Work from Home: The Domino Effect

There have been debates about the fall of the 40-hour workweek for years, but COVID-19 has kicked it back into full gear with a new twist—mandatory remote work. 

Just recently, Twitter announced that its employees were able to remain working from home “forever.” Jack Dorsey, the CEO of Twitter, also serves as the CEO of Square and announced the same opportunity to the employees of that company shortly thereafter.

Around the same time, similar policies were announced across other technology giants like Facebook and Spotify. 

While not everyone finds working from home appealing, and some are not convinced that it can be as effective as in-person collaboration, there certainly has been a lot of excitement around these announcements, as many companies begin to see that many employees can work from home successfully, sometimes even with more productivity. 

But there are also some concerns. What could this new work reality mean for employees of the future? Keep reading for some of the questions we need to consider ...

How will companies use cost savings? 

Companies across the globe pour a lot of money into office rental space. The average rental space in Silicon Valley costs just over $5 per square foot. When you have multiple floors of employees and a nice open-concept office space, it adds up. If they choose to reduce their physical footprint, how will companies choose to utilize these new funds? Will they put it toward salaries? Will it be needed to create other employee engagement solutions that work in a virtual context? Companies will need to be strategic with the cash they save and may end up reinvesting in their employees in another way. Either way, companies that choose to embrace remote work, even in part, will be adjusting their budgets over the next few months. 

Will salaries drop because of flexibility? 

When Facebook announced that many of its employees would be able to work from home permanently, the company also said they might not be keeping their Silicon Valley salary if they live in a more affordable part of the country. What will this mean for other dispersed companies? Employees will need to consider how this might impact their quality of living, and if the trade-off is worth it. Companies will need to communicate this quickly and clearly and consider how it will impact their recruitment. Will this allow them to hire more people than before? With this in mind, it’s not too far off to think that this policy could increase the practice of outsourcing across more jobs than ever before. Which leads to … 

Will people in expensive cities leave? 

Typically if you live in an expensive city, there are a decent number of high-paying jobs to match. If employees are now competing with qualified individuals around the world, or at the very least across the country, their salary requirements may become less and less appealing to the typical employer. Why hire someone who lives in New York City when you can hire someone just as capable in a small town in Ohio?  Also, consider the knock on effect… What is the local economic impact to the businesses that provide goods and services to the people in these big city offices if many of them move away? 

What do you think is going to happen as more companies move toward remote work? Do you think the trend is here to stay?