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How Much Should I Pay My Employees? A Comprehensive Guide

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As a small business owner, one of your biggest financial decisions involves asking yourself the question, “How much should I pay my employees?” It’s a question most small business owners struggle with, especially those who don’t have a dedicated human resources department or who are hiring for the first time. But what to pay employees is an important question because according to a recent study by Glassdoor, 67% of job seekers consider salary to be a top factor in considering whether or not to take a job.

You want to hire and retain top talent, but you also need to create a business budget that allows your business to turn a profit and grow. So figuring out how much to pay your employees can be a balancing act. We’ll walk you through the best way to determine what to pay your employees. Here is everything you need to consider in order to pay employees appropriately while staying within your operating budget.

How much should I pay my employees? 

There are myriad factors to consider. One guiding principle to keep in mind is that a salary is an investment—so make sure you don’t pay more than you feel you will get in return. A good rule of thumb is to put 40%-80% of your business revenue toward employee salaries.

That said, deciding how much to pay your employees is a huge question to answer and a lot goes into making that decision. We’re going to cover the factors you need to consider as well.

Decide your budget for total employee salaries

Before you go ahead and decide what to pay one employee, think about how much you want to spend on the salaries of all of your employees. In other words, determine what percentage of your business’s revenue should go to your employee’s salaries. Keep in mind that this is likely your biggest business expense. But creating this budget will help you be sure you’ll have the funds to pay your employees, offer raises, and hire if you’re looking to.

Estimates for the percentage of your business revenue that you should spend on employee salaries vary greatly, especially depending on your industry. The percentage of revenue a restaurant spends on salary will likely be very different than the percentage of revenue an accounting firm spends on salaries. Other things like the age and the seniority of your employees can impact the amount to budget as well.

When creating a budget for paying your employee salaries you should also take into consideration the taxes, benefits, overtime, paid time off, and any reimbursements you expect to have to pay to employees. All of these costs combined should be part of your budget. As such, it can all end up being anywhere from about 40% to 80% of your business revenue.

The fringe benefits you offer will also increase this budget but they’re extremely important, offering good fringe benefits is just as important as paying a fair salary. A Randstad survey revealed that 55% of employees left a job because they found better benefits elsewhere. The IRS defines fringe benefits as “a form of pay (including property, services, cash, or cash equivalent) in addition to stated pay for the performance of services.” This can include anything from social security and workers’ compensation to health insurance and paid time off. While it’s easy to think of a salary as the cost of employment, it’s essential you consider the cost of providing fringe benefits when trying to determine how much to pay your employees—lest you end up paying more in salary than what you had budgeted for. If you offer employee benefits such as health insurance, life insurance or a retirement plan, take the costs of providing these benefits into account. Their cost can equal 20% or 30% of an employee’s salary or wages.

All the while, know that your employees are still an investment for your business. So as you would with any money you’re putting into the business, think about the return on investment you’ll get from hiring a certain employee. Here are a few other things to consider:

  • How much time can that employee save you, and what is that worth to you?

  • If this employee is being hired for a more senior role, can they increase the ROI of other employees?

  • Can you afford to give this employee a raise if and when they ask for it?

  • What is the cost of onboarding this employee, both in terms of money and time?

Determining individual employee salaries

Once you have an overall budget for all employee salaries and benefits, you can start to look at what you’d pay one employee specifically. Most of the benefits will cost you the same regardless of the employee or their position, but the salary is what will vary much more. Here are some of the things to consider to determine an employee’s salary.

Type of job

The first thing you must do when determining what to pay your employees is write an accurate job description. This description should include the core duties of the job, the skills needed, and the level of experience required. You want the job description to be detailed enough that applicants can understand what they are applying for but it should also be generic enough that it can be compared to a similar job in your industry.

Note that job titles may not be specific enough to determine a pay range because roles can have different functions from one company to another. Writing a job description will help you make sure you’re comparing apples to apples when you research average pay.

