Britain is leading the way. How? A few companies are cutting the pay of remote workers up to 20% if they decide to work from home rather than working from the office. Is it a trend yet? No. But it’s being experimented with in some organizations. U.S. companies are taking a look.
You may soon be asked to take a pay cut to keep working from home. It’s estimated that working from home saves about $5,000 a year for employees by saving on commuting costs, child care, meals, insurance, tolls, wardrobes, and other miscellaneous items. You may save more or less, but your costs are less than working from an office.
Five years ago, approximately 5% of the workforce worked from home in mostly telephone sales. Currently about 30% of the workforce works from home in all sorts of functions. For the employers, there are both positive and negative factors. Here are a few of them:
- When managed well, companies enjoyed increased productivity and reduced costs
- Employees enjoy a higher quality of life with self-managed work schedules
- Many supervisors were not prepared or trained to manage a remote work-force
- If a recession is near, remote workers can lower labor costs and increase output
- Companies can hire less expensive home workers in non-big city markets rather than in offices based in New York City, Chicago, Los Angeles and the like
- Employee’s new view in working at home is that it’s part of the benefit package, and not as a factor in reducing compensation
- Smart companies have hired remote workers based on where they live rather than where the home office or business center is located. Example: Major tech companies may be located in the San Francisco area, but they pay differently for programmers in Idaho, Oregon or Mississippi.
- As hybrid workers continue to be engaged (working from home and some time in the office), how is compensation regulated? Is your at-home pay reduced versus days in the office?
As you can see, the issues are complex, questions surface as to fairness, and both management and employees are in a quandary: Each is looking for the upside benefits, but would like to forget the downside factors.
Some companies have taken the monitoring of work-from-home employees too far, which causes turnover. Example: One worker complained that every time he took a break to eat lunch or take out the garbage, a red light was flashing on the computer asking the question, “Where did you go? Work was not being done.” The company was monitoring his keystrokes and time on the computer. As a result, this employee took his skills and talent to a smaller, more trusting company.
So, the question remains, if you’re asked to cut your pay for remote work, what will you do? Accept the change? Negotiate a compromise? Seek a different job? My thought: Give it some thought now and be prepared for a potential change, well before you’re forced to decide.
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