Working from home: Who benefits most?by
Law firm Stephenson Harwood is offering its staff full-time homeworking in exchange for a 20% pay cut. Is this practical and will accountants follow suit?
Mid-tier legal practice Stephenson Harwood hit the headlines this week with a blockbuster announcement that all employees below partner level will be given the opportunity to work from home on a permanent basis. As ever, when an offer sounds like it is too good to be true, it is. In this particular case, employees will pay for the pleasure of a lie-in by taking a 20% pay cut.
It will be interesting to see exactly how the numbers are calculated, given that both parties will save national insurance contributions (NICs), while employees will actually lose considerably less than 20% after tax is taken into account. According to press coverage, the typical newly qualified lawyer is on £90,000 a year (sharp intake of breath) and will therefore be a 40% taxpayer.
This intriguing proposition is likely to spread like wildfire, not only in the legal profession but also others, almost certainly including our own.
Whether it will catch on or not is another matter. Indeed, the cynical may wonder whether this wasn’t merely the best publicity stunt by any professional practice in living memory.
When accountants want to get on to the front page of the papers, they usually have to get fined millions of pounds for poor performance. Stephenson Harwood (SH) hit the headlines by getting ahead of the market with a gimmick that is likely to be impractical.
Since SH is run by and employs innumerable solicitors, one imagines that they have looked at the legal implications, since there has to be a strong prospect that the majority of those taking up the offer will be female. That is not intended as a sexist comment but merely a reflection of 21st-century life.
If that is the case, the firm’s gender pay gap will inevitably grow, while some of those canny solicitors who choose to work from home may consider taking legal action against the legal practice on the basis that the policy is discriminatory.
Let’s look at some of the implications more closely. There has been an ongoing debate in the accountancy profession and far beyond regarding the efficiency of homeworking.
At one end of the scale, come the control freaks led by Jacob Rees Mogg, who despite the fact that more than one in 15 of the population was suffering from coronavirus at the time, issued sarcastic demands to civil service employees, trying to bully them into returning to their desks.
One wonders whether this is the only Brexit opportunity that the Minister for Brexit Opportunities has currently managed to identify, given that he has been uncharacteristically silent since taking on the ministerial portfolio?
Many of us will have worked with accountants whose attitudes are similar, assuming that any junior colleague out of their field of vision is slacking.
At the other end of the scale, there have been numerous stories about stress suffered by homeworkers, who are unable to tear themselves away from the laptop or mobile, working far longer hours than they ever did in the office.
It might seem strange that a legal practice should put forward this idea, given that so many of their professional staff will constantly be client-facing. Are they really going to change the nature of transactional business to allow underpaid colleagues to attend lengthy contractual negotiations via Zoom in the long term?
Unless that is the case, perhaps this is merely a strategy designed to cut support costs, since secretarial staff would be those most likely to take up the offer without damaging business.
Given the unproven theory that staff work harder from home than if they are travelling to and operating in a noisy office environment, surely the logic should be that they must get paid more rather than less. Let’s leave the powers that be at Stephenson Harwood to defend that one.
Too good to miss
In addition, if significant numbers of staff decide that this offer is too good to miss, beyond saving NICs the firm will be able to cut its establishment cost considerably at a time when city-centre property prices remain material and power costs are becoming extortionate. Additionally, they will save cash flow on season-ticket loans and, to the extent that they still exist, the cost of company cars.
Looked at from the other end of the transaction, some employees will undoubtedly love the opportunity to work from home full-time. Anyone wishing to live in the country far from their normal workplace or even overseas might be able to save enough to justify the pay cut. Even so, such workers must surely be few and far between.
The next step is likely to be a bandwagon jump by hordes of other legal practices not to mention other office-based businesses.
It is in the nature of free markets that the followers will undercut the first ones in. Therefore, expect to see others offering the chance to work from home full-time for a mere 10% pay cut, before 5% becomes de rigueur and then a really enlightened business goes for parity, on the basis that their own savings fully compensate for any perceived loss.
Having seen what Stephenson Harwood achieved by making this announcement to the media, one wonders which accountants will be the first to follow?