WFH Will Become WTF for Most Tech Companies
Photo by Cristian Tarzi on Unsplash
This post originally appeared on LinkedIn.
When the pandemic started over two years ago, technology companies were some of the earliest businesses to transition to remote work. Thanks to a confluence of factors, including flexible job requirements, political persuasion, geographic location, commute distances, and progressive HR policies, tech companies were able to shift to work-from-home mode with relatively little disruption—particularly software companies which do most of their work through a keyboard anyway and often already had distributed teams (like my company at the time which had a development team in Colombia).
Now that the pandemic is gradually receding, those same technology companies are also among the slowest to return to the office. While some have been emphatic about remaining fully remote and others are in a “battle” to get employees back in the office, about two-thirds of Bay Area tech companies are attempting hybrid models, expecting workers to come to the office at least a few days each week.
My take is that tech companies who remain predominantly WFH, will soon be asking themselves WTF were we thinking?
Granted, I’m not currently running a tech company, so it’s easy for me to second guess. But I’ve been in Silicon Valley long enough (including two stints at HR software companies) to predict that many of the tech companies currently boasting about their flexible WFH models will regret not getting employees back to the office. For some, it will threaten their survival. And I believe WFH is detrimental for most employees as well.
The most candid argument put forth by many HR leaders and CEOs about perpetual WFH or hybrid policies is they don't have any choice—that attracting and retaining talent will be impossible if they force people to work from the office. It is true, as anyone who has tried to hire in the Bay Area tech economy over the last 30 years can attest, that workers have long been in control. Generous WFH policies are just the latest mechanism for companies to compete for talent. But for most tech companies, that competition won't end well. And it could hurt the tech industry at-large.
Here are just a few of the negative outcomes of WFH already visible:
Salaries will skyrocket—For many big tech companies, their office perks were some of their biggest differentiators. But, if you're not in the office, you don't place any value on free meals, massages, and dry cleaning. (Child care, one of the most-cited benefits of WFH is often, surprisingly, not a perk). Consequently, the only decision criteria left is compensation. So, as we are seeing in many markets where demand far outstrips supply, the price is rising rapidly, making it even more difficult for start-ups to compete for top talent. Companies that think they can reduce employee salaries based on regional cost of living are delusional. Earning a Bay Area salary while living in Montana is precisely the improvement in income-to-expense ratio that workers are looking for. While higher salaries may seem great for an individual employee, the industry-wide effect will be to further concentrate power among the biggest tech companies who can afford it.
Employees will become mercenaries—One of the most rewarding aspects of working at a tech company is the camaraderie. Co-workers who go through the daily shared struggle of work form deep social bonds that make them loyal to the company and each other. Under WFH conditions, many of those social connections are diluted, eliminating the emotional switching costs of changing jobs. If personal relationships aren’t a factor and changing jobs is just a matter of logging in to a new Git repository, employees will adopt an even more mercenary mindset about work. The result is less fulfillment for employees and higher turnover for companies.
Savings on facilities won’t materialize—Some employers make the case for ongoing WFH policies based on the belief that they will save money on facilities. While this might be the case for nascent start-ups, which rarely spend much on office space anyway, most companies won’t realize these savings—particularly those that adopt a hybrid model. The result could be the worst of both worlds—continuing to invest in class-A offices and perks, but having them go underutilized and under-appreciated by employees.
Companies will lose their sense of mission—One of the not-so-secret ingredients for many Silicon Valley success stories is their shared sense of mission. Although, as observed in the recent book SYSTEM ERROR, “‘Making the world a better place’ has become more a punch line than a real mission statement for major technology companies,” it is incredibly difficult to generate excitement, commitment, and determination among a virtual workforce. Without that strong sense of purpose, employees will find themselves uninspired and unmotivated, while companies will find themselves unable to motivate their teams to disrupt markets and do the impossible.
Work/life balance will disappear—While WFH is often presented as empowering, particularly for parents, it can also easily tip into working everywhere, all the time. The ritual of going into an office was one of the few remaining lines of demarcation between work and home. Zoom, Slack, and Google Drive have become the tools of ubiquitous work, fueling a “burnout crisis” among tech workers, 62% of whom report being “physically and emotionally drained.”
Mental health will suffer—Although we all indulge in sometimes complaining about our bosses and co-workers, in-person work provides very important mental health benefits. For many, working from home has exacerbated how isolating tech work can be. A survey by the American Psychiatric Association found that two thirds of employees working from home say they experienced negative mental health impacts, including isolation and loneliness.
Gap between corporate haves and have-nots will widen—Many tech companies already have a two-class system within their organizations: the white collar jobs of executives, product managers, software engineers, sales reps, and others who often seem like a privileged class, and everyone else—customer support, facilities, manufacturing, fulfillment, etc.—who can sometimes feel like second-class citizens within their own companies. When one set of employees is allowed to continue working from home, and the other is required back at the office, it deepens these gaps—fostering resentment, as can be seen from Amazon’s warehouse workers to Uber’s drivers.
Innovation will suffer—One of the main reasons Silicon Valley has been able to retain its dominant global position in the technology industry, fostering more innovation, opportunity, and wealth creation than arguably any area in the world, is serendipity. A close-knit, inter-connected, geographically-concentrated, highly-motivated network of people, stirred around to create chance encounters, passing conversations, half-baked ideas, and second-degree social connections that end up turning into new companies. Those sparks happen in-person—at all-company meetings, team happy hours, and Friday lunches. While chatting at the coffee machine, parking lot, or office birthday party. It’s almost impossible to replicate those connections, those serendipitous encounters, without physical proximity.
Brent Hyder, the chief people officer at Salesforce, was quoted as saying, “I thought this period of remote work would be the most challenging year-and-half of my career, but it’s not. Getting everything started back up the way it needs to be is proving to be even more difficult.” But Bay Area tech CEOs and HR executives must rise to the task. A return to the office is not only good for companies, it’s good for employees. While businesses must remain flexible to accommodate the family, personal, and medical needs of every employee, returning to the office will be critical to the success of tech companies and to Silicon Valley’s continued leadership in the technology industry overall. Our industry and our economy will be stronger, more equitable, and more resilient as a result.