A “distributed operational workforce” with a net reduction in demand for office space facing a business premised on endless growth.
By Wolf Richter for WOLF STREET.
The office sector of commercial real estate is having a special moment: How on earth are all those offices going to get filled – meaning leased – when neither the companies nor the employees want to fill them like they used to?
So here are two surveys, one of tech companies and their intentions for their offices; and the other of office employees who now work at home and what they think about going back to the office. To round off the picture, we start out with a third survey, this one by Fannie Mae of mortgage lenders.
Fannie: mortgage lenders found that remote work increases productivity.
Corporate cost cutters are all over this whopper: 62% of the mortgage lenders (banks and nonbanks) said that shifting to a remote workforce improved productivity and 51% said it lowered operating costs.
The drawback is that 52% of the mortgage lenders said employee collaboration within and across business functions declined, according to the survey. But that’s not high on the priority list. On top of the priority list is productivity.
Of these lenders, 79% preferred a hybrid model with 21% to 80% of the employees working remotely. The most important factors in deciding their workplace strategy were in that order:
- Productivity
- Company culture
- Talent retention
- Customer experience.
And which employees would most likely have to return to working in-office? According to the mortgage lenders, these are the two most often cited:
- Senior management; “in-person executive presence helps facilitate communication, collaboration, and decision-making.”
- Customer-facing personnel; “many consumers prefer face-to-face interactions, and lenders indicated this to be key to success.”
A Chicago mortgage banker working in Alabama? Or overseas? Yup. The investment in remote-work tech capabilities, IT security, and IT infrastructure has allowed mortgage lenders to:
- Recruit talent without geographic limitations.
- Retain talent, as many lenders expect employee requests for permanent remote work to increase.
“The trend of a distributed operational workforce,” is what Fannie sees in all this:
“A workplace model might emerge among mortgage lenders that features managerial roles and consumer-facing personnel working in central offices while more operational roles work remotely in geographically diverse locations.
“Through a hybrid work model, organizations expect to execute on improved flexibility and reap the benefits of enhanced productivity, an expanded talent pool, and potentially reduced operating costs.”
Tech companies: 95% expect remote work for at least a few days a week.
Real estate services provider Savills released a survey of tech companies, 90% of which are headquartered in the US. Nearly one third has over 1,000 employees and a quarter has between 251 and 1000 employees.
Only 9% said that they will never return to the office. That’s the good thing. The rest will have some sort of office needs. Over the next 12-18 months, they need:
- Less office space: 47%
- The same office space: 40%
- More office space: 13%.
This means a major net reduction in demand for office space, in a business model (commercial real estate) based on endless growth and new construction, which will be a hard nut to crack.
Work from anywhere, even far away, is becoming a common option:
- 26% of the companies allow all employees to permanently relocate away from the office.
- 54% allow employees to relocate away on a case by case basis.
- 17% nope, everyone has to live where they can commute to the office.
Hiring software engineers in India instead of in Oakland? You bet: 72% of the companies said yes, they’re “open to recruiting talent from new geographies given that some roles will be able to be remote.”
And 95% said that “flexible work” – a mix of working remotely and working in the office – will become “normalized” in their organization.
How many days per week do they envision that the average employee will work in the office in a typical week? 76% of the companies said the average employee will spend 2-3 days a week at the office
- 1 day a week in the office: 9% of the companies
- 2 days a week in the office: 18% of the companies
- 3 days: 58%
- 4 days: 11%
- 5 days: 4%
And office design will move away from desk farms where everyone is married to a dedicated desk, and move toward the “hoteling desk model” where employees book a desk for specific time slots, and “collaboration spaces.”
Most employees who work at home want to continue.
A survey of Californian residents, conducted by the University of Southern California, showed that 38% of workers with access to broadband have been working at home full-time and that 17% have been working at home part-time, for a total of 55%, either full or part-time.
But work from home favors high-income earners, confirming every study and common-sense observation on this topic: Only 32% of the lowest income group reported working from home full or part-time, versus 60% making between $60,000 and $100,000, and 73% making over $100,000.
So those are the people already working remotely. And what do they want going forward?
82% want to work at home at least some of the time. Only 18% don’t want to work remotely at all:
- 31% want to work remotely 5 days a week
- 22% want to work remotely 3-4 days a week
- 29% want to work remotely 1-2 days a week.
- 18% don’t want to work remotely at all.
Clearly, companies are going to have to offer flexibility as part of the package in order to hire and retain good people.
Given these tendencies, offices are still mostly empty. Vacant offices are piling up on the market in a historic manner. And it’s not just temporary: the office slump is getting particularly ugly in Houston, San Francisco, Los Angeles, Manhattan, Chicago, and Washington DC.
In terms of workers going back to the office: in the 10 largest metros, office occupancy is still only 26% of the old normal level in early March 2020, according to Kastle Systems, whose electronic access systems are installed in thousands of office buildings around the country:
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Wolf, who are going to be the biggest bag holders here? Is it pension funds? I would love a future post on who owns this stuff.
I noticed around me that people who at the start of the pandemic really didn’t like to work from home (missing social contact with colleagues etc) have mostly come around and now love it.
Depressing, but my general sense is that public pension funds are the residual suckers/NYCo-opted for pretty much all bad asset classes.
…if you don’t count retail investors.
(Would be nice to get current/historic public pension fund funding ratios…there is quite a spread among states…and these numbers have drawn more and more attention over the years. “Zero’ed Asset” dates are also becoming a more widely available metric )
City after city, state after state – pension funds are mismanaged either through incompetency or corruption or both.
Some get caught, many just rob and no one bothers to check.
Why do people continue to believe their own city government is more competent than themselves when it comes to managing their own retirement?
Sheeple.
It is not the competancy. They believe the federal government will bail out the pension funds. Also, there is no choice how the funds are invested.
The system is designed to benefit the ruling class, i.e., the money managers get their cut long before the retirees see the first penny.
I should try not to get political. But just look at which party promotes such programs (ponzi schemes) and shovels our money at the fund managers. It’s so one-sided, at every level – city, state, federal.
Other party is not much better, but when it comes to collecting money now and paying back later with watered down dollars, one party has the monopoly.
“Why do people continue to believe their own city government is more competent than themselves when it comes to managing their own retirement?”
That is very much the Jr problem.
The senior problem is that the public pension premia has served as essentially nothing more than outright vote buying for decades.
And now the butcher’s bill is due.
There is a new surcharge you can apply to almost all financial transactions today and in the future. Ten percent (10%) off the top for the “Big Guy”. ??
