Opinion: it may be more in a company's interest to reward rather than penalise employees working from home
Companies located in very expensive locations often pay employees a premium to offset the high cost of living. As more workers take advantage of remote work, these companies are starting to rethink their pay strategies. Google recently announced that they will cut the pay of employees who work remotely if their remote location has a significantly lower cost of living than their more costly office locations. Google is not alone: Facebook, Twitter and LinkedIn have announced similar policies and it may not be long before tech companies in Ireland consider similar arrangements.
A business case can be made for such arrangements. Why should Google pay a premium to offset the costs of living in the San Francisco Bay area if employees live hundreds of miles away, where the costs of living are much more manageable?
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From RTÉ 2fm's Louise McSharry show, Seán Murray from The Journal talked to Louise on what working from home may look like once the pandemic passes
On the other hand, this policy can have several unforeseen effects. For example, suppose you work in New York City but live an hour away in the suburbs. You could face a penalty of up to 15%, and possibly quite a bit more, for working from home. Two employees who live on the same block and do the same job could end up getting very different levels of pay if one works from home and the other commutes into the city.
Two-tier pay systems are sometimes seen in companies where some employees are covered by a union contract and others are not, and the idea of different pay for the same work has been controversial for some time. The attitudes of white-collar employees to two-tiered pay systems might not be so favorable once this concept is applied to them.
Forcing employees who live close enough to headquarters to come back to the office in order to retain their current levels of pay is unlikely to build feelings of commitment or loyalty to the organisation. The long-term implications of paying the same workers different amounts for the same work depending on whether they continue to work from home versus working in the office are hard to predict.
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From RTÉ News, working from home during a pandemic
But if a business case can be made for cutting pay for people who work from home, an equally strong case might be made for paying them to stay away from the office. The current pandemic is far from over, and people who come to the office to work may be risking their own health and the health of others.
Maintaining a large and often opulent headquarters is very expensive. Building office parks or renting them is very costly. Then, there are the overheads of maintenance such as upkeep, providing power, water and other utilities and providing all of the office equipment needed to make "the office" function. Imaging if you could reduce your real estate and overhead costs just by convincing employees to continue to work remotely?
On the whole, remote workers are at least as productive as face-to-face workers and they are often more satisfied with their work. Employees who understand that they are more productive and are saving their employers substantial amounts by working from home might not be so willing to take a pay cut.
From RTÉ Brainstorm, Ella McSweeney and guests David Collings, Alma McCarthy and Kevin Murphy look at how everything from working from home to technology and data will change our working lives
Instead of cutting their pay, savvy employers might be able to retain their best employees and increase employees' satisfaction and commitment by sharing the wealth and giving them back some of the savings they make when employees work remotely. One of the effects of the disruption of the traditional workplace has been that employees are not as willing to put up with bad treatment as they once were. For example, one of the factors that has made it difficult for many restaurants to hire staff is that workers have become less willing to put up with low pay and abusive working conditions.
Companies who want to penalise employees for working remotely may find that they will have trouble retaining staff. The conflict and dissatisfaction these pay policies will create may cost them a lot more than they save by trying to cut pay based on where their employees live. Forget the pay cuts and start thinking about how to best reward those remote workers who are saving you a goodly sum by working from home!
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
