A New Currency in the Compensation Toolbox: Work From Home

If necessity is the mother of invention, then the COVID pandemic is the mother of a new compensation currency: Work From Home (WFH). 

The Evolving Compensation Toolbox

The total compensation toolbox has evolved rapidly over the last 30 years. For most of the 20 th  century, employees worked for 1 or 2 companies in their lifetime and their compensation programs reflected that work life: base salary, health benefits, a holiday bonus, and a retirement plan. That model fit the circumstances of that time.

However, since the introduction of bonuses and stock awards in the early 1970s, the toolbox has been in a steady state of change: bonuses, ESOPs and deferred compensation plans of the 1980s, stock options and cafeteria benefits of the 1990s, mega stock option awards of the early 2000s, restricted stock, performance units and work life balance of the 2010s. Now in the 2020s come two more: Work From Home and Work For Cause. This article focuses on WFH. 

WFH: The Value Proposition

Recent employee and company surveys have illustrated the large success and benefits WFH arrangements have produced post-pandemic. The following statistics draw a simple conclusion that companies should consider WFH arrangements as a critical element of their total compensation strategies.

1. Companies save money. According to research firm Global Analytics, companies save $11,000 per employee per year with WFH flexibility.
2. Employees save money. Economists estimate employees save approximately 7.3% of their annual earnings with WFH programs.
3. Employees want WFH. A survey from  McKinsey  reports that given the opportunity, a whopping 87% of employees welcome WFH flexibility.
4. Increased productivity. A survey from  Stanford  reports that employees who have hybrid work environments are 13% more productive than office only workers.
5. Employees will leave if you don’t offer it. A recent  Gallup survey     reports 60% of fully remote and 30% of hybrid employees are extremely likely to look for another job if forced into an office full time.

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