Let me start by asking you a question. Say, your employer is ready to offer you the perk of permanent remote work but asks you to take a pay cut (5-20%), would you take it?
A recent survey indicates that 45% of UK employees are indeed ready to take a pay cut to continue working remotely.
Let's first look at some of the arguments for the proposal.
1) Remote working = reduced costs. So, your net take home pay is still the same.
Employers argue that remote working results in:
- Reduced transportation expenses
- Less money spent on meals or outings with co-workers
- Tax concessions given you have a home office
- Reduced miscellaneous expenses like dry cleaning, wardrobe etc.
So effectively your take-home pay is still the same or even higher.
Counter
Companies also save significant costs when employees work remotely. So looking at just reduced expenses for employees is a narrow, one-sided view.
On the contrary, individuals now have to pay extra for setting up their home office, additional bills, backup connections, co-working passes etc. So employers should in fact seriously consider reimbursing these expenses rather than thinking of a salary cut.
2) Remote work = increased risk. The risk & lack of trust is built into the lower salary.
Some argue that a remote hire comes with added risk. When you hire someone who doesn't meet your standard but works in office, there's still a possibility to manage or correct that since it's easier to have constant informal contact. The bigger risk with remote working is hence built into the salary.
Counter
While the argument of additional risk might be accurate, proposing a lower salary doesn't solve the root problem.
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Instead companies could do either of the two:
- Don't compromise on hiring. Hire only the best remotely. While companies like GitLab, Doist etc. have been doing this for years, the same may not be possible for smaller startups.
- Reach a compromise where you negotiate a lower pay with the candidate for an initial probationary period. You also commit to a pay raise after the initial period.
For companies, pay cut for remote work could be a serious disadvantage
The truth is it's hard to convince people to switch jobs by going down in salary. On the contrary, people expect at least 10-20% raise to change jobs.
Now, if you decide to cut down the pay of your existing employees for offering the perk of remote work (which may not even be a perk now, thanks to Coronavirus), it will likely result in unhappy employees and start showing negative effects in their work.
Companies are seeing this all wrong when they think of lower pay in return for the benefit of working remotely. Sure it's a perk for employees but that shouldn't mean a compromise elsewhere. Instead companies should push employees to bring out the best version of themselves & perform even better now that employees have this additional freedom.
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Top comments (26)
I would vote no, this is an unrealistic ask because to be honest. Studies show that most workers who work from home, give more hours to their job not less. And the employer gets to save money on building, power, internet, etc by having an employee work from home. So this means that they are seeing a bigger benefit to an employee working from home. Not saying that the employee doesn't benefit, but I don't feel its appropriate to ask for the employee to take a paycut when they stand to save money.
Exactly my argument too :)
It's fine to consider remote work as a perk, just don't ask for a compromise elsewhere in exchange for the benefit.
Not a chance. If it was said that remote workers at my company would need to take a pay cut to stay working remotely, I'd tell them to keep me an office space (and then look for another job).
I'm paid what I am worth (actually probably less given how many pies I have fingers in, but I am very happy all the same). Working from home doesn't make me worth any less, nor my contribution to the company any less.
My commuting costs may be less, but my car maintenance is actually higher because the car is sat doing nothing more. I have increased electricity consumption as a result of powering my work machine (which is pretty hefty), and having air conditioning on to cool the room because my kit throws out a ton of heat.
I've also got to (potentially) buy other office equipment I might not have otherwise, and that would be provided by work. Some people don't have a proper chair to work on (I cringe when I see the pictures of people using dining chairs or other non-adjustable chairs as part of their office), or replace sooner than I might have needed to the same equipment.
Whilst I am currently enjoying working from home, I would rather be allowed to go to the office for some days per week to have the faster-paced interactions. It's a bit of an inconvenience to me to be working from home at times. It would be worse if I was getting financially penalised for the "privilege".
"Some people don't have a proper chair to work on"
100% right, Gary!
When we went more work-from-home, I bought a $1300+ Steelcase office chair. I'm a big guy, so I needed a specialty chair, but proper ergonomic chairs that won't fall apart in a year cost hundreds of dollars. The Haworth chair they gave me at work isn't much cheaper than mine. And even with that, some people might need sit/stand desks to avoid staying in the same position all day. It's an expensive thing to set up the first time.
