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Pay cut to work remotely - Fair deal? 🌏
Does remote work mean reduced cost or increased risk? Here are some arguments about employees being ready to take a pay cut to continue working remotely.
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?
Hanadi sparked this discussion by sharing an interesting stat 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.
- 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 pay cut and subsequent lower salary
Jordan made this argument 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.
- While the argument of additional risk might be accurate, proposing a lower salary doesn't solve the root problem.
- 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.
Now, if you decide to cut down the pay of your existing employees for offering the perk of remote work, 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.