The issue was the focus of a recent survey and a significant number of European businesses disagree with what employees want.
Remote workers may face lower wages in European companies, according to the results of a new survey, as companies look for opportunities to increase production and reduce costs.
Remote positions are rapidly evaporating to be replaced by hybrid openings, while companies, including tech giants around the world, are making headlines by ordering employees back to the office, in a reversal that many thought was destined to last.
A recent study published by spend management platform Pleo suggests that nearly one in five European small and medium-sized businesses (SMEs) are considering cutting salaries for remote workers.
SMEs represent 99% of all businesses in the EU.
Thorbjørn Fink, COO at Pleo, told Euronews Business that companies will “focus on cost savings during 2024”.
“Our report shows that 1 in 4 respondents see this as a topic for 2024,” he added. “But where those savings will come from is unclear. Some (about 20%) mention reducing the salaries of remote workers as a way to achieve savings.”
Fink also noted that many of the companies surveyed could improve their awareness of their financial health and tighten their belts in other ways that don’t involve cutting remote workers’ salaries.
“Some companies actually advocate adopting more remote working practices to reduce office costs,” he said, adding that it is essential for these SMEs to have an “accurate overview of how spending occurs and make data-driven decisions “.
Euronews Business contacted the office of European Commissioner for Labor and Social Rights Nicolas Schmit to ask about any wider implications of the move, but did not immediately receive a response.
How would reducing the salaries of remote workers affect the European labor market?
The idea of paying remote workers less is not new, but the debate continues to rear its head, with one side arguing that remote workers’ lack of commute and freedom to live wherever they want could result in higher utility bills. cheaper than those who work on site.
Others argue that remote workers are just as productive as their on-site colleagues and even reduce costs for employers, so their work should be compensated fairly.
Dutch multinational HR consultancy Randstad told Euronews Business that it is very important to treat all employees fairly, regardless of their location.
“We must ensure we create a level playing field, where all talent is treated fairly to achieve better outcomes for both individuals and organizations,” the company said.
Many business leaders have openly expressed their disdain for working from home.
British business tycoon Lord Alan Sugar, known for his stance against working from home, had said in 2022 that those who work remotely should be paid less. Other CEOs have also been very vocal about the downsides of remote working, with David Solomon, CEO of Goldman Sachs, calling it an “aberration”.
Tech giant IBM recently urged managers to come to the office or quit their jobs; From the SAP has both ordered its employees to return to the office, at least partially; L’Oréal has decided that Fridays in the office are mandatory twice a month. The list goes on.
“2023 has seen a growing dialogue between talent and employers regarding flexible working and this debate is set to continue into 2024,” Randstad said. “Our data shows that more than a third (35%) of workers are expected to stay in the office longer than six months ago, and just under half (41%) report that their employer has become stricter in the past about being in the office for a few months.”
As more companies begin to shed remote jobs, recruitment agencies are warning that companies are at risk of losing talent.
According to LinkedIn’s latest “Global State of Remote and Hybrid Work” report, demand for remote work from potential employees has significantly outpaced growth in supply. Their report conducted in late 2023 suggests that 50% of workers prefer hybrid and remote roles to on-site ones.
And they may not compromise on their workstation. According to Randstad, younger generations value work-life balance as much as pay and have a strong desire for flexibility.
“It is clear that some employers are bringing talent back to the office, but there is significant risk, as this pressure may lead to companies losing talent who are unwilling to give up flexibility,” the company said. a third (37%) of workers would consider leaving their job if they were asked to spend more time in the office. A quarter (25%) even acted on it and left their job because it didn’t offer flexibility.”
The HR consultancy said that “employers need to address flexibility in a way that also promotes culture, performance and engagement”.
Which country offers the most hybrid jobs?
Despite the high number of job seekers who refuse to compromise on remote roles, employers are downsizing and turning to hybrid job offers, as a sort of compromise between the flexibility desired by employees and the company’s goal in terms of participation.
As of December 2023, the ratio in the United States was relatively low, with remote opportunities accounting for a tenth of the overall number of positions and hybrid roles at 13%.
In Europe, however, the ratio was quite high: in the UK 43% of positions were hybrid options, while France had 31%. In Germany, 31% of job offers posted on LinkedIn were advertised as hybrid positions.
Meanwhile, remote positions receive nearly five times the share of applications than available jobs, according to the business-focused social media platform.