Flexible working: can the genie go back in the bottle?
It is never wise to trust every survey you read but there is no question that the general pattern of numbers in reports canvassing workers’ opinions are becoming increasingly polarised.
Trends vary from country to country. Investigation by the USA’s National Bureau of Economic Research - published in April 2021 - found that “most workers welcome the option to work remotely one or more days per week... SWAA respondents are willing to accept pay cuts of 7 percent, on average, for the option to work from home two or three days per week after the pandemic.”
More recently, Owl Labs and Global Workplace Analytics’ State of Remote Work presented more radical numbers: 46% of workers said they would be willing to take a 5% pay cut to work remotely at least part of the time. Thirty seven percent said they would take a pay cut of over 10%. A Goodhire survey found that 61% would take a cut in pay in return for working remotely - some as much as 50% – and 70% would forfeit benefits like health insurance, paid leave and pensions to keep their ‘WFH’ status.
Where there used to be a premium attached to going into an office, lines have blurred as people have become accustomed to working in a more hybrid, flexible way. Many organisations are exploring how to differentiate between the two: is it viable to have different pay structures acknowledging those who work from home all the time and those who work hybrid or maybe go into an office two or three days a week?
Whichever numbers you believe, there is now a value attached to working from home, which is impacting decisions for both the worker and the employer. The key question is how much workers’ mindsets and company policies have shifted – or swung back and forth - in the last couple of years.
Regional vs Centralised pay
The whole debate is fraught with difficulty, not least because it depends to a great extent where offices, HQs and depots are situated, and where workers live. Historically, many UK businesses had a London pay structure and a regional pay structure reflecting that the cost of living in London was higher than elsewhere in the UK. Now, many companies are faced with a situation where workers remain ‘attached’ to a London office but no longer commute more than once or twice a month because they have chosen to live hundreds of miles away.
Should these people get a higher rate of pay than someone who is fully remote? It is difficult to answer categorically and so far most companies are retaining their existing pay structures while they work on a robust and future-proof approach to their office space and hybrid working. There is nothing wrong with this, but the clock is ticking.
Putting the genie back in the bottle
From what we are seeing, it does seem like the 2+3 is here to stay. Some businesses are demanding people go in five days a week, but it is very difficult to put the genie back in the bottle. We are finding that there is a talent cost attached to being too rigid, certainly when it comes to attracting a diverse workforce. By insisting on a strict five-day office week, companies now certainly rule out a whole raft of people either living with disabilities or caring for parents and children who have become accustomed to a more flexible approach.
So how can companies demonstrate that they are working towards a solution? Here are few areas to focus on:
Drive towards fairness - arguably the fairest approach, and the least penalising, is to have one pay structure that applies to all, regardless of where workers live. Regional pay data is notoriously hard to get hold of and depending on location (eg Edinburgh or Brighton) the cost of living may well be as high as London. As more people move out of cities, it is likely that the differentials we once saw do begin to shrink. It may be that we start to see ‘London allowances’ creep back in to try and lure people back to HQ.
Know your cultural identity – Whatever solution you end up working towards, make sure it fits with your DNA and strengthens your USP. The crowd still doesn’t know where it’s going on this, so don’t follow it blind. Find out what your workers want. Think hard about the type of culture you are trying to create, what your business needs and be open with staff.
Think future - consider the type(s) of talent you have now and may need in the future. Where will they come from? Do they have to be local to the office or HQ, or will they be sourced globally and never step foot in an office? If a 5-day presence in the office has restricted your talent pool previously, how might a hybrid model change that? How can you sweeten your deal in terms of your flexible benefits?
By taking these things into account you can present a forward-thinking company that has workers’ interests at heart, and that is also attractive in the market.
More insight from Justine Woolf