Average pay

The next factor to consider when trying to figure out what to pay employees is the average salary for comparable roles in your industry. There are a few different methods you can use to find out this information. The first is to perform internet research. The Bureau of Labor Statistics has a page in which they detail average pay rates for different industries and different regions. Websites like PayScale, Glassdoor, Salary.com, and LinkedIn also publish reports on salary data. We also recommend using keywords from your job description to get as specific as possible. For example, find out what the going rate is for key skills like bookkeeping or data research.

You also need to factor in the geographic location of your job to get an accurate idea of what to pay employees. The average pay for the same job can vary depending on the cost of living in certain locations or whether there are too few, or too many, qualified employees in the area. We recommend the help of other businesses and recruitment firms in your area to get a better understanding of the local market for the role you’re hiring for.

While your researching average pay, look for low, average and high pay rates for a job, and create a pay range you feel comfortable with. This gives you the flexibility to offer candidates with more experience or skills higher wages—if you determine that they are worth the investment.

Candidate pay expectations

Of course, the candidate will also come to the table with an expectation of how much you should pay them. This is why it’s important to enter salary negotiations with a range in mind. For a candidate who meets the essential qualifications of the role, you may want to offer them a salary in the lower to medium range of the average salary for the job. But for a candidate who exceeds expectations, you may try and entice them by offering a salary in the higher range.

Note that when you’re negotiating salary, you want to keep in mind what you think your ROI would be. If you offer a highly qualified candidate a higher range salary, do you feel they will deliver enough value to make your investment in them worthwhile? This is often one of the hardest questions to answer when figuring out how much to pay your employees, and it underscores the importance of doing your homework before making an offer.

Laws about paying your employees 

There are obviously going to be plenty of factors to consider when choosing how much to pay your employees. The most important ones for you to follow are going to be the legal parameters for employee pay that help answer the question, “How much should I pay my employees?” We’ll go over the legal parameters you need to factor in when determining salary.

Exempt vs. nonexempt employees

When considering how much to pay your employees, it also helps to know the difference between exempt and nonexempt employees. The Fair Labor Standards Act (FLSA), the federal law that regulates employment policies, recognizes two types of employees. Exempt employees are not subject to minimum wage or overtime pay laws; they must be paid a salary—a set amount of pay no matter how many or few hours they work. Nonexempt employees are entitled to minimum wage and overtime pay. They’re typically paid hourly, but some are paid salaries. For more information on determining if an employee is exempt or nonexempt, see this Department of Labor fact sheet.

Generally speaking, the FLSA recognizes three main categories of exempt workers: Administrative, professional, and executive. These three categories are purposefully broad. Most other categories of an employee can be considered nonexempt, although not all are.

Labor laws

Exempt vs. nonexempt is only one part of the labor law that employers must comply with when determining how much to pay employees. The FLSA also sets specific minimum wage and overtime pay standards that you need to consider when asking: “How much should I pay my employees?” Many states also set their own minimum wages—and employees are entitled to the higher of the two minimum wages. New York, for example, currently has a minimum wage of $11.80, while Florida has a minimum wage of $8.46. The federal minimum wage is $7.25 per hour, meaning no state can pay less than $7.25 for a minimum wage job. The Department of Labor website has more information about minimum wage laws in each state:

  • For nonexempt employees, overtime pay at a minimum of one and one-half times the regular rate of pay is required after 40 hours of work in one workweek. The Department of Labor’s Wage and Hours division has tools you can use to calculate hours worked and overtime. (Some states, notably California, require overtime to kick in at more than 8 hours worked in a day).

  • If you want to pay employees, such as employees making craft items or garments, on a piece-rate basis, you can do so as long as the piece rate is at least equal to the minimum hourly wage rate (and overtime, if employees work more than 40 hours per workweek).

  • If your employees regularly collect more than $30 a month in tips, such as bartenders, waitresses or hairdressers, you can count tips as part of their wages, but you have to pay a wage of at least $2.13 per hour and meet some other requirements in order claim a tip credit. (See this fact sheet for more information.)

