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Recent studies highlight how much people cherish remote work, even suggesting many are willing to accept lower pay if it means being able to work from home, at least part-time.
The COVID-19 pandemic significantly boosted the popularity of remote work. For many, it was their first experience working away from the office, and it’s not hard to see why it’s so favored: the balance between work and personal life is the top advantage, as noted by the Pew Research Center.
Some experts have even managed to assign a monetary value to this preference for telework. A study conducted by researchers from Harvard, Johns Hopkins, and the University of Illinois at Urbana-Champaign found that approximately 40% of workers would consider taking a pay cut of at least 5% to maintain their remote working arrangements. Furthermore, about 9% of these individuals would accept a reduction of at least 20% in their salary to keep working remotely, based on responses from over 2,000 employees.
In simpler terms, being able to work from home, even just a few days a week, is seen as valuable as a pay raise. Nick Bloom, a professor of economics at Stanford who researches workplace practices, notes that data he’s gathered in recent years equates remote work to about an 8% salary increase, a figure that has maintained stability over time. In certain worker groups, the perceived value might be even higher.
For instance, a National Bureau of Economic Research paper published in January showed tech workers, on average, were ready to take a 25% pay cut for jobs offering flexible or fully remote options. “It’s undeniably a job perk,” says Zoe Cullen, an assistant professor at Harvard Business School and co-author of the study.
The paper examined data from nearly 1,400 tech workers in the U.S., mostly around 32 years old and with roughly seven years of experience. These individuals were receiving job offers with an average annual compensation of $239,000.
Of course, not everyone is fond of working from home. Pew Research Center reports around 41% of those who can work remotely but rarely do so say they feel more connected to their colleagues when in-office, and 30% believe face-to-face work helps with mentoring.
The peak of remote work observed during the pandemic has, however, declined. Several major corporations such as Amazon, AT&T, Boeing, and JPMorgan Chase have started requiring some employees to return to the office. Additionally, as of January 20, former President Donald Trump issued an order to end remote work for federal employees, mandating full-time office attendance with certain exceptions.
Yet, on a broader scale, there’s no clear trend of companies significantly pulling back from remote work, according to labor economists. Research shows that the proportion of work done from home has stabilized at about 25-30% of the workweek, which is more than three times higher than pre-pandemic levels.
Remote work isn’t solely beneficial for employees; it’s advantageous for businesses, too. Companies save on real estate by reducing office spaces and can tap into a national talent pool, sometimes leading to savings on salaries due to geographic differences. There’s also a noted decrease in quit rates among remote-capable workers, which means reduced costs related to hiring and training new staff, as Bloom points out.
