It’s a water cooler conversation most of us would be having right now, if only we had a water cooler to gather around. One year after Covid sent us scurrying to a strange new world of homeworking, opinion is still split on the merits of a mass return.
Goldman Sachs’ chief executive has called home-based working an ‘aberration’ while HSBC may axe 40 per cent of its office space. Somewhere in between these differing corporate perspectives, the economic and legal impact on individuals is at risk of being overlooked.
If home working is here to stay, then we need to ask who will benefit most – employers or their staff? Evidence suggests employers will harvest the productivity gains and cost savings associated with home working. The benefits are far less like to be passed on to employees through higher wages and better terms and conditions.
Who benefits?
Perhaps we should not be surprised. Chronic wage stagnation has been a feature of labour markets in the UK for the past 40 years. A study on UK home working by my Business School colleague Lila Skountridaki supports this claim.
Not only do employers look set to bank any productivity gains, but they will also benefit from a reduction in costs associated reduced office space. Savings linked to lower energy bills and spending less on cleaning, upkeep and security seem destined to stay in house.
Home workers, by contrast, will face a hike in their utilities and internet bills, and will have to bear increased costs for equipment such as printers, paper, and furniture. The private space of employees will also shrink, as they continue to squeeze their office into their home.
Findings suggest the cost of home office adjustment will come out of employees’ pockets rather than boardroom budgets. The net result will be an additional negative impact on real wages for stay-at-home workers – a reinforcement of chronic wage stagnation.
Few home comforts
Some commentators stress the home-based benefits of not having to commute – but many people do not have to travel that far. Others actively enjoy it. They also highlight savings on clothing, coffees, lunches and, even, food containers.
Yet staff, typically, covered these costs anyway, so the savings simply remedy a situation where staff were effectively subsidising work-related costs. Expecting employees to invest their private resources in a firm’s success goes far beyond the employment contract and, ultimately, puts further pressures on real wages.
Unless the Government legislates to ensure the benefits of home-based working are more fairly distributed, employees will end up with a deal that offers fewer home comforts than they might have anticipated.
This article originally appeared in The Times on 31 March 2021
The views expressed in this section are those of the contributors, and do not necessarily represent those of the University.
