Why Offering A Pay Cut For Remote Work Is A Bad Idea

Some companies are happily embracing remote work models, but with one small caveat — a pay cut. 

For law firm Stephenson Harwood, employees can work from home if they please, but not before giving up 20% of their salary. Those who come in a few days a week can claim travel expenses, however.  

For some professionals, the sacrifice may be worth it. As they are now saving money on commutes and eating out, the loss isn’t felt.  

While the firm does not anticipate many workers to switch to a fully remote arrangement as most roles require some in-person work, the introduction of a pay decrease has opened discussions about why this strategy could backfire.  

“The short term implication is that it’s damaging for an employer’s brand,” said Harriet Minter, a hybrid-work consultant and author. “All employers want to look progressive and like a good place to work, but threatening to cut the pay of staff that work remotely suggests that your business just wants to go back to the old ways of working — regardless of what your staff want. 

Minters added that enacting this type of policy can widen the gender pay gap as women are more likely to take up remote arrangements due to home and childcare responsibilities. 

Additionally, workers claim that working from home can actually lead to longer hours, meaning they would be getting paid less for more work. 

During a time when the war for talent is hotter than ever, companies that provide flexible or remote work arrangements contingent upon a pay cut are not only hurting their reputation, but could see higher attrition rates.