Why we should not cut pay for home workers

We’ve seen a growing divide between leaders demanding employees return to the office and those embracing a more hybrid approach. But what about some organisations’ plans to cut pay for home workers? Ben Buckton weighs up the considerations. 

While it may feel like the pandemic lockdowns are slipping further into the past, some of the lasting effects, particularly around working practices, are here to stay.

In particular, attitudes towards flexible working are starting to show a divide in the business world as more organisations get vocal about how they would like their people to work in future.

In the professional services sector, where many roles are desk-based and knowledge-led, companies have used the pandemic to take a hard look at their working practices and put firm and often innovative policies in place which allow people to continue enjoying the flexibility that hybrid working allows, without missing out on the benefits of team building and collaboration.

However, recent months have seen a small number of companies adopt a hard line in the office versus elsewhere debate, with some even announcing significant pay cuts for people who want to be permanently home-based.

In fact, research from the CIPD has shown that 13% of businesses are considering reviewing the pay and benefits of home workers. It’s clear that this conversation isn’t going anywhere soon but then, what’s the answer?

Empowering employees

Certainly, the answer does not involve creating a rift amongst the workforce by adjusting pay structures depending on the employees’ place of work.

Forward-thinking organisations should quickly realise that it’s not about working from home or working from the office, it’s about empowering people to work where they operate most effectively based on the work activities they have to carry out and ensuring they are rewarded based on their contribution to the business.

Employers that consider offering different salaries according to place of work will be quick to turn to the cost savings argument.

While it is true that people working from home will save money on the cost of commuting – particularly in London and the home counties – there are obviously additional costs that are incurred when working from home, which go some way in countering this argument.

For example, every household in the country is feeling the biting effects of the continual rise in the cost of energy and the ongoing cost of living crisis, not to mention real-terms wage cuts due to inflation.

Pay cut savings?

For businesses themselves, having a larger proportion of their workforce based at outside the office more often gives them an opportunity to make cost savings of their own, including rethinking their office space strategies, renegotiating leases in the longer team, as well as saving on peripheral costs for printing, energy and other supplies. Flexible working offers opportunities for all parties.

London salary weightings aside, from a perception point of view, paying different salaries for different places of work also has the potential to be damaging. Reward should always be based on an individual’s contribution to the business.

Placing a lower value on those who choose to work elsewhere or who cannot travel into the office, when they may have been hired on a flexible contract or during lockdowns, is counterproductive, counterintuitive and assumes that they put in lower effort and have a lesser impact than their office-based counterparts.

Understandably, giving people the message that they are worth less is never well-received and is extremely likely to have an adverse effect on productivity, happiness and job retention. In our fierce job market, holding onto good people should be a high priority.

Anytime, any place

In June 2021, we introduced empowered work principles across the business. This followed a survey that showed 88% of our people wanted more flexibility in their roles post-pandemic.

Essentially, our people work when, where and how they need to, in order to deliver in their role as long as they are balancing the needs of their clients, colleagues and role.

We went for a principles-based approach, rather than a set policy, recognising that both the dynamic and needs of every team is different. Therefore, we support our leaders to find and agree the right approach with their people, rather than instigating a set structure.

The principles empower people and teams to manage their own time and working patterns alongside the demands placed upon them, and by focusing on outcomes (rather than inputs), we have seen increased motivation, talent attraction and a positive work culture.

Additionally, since introducing the principles, average sick days taken per month have reduced by 60%, despite headcount growing across the group.

Knock-on effect

Any business considering dropping salaries for people working from anywhere other than the office compared to their commuting counterparts who contribute exactly the same to the business will very quickly see that motivation, commitment and culture takes a significant knock. It is completely counterintuitive to the high-performance culture that we, and many other businesses, are working so hard to promote.

For organisations like ours, with brands and offices spread across the length and breadth of the UK, forcing people to come into the office breeds a presenteeism mindset that can exclude people from operating across offices and embracing aspects of their role such as seeing clients and colleagues, networking and exploring other opportunities.

We actively encourage our people to work from clients’ sites, for example. The idea that being at work means travelling to the same desk for five days a week harms agility and flexibility. It also perpetuates the age-old tension between regional offices and London ‘headquarters’.

There is absolutely a place for getting together, and scrapping the office entirely is not the answer at all. Having a physical base or hub (as we call them), in some form, is still critical. Team meetings, socials, collaborative working on clients or projects are all enabled through having a workspace of some form.

Productivity and preference

Whether that office falls into the category of having set desks and areas, or is more multifunctional in nature, depends on the organisation, but just as there are people who relish working from home, there are others who want and need the regularity of a set place of work.

The benefit of an empowered working set-up is that people can work wherever they feel they are most productive and wherever best suits their role.

Offering different salaries for remote workers, rather than based on contribution, is inequitable for a huge number of reasons. Any business that cares for the happiness, productivity, loyalty and effectiveness of its people, not to mention the commercial benefits that flexibility brings, will see that and seek to empower, rather than restrict.

However, there is one question to finish on which as yet remains unanswered. At those organisations cutting salaries for people working from home, will their workers whose roles require them to be in the office – for instance, production staff, or front of house teams – be receiving significant pay rises to recognise that?

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Phone

This field is for validation purposes and should be left unchanged.

Δ

It’s unlikely.

Performance and Engagement opportunities on Personnel Today

Browse more performance and engagement jobs