Reimbursement

Some states, like California and Illinois, stipulate that you as an employer have to reimburse employees for work expenses. Not all states require this but more and more have been enacting laws that require employers to repay their employees for work-related expenses, think food while traveling or mileage for employees who have to use a personal car for work.

For milage, the IRS standard pay is $0.58 per mile for miles driven for business, this is to cover gas and wear and tear on the employee’s vehicle. The rate varies for some other industries, and while it’s not required by law to reimburse this money, its standard practice in business, along with other reimbursements as well.

The bottom line

When it comes to the question: “how much should I pay my employees?” hopefully now you have a better idea of where to start. Do research, learn about labor law compliance, and work out your budget. If you have any questions or concerns, run your plans by an accountant or attorney familiar with tax issues and employment laws. Remember that you’re not just assigning a number to a job, you’re hiring a person and you’re investing in your business. So while you want to keep your business’s interests in mind, you should also be fair and reasonable with your employees. After all, they are the ones who are going to help your business grow.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How U.S. Employers Can Support Women’s Health

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As physicians, it is all too obvious to us that women’s health in the United States is in a state of crisis. Compared to other high-income countries, women of reproductive age in the United States have the highest rates of pregnancy-related death, preventable death, chronic health conditions, and mental health care needs. They are more likely to die during childbirth than their mothers, and the Supreme Court’s anticipated reversal of Roe v Wade will likely further increase pregnancy-related deaths.

Even more staggering are the inequities: Black women are three times more likely to die during pregnancy, regardless of education or income. The costs of health care are also burdensome, with women delaying care due to cost and suffering financial hardship due to medical bills, even if they have private health insurance.

These poor outcomes negatively affect society and the workplace. When faced with the challenges of navigating work and family without adequate support to do so, many women simply opt to leave the workforce. This attrition results in decreased diversity, lost talent, and less productivity. The Covid-19 pandemic only exacerbated these trends. Between 2020 and 2022, 1.1 million women left the workforce, accounting for 63% of jobs lost during the pandemic. While many are gradually rejoining the labor force, many — especially mothers — are choosing not to return.

Employers can take action today to combat these challenges. Investment in women’s health results in a healthier population overall. Companies that offer comprehensive support for women’s health have higher productivity, better retention of female employees, and most importantly, they help improve health outcomes for women.

Women’s Health Is a National Priority

At a national level, recognition of these poor outcomes in the United States has led to new efforts to improve them. In December 2021, the White House made a call to action to reduce maternal mortality and morbidity. This effort included a $3 billion investment in maternal health, encouraged states to increase Medicaid postpartum coverage from 60 days to 12 months, and established a “Birthing Friendly” designation for hospitals that take steps to improve maternity care. The Centers for Disease Control and Prevention (CDC) currently funds perinatal quality collaboratives that convene a variety of stakeholders to improve the safety and patient-centeredness of maternity care. The National Institutes of Health — whose 27 individual institutes strikingly does not include one dedicated to women’s health — recently announced new funding for research into improved maternal health diagnostics.

The private sector has not kept pace with these advances. Women account for more than half of the national workforce, and most obtain health insurance through their employer. These plans, however, often impose serious financial barriers for essential health care services.

While the Affordable Care Act requires private plans to cover many preventive services, such as prenatal visits and mammograms, other essential services are not covered, such as genetic screening and prescription medications during pregnancy, hospitalization for childbirth, and diagnostic testing after an abnormal mammogram or pap smear. This is in stark contrast to Medicaid plans, where the amount that patients have to spend out of pocket for these services is exceedingly low. Unfortunately, these gaps in coverage are often most detrimental to employees living on lower incomes and those in marginalized racial-ethnic groups.

Employers are powerfully positioned to advance women’s health in the United States. There are several ways in which they can support women and in doing so, ultimately create a healthier society.

1. Provide better health insurance.

Currently, even among women with private health insurance, 98% of new moms in the United States are left with thousands of dollars of out-of-pocket costs after childbirth as the result of “low cost,” high-deductible insurance plans. In fact, more than half of women with private insurance change their plan around the time of childbirth to seek savings. When employers try to maximize the aggregate value of insurance plans, critical gaps still exist at the individual level.

