As organizations increasingly lean into return-to-office mandates, they are being met with sharp pushback from employees—and growing evidence suggests strict RTO policies could push out an organization’s most valuable talent. Largely, American workers who are resistant to full-time, in-office work decry the lack of flexibility and loss of empowerment.
But there’s another byproduct of return-to-office that may not be on the immediate radar of decision-makers, but could affect engagement and retention in the long term: finances.
The ‘significant’ message being sent by the ‘invisible pay cut’
A new analysis by MyPerfectResume found that, on average, U.S. workers spend 223 hours ever year commuting to an office. That translates to about six unpaid 40-hour workweeks. Factoring in the average hourly wage nationwide, that lost time translates to about $8,158 annually per employee.
So, when workers who were previously remote have to shift into full-time, in-person reporting, they’re not just losing flexibility, but also valuable time. And that isn’t going unnoticed, says Jasmine Escalera, career expert at MyPerfectResume.
“That is a significant amount of time and money that employees do not see in their paycheck,” she says, “and over time, it can make them feel undervalued.”
Fair compensation is one of the clearest ways organizations can communicate an employee’s purpose, so when employees notice such a glaring gap, the long-term risks to engagement and retention will be “significant,” Escalera says.
It’s a reality complicated by today’s economic picture. According to MyPerfectResume’s research, nearly three-quarters of American workers currently rely on secondary income—such as part-time or gig work—to make ends meet. When they’re losing even more time and money commuting to their primary job, their financial picture becomes even more daunting.
As mandatory return-to-office continues to gain steam, the individual impacts on productivity and performance could snowball, creating a ripple effect that harms an organization’s long-term talent strategy.
The value of employees’ time is an issue that HR must raise from the very start of discussions about return-to-office, Escalera says.
“Addressing this gap when making a return to the office mandatory is essential to demonstrating a commitment to a healthy, balanced and fairly compensated workforce,” she says.
A trade-off for time
For organizations considering requiring in-person reporting—or those that already rolled out such a policy without attention to the invisible pay cut—Escalera suggests HR go straight to employees to uncover the impact of commuting on pay. Workforce surveys can help leadership understand real commuting costs, while also conveying to employees that the organization wants them involved in shaping solutions.
“When HR listens and responds to commuting concerns,” she says, “it strengthens trust and shows that leadership recognizes real employee experiences instead of making decisions without considering impact.”
When it comes to solutions, cash offerings can soften the blow of return-to-office: compensation hikes, performance-based raises, travel bonuses, commuter benefits like transit and parking subsidies, and rideshare or carpool support, for instance.
At the same time, leadership should consider ongoing flexibility, where possible. For instance, allowing employees to continue to work from home on select days or creating staggered schedules within teams to help them manage home and work obligations can send the message that leadership values their time.
“Combining financial support with flexible arrangements can help close the gap, reduce stress and keep engagement high when in-office work is now required,” Escalera says.
Source – https://hrexecutive.com/the-invisible-pay-cut-of-return-to-office/