What Is the Cost of Remote Work for Employees and Businesses?

The COVID-19 pandemic forced millions of people to begin working remotely, but what is the cost of remote work? Employees have adjusted to a new “normal” work environment, and companies have adapted to a “new” operational domain. A Glassdoor study shows job seeker interest in remote work remains high, but businesses are less interested.

What can each side, businesses and employees, do to help alleviate tensions between parties? It depends on one’s point of view. Business leaders, for the most part, want to bring employees back to the office. Remote employees want the flexibility remote work provides, and are demanding a better work-life balance. Is there any middle ground?

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Employees Crave Flexibility

Before the pandemic, many organizations provided a “work from home” option to their employees. Although not widely used, employees already working from home provided a blueprint to handle a crisis like COVID-19.

Surprisingly, even companies with relatively small infrastructure were able to allow thousands of employees to continue working. With everyone remotely connected, all employees began to realize the potential remote work could offer, including flexible schedules, no commutes, and more family time.

40% of employees said their organization hasn’t communicated its vision for post-pandemic work.

In April 2021, McKinsey released a report outlining employees’ questions and concerns during and after the pandemic. The survey shows that remote employees are more productive and less anxious when a company takes the time to communicate expectations.

Unfortunately, 40% of employees surveyed said their organization hasn’t communicated its vision for post-pandemic work. Communication alleviates frustration and burnout; employees deserve to know what’s coming. After the crisis ends, 52% survey respondents said they want a more flexible working model.

Businesses Remain Skeptical of Remote Work

Many employees believe remote work saves their employers money, but companies want to cut pay to those workers who wish to continue remote work.

For example, Google wants to lower wages if an employee moves to an area with a lower cost of living. Before the pandemic, many companies’ pay was based on the location of a central office. When companies like Google and other big tech firms floated this idea, many employees felt betrayed and outraged.

These employees don’t want to take a pay cut because they move to a different location. It’s worth noting that employees who moved before the pandemic didn’t receive a pay cut. And when business leaders relocated, their salaries didn’t receive adjustments.

That said, depending on the type of work, businesses leaders have trouble believing remote employees are actually more productive. They say things like on-site workers are more innovative thanks to in-person chats with colleagues. However, recent evidence shows office employees actually tend to work with headphones and ignore each other.

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Business leaders also appeal to fairness. Many industries require people in specific business areas to be in the office, staffing call centers and manufacturing units. If these employees need to be there physically, the thinking goes, then so should the whole workforce.

As businesses threaten remote employees with pay cuts or layoffs, employees with new attitudes are leaving companies for full-time remote opportunities. As global demand for skilled workers — especially in technical fields — rises, employees believe they can demand more flexibility.

What’s more, some states are offering remote employees financial incentives to work there. Cities in states with a lower cost of living like Arkansas, Georgia, and Arizona offer stipends to people who want to work exclusively remote. Unfortunately, the incentive is just for the first year of work. It’s up to businesses to offer more long-term incentives to keep remote workers happy.

What the Future Holds

If the pandemic lasted a few months, these conversations wouldn’t be happening. As COVID-19 progressed, workers’ priorities shifted. Work will need to more flexible for both workers and businesses going forward. Recent outbreaks of the COVID-19 Delta variant are pushing out companies’ timelines to get employees back in the office.

The advantage, for now, is with remote employees looking for a more permanent remote work model. Business leaders trying to get these people back in the office face an uphill battle as long as the pandemic goes on. For the present, both sides need to think about the future, and how things can work differently.

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Kent Barnett
Kent Barnett is originally from Pittsburgh, Pennsylvania. For the past 35 years, he has been an instrumental player in the related fields of business, technology, and entrepreneurship. In the late 1990s, he founded his first company, which was later acquired by a multinational corporation. Barnett relocated to the technology corridor of Northern Virginia, where he has continued to build his expertise while providing advisory services to many national and international companies.

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