Employers see a future of flex work and hybrid compensation models
Employers expect that just more than half of their employees will still be working from home in the first quarter of 2021.
Employers in North America believe flexible work arrangements are here to stay, at least for the short term. Many also expect these changes to require hybrid compensation models, according to a new survey by Willis Towers Watson.
The survey looked at several key issues arising from changes triggered by the COVID-19 pandemic.
Remote work. About six in 10 employees currently are working at home, while 25% are working from anywhere, compared with just 14% and 6%, respectively, last year.
Related: Remote work still popular, but there are kinks to work out
Employers expect that just more than half of their employees will work from home in the first quarter of 2021, while 24% will work from anywhere. Just over a quarter of workers are expected to use flextime arrangements next year, similar to the 25% currently doing so.
Corporate policies. More than one-third third of respondents don’t yet have a formal policy or set of principles to manage these arrangements, although 60% of those currently without formal policies are planning or considering adopting a formal policy by next year. Nearly two-thirds (64%) of those with policies are planning or considering revising them this year or next to adapt to the changing nature of where work gets done.
Reasons for change. More than nine in 10 respondents cited employee safety concerns as a primary reason for providing alternative work arrangements, followed by employee retention (47%) and increasing and maintaining employee engagement (39%). For the first quarter of 2021, the percentage of employers that cited safety concerns held steady at 89%, while employee retention and employee engagement jumped to 61% and 53%, respectively.
Compensation strategies. Half of employers say the new work requirements will require a hybrid reward model. Eighteen percent are setting pay levels by first determining the market value of an employee’s skills and then applying a geographic differential based on where the employee is located. However, six in 10 employers will continue to pay remote employees the same as in-office employees no matter where they work. Twenty-nine percent are providing additional benefits to promote workplace flexibility, including backup day care, subsidies for day care or virtual learning, and subsidies or reimbursement of costs of working from home.
Budget impact. Most respondents say their flexible work policies won’t have a significant impact on their overall budget, with two exceptions: Forty percent expect to see a reduction in commuting and travel costs next year, and 36% expect their real estate expenses to decline in 2021. One-fourth expect to see some reductions offset by an increase in expenses for allowances and subsidies for working from home.
“As companies continue to evaluate the cost benefits of alternative work arrangements, many indicate that the workplace changes as a result of the pandemic are here to stay,” said Catherine Hartmann, North America Rewards practice leader for Willis Towers Watson.
“Employers that are able to create and manage a flexible workplace through automation and adaptable policies while reinforcing an enhanced employee experience will not only meet their employees’ needs but also be better positioned to compete in the new world of work.”
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