As many as two thirds of companies are considering slashing the pay of staff who are hesitant to return to the office.
Up to 68 per cent of businesses are debating whether or not to introduce pay cuts for staff who choose to work from home, according to a survey by HR software provider CIPHR.
This is despite over half of those surveyed (53 per cent) agreeing that they saved money with an uptake of remote working.
86 per cent of employers said they had suspended, reduced, or removed location allowance payments during the pandemic because of the shift to working from home.
The survey was carried out on August 11 and 12 among 150 businesses, the majority of which were medium or large sized companies.
All those surveyed work for organisations that pay location allowances to their employees and have some employees working from home at the moment.
More than three quarters of employers (77 per cent) said it was more beneficial for younger employees to work in an office than from home.
Chancellor Rishi Sunak has been championing a return to the office in a bid to revive the country’s city centres following the government dropping its work-from-home messaging.
Sunak told LinkedIn he still kept in touch with mentors he had met in offices and had found their help invaluable at the start of his career.
“I doubt I would have had those strong relationships if I was doing my internship or my first bit of my career over Teams and Zoom. That’s why I think for young people in particular being able to physically be in an office is valuable,” the chancellor said.