Bosses want their workers back on-site on a more permanent basis. They're willing to pay a premium to do so.
While many jobs still offer hybrid- or remote-working patterns, more bosses are mandating their employees to return to the office on a full-time basis. Boeing, UPS and JPMorgan Chase are among the large corporations that have enforced in-person attendance five days a week.
But for some of these companies, getting workers fully back on-site comes with a high price tag. This is particularly the case in the US, which has seen the most dramatic shift to flexible working – by January 2024, around 29% of all paid workdays were still worked from home. "Employers who cannot compete on flexibility will have to compete more aggressively on pay," says Julia Pollak, chief economist at ZipRecruiter, based in California.
The result is that US wages for fully in-office roles are surging. According to ZipRecruiter data, seen by the BBC, companies were offering on average $82,037 (£64,562) for fully in-person roles by March 2024 – an increase of more than 33% versus 2023 ($59,085; £46,499). The trend is cross-sector: compared to hybrid ($59,992; £47,211) and fully remote ($75,327; £64,320) roles, workers appear to be more likely to increase their salaries by returning to pre-pandemic office schedules.
Part of this is compensating for the loss of flexibility that workers have prioritised for the past few years – the greater the push to relinquish that autonomy, the more employers have to offer to compensate. The ZipRecruiter data shows that workers who swapped from fully remote to fully in-office set-ups in the US through 2023 received a 29.2% pay bump – nearly double that of those moving the other way.
"The conclusion is that people demand higher pay increases for fully in-office jobs," says Pollak. "An employer offering flexibility can negotiate the overall compensation package with non-monetary incentives, while an employer wanting teams on-site five days a week can only offer financial terms – a dollar value is placed on time spent in the office."
In the UK and Europe, the availability of remote work has been scarcer – for example, an October 2023 survey of 15,000 employers and employees in the UK showed that 43% of workers had returned to fully in-office settings. This means the trend for an in-person premium is expected to be weaker than the US, says Pollak.
ZipRecruiter data shows that workers who swapped from fully remote to fully in-office set-ups in the US through 2023 received a 29.2% pay bump
In the current cost-cutting climate, offering employees flexibility over a pay bump seems like a win for both sides. Yet despite this, some bosses are willing to increase their wage bills in exchange for full offices, because they believe the trade-off is worth it, says Pollak – the expense will lead to improved business outcomes.
"Among some employers, there can be a perception that remote workers are less productive," she adds. Many are also "psychologically and financially invested in their corporate real estate" – they want to fill their workplaces, at whatever cost.
There's an unintended consequence to this salary discrepancy, says Barbara Petrongolo, professor of economics at the University of Oxford: it could reinforce inequities in the labour market. "Those with caring responsibilities tend to prefer flexibility, and that's disproportionately women. So, if the highest-paid jobs offer less flexibility, some sections of the workforce are forced to essentially give up higher-paying opportunities."
If bosses really want their workers in offices, the current premium offered for a fully in-person workweek is likely to remain for a while, say experts – there is no sign that flexible working patterns are disappearing. For example, ZipRecruiter's March 2024 data shows that around 33% of professional and business-service roles in the US are advertised with hybrid or remote working.
"Workers still want flexibility, and there are plenty of jobs advertising the ability to work from home at least two days a week," says Petrongolo. "So, in order to impose inflexible working conditions which are unfavourable to the employee, employers have to continue to pay more."
Source: BBC
