POSTED: August 24 2021
68% of employers considering pay cuts

68% of employers considering pay cuts for remote employees

A recent survey by CIPHR found 68% of organisations are contemplating pay cuts for employees who want to work from home full time.

This is despite the fact that just over half (53%) of businesses surveyed admitted to cost savings from remote working. In London, the trend is particularly clear – with the results revealing 86% of employers have already reduced or suspended geographical premiums.

Claire Williams of CIPHR said employers should proceed with caution if they plan to cut wages based on an employee’s working location.

“If an organisation wants to keep a physical premises, and is struggling to make this cost effective with the level of remote workers, organisations must focus on fostering the right environment for employees.

“Incentivising the best parts of office life could highlight some of the benefits of working in the office with your colleagues. Increasing social events or activities, or helping with travel costs could boost the incentive to work from the office.”

There will of course be the threat of legal complications if employers reduce pay, but just as much of a threat could be the impact on employee loyalty as a result. Employers may need to think creatively about how to ensure employee’s opinions are heard – and balancing this with genuine business needs. In any case, we would recommend seeking hr advice before pursuing any kind of pay cut, to limit the impact on employee loyalty, morale, or even mitigate the risk of more serious issues such as tribunals.

The research was based on 150 business owners, CEOs and senior managers. Original article.