Therefore, it is essential for employers to seek comprehensive insurance plans that include coverage for pregnancy, childbirth, and postpartum care without high deductibles, co-pays, or out-of-pocket costs. These plans should also cover crucial mental health services, including treatment for substance-use disorders, and evidence-based management of chronic conditions across women’s lifespans. Women must have a seat at any table where insurance plan benefit design tradeoffs are being decided.

Since health care payers are sensitive to market pressures, demands by purchasers for high-quality women’s health insurance coverage will drive market change within the health care delivery system. This should not be seen as a short-term expense, but rather, as a long-term investment.

Employers’ comprehensive insurance plans should include access to safe abortion, which unequivocally saves lives, helps people achieve their life goals, and is an essential part of comprehensive health care. However, if the Supreme Court overturns Roe v Wade, as a leaked draft opinion suggests it may do, abortion will become illegal in at least 13 states with trigger laws, and other states are also likely to restrict abortion access.

Multiple companies have therefore pledged to reimburse travel and lodging expenses for employees seeking abortion services, since many may soon have to travel out of state. Should access to safe abortion become restricted, such corporate provisions, alongside insurance coverage for abortion care itself, will become increasingly important to foster access to the full scope of health care and avoid deleterious effects on employee retention and recruitment. Employers unable to cover costs of travel or treatment can protect safe abortion access by providing paid medical leave as some have done.

2. Provide paid parental leave.

The United States is the only high-income country without national paid parental leave. Lack of paid leave means that pregnant and postpartum people take less time off work, which is associated with increased birth complications and worse maternal and infant health.

Paid leave doesn’t just benefit maternal and infant health; it benefits everyone. A recent study compared companies in states that have enacted paid parental leave with those that haven’t. It found that in the states with paid leave, performance rose by 1%, productivity rose by 5%, and employee turnover decreased. What’s more, longer paid parental leave keeps more women in the workforce. Companies that have begun to invest in paid parental leave are already reaping rewards.

3. Redesign the workplace to support women.

Women face many barriers and stigmas around basic health and wellness in the workplace. A 2020 survey study found that only 10% of new mothers had designated breaks to support breastfeeding, and only 17% had support from supervisors or coworkers. Support for preventative health appointments, childcare, and mental health is often lacking as well.

With input from women employees, employers need to design a workplace that supports positive health behaviors and recognizes that women often shoulder an unequal burden of caregiving at home. Many have begun to reimagine the workplace as one that includes on-site subsidized childcare, spaces for pumping breaks and breastfeeding, and flexible work-hour arrangements to accommodate appointments and caregiving responsibilities.

Resources and guides are available to make these changes. By intentionally integrating support into the workplace itself, companies are more likely to retain talent and improve the employees’ health, wellness, engagement, and productivity.

In a social and political environment that sees growing threats to women’s health and autonomy, the steps outlined above represent ways for corporate leaders to make women’s health a priority. The moral case is obvious, but the business case is just as strong. By investing in comprehensive support for women’s health, companies can improve productivity, realize their employees’ full potential, and reverse the troubling health outcome trends that continue to unfold in the United States.

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Using Emojis to Connect with Your Team

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Employees don’t check their emotions at the office door — or Zoom room. But it can be harder to read how your team is feeling when you’re working remotely or in a hybrid office. Managers can use emojis as a fun and easy way to connect with their team. They can offer deeper insight on how your team is feeling, help you build your own cognitive empathy, help you model appropriate emotions, and help reinforce your company culture. Emoji usage can be an intergenerational and cultural minefield, however, so if you are new to the practice, the authors suggest starting with simple emojis (for example, a thumbs up) rather than those that represent complex emotions.

Leaders have often relied on physical cues, such as facial expressions and body language, to gauge and communicate emotions or intent. But doing so is more difficult in the remote workplace, where facial expressions and physical gestures are difficult to both read and convey.

