Cost of living crisis could flip WFH debate on its head

Since the outbreak of the coronavirus pandemic, some employers have been able to continue their business operations from home while prioritising the health and wellbeing of their staff and customers.

Several employers had already recognised the benefits of working from home prior to the pandemic, including an improved work-life balance for their employees and an increase in business productivity.

More than 80 per cent of UK financial services firms expected to adopt a hybrid model with employees working part-time at home and at the office in 2021, according to a survey from the Confederation of British Industry and PwC, which polled 118 firms.

And it was easy to see why this figure was so large, with increasing numbers of employees working at home, or using home as a working base for at least part of the week, it is clear there are a number of benefits for business, such as:

• Flexibility and agility: flexible work arrangements are enabled by home-working. Employees may have more flexibility in juggling working hours since they are no longer tied to an office. They may even be willing to work on weekends, if they engage with customers in different time zones, for example. This helps enterprises meet business needs. 
• Improved employee retention: home-working can help boost retention, as the flexibility it provides to employees can help them better meet childcare needs, reduce their commute, and enable them to fit their work around their personal life. When allowed to work from home, staff will also feel increased levels of trust from their employer, which can contribute greatly to staff satisfaction and loyalty. Modern document management platforms ensure work can be done securely in remote environments.  
• Attract new talent: home-working can be offered as a recruiting incentive, helping to attract new talent to businesses. Even just offering the option to work from home will give businesses an advantage in the job market over competitors that do not offer remote working to their staff.

In a survey conducted in 2021, almost a quarter (24 per cent) of the UK's million financial services workers wished to continue working from home indefinitely.

According to a survey of 1,400 UK financial services employees, 69 per cent wanted to work at the office two days a week at most, with only 8 per cent wanting to return full-time.

However, with energy bills expected to rise by £800 in October, is working from home really a must-have for most people?

Calls for the chancellor to take immediate action are gaining momentum after the head of the energy regulator, Jonathan Brearley, told MPs the cap on household energy bills would rise to about £2,800 in October.

In April, Ofgem increased the cap by £693 to £1,971, which will result in an average annual bill that rises by nearly £800.

As the cost of living crisis deepens, UK inflation has risen to 9.1 per cent, the highest rate in 40 years. It's up from 9 per cent in April, according to the Office for National Statistics, with the increase being driven largely by rising food prices, which added more than 0.2 percentage points to the inflation number.

If people are forced to come into work at greater expense than ever, firms could face further exoduses of talent.

Furthermore, employers across the country are gearing up to cut home-worker pay as part of plans that could spark widespread backlash.

A survey of more than 1,000 employers by the Chartered Institute of Personnel and Development found that one in 10 companies plans to cut pay or benefits for home-workers after failing to encourage them to return to work.

According to the survey, 4 per cent of companies have already reduced pay or benefits for remote workers, while 13 per cent are on the verge of doing so. 

As the economy slows down over the next few months, workers across the country will notice they have less disposable income.

Former chancellor Rishi Sunak announced interventions (a £150 council tax rebate and a £400 rebate on energy bills), but these additional measures may not be able to solve all the problems the population is facing.

While they will go some way to dealing with this cost of living issue, this is only a short-term solution.

As a result, it is likely it won’t just be political leaders who are under pressure. Company leaders too will increasingly be expected by employees to introduce their own mitigations against this crisis.

This could mean leaders will have to accept a second coming of working from home for those whose jobs can be done in this way, or alternatively, employees could start to flock back to the office in an attempt to combat the rising costs of working from home.

What's more, not all households will have the same financial experiences. For example, employees who live further away and therefore incur higher travel costs will have to consider both travel and energy costs when deciding which model of working makes them financially better off in the current climate. 

Company leaders will increasingly be expected by employees to introduce their own mitigations against this crisis.

One of the pervading themes of the 'great resignation' was people wanting greater working flexibility and a healthier balance between their personal and professional lives.

If that balance is taken away, and people are forced to come into work at greater expense than ever, firms could face further exoduses of talent.

There is still a lot of work to be done to determine where the pendulum will really swing post-pandemic, between 100 per cent working in the office (as it was before Covid) and 100 per cent at home (as it was during lockdown).

Working from home may help mitigate the cost of living crisis, but is it the easiest and cheapest method?

We are enduring an unprecedented cost of living crisis due to inflation. With that in mind, we might see the working from home debate flipped on its head.

Colin Dean is major accounts director at document management platform M-Files