You can get in cheaper if you have a local used office furniture place. I got a nice, sturdy adjustable task chair there for $150, but that was just a good deal on a lesser-known brand that they had gotten a whole lot of at once and needed to clear out. But the availability in those places could go down sharply after the first round of companies dumping furniture they don't need for offices they don't have any more.
Great points. I just wonder why people are ready to give in so easily. 45% respondents agreeing to a pay cut is astonishing and frankly concerning too. Same work should mean same pay.
Definitely not. You're hired to do a job at the salary you've mutually agreed. It wasn't on the proviso that you need more money to get there and eat out. You're paid that because you're worth it and that's what you get for doing that job.
Absolutely with you on this. My thread on Twitter is more vocal :)
Their pay should actually increase, as the costs (renting office space, electricity, heating, internet, amortization of office equipment, in-office perks, tools, etc) of the company significantly decrease.
yeah exactly, their costs go down but your costs go up. think: AC/Heat all day, lights all day, etc.
Absolutely. Plus individual costs increase because of the extra bills, need for reliable backups, home office setup etc. I am all for regular reimbursements for this.
My company addressed concerns of us being full COVID remote and taking on additional business expenses by saying to come into the office if you don't want to pay for office things and electricity.
So I got a new job for more pay, where I can factor the salary negotiations into my remote work costs.
The entire (now much smaller) engineering department was to be fully remote and cubicles were taken over to move to hoteling and removing half of them for distancing, so it's not like we even could reasonably work from the office if we were comfortable doing so. And most people aren't.
I've bought a bunch of things to make fake walls in my apartment to give me an "office" and improve my desk equipment, but I'm fine taking on that as I game and can use this stuff elsewhere. But I don't commute, so no savings there, and my electric bill is practically double. I already had good internet (again, gaming) but I know people who are trying to do this on their ancient connections because there's no better option without doubling it.
I was very easily taking a pay downgrade if I were to continue to work remotely as they intend for engineers due to taking on business costs and to be told that my paycheck would be reduced as well would just be insulting.
Thanks for sharing this Kayla. Your previous company made a choice to force their costs onto engineers and eventually ended up losing you. I am quite sure lot of other companies would learn this the hard way. It's going to be tough for them to retain people & get work done with a pay downgrade.
You forgot to account electric and internet bills. In some countries may be cheaper but there are other countries are not cheap. Remote work uses employee's resources. It's mostly like a win-win for a company in terms of cutting costs. Some are already underpaid with long hours of work yet if you got a pay cut to get to work from home is actually a loss for the employee.
Everyone loves to make it look ideal but put in prospect the issues some people might have at home when working. I think the employee should decide himself based on his or her own needs. We switched our work entirely from home, and even for our billing processes, we decided to enable a recurring payment system with the help of probill.com/. It may seem impossible to control your team from home, but you can easily create a thriving environment with good planning and dedication. Try adding an implementation that can automate some of your company's functions and feel the difference.
In times of COVID it is totally irresponsible to not offer remote work without any cuttings. Additionally the employer saves money by reducing the required space at the office, the additional infrastructure is usually already established, due to sales people and consultans often work remote, as they travel a lot.
At the same time the employee has increased costs - having an extra room for working is in some cities a pure luxury. If famili with children is involved say goodbye to your savings and private retirement funds. Cooking at home can be expensive, if electrical power costs a lot in your region and any heating devices that is run by electricity is consuming A LOT. If it's hot you have to run your air conditioning and cooling devices, consuming electricity, if it's cold you have to heat.
You have to pay for the desk and chair (the good ones can easily together cost an equivalent of a monthly income), for the screen, the desktop, utilities like keyboard, mouse.
So the added risk is mostly at your side. The risk at the employer side is losing control but let me tell you, you don't want to work at a place where your boss, the management or the C-people want to micro manage things, these are usually dead horses.
+1. All stats show that remote work => more work hrs, higher productivity, more work done. If anything, those who work remotely should be compensated higher.
I would expect a pay raise, or compensation for providing and taking care of my own work environment.
Working from home means increased electricity, heat, water, internet usage. Also wear and tear of various utilities. Increases expenses because I now have to buy my own coffee, etc.
Working from home a lot of the cost of running an office is moved to individuals.
100% no.
They are paying me to produce things. It does not matter where I do it. THEY are reducing costs by not having to pay for electricity, bandwidth and office space for me.
If they ask you to take a paycut to do the same job this is a red flag.