COVID-19's Impact on The future of work

Motivation

COVID-19 is the biggest natural experiment on remote work. What used to be a minority choice was catapulted into the majority. Just as many previously reluctant employees have now embraced the freedom of WFH, employers have discovered the delicious cost savings too.

Once you open the Pandora’s Box, it is irreversible. Once we are all free of COVID, nostalgia for human interaction might drive people back into the cubicle — but I doubt it will last. Who is gonna tell Google to roll back their 1B savings?

Therefore, I am curious about the long-term impact of COVID on the future of work, especially the following aspects:

  • Is WFH an irreversible trend?
  • What will be the impact on home prices?
  • What will be the impact on metropolises, such as NYC, San Francisco and LA?
  • What will be the impact on the modern workplace?
  • Will our benefits be the same, or now we are fully responsible for our own office setup (and its utilities, printers, office lunches, etc)?
    • If people are expected to be self-reliant re: office setup, will we see a Matthew effect?
  • What will be the future of work? How do I adapt?

These long-term questions cannot be answered over night. I will follow events as they unfold.

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1950s:

In 1956 the number of white-collar workers in the US overtook the number of blue-collar workers for the first time. Not everyone was delighted. The same year, the journalist William Whyte published The Organization Man, a diatribe about Americans’ willingness to conform, particularly to office life. He complained that workers were satisfied with “a good job with adequate pay and proper pension and a nice house”; he urged them to rebel by cheating on office personality tests. Whyte’s book meshed with left-wingers’ despair about white-collar workers, who refused to unionise and often accepted sub-factory wages.

Office life was so potentially all-consuming that management writer Peter Drucker urged workers to develop a “serious outside interest”. (He himself chose oriental art.)

The birth of modern tech campuses:

Attempts to humanise the office had begun. From the 1950s Quickborner, a firm of German designers, had tried to turn networks of private offices into free-flowing landscapes. This kick-started a decades-long battle between privacy and openness.

In 1974 Norman and Wendy Foster designed the Willis building in Ipswich, where workers could see each other on different floors, and where there was a shared swimming pool and roof garden. Hierarchies were crumbling. Today few executives sit on a separate floor.

Right before COVID, we had this:

When was the high point of the office era? It depended too much on who you were and where you worked. Maybe the best is still to come — in the office era’s afterlife. Silicon Valley has pioneered campuses that conspire to keep young employees from leaving. While others try to make home more like the office, the Valley has made the office more like home — dress down, bring your dog. In central London alone, over 15m square feet of office space is under construction, according to Deloitte Real Estate.

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Thanks for starting this conversation. I also have another question I’ve been thinking (worrying?) about lately:

If remote work became common and convenient. Would corporations still hire knowledge workers from their own countries?

For the corporations based in wealthy countries where educated professionals get paid extremely well, it would only make economical sense to outsource as much knowledge work as possible, just like how corporates, driven by low labor cost, outsourced pretty much all manufacturing.

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This is a time bomb. Hence the implied sense of urgency in this question: How do I adapt?

A quick brainstorm. In what situations do you have to hire knowledge workers locally?

  • National security interest.
  • Core trade secret / R&D work.
  • Creative/IP Work: You can hire a seamstress from India but it is hard to replace Karl Lagerfeld (Chanel creative director),
  • Existing social network: a third-world transplant wouldn’t have it. VC, for example, is a strongly relationship-based business.
  • Deep domain knowledge

All above favor people with existing SES advantages. I suspect: The easier it is for a person to “be plugged into” a job regardless of context, the more replaceable he or she is. Compare a new college grad journalist (who write about anything) vs a veteran journalist specializing in public health…

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Some initial thoughts:

For some professionals, certainly.

I have a friend who is a Psychologist who permanently shut down her office because she and her patients absolutely loved remote counseling. Patients don’t need to drive anymore, and she doesn’t need to pay for the rent of her office. Everybody wins.

She also mentioned she almost never accepts anger management patients because these people can act threatening. I suppose with remote counseling the mental health professionals would feel safer and be able to help more people with anger issues.

For myself though, I can’t deal with the loneliness WFH, plus (thanks to how much we work), the workplace is almost like an effective resort to meeting new like-minded people and socialize. So I’m definitely going to go back to the office.

