for salaries in insurance, financial services and regulated industries?

The large-scale switch to remote working as a result of the pandemic was swift, and focused on logistically enabling employees to remain productive and safe while business could remain profitable. Less consideration was given to long-term factors such as how remote working might impact salaries; however, it is evident that remote and/or hybrid working will remain the norm for many businesses and this may affect how benefits schemes – and even salary – are calculated in the insurance, financial services and highly-regulated markets.

There is an argument that remote working permits a downward pressure on salaries as people save money on commuting costs. Furthermore, remote working offers the ability for employees to move from expensive urban centres to areas with reduced costs of living.
Any downward pressure on salaries runs the risk of demoralising staff, however, especially following on from a time that was incredibly challenging for many. It also runs the risk of losing high-quality candidates to competitors willing to pay more, especially when candidates are less bound by location.

Instead, businesses should focus on the opportunities that will be afforded as a result of greater remote working – namely, the access to candidates not previously available to them due to geographical restrictions. In some instances, businesses may have the opportunity to save money as a result of reduced office working, through downsizing offices or moving to a cheaper location, which could then be redirected into offering more competitive salaries to attract higher-calibre candidates.

Ultimately, less geographic restriction should benefit both employee and employer, with employers who focus on the opportunities rather than the savings likelier to benefit from the increase in talent available. Other elements of the job offer – such as flexibility and benefits – are likelier to become more important to candidates as remote and/or hybrid working continues and work-life balance becomes challenging.

How do employers calculate salaries in the insurance, financial services and regulated industries?

Salary is not a straightforward calculation of how much an individual candidate is worth to a business. Elements that affect salary include but are not limited to:

– How much the candidate is looking for
– The allocated budget for the role
– Market rates in a competitive landscape
– What expertise, skills and/or contacts the candidate brings to the business
– How much money they will make for or save the business
– How business-critical the role is

The above and additional elements broadly fall into one of three categories – budget, market conditions and the value the employee brings.

Viewed through this lens, the location of the employee matters less and remote working is more liberating for both employee and employer than detracting. Parity among employees and morale may be a contributory factor when it comes to pay being down or upgraded independent of primary location costs, but this would benefit more from standardisation rather than multiple lines being drawn based on where and how an employee works.

Important factors to consider when setting salaries

– What the business can afford
– The availability of talent and market demand for similar skills and experience
– Pay scales for existing employees in same or similar roles

The latter point makes salaries easier – adherence to and transparency of pay allows standardisation and parity among employees (which in turn boosts morale, job satisfaction, and therefore, productivity).

If you are looking to broaden your candidate pool, finding an insurance industry-specific recruiter, like Davies Resourcing Solutions, will help. Myself and my team have market insight on recruitment marketing channels to make sure your job listings are seen by your ideal candidates and can help you pitch your salaries at the right level based on accurate competitor analysis and market benchmarking.

David Rose
Director, Search
To find out more call us on: (0) 203 668 2890

Email us: info.resourcing@davies-group.com