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 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. We conducted a survey in April to gauge how home- or hybrid working is operating in practice two years on: the benefits and potential pitfalls employers perceive; and the extent of any impact on pay – particularly location allowances.  

Benefits and potential pitfalls

The overriding benefit of offering 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 (6% already did so), 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.

And although the survey did not specifically ask about these factors as potential benefits, several respondents also cited increased productivity and the scope for reducing office space as advantages. On this latter point, the increase in home- or hybrid working has enabled around a third (35%) of organisations to reduce office space, while one company reports that it has moved to offices with the same capacity but better facilities (for the same price) in the hope of encouraging a return to the office.

In practice, some respondents are currently limited in terms of what changes they can make in this regard as they are tied into leases agreed before the onset of the pandemic. However, more than three-fifths (63%) of respondents have revised their approach to desk or space allocation and around a third (35%) now have fewer desks in the same space, possibly as a legacy of social distancing measures in some cases. But this could also be a lasting inheritance of the pandemic. 

Some 86% of respondents report that their perception of homeworking has changed over the past two years, with many having observed work-life balance benefits without the reduction in productivity that they had perhaps feared. However, a minority continue to prefer their staff to be on site as much as possible or reserve the right to reduce homeworking options in the future if needed. (One respondent comments that it is not just managers’ perspectives that have changed, but in some cases employees’ initial scepticism about homeworking has also been dispelled now they have experienced it.)

However, although enforced homeworking resulting from the pandemic appears to have opened many employers’ eyes to the potential benefits, just 27% of respondents report that they have had an unreservedly positive experience of implementing increased home- or hybrid working. Around half (49%) of organisations have experienced difficulties in promoting teamworking, with a common concern relating to difficulties in helping new recruits to settle into teams where other members are increasingly working remotely, while a quarter find managing staff or team performance more challenging. However, in keeping with our findings above, few organisations (8%) feel that ensuring equality of opportunities for career development, progression or promotion has been more difficult. Employers did, however, express 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.

To address these issues, some employers (as already mentioned) have designated fixed days where all staff must be on site together (29% of organisations). Other initiatives include collaborative technology such as instant messaging tools (84% of respondents); regular virtual meetings to ensure all team members can connect with each other (80%); and extra line manager training (33%). However, only one employer has redesigned jobs or reallocated responsibilities based on the most suitable location or staff member for tasks. Meanwhile many respondents have sought to create more work-related or social opportunities for staff to get together.

Few respondents have put in place specific initiatives aimed at homeworkers to ensure they continue to receive opportunities for career development, progression or promotion, largely because many feel that this is covered by existing means that are open to the wider workforce such as online training (which has been expanded or retained in many cases following the pandemic), regular one-to-one meetings with managers, and central communications (typically by email or on the intranet) about vacancies or courses.

The impact on pay

Around a quarter (23%) of respondents to the survey differentiate pay by location. The increase in hybrid/homeworking appears to have had little influence on the payment of location premia as yet, with all but two respondents determining eligibility on the basis of the business address rather than where the worker lives. (One of these two exceptions, a not-for-profit organisation, now only pays London premia to staff who live in London boroughs.) However, a further (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. Meanwhile just one respondent bases eligibility for receiving a location premium on the proportion of time a hybrid or homeworker spends working in the office. Separately, one private services employer in the sample reports that it is considering introducing a commuting allowance for all staff, to encourage office attendance.

Comparatively few respondents (18%) pay a homeworking allowance. Where they do, such allowances typically take the form of a lump sum, often £6 a week in line with the statutory tax relief limit, and in some cases such provision is reserved for exclusive homeworkers rather than hybrid workers. Payments are generally intended to contribute towards the utilities (heating, electricity and broadband) costs entailed by working from home.