The taxpayers, they will all go to die in Fed maiden lane type legal entities and you won’t hear anything about it. Same with countless expensive hotel developments that are operating at less than 20% capacity, they are all bankrupt.
But they will be bought at face value by the Fed and unless you are prepared to overpay for them, you ont have a chance to bid at a reasonable market value.
“expensive hotel developments operation at less than 20%”
And/But .. no matter what they pay for them .. what good are they to anyone if they don’t bring in profit .. the utility bills must be paid .. might make more sense to shut them down ??
Back when I was in college, my prof said that insurance companies owned all of the buildings over 4 stories west of the Mississippi.
This would positively insure an bailout.
Social contact opportunities will be different post-pandemic.
Then will be easier o schedule meets when needed or wanted.
Before the Industrial Revolution, most people “worked from home.” We have come full circle.
We’re getting there, especially when everyone has to start growing their own food.
:)
Yeah (waves hand cultivator with one hand, a barrow of taters, carrots, and onions by my side) … been in the trenches as it were, for a decade plus. Many will be getting an impromptu crash course in ‘personal agriculture’ out of shear necessity.
Some people know where things are headed and have the money to do something about it.
Guesses on who started buying and now owns 250,000 acres of US farmland?
Hey, thats the King’s food you are growing. Anything after the quota, belongs to you, unless you took it from the commonage.
Why not convert vacant offices to affordable housing then, especially in areas like Silicon Valley, San Francisco, and New York where there are severe shortages of housing?
Who eats the gigantic costs of said conversion?
Current owners (who else should?).
They do so by having to sell for 50 cents on their invested dollar (justified by low occupancy).
Buyers at 50% off then cough up new money to repurpose.
Why should bedraggled Fed Fairy be wheeled out again?
Because this is about power, not money, and those at the top will never see themselves reduced to the level of serfs.
We all know who “should”.
We also know that universe doesn’t exist any more.
In Soviet America rich people never lose, they just create more diversions and distractions to keep the little people fighting amongst themselves comrade!
Every time I hear this I wonder if the person spouting this opinion has any idea of the levels of difference in infrastructure required.
Housing requires water and sewage at levels that these large places just are not built to handle and the only way to upgrade those would be to tear it all down and rebuild. Unless you can find 100 people willing to live with only six latrine stalls and no showers.
You might be able to build it into the buildings, but the underground hookup would require very extensive work, and then there’s the permits, EPA reports, and added waste management facilities the cities would have to build.
And that’s just one problem.
Having lived in Silicon Valley (and similar places) I can say a major issue is the NIMBY mindset. California has millions of dollars of money set aside for low cost housing they can’t spend because no neighborhood want the issues that come along with that. Until people realize the only place you can build low cost housing is where real estate is cheap this problem will exist.
“Unless you can find 100 people willing to live with only six latrine stalls and no showers. ”
“You will own nothing and you will be happy”
Hence immigration. If you’re coming from Guatemala and have been using an outhouse, or hole in the ground, and get an apartment in the Salesforce Tower, paid for by the few remaining taxpayers in the city, that six latrine stall will seem like paradise.
There’s no reason that additional sewage and water supply pipes cannot be run down the outside of a building, or using an elevator shaft.
What highrisehivesahead said and also have you ever seen pictures of how things were in the late 1800’s and early 1900’s? Choice is not going to have anything to do with it. When the WEF says that we are going to an ownerless society, well we’re still going to have owners but it just isn’t going to be you. Haven’t you guys ever read animal farm? You can already see those narratives being put out by the media. Two legs bad four legs good! And all animals are equal, just some more then others!
Its going to be one giant version of the company store. We’re almost already to that point now.
https://en.wikipedia.org/wiki/Company_store
They used to be called the YMCA!
KGC- Absolutely correct. Electrician by trade, commercial retrofit to residential is a nightmare for us, and it’s nothing compared to what the HVAC mechanics and plumbers would have to deal with. Most inspectors would be unfamiliar and prone to red-tagging, running the price up. It wouldn’t be easy to find subcontractors on a cost plus basis and no sane person would bid it. And the subs rarely have good commercial/industrial electricians doing anything residential, they cost too much and the money isn’t there in new construction. So who do you send?There’s plenty of easier money to be had for skilled trades now, and that trend will outlast me. In unskewed right-to-work states anyway.
Reminds me of a friend years ago who was married to a lady from England. He went there for a visit, and told me how the town she came from was so old most of the buildings were 400+ yrs old, and had all the plumbing added on with pipes interior and exterior, and nothing really engineered correctly. He said he never realized how great it is to have toilets that actually flush…..
KGC-without trying to be overly critical of our general population, you well-describe just one of many practical facets of our national Dunning-Kruger Syndrome (have a case of it, myself?-no doubt!) epidemic (previously known as ‘willful ignorance’, more commonly overheard in the expression: ‘…who knew???…’).
may we all find a better day.
Old offices and warehouses are converted to housing all the time. Look at the downtown of any major city. It’s a lot of work, but you’re making it sound like a manned Mars mission.
Well it’s not rocket science, but there’s a a heck of a lot of difference between old office buildings and warehouses, and malls. Malls are usually built on land previously vacant, and hooked up to sewer and water based on retail use. Those two public bathrooms in the two block long mall? They use the maximum planned sewage line laid for that square mile building.
Yes, you can add more pipes to the building (not cheap, and the idea of running them down the elevator shaft is so stupid it makes my head hurt). But what are you going to connect them to? The lines from there to the waste treatment facility are the minimum required to handle the very limited amount of waste generated by transients, not people living in that space. So what you need to do it replumb the whole thing out to the waste treatment facility, which isn’t big enough to handle an extra 700-800% (minimum) increase in waste daily.
The same for water. Just how many of those stores in any given mall actually have access to a fresh water source? Most don’t; and there’s nothing in the ground that will easily convert to provide the water and remove the drainage. It wasn’t a requirement for building the mall.
And ask an HVAC guy what trying to provide heat and air to a number of small apartments is like when the plan was originally for 17,000 sq ft rooms. It’s not so simple as just saying we’ll just split the duct into 17 separate areas, because that’s not how air flows.
Then you have fire prevention, and earthquake standards, and traffic patterns, and law enforcement, and so many other things.
You want to know what I think of when I hear about using big open facilities as housing? The stadium in New Orleans when Katrina hit. If you’re not sure how that worked out google it.
No, actually they are not. And if they are, it is on a small scale. When you are talking about converting a 10+ story building from office to residential, the costs are outrageous.
LA TIMES .. In recent years, voters in California have approved billions of dollars to build homes for low-income families & the homeless.
