I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don’t want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don’t mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven’t seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there’s no conclusive evidence that this is the case. But I haven’t seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees (“we’ve seen KPI so-and-so drop with everyone working from home” or “project X was severely delayed by lack of in-person coordination” wouldn’t make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like “we value the power of working together”. Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like “these companies made a big investment in offices and now they don’t want to look stupid by leaving them empty”. But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can’t believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
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They took the risks, in hopes of higher rewards. They want the rewards without the risk.
A comment I’ve seen a few times is that remote work highlights the minimal value that middle-managers provide to companies.
If you’re employees work from home with little interaction with their managers and they do it well/better, then why have those managers? Like you said, companies want to be cost effective. So the push back to the office could be coming from managers who don’t want a light shined on their lack of value.
Middle management has gotten absolutely out of control in America
Imo (and this is largely conjecture) it’s an end result of stagnant wages. It used to be that you might stay in the same position but get actual pay increases 50 years ago. Now you don’t get the pay increases really, maybe a 3% annual bump if you’re lucky. They need something to retain talent so a lot of places end up creating bullshit management positions out of thin air to retain staff that come with a slightly more modest pay bump.
So instead of the 3% bump you get a 5% bump and now you’re “director of clinical programming” or “associate manager of marketing and sales for eastern iowa division” and have 10 employees “report” to you but in reality you’re neutered and have no actual power to do anything to them but tattle to the actual boss. But then the company doesn’t have to give you a 7-10% bump that outpaces inflation and feels like an actual raise. They save the real promotions for nepotism.
But this happens constantly and now industries are jam packed with employees that just bother other employees all day and/or create systems that slow down employees en masse to “increase accountability” that are constantly updated and replaced without removing old ones.
Whenever someone goes on about fixing healthcare this comes to mind. I’ve worked in healthcare for years and it is absolutely full of this. Pharma, insurance, hospital admin, all of them are loaded up with tons of these kinds of staff. I can’t tell you how many useless staff I’ve seen get promoted to positions that were literally created for them to supervise a handful of people. I can’t tell you how many times I’ve had to fill out 7 sets of paperwork that takes 2 hours and is all redundant copies of each other because 9 middle managers from the hospital, insurance, and state administration are all constantly convinced I’m a fraudulent liar despite being a licensed professional with a decade and a half of clinical experience and absolutely no investigations or citations on my record whatsoever.
Single payer healthcare is definitely a great idea that should be pursued but this is a huge problem that also needs to be addressed regardless of who’s paying the bill if you want to see changes with actual costs, wait times, clinician burn out, etc.
I’d imagine it’s similar for other industries too. How much wasted resources are in middle management at tech companies, at food production, at basically anything? How much of rising costs are basically going to pay the glut of middle managers that being nothing to the table but resource drain? Who do nothing in terms of bringing in money, who do nothing in terms of providing value? How much cheaper could my cellphone, bread, wood, etc be without these parasites sucking up resources
But then the societal impact comes up. If you addressed this problem tonight that would mean millions of people go from comfortably middle class to jobless overnight. America isn’t known for great social supports as is, what happens when you throw a 7-8 figure number into the mix (with the reduced tax income from the loss of their job income).
Fwiw I genuinely think that point is a huge factor in why our government resists proper single payer healthcare; a true program would displace millions of workers overnight as it would make companies like Aetna, Cigna, etc largely redundant and reliant on their much less lucrative life/home/auto/renters insurance divisions. They would slash workers left and right. If we ever get one it will be a two lane system where the private insurers stay alongside it as a “boutique” option for the rich to receive better service, guaranteed. Plus you know, those companies literally own politicians lol and that’s the other much larger problem
Here’s the fun part:
When execs were hyper focused on outsourcing, not once did they say productivity was a problem
Second local workers wanted to do the same though, suddenly if you’re not in the office you’re useless.
Which is it? Outsourcing is trash or WFH is just fine?
