Over the past year, the pandemic has drastically changed the working practices for most organisations. One of these changes has been the dramatic increase in home working. However, as restrictions are lifted and we slowly return to the workplace, employers need to be making a choice on how they will operate moving forwards, and this may include discussions around remuneration, based on location.
Research has shown that many organisations intend to adopt a hybrid working model in some form, for example by combining home working with office-based working. Increasing true flexibility at work is a welcome development. This can help boost staff motivation, productivity, and job satisfaction and help to close the gender pay gap. But is there any risk to salaries for staff choosing to work from home and the office?
Prior to Covid-19 (Coronavirus), Office for National Statistics (ONS) data shows that those working exclusively from home experienced a wage penalty, whereas those combining home and office work experienced a wage premium. We do not know whether this difference was driven by policy specifically related to full-time home working or an ‘out-of-sight, out-of-mind’ approach to remuneration.
Looking ahead to best practice, if employers want to get the best out of their staff, location is not the most important factor. Our recent Management transformed research, published in November 2020, found that the role of the line manager is key to boosting productivity and wellbeing.
In addition, ONS data, published in April 2021, shows that home workers have tended to work more hours and are more likely to do unpaid overtime during the pandemic. People work in different ways. Some people are naturally night owls, who are at their most productive later in the day, some the opposite with many different preferences in between. Some work best when able to flex their hours, some when they have defined working times and a defined space to work from. There is no one-size-fits-all approach. But there is best practice.
Employers need to be consulting with their employees and giving them the choice on how and where they work. This, along with good line management, will boost engagement and productivity. As research from King’s College London, published in April 2021, found “true flexibility is about how people work, not just where, and that home working should therefore be seen as the beginning, not the endpoint, of moves towards new ways of working”.
Daisy Hooper is head of policy and public affairs at the Chartered Management Institute