The ‘stay at home’ order that came into effect in early 2020 in an effort to contain the emerging coronavirus pandemic saw millions of employers move their staff to a homeworking model for the first time – and at short notice. However, while life has since returned to something approaching normality in several respects, many organisations have retained homeworking arrangements, often on a ‘hybrid’ basis that sees staff spend part of the working week on site and the rest at home. Our new research looks at how home or hybrid working is operating in practice two years on: the benefits and potential pitfalls that employers perceive; and the extent of any impact on pay – particularly location allowances.
Managing home and hybrid workers
For most respondents, eligibility for home or hybrid working patterns is usually determined by job content – clearly it is not an option for hands-on or frontline roles such as cleaners, drivers or receptionists and typically only affects those in office-based jobs – with line manager discretion and individual employee needs or preferences also having an influence. Organisations appear to be adopting a relatively light-touch approach in terms of how they manage hybrid working, with the majority devolving responsibility to line managers for agreeing and monitoring arrangements with the team members concerned. Where respondents have formal policies concerning how many days employees must spend in the office, the most common requirement is for staff to spend a minimum of three days a week on site. It is also relatively rare for organisations to stipulate particular days that hybrid workers must come into work.
In terms of practicalities, most employers (78%) supply computer equipment for homeworkers while many also supply office furniture where needed, with just under half (45%) paying for suitable chairs and a third (33%) for desks. However, provision of other resources such as printers or separate phone lines is relatively limited. Comparatively few pay a homeworking allowance and in some cases such provision is reserved for exclusive homeworkers rather than hybrid workers.
Why have employers maintained homeworking post-pandemic?
The overriding benefit of continuing to offer homeworking, cited by almost all respondents (92%), is an improved work-life balance for staff, while 84% also perceive recruitment or retention benefits – 78% report that they have started to advertise jobs with the option of home or hybrid working since the pandemic, with some gaining from a wider, further-flung talent pool as a result. Around three-fifths (63%) also feel that homeworking helps to safeguard their employees’ health and wellbeing. Other potential benefits cited include increased productivity and the scope for reducing office space, with many respondents reporting a change in their perception of homeworking over the past two years.
However, although enforced homeworking resulting from the pandemic appears to have opened many employers’ eyes to the potential benefits, several respondents report challenges, particularly in relation to promoting teamworking. A common issue relates to difficulties in helping new recruits to settle into teams where other members are working remotely, while a quarter find managing staff or team performance more challenging. Some have also expressed concerns over risks to employee wellbeing – for example, in relation to the potential impact on mental health for isolated staff who would prefer to be in an office environment, or the risk of burnout for those who find themselves taking fewer breaks when at home. Initiatives that employers have put in place to tackle these issues include designated fixed days where all staff must be on site together, collaborative technology such as instant messaging tools, regular virtual meetings and extra line manager training.
The impact of hybrid working on pay
With remote working opening up the scope for staff to be based much further afield, how have employers in higher-cost areas responded in terms of changes to location allowances? So far, any impact appears to have been relatively muted: around a quarter (23%) of respondents to the survey differentiate pay by location, with all but two respondents determining eligibility for location premia on the basis of the business address rather than where the worker lives. Given the prevailing tight labour market and increasing cost of living pressures, organisations may feel now is not the time to look at reducing the level of London pay, or premia for other hot spots. That said, one (private services) survey participant reports that it is considering reviewing London allowances at the end of the year in light of increased home or hybrid working, while another reports that it is considering introducing a commuting allowance for all staff, to encourage office attendance.
About the report
Our new report, ‘Hybrid and homeworking and implications for pay’, is published later this month and includes detailed qualitative insights from employers on the practicalities of managing such arrangements effectively and how these new working practices are impacting location allowances. It also looks at the extent of four-day-week working practices, which are becoming more widespread in part due to initiatives such as the pilot programme overseen by 4 Day Week Global. To order a copy, please visit the IDR website.