But those plans have often failed to meet public expectation because those billions build fewer & fewer apartments.
There are many other factors in play .. it’s a rock & a hard place situation.
Zoom conferencing reduces the need for airline travel, car rental and hotel reservations.
People working from home might like to take care of their young children while working, reducing daycare expense. There may be distractions linked to working at home.
If someone can produce more from home than while sitting in a city rush hour traffic jam, that would be nice.
So for parents working remotely from home one would then expect them to wear several hats at once, one for their job and one for child daycare tasks at home.
How well does that work in practice?
Same way they have been ‘subcontracting’ their yard work and dog walking for several years.
Pretty sure women are disproportionately unemployed or under-employed right now due to the lack of daycare but i could be wrong.
I’m not sure how big this is yet .. but private child care has taken off with momentum .. grand parents & neighbours are taking over from institutional child care .. which became all the rage for a long time .. but to my mind it was not ideal child care .. but impersonal child care.
We also had the .. No jab No Pay – No Jab No Play .. scenario thrust upon us .. parents can be bloody minded where someone else wants to take over the upbringing of their child.
As a result many parents moved to home care.
Considering that “going to the office” is a recent invention, I can assure you that it works very well. Probably better.
My daughter works for AIA Australia .. they have offices everywhere since way back when .. they all communicate & stay in touch because the have to .. working from home is an extension of that.
I do wonder a bit, how far “work from home” will go, and what happens to salaries globally as a result.
If someone moves from the US office to Cancun to WFH from there, does he make the same salary as before? (I expect the company will try to lower it). What if someone moves from the India office also to Cancun… do these two employees now get different salaries and benefits then? It would seem not..
Basically, globalized WFH will motivate companies to offshore additional work that has been found to be WFH’able … i.e. your job goes to WFH in India..but without you.
It will also motivate people in high income countries to move to cheaper countries where they can arbitrage the salaries. Of course the companies will push to lower the salaries in this case, but there is a limit to that, as most westerners would probably not go to Cancun and be satisfied with a Mexican salary (for example), particularly when it comes to retirement savings concerns, ability to travel, buy fancy global products that the locals there cannot usually afford..etc..
Net all though, it will push salaries in high cost / high income locals down.. further motivating people in high cost / high wage countries and locals to move to cheaper countries that may be still fun to live in. At the same time, this will making life tougher in the high cost countries where people cannot leave as easily (i.e. those with kids.., elderly parents to take care of..etc) as they will have to settle with lower salaries due to all the mover-outers pushing rates down (an American in Cancun will speak good English, and be in a North American Timezone, but will be to some extent, cheaper than the same person in SF, or NYC).
Formally cheap, but nice places globally (Cancun, Pattaya..etc), will also get more expensive..
Interesting times ahead..
I am seeing that in Nicaragua. I have 28 years there as I am not an ex-pat but married to a Nicaraguan and all children are Nicaraguan-US. An area called San Juan del Sur in the country equivalent of a state called Rivas is quite interestingly experiencing an influx of whole families living the internet connected existence for work in the USA and distance learning for the primary and even early secondary school children.
Chase,
I had the pleasure of spending 5 days in your adopted hime town. We had a great experience!
C
You’re not quite there…
What will happen, and was already happening pre-pandemic, is white collar middle class jobs will be shipped overseas. The gutting of the middle class is being accelerated before our very eyes. The only jobs that the newly unemployed people will find are going to be the skilled labor variety that can’t be automated away. It’s going to be ugly unless there are major changes in the business laws to promote isolationism. And a quick American shift from globalism to isolationism or protectionism will have dramatic consequences in the global economy.
I am puzzled why the pandemic made people aware of business practices that have been on going for 25+ years.
Harrold,
When enough reality starts to pierce through, people start to ask questions. But it has to land on their doorstep. As in,
Why can’t I buy any toilet paper?
Essential shortages like these in the US, you have to go back to gas rationing in the 70s.
This is already happening. And what about all the moves within the US? Already happening. Even within the same state – urban to rural. Interesting times.
“Even within the same state – urban to rural.”
And, using current political metaphors, from a blue state to a red state, or reverse. We are physically locating ourselves to match our political ideals. Us vs. Them.
Kind of like a North vs. South thing, some 150 years ago…
More like “from a blue county to a red county,” IMO. Even within blue states there are places where you can live fairly freely, with local governance that appreciates freedom. The same is true in reverse: Austin, Miami-Lauderdale, St. Louis, among others — very left-wing cities in red states.
Mi/Clete-your color, politically or ethnically, doesn’t matter. The fact is that if you are human, you are being rendered surplus by environment, reproduction rate, and current economic operating system.
may we all find a better day.
Only 12% of the companies in the survey said they adjust pay based on where the worker lives. Only 12% for now. But this will become common.
Easy solution to this for the employee. Buy a 1 br condo, airbnb it, use that as your address for work, forward mail to real address. voila, problem solved. just can’t have work friends over to your place for a bbq.
I work in Telecom Site Development (cell phone towers, etc.).
I’ve WFH for most of the past 2 decades. It makes for a much happier/hard working employee. I used to spend But I can’t move to another country, I have to visit sites, offices, meetings, etc.
A one 1 hr commute to work means you spend 3 weeks out of the year doing nothing but sitting behind the wheel of the car.
That’s 2 hrs/day x 5 days/wk. It’s a ridiculous waste of time. Most people are surprised to hear that and see how dumb that is.
I’d say most folks are in a similar position:
1) Can WFH but can’t be out of the area completely.
2) More successful at the job w/out micromanaging.
3) Better at what I do than my Bosses could ever dream of.
4) Leaving me alone to kick ass is logical.
1) Only 32% of lower income reported WFH vs 73% of employees
with an income of > 100K/y. Pigs fattening before their last trip to
the slaughter house.
2) The Pareto top work from the golf course or their leisure boats.
3) In FL, to replace NYC : WFH pay high RE taxes.
4) In SF : rent, taxes and streets defecating stick it to u.
5) For wall street and the banks : NYC became a slave ship. They deface EMS. Bangalore and the Philippines replace them for a portion of their income.
6) Front stores shuttering started well before the pandemic.
7) The FANG can delete excess WFH with a click, because of their gov moats permits.
8) The Pareto top own most of stocks, reduce office space, donate to the poor, employ more talented people than they are, for a fee, from home, because they can send them back home with an overnight E- pink slip, to take a loss.
9) IWM monthly selling tails were put on the FBI top wanted list, before they can terrorize the Pareto top and their innocent WFH employees..
