“The conclusion is that people demand higher pay increases for fully in-office jobs,” according to Pollak. “An employer offering flexibility can negotiate the overall compensation package with non-monetary incentives, while an employer wanting teams on-site five days a week can only offer financial terms; a dollar value is placed on time spent in the office.”
According to ZipRecruiter data, employees in the US who switched from entirely remote to totally in-office setups until 2023 had a 29.2% wage increase.
“Among some employers, there can be a perception that remote workers are less productive,” she continues. A lot of them also have a strong “financial and psychological investment in their corporate real estate”; they will stop at nothing to occupy their offices.
According to Barbara Petrongolo, a professor of economics at the University of Oxford, there is an unexpected consequence to this salary disparity: it may exacerbate existing labor market inequalities.
