The true cost of home working in adland
Amid growing reports of companies opting to pay remote staff less than their counterparts who return to the office, George Greenaway-Poole from recruiter Major Players looks at how the introduction of any such policy would be received by those working, and job-seeking, in the advertising and marketing industries.
In recent weeks, we have seen a number of organizations ramping up their rhetoric around employees returning to the office. There are reports that Google may cut pay by up to 25% for staff (in the US) that opt to work from home, while it has been suggested other big tech companies including Microsoft, Facebook and Twitter may alter employees' pay based on where they live.
Cutting salaries for employees who opt to work from home is an ongoing experiment that’s been playing out across Silicon Valley, which is often seen as a trendsetter for other large employers. But how would a similar policy fare for the UK employment market, and specifically, for those within the creative industries?
Quite frankly, it would go down like the proverbial lead balloon.
Pre-pandemic, most organizations were extremely skeptical about allowing employees to work from home, with concerns mostly factored around productivity and quality of work. Fast forward 18 months, these concerns have been largely unfounded, with the pandemic proving that working remotely at scale is achievable. In fact, our recent 2021 Salary Survey highlighted that UK employees were logged on for 11 hours a day, up from 9 before lockdown began, therefore demonstrating the increased output of staff working from home. It also found that 66% of those in permanent roles were working more hours than the previous 12 months.
So, if employees are working harder and delivering more, why are businesses so keen to reward them with ultimatums to getting back to the office?
Over the last 18 months, business have been forced to quickly adapt their way of working, relinquishing many control mechanisms and having to place greater trust in their employees than ever before. While this has had some positive outcomes, the challenges we are currently seeing across the industry are around employee engagement and culture. After a tumultuous time for most employees where they have been furloughed, suffered a reduction in salaries and faced uncertainty around their futures, it can be a struggle to keep people focussed and engaged when working remotely.
However, employees see the benefits of flexible, home working. Not having to pay for the commute or for coffees and lunches every day is a huge relief for people. That, coupled with the flexibility around childcare and general lifestyle re-balancing (for example doing a gym class in the middle of the day when it’s cheaper), is a huge incentive to continue to work from home.
The tech giants have discussed paying employees less for those that reside in inexpensive areas, who still opt for home working. It’s no surprise that companies are looking at ways to cut their costs in the current climate and turning attention to salary weighting is one way of doing this – although doing so could be challenging as it would likely contravene T&Cs in an employee’s current contract. There are other expenses that employers need to take in consideration too, including the cost of heating, electricity, internet etc. More concerning is that this stance would penalize those from lower socio-economic groups who are already struggling to make ends meet.
A recent market update provided by our commercial director, Rosa Rolo, highlighted that the UK job market is at its busiest period pre-2008. This has largely been put down to 'the great resignation' which happened earlier in the year, where it’s estimated 4 million employees left their roles. This has resulted in a war for talent, with many businesses stifled in their attempts for a quick post-pandemic recovery, while also having to navigate the Brexit effect and the implementation of the unpopular IR35 legislation.
All the above has meant there has been a huge power shift from the employer to the employee, where the latter can now make far greater demands on renumeration, benefits and flexible working. A recent Major Players study highlighted that 72% of employees want to retain a hybrid working model, sharing time between their office and home. As a result, I think we are seeing businesses in the UK being far less forceful with their workplace policies, with the majority of our clients operating either fully remote or hybrid and instead looking at alternative employee engagement initiatives to encourage people back into the workplace.
At a time where businesses are heavily focussing upon attracting, retaining and engaging talent, I do not envisage many, if any, will take a similar stance to these big tech companies. That’s not to say it might happen in the future, but while the power pendulum has swung towards employees and job seekers, it would be a big risk.
George Greenaway-Poole is head of marketing at Major Players