At what point will all this vacant real estate–and in London it’s spreading like mushrooms in the dark– actually show up in the financial economy as in massive haircuts, foreclosures, bank failures, anything?? It’s like suspended animation..
Have pity; it is very difficult for those involved in new office construction to adjust to reality. Self delusion, denial and wilful blindness all have to run their courses before the addict – too late – comes to his senses.
The Kool-Aid has been drunk deep in London.
Until the government outlaws working-from-home and demands that everyone return to their offices. Wearing masks, of course. Oh, and with their vaccine passports in hand — passports for domestic travel.
Exactly!
When will the final effects of these EMPTY spaces, show up in the mkt?
I am waiting for singns and see nothing, just rants!
I fear that this WFH productivity tale that is now being spouted everywhere is going to end badly. Not for the corporations, but for the workers.
1) Start discovering which jobs and which people are most suited to be moved to a WFH situation. As stated in the article, probably not customer-facing people or senior managers. But regular office drones, perfectly. Count money saver #1.
2) Refine methods to continuously monitor and evaluate these WFH drones. Advanced “bossware” works wonders here. Automatically send pink slips to the least productive. Count money saver #2.
3) Encourage WFH workers to move to lower-cost-of-living areas, so that they can be payed less since their cost of living is lower. Count money saver #3.
4) Since we now have a population of almost perfectly interchangeable WFH drones, start scouting the world where to find the cheapest ones that still breathe. Continuously “optimize the workforce” by putting in the WFH drones that agree to the lowest remuneration. Count money saver #4.
This is not a dystopian scenario by a depressed science-fiction author, but something that can already be observed in reality in the case of call centers and such. It is the logical consequence of optimizing an operation towards the lowest possible cost, regardless of other considerations.
People who think WFH is a good thing for themselves, their careers or their future ought to have their heads checked.
“People who think WFH is a good thing for themselves, their careers or their future ought to have their heads checked.”
Not at all. The surveys noted above said it. Companies LIKE WFH because people are more productive. The only employees working from home who will have a problem are the ones who are not really working. “Bossware” will not be a problem at all for these folks.
@CS,
“…Companies LIKE WFH because people are more productive…”
Of course *companies* like WFH. That’s only logical. For a company the ideal WFHer is a standard productive unit. A simple Zoom interface, no strings attached, easily replaceable at any time when another unit with better price/performance (productivity) can be found. Wherever that may be.
For the *employee* things are different. As a WFHer, potentially every employee in the world becomes your competitor. Economy 101 says that competition drives down prices. In this case, the WFHer’s salary and benefits.
Good luck with that.
“Of course *companies* like WFH. That’s only logical. For a company the ideal WFHer is a standard productive unit. A simple Zoom interface, no strings attached, easily replaceable at any time when another unit with better price/performance (productivity) can be found. Wherever that may be.”
As if this weren’t already true…
WFH also allows me to offer my skills (which is what employment is all about) to millions more potential employers. Don’t ignore the other side of the coin.
It makes sense. As I work for a large aerospace OEM I see that trend for years. This year our target is 30% of engineering work to be outsourced. Before pandemic we could not work from home, because the company didn’t have infrastructure in place (firewalls setup, software licenses), but now I can do everything from home. And that home can be anywhere.
Regarding productivity, for companies productivity is measured in cost. They don’t care if something requires 10 hours in one place, and 20 hours in some other place, they care how much they need to pay for these 10 or 20 hours. If aggregated cost of 20 hours in that other place is lower, it counts as productivity gain.
There is so much work in IT industry, that people feel secure, but now you are opening a global pool of resources. I know senior programmers in Eastern Europe that are doing that for years, for a shitload of money. There salaries are in 60-70k USD range , with low taxes. Still lot cheaper than senior programmer in Canada or US. With that money in Eastern Europe you can have great life. Pay of apartment in a couple of years, travel…. Only fool would move to Germany or Switzerland.
A guy from Toronto,
“This year our target is 30% of engineering work to be outsourced.”
Probably offshore, as they say? India, China, elsewhere?
“Probably offshore, as they say? India, China, elsewhere?”
Most of it to India, we have an office there.
Some to Europe, we are own by European company, so they transfer work between offices, but somehow we always end up short. :)
Everyone is protecting their workforce, at least in Europe.
guy from Toronto is exactly correct. Permanent WFH will be the end of white collar jobs for millions of Americans over the next 5-10 years. People made a decision to value their health, but without any protection from Unions or Govt, there is very little to stop those jobs from heading to India/Mexico/anywhere cheaper.
Yes, “bossware” will become an increasing issue I think
The fact is that in ‘work-at-office’ scenarios, a lot of people are not really working ‘all the time’, or in a way visible to bossware systems (i.e. talking with a coworker in an office about an issue..etc).
So bossware tools already in MS-Office admin would not count this as ‘interaction’ or ‘work’, as its looking at # of emails written / read, keystrokes, or accesses to MS-Word & Sharepoint..etc .
Those tasks are not necessarily ‘productive’, though they are easily measured and may end up causing companies to encourage the wrong kind of behavior or fire the wrong people.
I’ve worked from home for most of the last 2 decades. In 2009-2010, I saved my client (a major telecom company) over $4M.
My paycheck? $85K w/benefits working for a vendor. I saved them 47X my annual salary and was thrilled to be WFH, for all the obvious reasons.
You’re 100% wrong. Anybody that wants to go into an office should have their head checked!
It’s not really necessary….maybe once every week or two.
Work from underwear will lead to massive outsourcing of middle management. People who love phoning it in wearing their skivvies should be careful what they wish for because their jobs can probably be done by other people in their underwear who work from India or the Philippines.
I’m not sure what your point is since this is true regardless of whether someone works from home or in the office…
I believe one of his points might be that working remotely lessens your chances of promoting yourself through in-the-flesh productive collaboration and teamwork, and dealing face-to-face with management in the office.
If you are only a talking head on Zoom and an email scribbler to the company you might have less of a chance to stand out for promotion and advancement too.
Remote solo work has pros and cons that really depend on exact nature of a business and their work culture. I don’t see widespread adoption of it, or that it will remain as popular going forward as compared to these pandemic times.
I don’t see any difference between face-to-face collaboration in person or via Zoom/Teams; other than wasted time and money preparing for work and commuting, which we don’t even get paid for despite that also being work.
If companies are smart and want to maintain the increased productivity we’ve seen from those working from home during the pandemic, they will adopt it. It’s always been popular with the workers, whom few people actually seem to care about.
