This quarterly report draws together the latest insights on pay and reward across a range of sources. It outlines current analysis and future forecasts based on available data to support employers. There is also a particular focus this quarter on post-pandemic pay based on hybrid operating models.

Location-based pay is not a new concept for HR and reward professionals. However, the focus has increased for many employers on this element of the pay structure following the COVID-19 pandemic. ONS figures show on average 38% of employees now work from home for at least some of the working week. Previous surveys had put this figure at 12% pre-pandemic.

The pandemic has shifted the primary location for many employees, leading to changes in pay structures. Data suggests that the gap used to justify regional pay differences is beginning to shrink as regions outside London increase at a quicker rate. Working from home presents a range of benefits for employers and employees including cost savings.

The shift has begun to raise questions however on whether to differentiate pay based on location, whether at national, regional or local level. In deciding which core elements underpin the pay structure, employers will need to strike the right balance and consider some specific challenges such as gathering the right data, justifying differences, and future-proofing pay structures.   

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