Should you be paid less for working from home? Or more?

One of the most sweeping changes due to the pandemic is the situation around remote working (for the kinds of work that can be performed remotely, that is).

Consider this background: several large companies have tried remote work and have famously canceled/banned it afterward.

Yahoo’s (former) CEO Marissa Mayer famously banned remote work in 2013! The leaked internal memo sent by the HR head said, “Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together”.

Here is (former) Reddit CEO Yishan Wong explaining the logic of canceling remote work, in 2014: “There were too many times when we just needed to be able to walk over and tap someone on the shoulder and discuss a complex issue in-depth, right away”.

In 2017, IBM, one of the earliest companies to formally have a telecommuting policy, asked its remote workers to get back to the office.

It is entirely incidental, and ironic, that the CEOs of these 3 companies are no longer in that post or in that company.

And then, the pandemic happened in 2020, literally forcing the entire world to adopt to remote working en masse.

Companies chose office work because remote working was not made feasible in its entirety due to the lack of appropriate technologies to mimic office-based work. Or, we were doing it wrong, trying to force-fit office-based work and find equivalent tasks to be done from home and inventing tools to support that preconceived notion of office-like work but at home.

So, when the pandemic happened, all companies literally scrambled to do work the only way possible – remotely. Zoom’s popularity took off rapidly and it became the default word for videoconferencing. Google Meet and Microsoft teams followed suit.

Now, as there are some early signs of the virus waning (though it is catching up again, due to the Delta variant), there are talks of ‘returning to the office’.

Along with that talk is the word about pay cuts. Quite a few large companies, including Facebook and Google, have announced pay cuts for remote workers!

Why?

Because companies know that employees have tasted the freedom of working from home, though most employees also know that work-life boundaries have also vanished and we probably end up working more, and not less, when working from home. With an office, there was a physical silo between work and life, not it is the same room! But companies believe that real work happens only in the office, in person. So, to dissuade employees from continuing to work from home/anywhere, there are several justifications for pay cuts for choosing remote work – you are moving to/working from a less expensive area/town… employees who physically come to the office are putting in extra effort, and so on.

But here is the irony of this pay-cut situation: assuming remote working is all about taking work online/digital, remember what happened when commerce went online/digital. The price of products, when sold online, was lesser than when they were sold offline.

Why?

We know already, as we have adequately eased into e-commerce: offline sales involves a lot of operational costs – prime location, infrastructure, admin, showroom staff, transportation to multiple showrooms, and so on. Online? One mega warehouse in a cheaper part of town/country where products could be stored, and shipped to wherever needed as per the orders online. That resultant cost saving was passed on to the buyers.

So, should that logic be used for remote working too? After all, companies don’t need to invest in expensive prime locations to place their offices, save on administrative expenses like electricity, facilities management, and so on. Can they then not pass on that benefit to remote workers who made this miraculous saving happen?

But we are only hearing that remote workers are likely to be paid less. Not more! And companies continue to value in-office employees more, holding on to the vestige of the past and assuming that the pandemic-infused remote working behavior is a momentary blip in the larger scale of things and can be wished away.

This is a fundamental tension between an old way of doing things vs. a new way of doing the same thing, and companies holding on tightly to the former without considering how to ease into the latter with far better tools.

At the very core, I believe there could be 3 kinds of work, for office work (as against work that demands physical presence – manufacturing, delivery, etc.):

  1. Interact – this is meeting for the sake of collaboration, sharing and exchanging ideas, arriving at a consensus
  2. Create – this is doing something hands-on, either on your own, or together with others
  3. Focus – this is times when you need to concentrate and think

Assuming ‘Focus’ can be done from anywhere where you are comfortable, the ‘Interact’ and ‘Create’ tasks require interacting with co-workers.

Is it impossible to collaborate or do something hands-on with others via digital tools? Not really.

Is it clumsy and not 100% like how it can happen offline? Of course, but that could also be a function of the digital tools not having been reconsidered appropriately, or a function of bandwidth not being able to support that level of real-time interaction. It is an evolution.

But at the core are 2 issues – lack of trust by companies in their employees, and not having appropriate methods to gauge work in terms of output and outcome.

If the best talent enjoyed their remote working capability during the pandemic and decide to continue working only in that mode, pay cuts would only deter them to continue working for the same organization. And given their talent, they would probably find more lucrative offers elsewhere in companies that openly welcome remote work.

I reckon that in the long run, just like how e-commerce manifested with a model of lower cost of retail using digital technologies and hence lower (relatively) prices for products, work would also place a premium on remote work and actually end up making that more lucrative, either salary-wise or a combination of salary and perks. This is primarily because the really talented and productive-from-anywhere employees are going to eschew the drudgery that comes along with office work to the freedom of remote work that lets them live life the way they want. And when that happens, companies cannot help but pay them better to be able to attract them.

There is also the talk of the hybrid model now – come to the office 2-3 days a week and work from home the rest of the days. That seems like a tangible compromise now, but it would increasingly feel stifling because employees don’t have true freedom to work from anywhere – they are tied to a physical location root themselves; only the number of days to go to the office has changed. Eventually, the hybrid model may pave way to come to a common meeting place once or twice a month to perform ‘interact’ and some parts of ‘create’. That would be more lucrative, like occasional work travel, but for a whole lot of more employees than those for whom travel was an essential part of work (sales, client interactions, etc.).

This may seem improbable and preposterous now, but that’s also because we are desperately clinging on to only one way of working as a blanket approach. There is comfort in the familiar and we still have some distance to cover in terms of the evolution of digital working tools and the bandwidth to dramatically alter our perception. But the pandemic has shown us that work does not need to come to a stand-still, and even with rudimentary digital tools of the current times, we could manage remote working reasonably well.

Of course, there is ‘Zoom fatigue’… there is the despondency of the lack of physical interactions and the inability to read body language in a virtual meeting… there is the feeling of the lack of oneness of purpose while sitting and working all alone by ourselves. But just like how Yahoo, Reddit, and IBM chose only a blanket decision – to cancel remote working in the face of such reasons, pay cuts to remote workers is a step that indicates ‘kicking and screaming’ of the corporate world to hold on to the comfortable model.

It’s just a matter of time, as the movie industry is finding out, the hard way, courtesy the pandemic.

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