“…lessens your chances of promoting yourself through in-the-flesh productive collaboration and teamwork, and dealing face-to-face with management in the office.”
Why not “promote yourself” via getting all your work done correctly, on or ahead of schedule and in a way that makes your boss look good? You’re talk of “in the flesh productive collaboration” sounds suspiciously like office politics – which we all know is a giant waste of time.
The pandemic appears to have opened peoples eyes to business practices that have been going on for 25+ years now.
A lot of middle management will be made redundant, because with WFH it is getting a lot more difficult for them to prove that they contribute anything useful to the business. This is perhaps not the case everywhere, but it was definitely the case where I used to work.
That’s wrong. It’s like you’re in love w/the old black and white TV and the rest of us are trying to convince you to try color.
I work much harder from home. Because I don’t want to lose the privilege.
The office is for people who can’t accomplish anything on their own. So they need that setting to glad-hand, micromanage, ass-kiss, do the ‘power lunch’, blah-blah-blah.
Work is work. You can do it anywhere. I can get more done sitting in a Starbucks than in some dingy office, surrounded by buffoons.
It’s the 21st century. You gotta open your eyes and your mind to the new reality of how things really work. Drop the horse and buggy…try a car!
Hahahahaha, yes, I’ve been working at home for years, and I work like a slave, from 5 am till 10 pm and sometimes longer, with only a few breaks. I’d never ever never never ever do that in an office. Working from home is great if you love your work.
If your work sux, I’m not sure how great working at home is. You would need a huge amount of self-discipline.
Wolf,
I see posts from you at 1AM, 2AM, & 3AM? You must reeeeeeeeaaly love your job.
I’m on PT, 2 hours behind the server time stamp (3 hours behind in the winter). Server runs on UTC minus 5 hours (UTC-5) all year.
NoDecent/Wolf-once again illustrating the age-old human desire for ‘one size fits all’.
Ah, people-can’t live with ’em, can’t live without ’em (but more than a few working hard now to live without any vestige of them while acquiring their meager remaining assets…).
may we all find a better day.
I discovered the same thing building my off-grid home up from bare land. 10 years of all weekends and vacations (plus “sick” and “stuck” days) and 4 more years full time. Lived in total misery at first, outside or in back of 72 Volvo with boards and cement, then on a 4 x 8 plywood on ceiling joists (which included a rattlesnake hunt every am spring to fall, killed at least a hundred, mostly the small stupid hungry ones, 14″ to 2 ft), heat, cold, finally got a wood stove and pretty soon I didn’t have to haul quite as much up each time, got a truck, and finally I was getting sealed in and damn comfy.
Totally on my own schedule except for emergency things like road washouts. The perfect “business”. I loved it.
? And then what did you do with that house? It seems to don’t live there anymore.
If I were to advise an average young person I would say…consider working as a skilled tradesman.
RobertM, I agree.
My son is an electrician and worked at a near-by lumber mill, five days a week, 8-9 hours a day, plus commuting time. He decided to become an independent electrical contractor and how works from home about 3 days a week, but those scheduled work days are rarely more than a few hours long, with the occasional all-day job. He loves being able to be around his family more frequently, especially with no commuting on a daily basis.
“He decided to become an independent electrical contractor and how works from home about 3 days a week …”
Just curious, but how does an electrician perform their work from home? I would have thought it was a hands-on job.
Perhaps the ‘office/shop’ part is now phone, garage, van.
Hire others and delegate. Focus on obtaining new contracts. Manage and develop network to build more efficiency.
This works well with experienced of any kind skilled tradesman, with the right contacts, network and keeping the employees satisfied without expolitation.
ding-ding-ding!!!! And so it is for everybody…the flexibility of:
1) Getting your job done
2) While not being chained to a desk
3) And not wasting 3 weeks year sitting in traffic jams
4) etc, etc, etc,
I hate to break it to some of these people, but you can be great at your job and still do a conference call in the buff. What counted as “professionalism” before was largely stupid (ex. wearing a tie).
Because what could be more “professional” than tying a colorful piece of cloth around your throat and tightening it up. Wouldn’t want too much oxygen to get to that brain!!!
So you are saying this approach will work for everyone ?
And if your dream existence works for only a fraction of the now employed ?
What do we do with the remainder of the formerly employed ?
Soylent Green ?
Of course, you will say who cares !!
It doesn’t affect me !!
Those formerly employed folks will still be here.
Now what ?
Yes, yes….I know you don’t care.
And yes….what happens to those folks WILL affect you.
Agreed. You will always need them and they can make very good money from what I see around me.
+1. Better job than a Software Engineer in my opinion.
This WFH model is total BS for most workers. Its a trap. The sole purpose is to dehumanizes the workforce, and sucker them into a situation which will lead to their own elimination. WFH is just the 1st step to getting rid of workers, especially the one’s that affect the bottom line of the Corporations. Step 1 – WFH, Step 2 Work from anywhere, Step 3 Work from Bengladesh. Net result – you’re gone , time to start looking for a job pumping gas. OOOps that job has been eliminated too.
Ive been told pumping gas jobs going away now too bc electrics.
I’ve heard someone invented automatic teller machines that can replace bank human tellers.
They actually have replaced them to a certain extent. I remember going to my local bank with my dad when I was a kid, there must have been 10 tellers there. Now, it’s probably 3.
@SC,
Interesting that you foresee almost the exact steps that I do. I fear that WFHers totally fit the late and great George Carlin description of the Obedient Worker:
“…Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shitty jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it…”
The more your job lends itself to WFH, the easier you can be replaced.
Nowadays, I advise young people to learn a trade. Strive to become a top-notch welder, plumber, carpenter or suchlike. These arts will always be in demand and not much chance of seeing WFH welders from India taking over your job, or AI controlled robots crawling under the kitchen sink to repair the plumbing.
One of the most inspiring videos I ever saw about that:
search for “Essential Craftsman” series of videos, especially How To Be More Productive
I show this to all my high school students for an example of what an honorable and useful career looks like, versus being a Wall Street parasite:
SwampCreature,
Cost of living in Bengladesh is very reasonable.
Yes, and living cheek-to-jowl. Really get to the know the neighbors.
“The sole purpose is to dehumanizes the workforce, and sucker them into a situation which will lead to their own elimination.”
Where have you been, man? Wide scale exploitation of workers has been going on since the industrial revolution at least. Let’s not pretend working from home would be some kind of catalyst for something that’s already standard practice.
If only the workers could unite and somehow control the means of production. That would be something.
Yea…and western civilization would be over. To be taken care of by others is an instinct. Freedom is not.
