THE BBC recently reported that a well-known London law firm had offered their employees the option to work from home permanently, but with a 20 percent pay cut. The law firm is not alone, since late 2021, Alphabet (Google) notified employees that those working from home permanently would be paid up to 25 percent less.
Facebook and Twitter followed and also decreased the pay for remote employees that moved to less expensive (rural) areas.
It is only the smaller tech companies such as Reddit and Zillow that decided to follow a location-agnostic pay model due to advantages with regard to hiring, retention and diversity.
Since most countries lifted lock-down regulations, companies need to decide if employees have to return to the office. However, this is no easy decision. Ever since employees started to work from home due to the Covid-19 pandemic, a debate has been raging over who benefits the most when employees are working from home. Employees save a considerable amount of time and money, mostly due to the high cost of transport and traffic congestion. But employers also save money on expensive office space, furniture, network infrastructure, electricity, and insurance.
Some employers, however, argue that employees are less productive when working unsupervised at home, while employees argue that they are more productive and are working longer hours since they do not have to commute to work. Often this work will continue into the evenings and even weekends.
In most cases, the argument of less productivity among remote workers does not hold. Several studies over the past few months show that productivity while working remotely from home is better than working in an office environment.
A study done by researchers from Stanford University among 16 000 workers over nine months found an increase in productivity of 13 percent. A survey by ConnectSolutions found that 77 percent of employees working remotely showed increased productivity, with 30 percent doing more work in less time and 24 percent doing more work in the same amount of time. A study by Airtasker showed that employees working remotely spend 15 percent less time avoiding work and work 1.4 more days each month.
The higher productivity, according to research done by Stanford, can be attributed to a quieter and more convenient working environment, as well as working longer hours due to fewer breaks and sick days. The Airtasker research indicated that workers in a home environment are less distracted by co-workers and spend 30 minutes less on water cooler talk and talking about non-work topics.
Advances in technology and communication software contributed to the higher productivity, while customer relationship management (CRM) software and email allowed workers to stay in contact with co-workers and clients.
However, problems in South Africa hampering working from home and productivity are the constant load shedding by Eskom and the lack of adequate broadband internet in certain areas that is necessary for quality video calls.
Unfortunately, the increased productivity found by many research studies will not necessarily be permanent. Many employees struggle with the lack of social interaction.
The Airtasker study found that 70 percent of people rank work social relationships as important as getting the work done. In such cases the mental health of employees may negatively impact productivity and decrease work satisfaction over time. Companies like Microsoft, Splunk, and Affirm reported a large spike in productivity during the first months of lock-down, but over time productivity deteriorated.
During the pandemic in 2020/2021, we were in unchartered territory. The only solution to continue working was to work from home. Now many employers want their employees to return to the office, but employees are reluctant. Unfortunately, there still seems to be a bias against work done in the home. Domestic work has been considered unpaid for centuries and is still undervalued in modern times. Cognitive scientists calls this “distance bias”, in which employers place more value on work done by employees in close proximity to them.
Probably the best solution is, therefore, a hybrid work model – a model that combines office time with remote working. According to this model, employees are allowed to work from home but need to come into the office 1 to 4 days a week.
The British Chartered Institute of Management (CMI) found that about 84 percent of companies are adopting the “best practice” of a hybrid work model. Research by Accenture found that 63 percent of high growth companies embrace hybrid workforce models, while 69 percent of companies with negative or no growth reject the hybrid concept.
Working from home can indeed be a more productive environment than the typical open plan office environment. It would be short-sighted if businesses do not acknowledge the shifts in the working world and that a hybrid working model may be the best solution depending on their unique situation and type of work.
What is certain is that a framework of flexibility will be needed in the future so that agreements can be reached with each employee and team to set the so-called “sweet spot” in a two-tier system of home and office work.
Professor Louis C H Fourie is an Extraordinary Professor at University of the Western Cape.
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