American billionaire investor and PayPal founder Peter Thiel famously claimed that the next billion-dollar breakthrough wouldn’t happen in Silicon Valley, but somewhere else. He imagined that we might see a breakthrough in robotics in Boston or an AI revolution in China in response to what he perceived as stagnation in San Francisco.
But what transpired in reality was a sort of hybrid. Silicon Valley continued to provide the epicenter for the brains, but people began to spread out from this central hub all over the U.S. and the wider world in places like London, Singapore, and Shenzhen.
Why are we talking about this? Because it represents something interesting happening. It is becoming much easier for businesses and their staff to work remotely.
The technology to facilitate full-fledged remote work arrived a couple of years after Thiel made his famous comments, and a couple of years before the arrival of the pandemic. Bosses in the corporate world weren’t quite ready to send everyone home the moment it arrived, but the outbreak of COVID-19 forced their collective hands. Suddenly, you couldn’t operate in a downtown office because it was against the law.
Now, though, the situation remains similar. Office work bounced back a little, but it’s clear we are nowhere near the situation that prevailed in 2019. Most desks remain empty for most of the week.
The purpose of this post is to take a look at some of the more nuanced reasons why remote work is getting easier for businesses. And why the media story of a battle between traditional “boomer” bosses and the working population misses out on much of the story.
If the pandemic had arrived in 2000, the economic story would have been different. The internet existed, but it was slow. Most households didn’t have it, and the cloud wasn’t even in the conversation. Nobody even envisioned it.
Fast forward to 2020 and all the digital technologies were in place to support the shift to home-working. In fact, the secular trend away from the office was already underway, just at a dramatically slower pace.
The specific technology that really counted was the ability to hold video conversations with dozens of colleagues over Zoom. The face-to-face interactions helped to maintain organizational cohesion and keep everyone on the same page, despite the utter lack of in-person interactions. Teams could converse with each other in a virtual version of the canonical “conversation by the water cooler.”
Other technologies helped, too. The ability to run a virtual desktop remotely meant that company IT teams could essentially replicate their in-house networks on employees’ consumer devices, which, of course, they all had.
And, finally, managed service providers went into overdrive to set all this up. Most firms were back to the operational norm in under a month after governments announced their various shutdowns, lockdowns, and shelter in place orders.
Naturally, all these technologies continue to the present day. And because of the bigger market for them, they continue to improve considerably.
Global Talent Access
However, improving technology is only one part of the story. While banks with expensive office leases would love to see employees coming back to the office, they are also benefiting from being able to access a massive global talent pool of individuals.
This new non-local labor market is changing the rules of the game. Industries located in, say, Detroit, can hire people from Romania and Germany, as long as they have an internet connection. This factor means that the need to shift around the country isn’t as high as it was in the past, offering hope to some of the communities left behind by the changing economy. There’s more potential today for a revival in many of these areas than before, precisely because of this remote work trend and the ability of the most talented individuals to live wherever they want.
Flexible Working Policies
Remote work also gives employees what they want most – the ability to live flexibly. While the boomers put up with long commutes and rigid office hours, the freedom-loving younger generations aren’t so keen on these traditional practices. These workers want to feel more in control of their lives.
While flexible working policies are sometimes costly, firms are waking up to the benefits. Companies that offer them are less likely to experience a brain-drain or quiet quitting than their rivals, boosting their productivity and helping them hang onto their most productive people.
Higher Productivity And Well-being
There’s also considerable evidence that home-working leads to higher well-being and productivity, especially when combined with stints in the office. People can get more done when they are beavering away at a computer in a silent home office compared to a noisy corporate environment. When the kids are at school, nobody is barging into their office asking for the latest financial report or Excel table. It’s easier to get into the zone and just get things done.
There’s also the well-being aspect. When people are in a familiar environment they control, they tend to feel better. Lunchtime isn’t a mad rush to grab a Pret a Manger sandwich. Instead, they can take time to prepare something nourishing. And while corporate bosses might not like it, workers can also take power naps during the day to energize them and keep them productive for longer.
There’s even evidence that those working from home are willing to work for longer than in the office, which again is a boon for companies. Workers might start at 9 and finish at 5 in the traditional office environment, but it’s easier to go from 8 am to 6 pm when at home because it is harder to switch off. There are no “baked in” finishing times.
Ultimately, it is becoming more straightforward for businesses to work from home. It also seems to pay more. Employees aren’t complaining about it either, which means it is almost certainly here to stay for the foreseeable future. And for many, that’s a good thing we should be celebrating.