If your company introduces a Work from Home (WFH) policy, do not just blindly rejoice. I just finished reading a paper by a big U.S. bank economist who is advising its customers that (1) WFH will help them expand their talent pool (2) Reduce wage growth for their workers over time (3) Solidify an employer-market, arbitraging best talent and lower cost.
As companies like Twitter, Facebook, Amazon, Microsoft, and Zillow embrace this redesign, do not think it is because they want you to have extra sleep by keeping you at home over jumping into early morning traffic. This is the fact: Covid-19 has forced a huge global experiment, pushing companies around the world to pilot something many would not have done. And the results came out largely just fine.
Both of Jack Dorsey’s companies will now allow employees to work from home permanently.
San Francisco-based Square said Monday it would let people work remotely, even after regional shelter-in-place orders end. The news came a week after Twitter, also run by Dorsey, announced its employees would have the same option.
“We want employees to be able to work where they feel most creative and productive,” a Square spokesperson told CNBC. “Over the past several weeks, we’ve learned a lot about what it takes for people to effectively
“We can get talent anywhere. There’s a lot of folks out there that do not want to move to San Francisco. They feel comfortable working in a much smaller office or just home.” CEO of Twitter, Jack Dorsey
ICT created value for companies through improved productivity. The internet has done the same. But there is a key difference: the web does create value but it is also great on destroying and shifting value. If you make a phone call with Whatsapp from Lagos to New York and spend one hour, you may be spending about $1 via equivalent broadband cost.
But if you have called direct via MTN, a telecom company, you may be off by $40. Yet, the $39 you have saved is not going to Whatsapp which remains free. So, for companies the value has been destroyed, not transferred between. This trajectory cuts across industries making it possible that you can innovate, and yet not earn any income from it; you just end up destroying value for everyone!
The WFH is a new technology app: it would destroy value for some workers (others will benefit) and help employers save while improving overall efficiency through a more talented workforce! It is basic economics, whenever supply increases, other things being equal, price drops. If WFH increases talent for companies, expect wages to drop for workers in some expensive regions of the world! If you live in those regions, you must ensure you can bring more value to avoid displacement. And understand where you stand in this dislocation.