I’m not against WFH! Just the way it is being broadly implemented. Our family business is in a hybrid WFH mode, 85% WFH 15%. in the field. It was the same before and after the pandemic. But that fits the job we’re doing to SERVE OUR CUSTOMERS! Works fine. A lot of other business can operate effectively in this matter.
I think a lot of the comments here have forgot this important thing about who the employee and the companies that employ them are suppose to serve. All I hear is I like WFH or I don’t like WFH. As a customer who also buys services in the marketplace I couldn’t care less about whether the employees are happy or unhappy about WFH. What I care about the quality of service I am receiving. And so far I can give you multiple examples of the decline in the quality of service which have resulted form this WFH model, and if I could I take my business elsewhere I would. Those workers may be very happy now, but they are not going to be happy when they find out they were just guinee pigs for a corporate laboratory experiment to outsource their jobs and continue the process which began around the year 2000 and is continuing as we speak.
Swamp, a great number of WFH folks doing tasks that are just part of a “project” and do not have to interface with the client (who is essentially paying their salaries). They are not usually responsible for making things happen and thrilling the client, so to say.
I had my own successful engineering consulting business (18 years) and my clients were primarily oil companies. I worked from home 50% of the time (home was office), but if a client called me on Sunday and said meet me in Denver Monday morning for a week of field work, I was their unless I was already out in the field somewhere.
Yep, some jobs adapt well to WFH. Its when you try to force a customer service job to WFH that I have a problem. Like when ALL STATE insurance CO tried to process a claim using WFH personnel. They did a s$it job. So did my own insurance Company USAA for that matter.
Government financing of medical care and infrastructures reduce corporate costs and make them more competitive. That was the successful model the US used in the late 1800s and early 1900s. Using debt instead of dollars is where the debt peonage grows.
I wonder when people will start double dipping and working at two (or more) jobs from home without telling their employers. One thing that you get from workers in the office is a relative assurance that people are actually working for you.
Who cares as long as the work is getting done?
ding-ding-ding!!!! We have a winner!!
It’s called results. You get results. You solve problems. It’s doesn’t matter where you are.
Some people can do their job well w/out driving to a special building to do it. I have a phone, computer and car. That’s all I need!
If you want me to accomplish less and be less motivated, sure make me come into an office! If you want less efficiency…go ahead!
nodecentrepublicansleft
“I have a phone, computer and car. That’s all I need!”
No, you need happy customers. They may want more than that. If so you may be looking for a new job sooner rather than later.
Swamp, there’s a definite difference between people’s outlook on work between those that just do “tasks” for a project and those that interface with clients directly. As we know, clients provide the funds that pay the worker’s salaries.
I know a guy that was doing that before Covid. :)
He was putting 10-11 hours, but he was charging 16 hours at IT contract rate.
The vast majority of WFH are using computers all day long. The employer can monitor their key strokes.
Nick kelly
Also, employers will also be requiring, if they haven’t alreay, zoom cameras to spy on you in your own home to make sure you’re doing only company work. You want that?? You can have it.
The artist formerly know as Marcus,
If you do a job that your company can’t tell whether you’re doing it or not because nothing ever comes out of it, and your only job is sitting at your desk and looking busy, then your job is at risk anyway. Productivity is all about 1. getting the job done, and 2. at the lowest cost.
…lowest possible cost per dollar produced. I think of productivity as revenue per worker, since labor is usually the majority of input cost.
There’s a correlation of revenue/employee and company success in general. It would be interesting to rank SP500 on this metric.
Getting the job done ONTIME!
Yup, delivering on time – no matter the condition of the work product. Poor quality can take quite awhile to appear.
Note that lowest cost is the lifetime cost, not the hourly or annual rate. Went through that when management decided to try bargain-rate software engineers in Bangalore/Hyderabad. QC and rework costs skyrocketed. Took them 3 years to understand that American engineers were cheaper. During that 3 years they discovered Russian and Romanian engineers.
Powell/Yellen should take lessons form Canada. Looks like the USA Go Big Team is really the Small Potatoes Team compared to Canada.
And yet there are still cranes everywhere you look in Houston. Two new skyscrapers coming up downtown. At least six big office buildings coming up in the Energy Corridor.
They can build just for speculation so that the economy can keep “growing”, like in China. Apparently in China 70% of new home purchases are now 2nd/3rd homes. Many are left empty so they remain “new” and go up more.
Yes, that has been happening in Houston, the most troubled office market in the US for years now: tenants move to the latest and greatest buildings without paying more, and the older towers empty out and default on their mortgages.
The oil companies are moving out of downtown to the energy corridor on the west side. That’s been going on for years.
Also, where I live in The Woodlands, energy companies are moving here too. Exxon’s new $4 Billion complex a few miles from me has over 8,000 employees.
Commentary from someone who has been working for 13 months now from home: I find myself at least equally or slightly more productive working from home as I would in the office. My job is such that I can completely work through the computer, conferencing apps, and software on the cloud. Honestly, I think I would become less productive at this point if I went back, due to no more reason than having to shuffle between spaces for meetings, conversation (Working from home, 95% of conversations are at my convenience. Drop-ins are not an issue).
I do not know that my company has made a formal decision what to do in terms of those that can work from home continuing to work from home, but I suspect the longer this continues, the more resistance there will be to “going back” and the more financial sense it will make to not invest in additional office space. One can always create shared spaces or “hot desking” to cover the occasional needed visit with existing space
And yes, work from home is definitely becoming – if it has not already become – a negotiating point and effective benefit.
This is my situation as well.
I’m more productive WFH–the 1.5 – 2 hrs. per day I commuted is now work time, so I’m actually working more, not less, and I’m sleeping more.
I don’t know of any coworkers that want to return to the office full time or even 3 days a week (which is what we were doing before Covid).
The big question management has is if it can sustain and build upon the company culture.
I would love to work from home but pilotless aircraft are still a few years away. Some lucky kid in the future will do my job from a beach in Costa Rica…….I kid!
C
Maybe you could pilot a Global Hawk from home.
LOL…….as long as I don’t have to hurt anyone in the process!
CEO opinions on WFA/WFH’s long-term fitness for their companies is all over the map figuratively.
Anyway, according to WSJ, you can get strong negative or positive management opinions on it depending on just who you ask.
Unsurprisingly, many employees endorse WFH enthusiastically. So depending on company in question they are going to be sorely disappointed when they have to show up at office on most work days.
I do believe that increased remote work has a future, but it won’t be a nearly complete takeover of work environment that many pundits and employees are wishing for.
