Danger: Faulty Predictions Ahead

We’re four months into rampant Covid-induced work from home, and the pundits are out in force to tell us that offices are a thing of the past, work from home is the new normal, and even that cities are going extinct.

Imagine that it’s September 12, 2001. Four airplanes have been hijacked and used as guided missiles. All air travel is shut down in North America. The Twin Towers are still smoldering. We don’t yet know who attacked us or how. If I told you that day that US airlines had operating revenue of $130M in fiscal 2000 what would you predict would happen 2 decades later? 

I would not have guesses that their 2019 operating revenue would be nearly $248M.

Did the world change? Absolutely. But did it change in the specific ways we thought when we were in the middle of it? Of course, not.

July 2020 is still the “September 12” of Covid-19 fallout. We can't accurately predict the impact of an event we're still in the middle of. Some of the predictions about work from home will turn out to be right, not because they are more prophetic, but because there are a lot of predictions and broken clocks are right twice a day. Many of these predictions are obviously preposterous. I have been the founder and CEO of a fully remote company since 2006, and I can tell you why work from home will not scale to the full economy.

The good news about our national work from home experiment is that productivity is up! The bad news, according to a recent report in the Harvard Business Review is the amount of time we are working. Employees are averaging 4 more hours of work each week, a 10% increase in time spent in meetings, and a 20% increase in instant messages during non-work hours. The flexibility to work where and when we want comes at the cost of setting clear barriers between work and home.

Additionally, some of the extra time is being used to offset the water-cooler effect. Marissa Meyer, then-CEO of Yahoo! Explained in a 2013 company-wide memo that telecommuting initiatives were being scaled back because “some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings.” When working from home during Covid, collaboration that happens naturally in an office setting is being scheduled instead. This effect was cited by Yahoo!, Bank of America, Aetna, Reddit, Best Buy, and AT&T when they scaled back previous work from home initiatives.

It also turns out that pandemic work from home doesn’t really resemble traditional work from home. Traditional work from home doesn’t involve conducting meetings with our kids in the next room, or juggling our schedule with our kids’ distance learning schooling. Traditional work from home is conducted in a home office, not a makeshift space at the kitchen table. 

Covid has forced workers living outside of major cities to battle their neighbors for last-mile bandwidth. Most towns don’t have enough fiber to accommodate every home on the block running multiple concurrent video chats. Many workers report that the tech stack provided by their employers is insufficient to enable optimal efficiency, leaving employees to spend time and money identifying workarounds.

Even the most introverted Americans have learned during the pandemic that humans are social creatures who need some human interactions. Companies pride themselves on shared cultures which are nearly impossible to create and maintain in a fully remote environment. New hires rely on face-time to learn process, people, and politics in any office. Remote work will implicitly devalue collaboration, ideation, and any task that isn’t quantifiable.

It’s not surprising that a recent survey of founders found that while 55% want more remote flexibility, 73% report missing social interaction and 51% miss face to face collaboration. Only 10% would consider a fully remote workforce, and nearly 85% of founders want to have required days of the week for entire teams to collaborate onsite. And that is after four months away from the office. These effects are exponential after four years or four decades.

Our personal interactions are where we become human to others. An employee who has a family and who you have to look in the eye is harder to let go than a statistic or an avatar that you've never met. As a manager, my weakness is that I wait too long to let people go because I have responsibility to my team and I care about the people on it. Remote employees will no longer be people who are your colleagues and friends, but widgets who are dispensable if they are temporarily unable to maintain the expected contribution to the collective. I don't think any of us want to become just a replaceable cog.

Companies will certainly become more open to flexible work but not 100% fully remote work. Yes, Google and FB have gone fully remote through 2020, but their post-pandemic goal is a 50% remote workforce. That means 50% of their workers will be onsite. Their core critical projects are still going to take place in Mountain View, and the remote workers are not going to get paid Menlo Park wages to work in Bangladesh or Beer Sheva. 

A fully remote tech sector would be a wage arbitrage nightmare. Work would go to third world countries at third world salaries. You'd probably have to move to Des Moines or Dubuque to get hired for domestic remote work. Wages in the west would fall while unemployment would rise, causing a demand driven depression. All of this is before considering corporate culture, productivity, or job satisfaction.

I've run a fully remote business for 14 years, and there are many management challenges. Not every great employee is a great remote employee. Working from home is great for some, but it is not for everyone. Individual companies can carve out custom solutions to these problems, but a full economy can't scale that way. 

Work isn't going fully remote, and cities aren’t disappearing. Humans will continue to want culture and restaurants and sports teams and will continue to pay a premium to live in a city or the suburbs that surround them. People still need to live near doctors and garbage collectors. Young people still need a dating pool. Families need quality schools for their children. 

We'll all work from home more frequently and possibly have less traffic on our commutes as a result, but our lives will remain centered around cities, and fully remote work will remain the exception, not the rule. 

I’ll see you at the office water cooler- at least for 3 days a week.