A recent study published by Microsoft identified that over 65% of its employees are “craving” for more in-person time with their teams. The study also reported that teams are becoming more isolated which has a direct impact on innovation. Studies like these and overwhelming anecdotal evidence resulted in Gene Marks, a columnist at The Guardian publish a piece on why wfh is a failed experiment.
He is not totally wrong too. While his arguments take into account individual preferences, mental health and work cultures, we also need to look at the larger picture. It begins with the question, what happens to those who cannot work from home? What will happen to the real estate allocated for large companies which are now becoming more dependent on wfh models? What will happen to the workforce then?
Stanford economist Nicholas Bloom has studied this growing trend and given us the societal and economic implications of wfh culture. All its advantages aside, Bloom calls the wfh culture a “time bomb for inequality”. The success of wfh almost entirely depends on the highly skilled, tech-involved or upper-level admin jobs which can be carried out through a computer. So, this group of people are going to continue earning, upskill themselves and forge ahead when it comes to economic and social mobility.
However, people with labour intensive jobs or those who do not have access to the tech required to wfh will, according to Bloom, be left behind. The immediate follow up is “So what? Not all jobs can be done from home. They have to be onsite.” This is true. But with more companies becoming remote first, the onsite job market will keep shrinking. Of course specialised skills will always be in demand. But, think of the labour-intensive, “blue-collared” jobs. Hypothetically speaking, let’s say a large MNC that deals with knowledge processing decides to go completely remote. Its skilled employees are spread across the globe with no one physical location. The work of the company goes on. But agencies that are usually contracted for maintenance or security of the building or to run the canteen are now left without jobs. Multiply this by the number of people who are dependent on such agencies and by the number of companies porting to remote work. And this is just one example.
Companies can cut down on their overheads by saving on rent. But it also means that teams don’t congregate. At the macro level, this has two main effects. First is the value of a skill/ labour. With remote working, geographical borders are no longer a constraint. That means increasing competition and increase in supply of skills (for the company), resulting in reduced compensation.
The second, Bloom predicts, is the shift from metropolis to the suburbia. Since industrialisation, the general trend has been to move to the metropolitan centres, the cities to find ‘better prospects’ when it come to employment. With wfh, this trend will be inverted as many would choose to move towards quieter, more spacious and cheaper suburbia rather the staying in overpopulated cities. If this trend sustains, then it could also act as a catalyst for rapid urbanisation of those areas.