Finally, we should put WFA/WFH in perspective by noting only a portion of workforce lends itself to jobs working in PJs on sofa at home.
Even if full adoption everywhere possible happened (and it won’t) I doubt more than 1/2 of workforce realistically can do it full or part-time.
And this whole idea of solo remote work does bring up questions of the nature and useful purpose of employment in the future. Perhaps UBI and transfer payments will make much of work unnecessary /s.
When workers return to full-time in an office for many it will be the first time they fully appreciate how much of their lives they were losing to commuting.
Published last year – news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/
The biggest problem with WFM regime is the weight gain and health. Many people that work from home have gained 10-20 pounds the last six months. Getting in the car, walking through parking lots, walking around the office, etc., were the only forms of exercise some people got. Now, people don’t move, except to walk 20 ft to a fully stocked fridge. Many people on my block have ballooned up.
I’d say its more like 30 to 40 lbs!
Small price to pay for having more control over my life because I don’t have to waste a bunch of time I don’t get paid for getting ready for work, commuting to work, and recovering from work.
I used to take public transportation just to get to work, when I was working 8 to 5, not too far away just to get the exercise. I could have driven, but enjoyed the quiet time on the metro and the exercise of walking to and from the metro. We have become a nation of couch potatoes. Home delivery of groceries, take-out junk food, home schooling, virtual training at home. Many people are gaining a lot of unwanted weight and living a very unhealthy lifestyle and blaming the pandemic.
The real discipline of WFH is doing enough physical exercise.
If working remotely is so great and so much more productive, how come I continue to hear the excuse from my dozens of vendors that things are taking sooo much longer because people work remotely from home?
I work in purchasing and we have hundreds of vendors. Literally no one is saying that.
S
Spoken like a man with an axe to grind.
I close my eyes and imagine landing in Bali to begin my new gig, only to find Regus and WeWork already there, driving up the cost of all the good living/working spaces.
Maybe the best “move” is to stay put here in Northern Ca.
No.
Get out of CA.
There is no such thing as “worse than CA”.
It seems to me that things come and go in waves and we all forget what the past taught us. Office space has been in demand and not in demand in cycles as long as I can remember and while we are in the who-needs-it phase due to a black swan event, an equally unforeseen black swan could swoop in and change everything in a short time.
Short term there are always losses and gains depending on which side you happen to stand on at the time but change is the only thing that is inevitable if you wait long enough
1) WFH allow too much flexibility measuring : hours x wage + productivity.
2) Managers of profitable projects will expand, mostly with inexpensive
overseas labor, even during a recession.
3) Managers of promising options will cont to operate.
4) The loser will be eliminated at minimal cost, thanks to WFH.
Perhaps the logical evolution of WFA/WFH trend will be an employment tier structure where those who wish to work remotely will eventually be assigned “independent contractor’ status (not overnight– but slowly moving that way as in the ‘boiling frog’ analogy). That is a great cost-cutting strategy.
The other direction to go with remote work is to double down on outsourcing more work to low-cost vendors. Big savings there.
But outsourcing comes with more possible quality control risks. Remember that Boeing MAX 737 problems have been partly blamed on Boeing outsourcing aviation software design to foreign workers making $9/hr.
I work for a bank on Chicago (with offices in the Loop) and have been WFH for 13 months.
Last week middle mgmt told us the company was preparing for Return To Office and we would not be one of those “work from anywhere” companies.
So we asked when can we go back 5 days a week?
Middle mgmt: 5 days a week isn’t possible. More like 2 days a week… The days will be assigned to teams.
This week senior mgmt put out a statement on the Future of Work: we are considering all options, including permanent working remotely.
Our sociopathic middle mgmt getting wrong footed by senior mgmt: priceless.
Ha, we knew something like this would be coming.
I also work for a fairly large regional bank in cybersecurity. I was hired remote 4 years ago and haven’t skipped a beat in the pandemic. The core of people from the offices including execs mostly work from home now. I heard a rumor they may mothball the main home office- or several floors there and several floors in a downtown tower office. This and all the reductions of travel have had dramatic reductions in costs. It really would make sense for companies to ask themselves if it’s truly worth bringing people back. I suspect a lot of companies might rather spend this money where it would generate more positive returns.
The WFH scenarios are definitely interesting. I work as an engineer and some companies in the industry are pursuing it full time and some are partial. With those that are reducing office space, you would expect reduced overhead rates and lower multipliers….eventually lower hourly professional rates. Haven’t seen them yet but it should create some crazy imbalance in the industry based on company decisions with the WFH scenarios. Yet, I keep hearing about countless companies that made ridiculous profits in 2020. It will be interesting to see how this all plays out.
It’s sad to think that people will one day hear the term “TPS Report” and not understand its cultural importance ;)
This may seem odd to you, but what’s a TPS report? (Mechanical Engineer/MBA who ran his own business here…)
Watch the movie “Office Space” – from about 2000. Running your own business means you may not appreciate it as much as we former drones, but it has some hilarious moments.
Thanks, Clete….I should watch that movie as I need a good laugh these days.
Somebody’s going to have to train a new generation of plumbers, electricians, framers, trim guys, etc. Who’s that going to be? Many competent tradesmen I’ve worked with couldn’t teach a fish to swim, it’s a different set of skills.
As unlikely as it may seem, the medieval notion of paying for one’s apprenticeship should come back soon. As an electrical apprentice in Bavaria in 1978, I contractually accepted less pay than a helper for three years knowing that as a journeyman I’d make it back and more, union apprenticeships work the same way plus the local gets a cut of everything. The IBEW 613(Atlanta)apprentices were very competent and well trained when I went up there, but the IBEW can’t scale to the total amount of training all the new electricians are gonna need.same with other trades. And I sure as hell wouldn’t trust the IO with all those dues and assessments, they’re bad greedy now. A young person wanting to do something along these lines for a living has to get lucky and find a good mentor. Trade school training is only as good as the individual instructor, and can’t cover a lot regardless. Even a tough one like the Germans sent me to, still saw ten weeks on the job site for every two in school. Most future construction will be modular, stick-built has become prohibitive in materials costs and labor is right behind it. And not a bad thing either.
The question will be for companies allowing work anywhere… what’s the new practical threshold for physical nexus in a state (ignoring other countries for now)? If my company is in Florida and all of a sudden five of my employees move to hills of North Carolina. Am I now subject to NC sales/use, income, unemployment, etc. taxes? Do I have to register as a foreign entity? Currently, I the answer is probably yes. That’s some serious exposure for small and maybe even mid-size businesses. You can get away with one or two, but the internet sales tax debacle is showing states will hunt you down if they think they can collect a tax.
