Dec. 3, 2021 "The unintended consequences of working from home will be multifold and worrisome for Canadians": Today I found this article by Howard Levitt in the Financial Post:
On my Sunday Newstalk 1010 show, a caller complained that while his employer was permitting him to continue working from Costa Rica, it was cutting his pay by 25 per cent.
He was unhappy with my advice.
Remote working is at a tipping point. Close to two years ago, most employers were legislatively required to close their offices and employees, those not laid off, were required to work from their homes.
Many Canadians seized upon that to move to their cottages or relocate to less expensive areas, whether rural Canada or not in Canada at all.
The implicit understanding was that, when matters normalized and offices could reopen, they would return to work. My firm shut for all of two months from March to May 2020 and has been going at full tilt, in the office, ever since. But we are an anomaly. Our office building is largely empty as are most of the towers of Corporate Canada. Despite much talk about returning to the office, it has, by and large, not yet taken place.
Soon enough, and it may have already occurred, employees asked to return to their offices will be able to argue that that is a constructive dismissal since they have now been working remotely beyond the time that was legally necessary.
My advice to employers is to get ahead of this issue now and require employees to either return or execute a contract permitting the employer to require them to return in the future on one month’s notice.
As for my caller, as long as the employer is prepared to let the employee return to the office in Toronto at full salary, it can allow him the choice of working remotely at a lower salary. It could even, as some U.S. companies are doing, designate a different pay rate depending upon where the employee chooses to work.
So there might be a 10 per cent pay cut if the employee works from their Toronto home, no pay cut if they move to New York City, but a 50 per cent reduction if they move to India or Costa Rica. This is permissible only if the employee has the option of returning to the office at full salary. Otherwise, reducing their salary is a constructive dismissal.
I pointed out to this caller that there was something else he had not considered. If the employer became comfortable with his job being performed remotely, what was to prevent it from hiring a Costa Rican or from anywhere else, to perform their job at a fraction of even their reduced salary. The Bank of England warned of precisely this situation months ago.
The work-from-homers, lobbying to make work-from-home permanent (and most Canadians who are doing it wish it to continue, at least part of the time), should watch what they wish for. The unintended consequences of working from home will be multifold and worrisome for Canadians.
Let me take the example of a fictional Alice, a loyal employee of many years of a fictional employer. Over time, this employer got to know her and her family and helped her through various life difficulties.
Alice grew older and her work deteriorated. But the company did not fire her because it knew the burden that would place upon her and her family. Instead, it allowed her to work out her remaining time until she chose to retire. Alice is a common story. I have acted for many employers and heard about their Alices.With employees working from home, there is no longer the human connection creating the loyalty which employers show to their Alice. And employees, who never got to know and socialize with their employers in the hallways and at company functions, have less loyalty to their employers in turn.
Dismissing becomes more anonymous. I have spoken to employees who have been hired in the last two years and never once met their managers or coworkers outside of a Zoom call, often with the video off or with an avatar as their representation.
Another aspect of that anonymity is that employers are less likely to see an employee’s benefits to the organization and, as result, more likely to find them disposable in any cost reduction.
Without the personal rapport, and comfortable with employees working remotely, companies can recruit new workers anywhere in the world at a fraction of the wages.And smart recruitment agencies are expanding their searches to meet those demands. In the same way, they might not even wait until they need a new employee but replace existing employees with less expensive ones.
This is not only problematic for the employees in question but for Canada’s employment and tax base, as fewer Canadians are ultimately employed.
Coupled with robots and other forms of automation becoming increasingly functional and less expensive, I see the makings of a labour force and financial crisis, with less employees paying taxes on high income jobs, on the horizon.
Of course, employees that are still working remotely will lack the relationships with key executives that lead to promotional opportunities.
Looking ahead, what will working from home ultimately beget? Unemployment, reduced salaries, the transfer of jobs abroad and an underclass of employees far removed from decision-making and promotional opportunities.
Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.
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Working from home during the pandemic loosened professionals’ ties with the consultancies or law or accountancy firms that employed them, the Financial Times recently reported. The lifting of lockdown then encouraged job-hopping because candidates could now bond with prospective employers face to face.