Anecdotal evidence, as well as conversations we’ve had as part of our ongoing research into effective leadership in the digital age, is pointing to the growing use of emojis in the virtual workplace as an alternative to physical cues. They can help clarify meaning behind digital communications, as well as the type and strength of emotions being expressed. But they can also be an intergenerational and cultural minefield. For example, Gen Z’s are reportedly offended by their colleagues’ use of the smiley face emoji, which they see as patronizing. And cultural and geographical differences can mean that one person’s friendly gesture is another’s offense.

To lead in the remote or hybrid workplace, managers need to be aware of these pitfalls and need to understand how to use emojis effectively.

Using Emojis to Connect with Your Team

Based on recent research on emoji use in the workplace, our interviews with leaders who self-identified as using emojis for team management, as well as our own research into effective leadership, we identified four ways using emoji can help you connect with employees and enhance your leadership in a hybrid or remote environment.

1. Get deeper insight on how your team is feeling.

When employees at Danske Bank A/S, a Danish banking and financial services company, log on to join their remote management meetings, they share an emoji. “Our virtual meetings start with capturing the mood of the day. We each post a sticker with our name and an emoji that represents how we feel,” explains Eduardo Morales, a Danske Bank product owner. As these meetings usually are attended by more than 40 people, emoji sharing allows attendees to get a sense of each other’s moods, as well as the collective mood of the group, with just a single glance at the screen. “It saves time, and yet our interactions are richer,” Morales says. “Emojis allows us to reflect upon and express a broader range of feelings beyond the standard verbal response of ‘I’m fine.’”

The simple task of emoji selection gives team members a moment for self-reflection, which has been found to positively impact performance. And those with higher self-awareness become more thoughtful in expressing their emotions, which results in a better accuracy of emoji selection to represent their given mood.

2. Build your own cognitive empathy.

Your employees’ emotions are a data point that can help you understand what motivates them and how they experience their work.

“How do I as a leader understand what my team is working on and how they’re feeling about their work when everybody is remote?” asks Luke Thomas, founder of software startup Friday.app. He decided to start using emojis as part of his weekly check-ins. He asks direct reports to select an emoji to indicate how their week went, and then follows up with open-ended questions, such as: What went well this week? What was the worst part of the week? Is there anything I can help with?

Thomas explains that these updates allow him to have richer one-on-one discussions and then act on his employees’ needs. “I spend less time doing status updates and check-ins, and more time engaged in building better relationships, removing blockers and coaching,” he says.

3. Model appropriate emotions.

Emotions are contagious, and research suggests they may be even more amplified in the digital space. Managing your team’s emotional state and mood is a critical element of leadership, and emojis can help leaders express and role model emotional cues suitable for certain situations.

One senior leader at a global consumer products company explained that he uses emojis and GIFs to help motivate his team members and colleagues: “I use them as “pick-me-ups” to energize and to drive positive moods and behaviors within my team.” He described a recent example of how he used a humorous GIF and emoji to bring a moment of levity to a challenging financial discussion that was taking place on an online chat. The digital cue served as a transition, enabling the discussion to be steered towards a more positive orientation.

Leaders can greatly influence an organization’s emotional culture. Using emojis that represent positive workplace emotions, such as happiness, pride, enthusiasm, and optimism, is a first step for leaders looking to effectively role-model digital cues.

4. Reinforce your company’s culture.

Organizations have emotional cultures that can impact everything from employee satisfaction to burnout to financial performance. Emojis can both reflect and enhance the emotional culture of your organization in your daily communications.

“Our corporate culture is very fun and friendly — we hug a lot,” shares a manager at a global home furnishings retailer. After moving to remote work, managers at the company had to find a new way to express this aspect of their culture. “We can’t close a single department meeting without sending emojis and GIFs. A lot of them,” one told us. If the emotional culture is ebullient, as was true for the one described above, emojis can be used liberally and without necessarily having the leader set the norm.

In other workplace cultures, leaders use emojis to reinforce their organization’s core values. Take the example of material science company, DuPont. “We like to show appreciation and recognition for each other, so I often use the applause emoji to recognize people’s accomplishments,” explains Lori Gettelfinger, a DuPont global brand leader.