@Larry: Right now (I am NOT a CPA or attorney), the employees are liable for their own state income taxes, but with the company HQ in Florida, you should only have to pay unemployment taxes based on your locale. And if your employees are smart, they’ll maintain Florida residency (a friend’s address?) and be taxed at the low, low rate of zero.
Advocating a little law breaking are we?
Not so much advocating as observing.
Reasonable comment.
I just hate tax evaders.
Think long term. Globalization. If everyone is saying most jobs can be done anywhere, this pushes need for education everywhere to be able to do the jobs, which then pushes companies to form in every country to compete with US companies. This should push the demand for education up, then the demand for workers up. At first there is more supply of workers than demand, so wages fall. But long long term, the push to create innovative companies would soak up all the educated labor. Globalization is great for everyone long long term, only considering wages. Now it should lead to eventual robots doing everything so no one has to work, so long as the robotics are taxed at 99% and we are all paid with that tax
JW
Sweet God of the Universe !!!!
What total and complete drivel !!!!
Or are you the reincarnation of Dr Pangloss ?
I can be optimistic.
Abd you can’t prove something can’t exist.
Call it drivel if you want. That is only a guess on your part. And since your statement came with zero refutations, it is even more drivel than mine. At least I add a possible outcome. Your comment adds nothing.
But I wish I knew what you really thought about where we will be in 100 years in terms of global labor, taxation and robotics.
Here is why what you wrote is drivel….also propaganda….
Globalization…..ALL upside…NO downside……All is for the best in the best of all possible worlds.
What rubbish.
You aren’t optimistic….you are delusional.
See Pangloss in Candide.
“Globalization is great for everyone…..”. Snort !!!
Study the history of what globalization has really wrought. The damage has been immense.
Think about this: How is a robot going to be a politician (liar), and banker (sleezeball)!
And who is going to play football?
(the above a all jobs)
I could go on and on…..but.
My comment was more narrowly focused on wages and work. And you have to generalize if you are going to make a blog comment in three sentences. If I wrote an essay, I would obviously make a few finer points.
Good grief. So hard to talk about content as everyone always wants to meta-talk about how you talk.
Anthony, I was referring to the jobs mentioned in this article, where people are able to WFH.
Talk about a total load of BS. In case you are not aware of this fact, the vast majority of countries have higher education at a fraction of what it costs in the US and multitudes of graduates. In many countries, it takes a bachelors degree to get a sales job in a department store.
The extravagant cost of education in America has resulted in a population which is undereducated and over paid.
Globalization will tap into that wealth of education in other countries displacing millions more Americans.
What has already happened to manufacturing workers, is now happening to any worker who can do their job via a computer.
And if you have any delusions the people who are making the profits off globalization are going to share that with you than you must still believe in the Easter bunny….
It is only a hop, skip, and jump from working at home to being replaced by someone out of country who works for a hell of a lot less than you.
I predict a lot of people who think they have the best of both worlds, receiving a big city paycheck while moving to Mayberry RFD, will at some point in the not too distant future find themselves laid off and living somewhere they cannot find a decent paying job….
Jdog is stealing my thunder.
Keep your ‘skills’ updated, acquire more skills or a hybrid type, when & where you don’t become EXPENDABLE! Keep scanning ahead for trends and demands!
Change is constant. Accept it and be prepared!
Spoken like a misguided teen…..
It’s looking likely that US remote workers are the beta test group for what will become foreign remote workers. Zoom Pink-slips anyone.
Will those newly unemployed who moved to Boise be able to hold onto that vacant Bay Area home? Will an Asian currency crisis spark a mega bubble in SF before then or will Blackrock take those homes off their hands at bargain prices?
UK is implementing AI monitoring system on computers. If person not at desk, “doing” accountable activities, the AI system flags non-compliance of employee “while-at-home”. Here in the US, domestic workers are required to download a monitoring app to their “personal” phone for monitoring on work site. The boundaries of “surveillance” may put a crunch to the fantasy of the idyllic freedom scenario of working-at-home, and employee rights if any, in general. At this point, I say there are none whatsoever based on Amazon’s abilities and others for surveillance. Any new privacy teaser that APPLE is presenting are totally denied by the Website disclaimers that any user has to agree to to even use any site. Most of the website disclaimers INCLUDE data escape clauses to transfer and really “sell” data to any of their umbrella operational affiliates.
I’m not as pessimistic about WFH enabling wholesale offshoring as many of the comments here. I work as a computer programmer, and my industry has been constantly trying to offshore my work for the last thirty years. The allure of programmers that can be paid 1/5th the money, even if they take twice as long to do the work is irresistible.
In spite of the seemingly lower costs, the track record of the offshore projects have ranged from abject failure to merely massive cost and schedule overruns. I’ve watched at least two companies put themselves out of business by betting heavily on offshore development. It doesn’t seem to matter if it’s India, Eastern Europe or China – they ALL struggle to do this work. The Eastern Europeans tend to do the best, but they also have the highest costs.
There’s also a great deal of value to being where you can show up in the office on a few hour’s notice, and also where FedEx can put a package into your hands by 10:30am the next morning.
The biggest factor that makes offshoring problematic is cultural. It’s not just the ability to speak English, but a real understanding of the American business culture and expectations. Each one of the major sources for offshore talent falls down in different ways.
India’s education system is heavily based on rote learning and doing well on tests. It spoon-feeds information, and utterly fails to teach the students how to learn on their own. In an industry where change is constant and rapid, and the problems tend to be poorly defined, the average Indian programmer struggles to deliver results.
China has many of the same problems as India with education, aggravated by a cultural bias against making mistakes. All software has flaws, and the Chinese culture punishes mistakes mercilessly. The major way this is avoided is by making sure that the mistakes cannot be attributed to a single person, which eliminates any accountability or incentive to do it right.
Eastern Europe struggles with many of the people there being raised under some flavor of Communism. The old joke about Communism was that they pretend to pay us, so we pretend to work. It also removed any incentive to focus on quality of work. That is slowly changing as newer generations grow up in a less abusive system, offset by steady increases in costs/salaries in the region.
I predict that there will be a fresh wave of offshoring in the new WFH/WFanywhere world, but the tasks that actually require skills and knowledge to perform will come back (again.) The best-paying jobs will come back….the crap jobs have already left and aren’t coming back.
Perceptive comment about China. I’ve been saying this to people since the early 80’s when I worked in Hong Kong but …..
It’s almost as if they don’t care if something goes wrong provided they don’t get the blame for it.