Want staff to return to the office? Pay them more: CEDA
Employees value working from home so much they would take a pay cut to work hybrid or remote, research has found.
Workers with hybrid or remote working arrangements earn nearly 6 per cent less than comparable employees who don’t work remotely, a report by the Committee for Economic Development of Australia (CEDA) found.
The report suggested that workers are willing to take a pay cut for the benefits associated with working from home.
As the accounting industry grapples with a worker shortage, flexible work arrangements could be a powerful sweetener to attract and retain talent. CEDA warned that companies considering a return-to-office mandate could expect to pay higher premiums to retain staff.
“WFH provides greater choice for both employers and employees, allows greater access to the labour market for those who previously faced barriers and alleviates cost pressures for employers,” CEDA said.
“At a time of persistent skill shortages, this is surely a win-win.”
Almost half of accountants (41 per cent) believed that talent shortages would have ongoing impacts on the profession, and 45 per cent of firms said worker shortages made it difficult to meet client demands while maintaining work/life balance.
To cope with a dearth of workers, accounting firms have responded by hiring offshore staff, offering more competitive salaries and benefits and saddling staff with heavier workloads.
These approaches have entailed challenges including cultural and regulatory differences, increased labour costs and employee burnout.
CEDA said that flexible work arrangements could help employers retain workers while saving on labour costs, and provide firms with access to a broader talent pool.
Previous CEDA research found that flexible work arrangements boosted workforce participation for historically under-represented groups including women with young children, carers and those with disabilities.
“The growth in WFH has helped overcome participation barriers that previously made it harder for these groups to get a job, keep their job or increase their work hours,” CEDA said.
The think tank’s modelling found that individuals who worked from home had wages 5.8 per cent lower than those who did not, earning $4,400 less on average than their in-office counterparts.
These findings were consistent with a 2023 Australian survey which found that workers would take a pay cut of $3,000 to $6,000 to work remotely some of the time.
“Those who value working from home are making a trade-off between their wage and the benefits they see from the arrangement,” CEDA said.
“Employers can also make a trade-off, choosing either to accept the cost savings from WFH arrangements or to pay a premium to mandate office attendance.”