Really hard to say at this point, it depends on how many percent of white-collar workers can and want to do remote work.

If employers act like jerks and don’t reimburse their remote workers’ equipment.

Well, they are almost incentivized to act like jerks by the labor market, aren’t they? Think how contract workers have to pay for their own health insurance, and Uber drivers have to maintain their own vehicles.

People will feel pressured into competing with other workers by being “self-reliant”, and “invest” in their own office equipment.

Damn although I agree with you, it gives me anxiety. When I think of the big techs I and people I know have worked for, the one which has the strongest Culture of Documentation seems to be outsourcing most of its knowledge work (from operations to software engineers).

Also changed title from “The future of work” to “COVID-19’s Impact on The Future of work”, let’s strive to keep the discussions consolidated and specific.

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That also means greater competition for your psychologist friend. :slight_smile:

  • Existing clients aren’t more likely to switch (because it is expensive to do so, your psychologist knows your history and you two have a relationship), but new clients are not going to be bound by geography. If I know there is a good psychologist across the state, I am not going to let it stop me.
  • If I am a new psychologist just starting out, how am I going to compete with the ones with 10+ YOE under their belt? Am I gonna just compete on price?

But will you continue going into office when most of your coworkers are gone?

Consider the network effect here: The more people drop out, the fewer reasons for existing people to stay. The more people drop out, the fewer reasons big corporations have to maintain a proper office (and its benefits). One day you might just wake up and feel like, “Crap, there is no point in me going there anymore”.

Again, there will be post-COVID rebound in the very short term. But I imagine the above-mentioned “spiral” will happen in the long-term.

People will feel pressured into competing with other workers by being “self-reliant”, and “invest” in their own office equipment.

The future of work is B.Y.O.E. Bring your own equipments!

I firmly believe some industries are already BYOE…Maybe they can tell us something. Can’t think fo a concrete example now. Someone help me?

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Podcast on the way to work. People with Silicon Valley money are coming to invade Boise, Idaho!

If you are gonna WFH, you will want a big home. Would you rather pay for a big house in Boise or Palo Alto?

Here are some quick stats from Redfin:

Redfin doesn’t have the exact same stats for SF, but I was surprised to see Boise has a higher competitive core than SF. 87 vs 74.

I feel this is a two-way street though, wouldn’t (maybe not psychologists, but therapists) have to compete for clients?

Although, there was already a shortage of mental health professionals in the US before COVID, and COVID just made it worse. So probably not something they need to worry about for a very long time.

I think people who still want to go to the office would either be super extroverts or workholics. Depends on their ratio I guess, I can accept a 50% workaholic office? Maybe? Any higher than that I wouldn’t want to go.

Would be sad.

Ride sharing, mainly.

Boise is such a white little hippie town. Restaurants are expensive and mediocre. I don’t know what’s the hype about :confused:

I guess nature around it is alright.

I myself would rather live somewhere with a lot of immigrants.

Good call on the distinction between psychologists (a higher entry barrier) and therapists. Here I will use therapists as an umbrella term for all mental health professionals, who do conversation-based therapy.

  • Customer POV: Great geographic flexibility if you are starting to see a therapist. More supplies.
  • Therapists POV: Greater geographic flexibility when accepting clients. Demand magnified by COVID. Greater demand.

We might see a boom in this industry that lasts way beyond COVID.

One edge case: Uber Fleet

Let’s say you own a few cars. You can rent those cars to Uber drivers. You can charge them a daily or weekly rental fee and allow them to drive in your vehicle, as opposed to their own.

On the other hand, if you’re a driver that doesn’t own a car, Uber Fleet is a great way to gain access to a vehicle. You can rent an inexpensive car that qualifies you to drive for UberX, a black car that qualifies you to drive for Uber Black.

We’ve even seen drivers who own basic UberX cars join a fleet just to be able to drive for Uber Black or Uber Black SUV. (Driving for those higher service levels means you’ll earn more money per ride).

The ultimate BYOE though, I think would be Airbnb. AFAIK, the only assistance Airbnb provides to hosts is insurance and a (very shitty) customer service.

What worries me though, is this: Our relationship to our employer will gradually look like the relationship between Airbnb host and Airbnb. Apart from a few core personnel, more and more people are going to become “contractors” who BYOE. A slow, step-by-step decoupling process that starts innocuously: WFH! Decoupling us from our offices!

