Should employees be required to take a pay cut if they continue to work from home? At first glance, it’s a seemingly simple question, but one that’s seen an increased spark in interest over the past few weeks with the news arriving that Google is rolling out a payment calculator that assesses compensation cuts to employees based on how far they reside from their New York offices.
Compounding onto this news was the more recent talks held by UK ministers suggesting that civil servants that work but live outside London could see their wage top-up (known as London weighting) slashed to account for the perceived reduction in living costs they’ll benefit from.
While the unnamed minster’s idea was promptly shut down by Mr Kwarteng on the grounds that it will set employees against each other, this news in combination with Google’s stance raises an interesting change in the tide towards the mass agreement we’ve generally seen across the job sector so far that flexible working is here to stay.
“We want employees to be able to work where they feel most creative and productive.” – Jack Dorsey, Twitter CEO
So why exactly is this new conversation seeing an increased amount of interest now? And beyond that, is the docking of wages to account for remote working even an applicable or ethical course of action?
During this week’s lunch & learn session, the MRJ Recruitment team got together and debated these questions and came up with some brief, impartial conclusions.
The docking of wages could set up a bad precedent
The first thing to acknowledge in any discussion around this topic is that the question at hand isn’t necessarily a bad one.
Up until recently, remote working was for many a necessity rather than a choice, with it only being past the mid-point of the year that we can freely debate the topic without the looming pressure of lockdowns being over our heads (though it remains to be seen if the October rumours are true).
With society largely moving out of what could be considered the worst period of the pandemic, it would seem natural that the question regarding the permanence of remote working for the majority would eventually arise.
However, as noted by a member of our staff, after what’s understandably been a rough passage of time for the job sector at large, what message does it send to employees that their wages will be docked should they wish to remain remote or flexible? Coming off the back of a period where trust needed to be held on both the employee and employers’ side regarding work, our team notes that docking wages based on-location could cause distrust on the side of employees.
On a similar thread regarding the potential ramifications the move could make, a news article centred around the topic noted:
“Employers don’t want to create a risk where those returning to the office are praised, while those who continue to work from home are placed at a disadvantage”
When reading into the minister’s suggestions, the core principle behind the potential idea of a wage cut comes from the idea that people working from home in London no longer have to commute and thus no longer need the London weighting system as their living costs will be reduced.
And while this is a reasonable statement to make, we feel that it’s also worth noting that working from home comes with its own monetary additions that can't be ignored.
While it is indeed true that commuting costs will be reduced, there are other living costs involved in remote working that need to be accounted for such as gas and electricity bills. These additional bills that will no doubt increase as employees work more from home make the debate regarding whether or not living costs are reduced harder to quantify and pin down, with the MRJ team not being able to land squarely on one side or the other.
Where do we stand on the core issue?
While the MRJ Recruitment team during our lunch & learn sessions were split regarding whether living costs are an adequate reason to reduce pay, one factor the entirety of the team seemed to stand in agreement on was the idea of flexibility being the way forwards. We believe that to adequately promote and encourage a productive workforce, there needs to be a sense of trust and flexibility offered on both the side of the employee and employer regarding changing work habits.
This pandemic has in many ways cast a new light on the nature of office work and from there potentially changed whether employees see office culture as necessary in today’s age. We stand on the side of believing there are merits to office work with the camaraderie being hard to come by through remote means.
But with that said, flexibility, choice and potentially meeting in the middle seem the most obvious course of action we’ll see the job market take moving forwards.