Take the time to gauge your organization’s emotional culture, which may be codified in mission statements, values, and daily behaviors. Then think about digital gestures, such as emojis, that can help reinforce it.

Minimizing Opportunities for Offense

If you are new or hesitant to using emojis in the workplace, we advise starting with simple emojis (e.g., thumbs up) rather than emojis that represent complex emotions (e.g. laughing emojis with tears) in order to decrease the likelihood that an emoji will offend.

Offense usually stems from a misinterpretation of a sent emoji or when someone uses an emoji that they think means one thing but really means another. For example, if a manager sends the emoji that features two hands pressed together, does it send a message of gratitude? A request for a favor? Or is it hands clasped in prayer? And is the emoji with the smiling face and two hands signaling a friendly wave “hello” or giving a hug? If you’re not sure, better to avoid using the emoji and to stick with something that is more straightforward and less open to interpretation.

Employees don’t check their emotions at the office door — or Zoom room. And when you’re leading in a virtual space, it can be harder to read how your team is feeling. Using emojis can help managers connect with their employees and strengthen their organization’s emotional culture.

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Distributed work is here to stay — how your business can adapt

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It’s no secret that the business world and working environments have changed drastically since 2020. With fierce competition in recruiting for skilled labor becoming a critical issue for businesses, having employees in varied locations around the U.S. or even internationally has become an increasingly common solution. It looks like this distributed work model is here for the long haul, so it’s time to get your business on board.

What is distributed work?

Distributed work is defined as a business that has one or more employees who work in different physical locations. This can range from having different in-person office locations, remote work or a blend of the two — often termed “hybrid work.” Large companies having a distributed workforce is nothing new, as having multiple locations allows companies to meet more of their customers’ needs.

The difference now, though, is the massive increase in remote work triggered in large part by the COVID-19 pandemic, ramped-up competition for skilled workers, and how those factors have combined to impact smaller businesses.

If you’re struggling to keep up with today’s workforce demands, take heart. Distributed work can provide some solutions.

Millennial and Gen Z workers strongly prefer flexible working environments and a distributed work policy fits into that preference nicely. Additionally, distributed work structures have the benefits of increased access to international talent, more productive employees and higher job satisfaction.

How to adapt your small business for distributed work

Making the leap to a distributed workforce can feel daunting, but it doesn’t need to be. Software solutions tailored specifically for supporting a distributed work environment can help ease the transition and make your business run efficiently.

In this guide, we’re going to take a look at important adaptations needed to bring your small business up to speed for distributed work and how to accomplish them.

  • Get your business security up to date.
  • Tap into global talent pools.
  • Maintain quality communication between employees.

Let’s take a closer look at each point below.

Get your business security up to date

When remote work exploded in early 2020 due to COVID-19 office closures, it quickly became obvious that improvements to business security protocols were necessary. Now with many businesses planning how their company will operate going forward, security continues to be a crucial consideration.

What are some security considerations important for businesses with distributed work environments? Here are a handful of important security features you’ll want to think about:

1. Avoid losing business documents with automatic saves

The stress from losing hard work or entire documents altogether is something most people have dealt with at some point. Having to backtrack and redo lost work is tedious and unproductive.

The best way to avoid that ordeal? Automated saves.

With Microsoft 365, your Office documents are automatically saved for you. Whether it’s a document in the company Sharepoint or in your own OneDrive account, your hard work won’t go to waste.

Additionally, Sharepoint allows your company to collaborate on documentation without having to worry about whether the current document is the correct version. An average of 83% of the current workforce loses time daily due to document versioning issues. Microsoft 365 makes it easy to avoid lost time and frustration, with the added benefit of simplifying collaboration.

2. Maintain business security across all user devices

In the United States, 68% of organizations reported being hit by a public cloud security incident when polled in 2020. Attacks like these can cripple your business’ productivity and lower public perception of your company as a whole.