This is super long-term of course, but I like long-term thinking/speculation. :slight_smile:


Also, next time you take Uber/Lyft, please ask the drivers if Uber/Lyft provided COVID shield for them or they had to pay out of pocket. My data points: Lyft would selectively do so.

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Yes, and it would make the employer-based medical insurance system of US even more ridiculous.

A couple of stats that answer this question of yours.

Plenty of people seem to not enjoy the expensive and dense metropolis and moved to more affordable midsized cities and suburbs during COVID.

I expect more people would do so if they are not bounded by work and finance.

:face_with_raised_eyebrow:

Related to surveillance technology, but strictly in the context of WFH.

This is just one example of what has become an onslaught of intrusive workplace surveillance practices in the United States. Companies have the legal ability to use keylogger software on business computers, deploy video surveillance cameras, monitor worker attentiveness, track physical movements through geolocation software, compile lists of visited websites and applications, monitor emails, social media posts, and collaboration tools, and compile productivity data on how workers are spending their time and how long it takes them to finish particular tasks.

With more people working remotely at home due to the COVID-19 pandemic, the boundary between business and personal activities has blurred because people are spending considerable time on company equipment and business video calls, including in the evenings and on weekends. As I discuss below, these developments raise important concerns for company workers and highlight the need for stronger protections of employees at the state and national levels.

Didn’t I just mention I saw a coworker browsing risque music videos in office…

I’d expect they have always been doing these things. Deploying video surveillance cameras is just too far, I would always cover my work laptop’s camera when I’m are not in a video meeting.

https://www.mckinsey.com/business-functions/organization/our-insights/help-your-employees-find-purpose-or-watch-them-leave

Nearly two-thirds of US-based employees we surveyed said that COVID-19 has caused them to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic. Millennials were three times more likely than others to say that they were reevaluating work.

Yet when we asked if people are living their purpose in their day-to-day work, the gap between executives and others mushroomed. Whereas 85 percent of execs and upper management said that they are living their purpose at work, only 15 percent of frontline managers and frontline employees agreed. Worse, nearly half of these employees disagreed , compared with just a smattering of executives and upper management (Exhibit 2).

Ooof :see_no_evil:

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https://www.economist.com/finance-and-economics/2021/05/06/a-new-age-of-suburbanisation-could-be-dawning

In the past two decades, shifts in demand have given rise to a new equilibrium. Rising incomes in knowledge-economy industries attracted workers to a few highly productive places (like New York and the Bay Area), and increases in congestion and commuting costs encouraged many to live near work. Housing costs in high-wage cities rocketed, propelled by restrictive zoning policies that prevented housebuilding from keeping up with demand. Highly paid elites were concentrated in pockets of wealth, while many other Americans settled in places offering jobs of middling productivity and pay, but where housing was more affordable.

Though it is early days yet, covid-19 may have disrupted this pattern… People with high-productivity jobs could work remotely from anywhere, potentially severing the link between a local economy’s productivity and the demand to live there, and thus enabling a large-scale migration from high-cost cities to low-cost ones. And remote work could allow workers to spend more time at home while still occasionally commuting into the office. In that case, remote work would reduce the cost of a given commute and might thus lead metropolitan areas to become more sprawling.

In fact, both appear to be occurring. In 2020 price gradients flattened between metropolitan areas, as house prices in low-cost cities rose faster than those in high-cost cities, and also within them, as prices in low-cost suburban counties rose faster than those in high-cost urban ones. Another recent paper, by Arpit Gupta and Jonas Peeters of New York University and Vrinda Mittal and Stijn Van Nieuwerburgh of Columbia University, arrives at a similar conclusion. In the year to December 2020 and across America’s 30 largest metropolitan areas, house prices rose faster the farther one moved from urban hubs. Prices of properties 50km from a city centre grew by 5.7% more than those in centres.

Now this is what I call a visionary:

The geographically disruptive potential of information technology has long been apparent. In a book published in 1997 Frances Cairncross, formerly of this newspaper, imagined that it might yield a “death of distance”. It may have taken the public-health imperative to stay away from others to help realise it at last.

Glad to know The Economist has this series: https://www.economist.com/open-future

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