Worldwide lockdowns sent millions home from the office with little warning, and the results of this unplanned global experiment are still being assessed.
As we all adjust to the new normal, employers are trying to decide how to navigate hybrid and home working in their long-term strategy, and if they do so, whether they will need to adjust salaries accordingly.
This could present a dilemma for workers around the world who would prefer to keep working from home, at least some of the time.
Percentage of the workforce that wants to keep remote or hybrid working:
For those who don’t want to go back to the office, is there really a work from home (WFH) pay gap in the job market and if so, is it a price worth paying?
Working from home vs working in an office
Pros:
- No commute, saving money and time
- Able to manage caring responsibilities better
- No distractions from colleagues
- Allows workers with the right skills to work for employers based on suitability and not location
- More family time
- Can choose to live in a cheaper area
Cons:
- Can be isolating and lonely
- Possible distractions include children, pets, other family members working from home
- Costs associated with the need to buy new furniture and equipment, heating and power. In the USA, 51% of remote workers say they have spent between $100 and $499 on equipment
- Making fewer new connections in the workplace
- Worries about job insecurity – 72% of managers in the USA who supervise remote workers would prefer their employees to be in the office
- Work may invade free time, affecting work/life balance. Remote employees have, on average, a longer working day.
- Pay may be lower than for office-based staff
Is a pay gap really emerging between remote workers and those based in offices?
There’s evidence that this is happening, at least in some areas. In the USA, a leaked pay calculator suggests Google employees may take pay cuts if they switch to working from home permanently, with one employee potentially seeing a 10% decrease in pay.
Meanwhile, companies like Reddit and Zillow now have a single level of pay for employees wherever they’re based, removing the need for a pay uplift for those who live in expensive housing closer to head office.
These pay cuts are apparently far from unpopular – one survey revealed 61% of Americans would be willing to have their pay reduced in order to maintain remote working status.
In Singapore, Malaysia and Hong Kong, managers are considering changes to terms and conditions to reflect WFH – including positive things like subsidies for buying technology or paying for power, and negative things like lowering of salaries to reflect the savings made by cutting out travel.
However, research from Italy suggests that while working from home might actually result in higher salaries for some workers – particularly older, skilled male employees – crucially, not all. It concludes that widespread WFH risks exacerbating inequalities in the labour market, particularly for the lower-skilled workforce.
Does working from home really improve productivity?
Productivity during lockdown was certainly good. In the UK, more than 80% of employees felt they got at least as much, if not more, work done at home as in the office before Covid struck.
However, whether that continues to be the case remains unclear. Only a third of workers felt their productivity had improved since leaving the office.
A hybrid approach – the future of work?
The UK research partnership Work After Lockdown’s recent report suggests this is a very popular idea with workers, with over 70% saying they’d like to work in the office at least part of the time.
In the UK, two-thirds of employer’s plan to introduce or expand the use of hybrid working to some extent. Some are considering using smaller, regional offices rather than one central office, utilising the services of companies like Instant Offices.
This would allow them to be agile, employee-friendly and help them to reduce costs – a solution that arguably offers both employers and employees the best of both worlds.
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