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Why it's unfair for companies to cut pay for staff that WFH

·Writer, Yahoo Finance UK
·5-min read
Some companies are already considering pay cuts for remote staff but many workers argue this is unfair. Photo: Getty
Some companies are already considering pay cuts for remote staff but many workers argue this is unfair. Photo: Getty

The shift to remote working has been one of the silver linings of the pandemic. Unsurprisingly, many workers want to continue to work from home in the future — so much so that they would accept a pay cut to do so.

According to a survey of more than 1,000 workers by the HR software provider CIPHR, nearly three-quarters of UK employees would agree to a reduction in pay in return for being able to work remotely on a permanent basis.

And some companies are already considering pay cuts for remote staff. For Google (GOOGL) employees contemplating whether to return to the office, choosing to work from home permanently may cost them. Reuters recently reported the technology giant has internally rolled out a pay calculator that allows employees to see how working remotely impacts salaries — and early results suggest they could see their pay cut depending on their location, if they ditch the office.

But with remote workers carrying out the same roles and responsibilities as office workers — and often putting in longer hours — many argue pay reductions are unfair.

Read more: What are your rights if an employer threatens a WFH pay cut?

“Employees who work from home may find it unfair because they may feel equally or even more motivated and productive than those staying in the office, yet their pay is lower,” says Argyro Avgoustaki, associate professor of management at ESCP Business School.

In the past 18 months, many remote workers have found themselves tied to their desks, spending more time in meetings and taking fewer breaks. “A sense of unfairness will particularly result once employees who work from home start comparing themselves with employees who work from the office and are similar in terms of productivity, tenure and skills, and live in similarly expensive areas,” Avgoustaki adds.

Pay cuts may also feel like a slap in the face for dedicated workers who switched to home-working during the pandemic. “They created new routines and setups with very little notice and were conscientious about their work. They should be paid for the job they do, not where they do it,”says Olivia James, a London-based performance specialist.

Watch: Google staff working from home could see pay cut

The argument for cutting pay centres on remote employees spending less on commuting to corporate hubs. Some companies have location pay schemes, which adjust employees’ salaries depending on where they live. However, whether someone lives 20 minutes or an hour from the office often isn’t taken into consideration when it comes to a job offer. Rather, people are paid for the job they do — as well as their skills, experience and the attributes they bring to a role.

Additionally, it’s important to note that people’s circumstances may have changed since the pandemic started. People may have additional caring responsibilities or be struggling with health issues, making working from home their only option for staying in the workforce.

“It may feel discriminatory to cut their pay,” says Ruth Kudzi, CEO and founder at Optimus Coach Academy. “Equally, this time has been financially challenging for a lot of people. Many — including a higher percentage of women — have lost their jobs and been made redundant which will have an impact on lots of households. The news of a pay cut may mean that they are now in a financially difficult situation.”

Read more: What companies can do to mitigate gender parity damage of pandemic

“I think that there is an expectation that working from home means people are less productive or somehow doing less, when research does little to support this,” adds Kudzi. “So it feels like people are being negatively rewarded for the work they have done often in challenging circumstances.”

The threat of pay cuts may be a misguided attempt to incentivise people to return to offices. There are various reasons why employers may want this, from the notion that everything has to go back to "normal" or a greater sense of control over employees. Some employers still have a culture of presenteeism and believe that physically being in workplaces can boost performance.

However, allowing people to work from home — or letting people split their time between home and the office — comes with many benefits for employers. For one, remote working may mean lower overhead costs for businesses.

“It can help companies avoid high office rental rates and reduce real estate costs,” says Avgoustaki. “Furthermore, it can help companies expand the pool of candidates and hire talent from different areas.”

Read more: What is the 'mere-exposure effect' and how does it impact remote workers?

Allowing remote working can also be more inclusive as those who may usually struggle to go to a physical workplace are able to work. According to a survey of 7,400 employees by the global nonprofit Catalyst, women with childcare responsibilities are 32% less likely to report that they intend to leave their job if they have access to remote work.

Finally, the psychological benefits of remote or hybrid working shouldn’t be underestimated by employers. A happier, less stressed workforce is a more productive one that will ultimately yield better results.

“Many workers are more productive and focused at home,” says James. “Those with anxiety and mental health issues often find the home environment is less threatening. People who feel safe perform better. Less commuting time should mean staff are fresher when they start work.”

Watch: The biggest job interview mistakes

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