: ‘Firms not offering this are missing out’: Hybrid home/office work is equivalent to a 10% pay rise, Stanford economist says
“‘Employees value Hybrid WFH about the same as a 10% pay rise on average. Firms not offering this are missing out on a highly effective way to retain and recruit staff.’”
— Nicholas Bloom, an economics professor at Stanford University
That’s Nicholas Bloom, a Stanford University professor of economics, on Twitter TWTR this week summing up a chart based on findings from his WFH Research project. Bloom, a prominent researcher on remote work, co-founded the monthly online Survey of Working Arrangements and Attitudes in May 2020.
The data included more than 17,000 U.S. responses through 2021 and was re-weighted to match the country’s population.
Workers in many industries have gained a newfound sense of control and leverage in a tight pandemic labor market, and some employers have turned to wage hikes and signing bonuses to attract job applicants. A record 4.5 million Americans quit their jobs in November, the Labor Department said Tuesday, with the quits rate increasing to 3% from the previous month’s 2.8%.
The option to work from home is yet another way to entice talent: “Remote Work Is the New Signing Bonus,” reads a Wall Street Journal headline from June.
Surveys show large shares of people with remote-work access want to keep the option going forward, at least to some degree. One recent report from the videoconferencing device company Owl Labs found that one in three people who worked remotely during the pandemic would quit if they weren’t able to continue working from home, while some 58% would expect a pay raise.
To be sure, Labor Department figures show most U.S. workers aren’t working from home due to the pandemic: Many are instead risking COVID-19 exposure through in-person work, or have been unable to work because of their employer’s pandemic-induced closure or loss of business. Access to telework has fallen unevenly across sectors and along lines of education, race and ethnicity.
Meanwhile, disruption from the rapidly spreading omicron variant has scrambled employers’ plans to usher remote workers back into physical offices.
So how do the potential cost savings of remote work stack up against forgoing a pay raise? One analysis by FlexJobs, a subscription service that helps people find flexible remote jobs, estimated that the average person — whose location and personal choices would, of course, vary — could save around $4,000 a year on expenses such as commuting, work clothes, and meals away from home by working from home full-time.
In a subsequent tweet, Bloom shared findings showing that technology and finance workers were more likely than workers in other sectors to value hybrid work, noting that “the job works well with WFH, and employees have enough income for good home-internet and space.”
“Hybrid WFH is valued more by employees with pre or elementary school children at home – so firms wanting to retain and recruit younger employees should consider offering hybrid WFH,” he added.