It is funny to see how a virus changed the perception about Work-From-Home, even at those fancy Silicon Valley companies which, until recently, were praising open space offices. While WFH will certainly remain more common after the pandemic, it would be a mistake to assume that it will be an opportunity for companies to reduce costs.
A study from Global Workplace Analytics showed that a typical employer can save up to $11 000 per employee working remotely six months a year. Among the most obvious savings are the reduction in office space and supplies, and a cut in travel and entertainment spending. Some companies even came up with innovative compensation policies, to take advantage of employees working remotely from a location with a lower cost of living. These savings are expected to largely offset the cost of setting up the IT infrastructure, or investing in collaborative software. This led many large tech companies, such as Twitter, Facebook, Zillow and Square, to make WFH a permanent, unlimited option available to most employees.
We would be surprised, though, if these radical decisions were to remain forever. Remote working admittedly offers a well-appreciated flexibility to employees, but its indirect costs might be much greater than the savings. Security is the first issue as cyberattacks are surging and, even if companies invest in the right protections, they will have less control on how their recommendations are applied. Data confidentiality policies will also be more difficult to enforce when employees work from home rather than from a restricted office area. In certain countries, domestic accidents or employee burnout might lead to lengthy lawsuits about whether they should be requalified as work accidents. Legal costs are thus likely to rise dramatically at the expense of companies. Lastly, we believe that productivity will eventually suffer. While WFH employees probably work longer hours since they don’t waste time in commutes, their focus is not of the same quality if they are interrupted by kids, or just lack the emulation of seeing their colleagues’ commitment. Most importantly, companies may lose out from experience sharing and brainstorming benefits, while slowly letting their identity fade away.
Work from home definitely has advantages but should not be viewed as a full time solution nor a major source of costs savings. We would not be surprised if early adopters eventually moved back to good old offices after some time.
ALF – February 12, 2021