To verify you’re spending every minute on actually working
As an anecdote, I work at a midsized software company as a product manager. I have an international team of about 20 that I manage from home (full-time remote). Overall there is some loss of speed and agility versus having a full-time in-office staff. I’m not a fan of trying to quantify productivity per se, but for things like estimations and deviations there’s no question that in my environment at least, things move a little slower and take a little longer. Now personally, the fact that we can hire engineers anywhere across the globe (including in LCOL areas), don’t have to pay rent and related fees, and that some of the best engineers specifically want full-time remote more than outweighs the reduced agility (putting aside all of the other potential QOL benefits) – and if needed, some of the savings from reduced rent and salaries could be used to expand the team anyway. Thankfully my management team agrees and has continued to pursue a remote/hybrid environment. But for those places that value speed and agility most it could be a bit of a problem.
I’ve been helping a Chinese company and it includes getting on the phone at 9am to talk to them right as they’re leaving the office. For an international team there can be time zone issues like that, but if you can find overlap between Europe and China then you can find overlap between anywhere
My work place doubled down on work from home and they allow work from anywhere. They still encourage to gather at the workplace sometimes for socialization and general good vibes.
A lot of large companies and executives have investments in real estate. If everyone stopped using offices all of a sudden, they would lost a bunch of money because the space wouldn’t be in demand anymore.
Control.
There are a few reasons.
- The people who own the buildings are going bankrupt and so to help out their rich friends CEOs are trying to force people into using office buildings.
- Companies don’t want to let go of their power over an employee.
- They don’t trust their employees.
- They can’t watch their employees.
A couple of extra ones to add to the list:
“Work you don’t see didn’t happen”
I think a lot of it is down to the assumption that employees are working less because less work is seen.
“A tired employee is a loyal employee”
That one might sound dystopian, but it’s also true. Commutes make people feel worse, and contribute to burned out feelings by reducing recuperation time. People in that kind of space are unable to look for new opportunities as easily.
I suspect they were ‘advised’ by the Banks and perhaps the government, to put the brakes on.
Every Corporation would be delighted to dump expensive city real estate, and “externalise facilities costs” to the workforce. ( which is what working from home is, from a balance sheet point of view). It’s what they teach at business school.
However, it would only take a handful of big players to to do this in succession to collapse the real estate market in most cities.
The knock on effect would likely include some large defaults by landlords and developers and who knows where that ends.
A secondary effect is house prices. certainly in London, where people pay a 2-5x premium to live within an hour of they high paying job.
If people no longer need to live near the office, why would they spend so much on crappy housing ? It would likely trigger an exodus away from the capital, collapsing the housing market.
In the UK if the housing market collapses, the economy follows it down the tube in massive way.
Hence the half hearted ‘push’ to get people back in the office .
The people in the boards of directors, the major investors, people who run large investment funds etc. are the same or very close to the owners of commercial real estate.
They don’t want to fuck themselves.
Also many times corporate rent is used as money laundering, to hide profits etc. Like the building is owned by company A, which is incorporated in the Virgin Islands, but is actually owned by the same group that owns company B that rents the building. So they pay money to themselves. So company B is not profitable and doesn’t have to pay taxes. Presto pronto.
Just a very obvious manoeuvre, there are certainly many more.
Managers find it easier to micromanage their employees when they are at the office.
Found out today that some executives are afraid of leaks and digital records of certain conversations that could happen in person instead.
That makes a lot of sense. But I wish “So we can cover up our bullshit easier.” wasn’t a reason for it.
That could be a consideration, yes. Funny enough, our whole Legal team has been consistently the one with the LEAST attendance in person in the office… Overall it seems like forcing your call center employees in office because you’re afraid they’ll leak strategic company secrets is a bit of an over-reaction. I doubt that the most high-level, secret discussions on mergers and acquisitions or mass layoffs have ever happened in our office to begin with.
It’s easy, a lot of companies have board members who are also board members in office space companies.
