3 Dilemmas in the New World of Work

1. Work-life balance

Perhaps one of the most challenging parts of life in lockdown was figuring out the new balance of work and life. With the natural boundaries that physical offices had set up for us now blurred, it was up to the individual to determine how they divided their time, collectively raising new questions around what this divide should actually be.

In response to the work-life complications that remote and online work presents, Portugal has introduced a new law that fines employers for contacting employees outside of work hours. This will be significant in reducing burnout, reinstating work-life boundaries and promoting a healthier balance between the two. Under this law, parents of children below the age of 8 also now have the legal right to work from home without arranging it with their employer beforehand. Beyond this, employees can no longer be monitored when working from home and companies will need to contribute to paying for the costs of working from home, including higher internet bills and better technology.^[1]

The ‘Great Resignation’ that we are currently witnessing speaks volumes to the conclusions people reached. While the boundaries of work and life were blurred in lockdown, we also got a taste of the time we could enjoy with flexible work and fewer hours spent commuting. In the US, 4.3 million people quit their jobs in August.^[2] One survey found that 50% of employees are considering quitting their job, with another survey revealing a much higher number in finding that 73% of workers are looking to quit in 2022. Driving these trends is the collective questioning into whether work and salaries are really offering the life we want, whether we are valued in our teams and workplaces and whether our companies stand for something we want to work for. ^[3]

2. Office restructures

If a hybrid model where employees split their working time between the office and home is set to become the norm, the practical implications are significant. Firstly, businesses and organisations will likely need less office space or at least will be reconsidering how to deploy the space they currently have. Much of this will be driven by a change in the function of office space. Offices will increasingly be used for specific purposes such as team building, collaboration and key meetings. As a result, commercial real estate giant JLL predicts the number of workstations in corporate offices will fall from 91 for every 100 workers, to 82.^[4]

Pre-Covid, the corporate world was anticipating a future ‘hub and spoke’ model for office spaces – a centralised big city office hub with several smaller offices spread around the suburbs. Covid seems to have turned this on its head, however, with many companies abandoning the ‘spoke’ element of this vision and instead investing in their prime office hub. As remote work has proved viable, those decentralised work spaces seemed to lose their appeal. In an attempt to encourage workers back to the office, though, companies are spending money making their main location more attractive, technologically advanced and central to shops and restaurants. Those companies that are maintaining other work locations are primarily doing so through collaboration with flexible workspaces.^[5]

Even these trends are ambiguous, with predictions being complicated by the even-way bets that the world’s most influential companies are placing. Much has been made of assertions from the likes of Google, Twitter, Facebook and Pinterest that remote work will be the default for the bulk of their workforces. Pinterest’s willingness to pay $90 million to break an office lease in August 2020 speaks volumes.^[6] However, the very same week Pinterest broke their lease, Facebook signed up for 730,000 square feet of premium office space in mid-town Manhattan. For their part, Google has announced audacious plans to expand their office footprint in both New York and San Francisco and CEO Sundar Pichai made it clear that physical offices would continue to play an important role in the company’s operations. “We believe that in-office collaboration will be just as important to Google’s future as it’s been to our past,” he wrote in a December 2020 email to staff.^[7]

3. Pay negotiations

Working from home is already raising significant economic questions, with some businesses cutting pay for employees who remain working from home. Numerous organisations are actively considering sliding pay scales for employees based on where they are living and working from. The most notable of these is Facebook. CEO Mark Zuckerberg announced in mid-2020 that employees would have the freedom to work from home permanently but that their pay would be “localised” depending on where they chose to operate from. This is significant considering over 75% of Facebook employees surveyed said they were considering moving away from urban super-cities like San Francisco and New York given they could now work from anywhere.^[8]

Google’s decision to adopt a similar model has stirred controversy in recent months, with employees experiencing different changes in pay according to their distance from the office. Employees who live in the less expensive areas that are further away from the office, will likely experience pay cuts under this scheme. Location determines pay package, meaning employees working the same job will be offered different pay depending on their city, state or district. Pay cuts can be as significant as 15%. With trendsetters like Facebook and Google embracing it, the model could quickly gain traction across other industries and businesses.^[9]

Understandably, these moves have stirred up debate among professionals. Many argue that cutting pay for employees who opt for remote work is unjustified given the ongoing value they offer to the company. Others argue that employees are saving companies money through reduced mortgage, rent and overhead costs, making pay cuts an overall selfish move for companies. On the other hand, employers argue that if productivity, collaboration and corporate culture suffer more through remote work, then pay cuts are justified.^[10]

Regardless of this debate, the question of how employees will actually respond to pay cuts and localised pay arrangements is an interesting one. A 2017 paper published in the American Economic Review would suggest that they might be more open to them than we think. Researchers found that employees were willing to accept an 8% pay cut to work from home, revealing the non-monetary value placed on flexibility.^[11]

It is difficult to predict how the dust will settle with these issues. Each question raises a set of assumptions that we took for granted before Covid that we can no longer ignore. With different employees demanding different things, and various trendsetting companies taking entirely contradictory actions regarding payment schemes, offices and worker expectations. How will the debate resolve? The jury is still out.