The end of the pandemic has sparked a tug-of-war between employers summoning their employees back to the office and workers wishing to hold on to remote and hybrid work options. In the U.S., the promise of working from home is leading workers to accept lower salaries than they otherwise would, as they appear to value flexibility more than money.
In a recent report, HR consulting firm Robert Half found that when the gap between a candidate's salary expectations and an employer's limit is too great, many employers negotiate remote and hybrid work options to "help seal the deal." Often, candidates are open to accept a lower pay in exchange for more flexibility.
Why It Matters
The rise of remote work during the pandemic has profoundly changed the global job market, making employees around the world question whether they actually need to be in an office full-time to fulfil their duties. Many found that the possibility of working remotely improved their work-life balance and are reluctant to go back to the way things used to work before the health emergency.
Remote and hybrid work options remain key factors to consider when candidates consider accepting a new job, and for employers it's a balancing act: trying to incentivize in-office work with some in-house perks and higher salaries, or giving in to remote and hybrid work at a lower pay.
What To Know
Robert Half analyzed jobs created in the third quarter of last year in the U.S. and found that 35 percent of new job postings were for remote or hybrid roles, up from 30 percent during the same time the year before.
"While some employers are requiring workers to come back to the office full- or part-time, flexibility remains a leading factor influencing workers' decisions to stay in their current roles or seek new opportunities," Michelle Reisdorf, district president at Robert Half, told Newsweek.
"We continue to see new remote and hybrid roles emerge, offering more options for those prioritizing flexibility," she added.
This is largely in response to what American workers want. A survey published in April last year by FlexJobs found that half of respondents were willing to accept a pay cut to be able to work remotely; 26 percent said they would accept a 5 percent pay cut, while 24 percent would be content with even a 10 percent or 15 percent cut.
It's not just money they would give up in exchange for the possibility of working remotely: 23 percent would forsake chances for professional development; 15 percent vacation days; 13 percent company-sponsored health insurance; and 10 percent retirement-focused company contributions.
"Numerous studies have shown that around a quarter of employees would be willing to accept a pay cut to have remote/hybrid working," Dr. Alison Collins, associate professor at Manchester Metropolitan University Business School, told Newsweek. "While figures vary, evidence suggests that around 10 percent reduction in pay would be acceptable, perhaps as a result of reduced travel costs."
"This is an ongoing debate, however, and it remains to be seen whether fully remote workers will ultimately receive lower salaries than office-based ones. It seems clear, however, that employers can improve employee attraction and retention by offering remote/hybrid working to those who want it," Collins said.
What Does the 2025 Job Market Look Like?
Robert Half's latest "State of U.S. Hiring report," released in December, found that there's going to be an increase in hiring this year, especially when it comes to skilled workers, with 63 percent of surveyed companies planning to add new positions in the first half of 2025.
"As companies anticipate growth and the acceleration of new projects, competition for skilled talent will remain at a premium," Reisdorf said. "To meet deadlines and achieve their goals, businesses will need to implement strategic approaches to attract and retain top talent in a competitive hiring landscape."
"Additionally, data from the Bureau of Labor Statistics shows that the U.S. unemployment rate has remained stable throughout 2024, including low levels for specialized talent," Reisdorf said. "Activity for specialized roles is aligned with pre-pandemic norms in many industries, underscoring ongoing demand for skilled professionals."
Remote and hybrid work options are going to be essential tools for companies to attract talent. According to Robert Half's findings, 41 percent of firms boost their hiring efforts by offering hybrid work, while another 41 percent do so by offering flexible schedules. Thirty-eight percent boosted hiring by increasing starting salaries.
What Are American Workers' Priorities This Year?
Compensation and flexible work options, according to Reisdorf, continue to be top priorities for both employees and job seekers.
"For employers who aren't providing remote work accommodations, they may need to incentivize other in-office opportunities or benefits to attract top talent," she said.
"While some negotiation might be necessary, there are other benefits that job seekers value, which employers can leverage. These include extra paid holidays, enhanced health insurance coverage, or more robust retirement savings plan options."
According to Reisdorf, every candidate is different and might be open to negotiating certain perks and benefits in exchange for more flexible work options.
"Our research reveals that 76 percent of U.S. job seekers would be open to working fully in-office in exchange for a higher salary," she said. "Among those, the average raise they said they would request is around 23 percent."
What People Are Saying
Theresa L. Fesinstine, founder of human resources advisory peoplepower.ai, recently told Fortune: "There's this unspoken exchange rate between flexibility and comp, and for some candidates, it's worth a significant trade-off."
Toni Frana, lead career expert at FlexJobs, said in a statement last year: "Return-to-office mandates are largely responsible for the growing divide between employers and their workforces. But as we've seen on FlexJobs, many companies are adopting work-from-anywhere arrangements and creating more opportunities than ever before for workers to find a career that has the location flexibility they want."
What's Next
Overall, remote work is here to stay—whatever the cost for employees. But that might change soon.
While some American workers are willing to accept lower salaries in order to continue working remotely, Robert Half believes employers and employees should look at having both flexibility and fair compensation this year.
The firm expects a hiring boom this year due to pent-up demand, with employers having to offer flexible options such as remote and hybrid works as well as "salaries that meet or beat market rates" in order to attract the best talent.
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