Ken Mulkearn | 01 Sep 2021

Has the pandemic changed anything?

In this bulletin (Pay Climate issue 26) we don’t generally talk much about employees themselves, or at least not directly. Instead we discuss what might happen to them, chiefly in terms of whether the wages they receive could rise at a higher or lower rate than previously. But the coronavirus pandemic has led to something of a reset and placed employees – particularly those who have had to be physically present at their place of work throughout – front and centre. Could this mean that deeply-rooted notions about hierarchies and the structure of pay in economic organisations are about to be overturned?

These considerations are particularly important at this time of year, when our readers are making decisions on pay reviews for the coming 12 months or longer and thinking about their pay strategies more broadly. Evidence on the prospects for reward in 2022 comes from our survey of practitioners, which shows they consider that upward pressures on pay are rising, mainly due to recruitment and retention. Added to this is the outlook for inflation, which looks set to increase over the coming months.

One way of seeing this is that ‘market forces’ are reasserting themselves as the economy recovers somewhat. But the problem with this viewpoint is that employees aren’t simply commodities or inputs into production, like so many computer chips or other ingredients. They have minds and bodies of their own and can act, individually and collectively, in ways that can have important consequences for those responsible for labour and wage planning.

This is where the debate about working from home comes in. Not because it is the dominant trend – ONS data shows that only a little over a third of employees did some work at home last year – but because of what it shows about responses to the increased risk presented by the pandemic.

The spread of home-working has meant that hybridisation of work location (and it’s more prevalent/possible in some sectors and for some roles than others) is probably here to stay. It was initially driven by risk but more latterly by concerns around recruitment and retention and motivation of the staff concerned and its persistence has been further facilitated by the boost that Covid-19 has given to the individual rights agenda. As such managements have had to get used to it, and indeed it might even be better for management, nudging them to adapt to employees’ desire/need for more flexibility by adopting improved supervisory practices.

But if some employees, often in more senior or at least more highly-qualified roles, have been understandably keen to minimise the risks to themselves, then might there be a quid pro quo for those that haven’t been able to do the same? This isn’t to say that those working from home are somehow shirking. Far from it – there’s lots of evidence to show they have been working harder. But important modifications have had to be made to working conditions for those arguably at greater risk, in workplaces, and some of this has spilled over to reward. 

Very broadly, pay rates and/or bonuses have been rising for those roles that can’t stay at home. Our latest analysis of pay settlements details how rewards for drivers have been increasing. Pay settlements in food retail have generally been greater than elsewhere this year, and NHS staff have received a greater pay rise than most other public sector workers. Even in care homes, where the structure of the sector makes for continued downward pressure on pay, organisations have been looking for ways to develop workers and pay them more at the same time as containing costs.

The common factor in both instances – for those who work mainly or partly from home and those who don’t – has been that human needs have been re-balanced with the need for profit or surplus. And if pay does rise for those on the frontline, then that is also likely to be the case for those in the rear. (Comments by some politicians about the possibility of pay cuts for civil servants who prefer to work at home betray an ignorance of employment law as well as this wider context.)  

All this shows how seemingly disparate trends can in fact be related. During the pandemic, something ostensibly as individual as risk, because it is commonly experienced, has coalesced into something wider and more collective. This will probably continue to be the case as long as the pandemic remains with us and possibly beyond. Maybe the revolution isn’t around the corner, but something in the world of work has changed, perhaps for good.