Both Sharepoint and OneDrive offer multiple layers of security to keep your business documentation safe on the cloud servers themselves, including:

  • Virus scanning for documents
  • Suspicious activity monitoring
  • Password protected sharing links
  • Real-time security monitoring with dedicated intrusion specialists
  • Ransomware detection and recovery

With these built-in protections, you can keep your company safe no matter where your company’s distributed work happens.

3. Adopt company-wide security policies

Effective company security policies protect your organization’s data by clearly outlining employee responsibilities with regard to what information needs to be safeguarded and why.

Having clear guidelines set ensures that both your company information and your employees are safe from security threats.

Items to include in your security policy might include:

  • Remote work policies
  • Password update policies
  • Data retention policies
  • Employee training guidelines
  • Disaster recovery policies

This list obviously isn’t exhaustive, so we’d recommend using a security risk assessment tool to pinpoint specific areas your business should address.

Note: Social engineering and phishing are major security threats for businesses of all sizes. To avoid becoming a target, your company must implement strong security practices for your users. For example, using a secure two-factor authentication setup can help prevent unauthorized users from accessing company documents.

4. Ensure communications are secured

Having a distributed work environment tends to mean that most (if not all) communications occur digitally. As such, keeping digital communications secure should be a top consideration.

Using Microsoft 365, you can ensure that your communication remains encrypted.

If video calls are a major part of your business needs, Microsoft Teams offers robust encryption for your calls. Additionally, email through Microsoft 365 offers top-tier anti-phishing protection for your business.

To learn more about available tools for secure business communication, refer to the Microsoft documentation here.

Tap into global talent pools

world map on a computer

The pandemic triggered a drastic reshuffling of how workers view their jobs, leading to what has been dubbed the Great Resignation. In the United States, more than 11 million jobs were sitting unfilled as of January 2022. With jobless claims on the decline, the domestic labor pool is small and competitive.

It can be easy to feel overwhelmed as a small company attempting to attract talent in the current labor market. You’ll want to ensure that you’re offering competitive wages and benefits, but it can be difficult to go toe-to-toe with large corporations.

However, this is another instance where distributed work can help. One solution? International talent.

The distributed work model makes employing remote workers worldwide more seamless than ever before.

A few considerations here to keep in mind, though.

  • You’ll need to apply for certification from the U.S. Department of Labor to hire outside the country.
  • Be aware of additional taxes that might result.

For more information, review the official documentation for this process.

Note: The same standards do not apply to international contractors, but there are special considerations for contractors as well. Read this guide for more details.

Maintain quality communication between employees

Successful businesses rely on open communication for everything from keeping employees up to date on company information to maintaining morale. Let’s go over a few ways to implement quality communication in a distributed work environment.

1. Cultivate a healthy work environment

Company culture can feel like an afterthought when your teams work separately from each other. However, cultivating a strong company culture is vital, especially for distributed work environments.

The first step here is to clearly define the company culture that you want. By setting the company standards early, your employees will be able to benefit from a solid starting point.

Second, reinforce the culture that you’d like to create. Setting goals, establishing performance metrics, fostering accountability, building trust with employees, and being open to feedback from workers all help reinforce a healthy company culture.

And third, it’s important to prioritize the mental and physical health of your employees. Encourage vacation time, allow for flexible working arrangements, and make mental health support a priority.

2. Foster open communication

Digital communication is key for distributed work environments, so keeping open and transparent channels for communication is imperative.

Email and chat tools are communication fundamentals, but fostering communication itself can feel a bit daunting.

Here are a few suggestions on building healthy communication for your distributed work teams:

  • Make empathy a priority.
  • Greet employees every day.
  • Create a virtual water cooler to encourage socialization.
  • Announce company updates directly.
  • Give recognition and feedback regularly.

By encouraging clear, focused — but also fun — communication, your teams will grow to trust each other and interteam collaboration can flourish.

Distributed work is the ‘new normal’

Building your business toward a distributed work model is a solid investment in growing your company in the future. Tools like Microsoft 365 offer an all-in-one solution to take the pain out of transitioning your business, so take charge of your business’ future today.



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