These are two sides of the “out of sight, out of mind” coin: heads, the isolation of remote working reduces loyalty to your existing employer; tails, the revival of in-person encounters encourages you to form an attachment with a new one.
In the “absence makes the heart grows fonder” camp, though, sits work by the Financial Services Culture Board. Its 2020 assessment of thousands of U.K. banking staff detected improvements in scores for feedback, leaders’ honesty, and wellbeing. Those scores fell back slightly this year, but remained more positive than in 2019.
Jenny Robinson, the FSCB’s senior behavioural scientist, suggests people might have felt “they were able to use their judgment and autonomy” more when working remotely.
Then there is a study by the Oliver Wyman Forum that found a desire for more flexibility and a better work-life balance, rather than a hunger to return to the office, were the most important reasons for leaving or wanting to leave a job, after the quest for more money.
The sweet spot is hard to hit. Undermanaged remote-working staff can feel neglected, leading to bad consequences, from job dissatisfaction to burnout and fraud.
Another poll this year, by the Chartered Institute of Internal Auditors, highlighted the risk of a “post-pandemic organizational culture crisis.”
“How do employees maintain their strong attachment to the business, continue to experience the shared purpose, values and sense of community within their organization and uphold expected behaviours in the absence of the old office-centric in-person interactions?” asked Heli Mooney, head of internal audit at airline Ryanair.
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Whether the office repels or attracts depends on where you sit in the hierarchy. Robinson identifies two “humps” — representing senior managers and junior employees or new starters. They are keener to return to the office than the staff in between. “How much a part of their organization does someone feel if their integration has been a keyboard transfer in a car park?” one manager responded to the FSCB when asked what it meant to belong to a business that has “no unifying cultural experiences.”
As the FSCB points out, there is a difference between connectedness, which technology enabled during lockdown, and collaboration, which can be more difficult. Processes that bind in new or junior staff, such as desk-side learning from experienced staff, are hard to replicate online. That is one reason investment banks, which set great store by such methods, have spearheaded “return to the office” campaigns.
Organizational cultures are certainly being reshaped by the shock of coronavirus and its consequences. That this is creating fallout in the labour market is not a surprise to Kevin Rockmann, a management professor at George Mason University in Virginia. Not everyone who was satisfied in their job before the pandemic will be satisfied after it.
Rockmann and Michael Pratt of Boston College studied the unintended consequences of distributed work at an unnamed technology company in a 2015 paper for the Academy of Management Discoveries journal entitled “Contagious Offsite Work and the Lonely Office.”
One central finding was that once a proportion of workers decided to operate remotely, the quality of work in the office was diminished. Staff found themselves “alone in a crowd, surrounded by people but not gaining any meaningful social contact in the on-site office” and ultimately chose to work off-site.
That feeling will be familiar to anyone who has returned to the workplace only to find that the people they want to meet have chosen that day to work from home.
As employers seek to reverse the flow to remote work, Rockmann says they and employees, like their counterparts in 2015, may have to make choices. “This is going to lead to some shake-up,” he says. It is fine to experiment, he adds, but ultimately companies “need to put their flag in the ground” and make working arrangements clear, so staff can elect to stay or quit. “A lazy solution is to jump to an in-between model and try to make everybody happy: the average level of dissatisfaction (with that approach) will be high.”
Of course, employers, and even staff, may be “homesick” for a cultural and management ideal that never really existed before the pandemic, the FSCB’s Robinson says. But, as the crisis ebbs, they will also come to realize that corporate loyalty and culture depend less on where work is carried out and more on how it is done, celebrated, rewarded and overseen.
There is one comment:
"a cultural and management ideal that never really existed before the pandemic"...oh! It existed all right. But at enormous cost to business and the economy. Government wage mandates, government tax collection and government social policy implementation piggy-backed on business operations.
The work-at-home entrepreneur genie is out of the bottle. When work becomes more democratized--and more focused on performance than on touchy-feely workplace issues--the individual, his/her skills and production will take centre stage. "Business" in the broadest sense will decline in voting power, unions' current tenuous hold on collectivism will decline as individuals (rather than work groups) strengthen and government will have to adapt to the worker-as-an-individual.
Finally!
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