Post-covid economics: The great resignation, remote work, & musical chairs

[Josquius]

As some of you will know I've recently accepted a new job offer. There's a variety of reasons why I'm wanting to leave my old role and move onto something new, but in one key area it initially looks a smart move (fingers crossed) - salary.

In my current role I was earning a decent salary for the north.
In my new role, where I'll keep working from home as I have been for the past year and a half, I will be earning a decent salary for London.
This amounts to a very substantial pay boost.

I have no doubt that I'm not the only one to notice the benefit of remote working in earning more money... but by the same reasoning used by employees in chasing wealthy city salaries then surely its logical for employers to hire people from poorer cities.
Google is proving pretty controversial with this lately, e.g.

https://www.inc.com/minda-zetlin/google-remote-pay-cut-calculator-facebook-twitter-employees-policy.html

Google may reduce the salaries of employees who choose to work at home full-time, based on the cost of living where they live, according to an internal calculator viewed by Reuters. It's an idea that's gaining traction in Silicon Valley and elsewhere. It may seem sensible, given that a salary that barely covers a San Francisco studio apartment might get you a mansion in, say, Topeka. That's the logic Google says it's using. "Our compensation packages have always been determined by location," a spokesperson told Reuters.
<snip>

So...its clear covid has caused many years of progress on the remote working front in a very short period.
As mentioned there's the great resignation factor, which in a way is great, democratising access to high paying jobs for all... but on the other hand why keep paying these high salaries if you can find an Indian guy willing to work for much less?
Additionally in the UK at least the whole country is currently engaged in an epic game of musical chairs as the housing market is a mess with people taking advantage of the fact they don't have to be in London to use their London-money to buy a decent house somewhere nicer.

So. A purpose for where I'm going with this thread...
When the dust settles...how will things look?
Its beyond doubt that the current spike in hiring and job switching is due to pent up demand from the past year and a half. Nonetheless the trends do seem to be here to stay unless the work from home progress is dramatically rolled back.

Will the major cities with top salaries see a stuttering and potential reversal in what they pay?
Will salaries have to do more to equalise nationally- to an extent even globally?
Will Google's lead be the one to follow with companies paying according to your address (cue: an upsurge in people buying Geneva post boxes)?
Is this a sledge hammer to the head of already struggling city centres, massively disrupting their attempts to transition away from shopping?- or will it prove a lifeline to smaller town centres allowing them to lead the way in doing this?

Will covid see a black death level of economic reshaping? Or will everything be swiftly rolled back to how it was before?

So many questions, so many thoughts to be had.

[Darth Wagtaros]

I'd leave my job, but I am in my mid 40s and have 20 years in a pension system. I'm not sure I could really afford to.

[garbon]

Part of what you raise (India) has been a perpetual part of outsourcing thoughts. From my experience, companies go in waves about outsourcing (doing it and reversing). I do know in my last company we eventually offshored some basic functions but left much of the thinking/front-line customer roles in US/UK.

I do think to some extent companies were already paying towards address as I'm pretty sure it was factored in against salaries of say employees not based in London/regularly in the office.

[Tamas]

If working from home persists and becomes a major thing (I most certainly hope for that but not 100% convinced it's going to happen now) then I am sure it will have the effect of liberating talented people from having to move to major urban centres to get a career. That's bound to be a major boost for regions with reasonable infrastructure but cheaper living.

BUT, I think that's largely going to remain within borders.

International outsourcing has considerable barriers, tax administration and data security jump to mind. It has also been ongoing for several decades, and I find it unlikely it is going to drastically increase in scale (but will to a minor degree).

What's a bit more interesting question is what the possible effects are within the EU - but there the language barriers mean the options for living abroad within the EU without a fall in life quality is a limited option at best. Brits lose out majorly here of course - taking your decent London pay and work from some remote Spanish town e.g. would be nice. Not to mention the financial advantages if you are from Eastern Europe and could earn your British wages from there.

But, again, it's not going to be a major thing, of that I am quite certain.

[Josquius]

Part of what you raise (India) has been a perpetual part of outsourcing thoughts. From my experience, companies go in waves about outsourcing (doing it and reversing). I do know in my last company we eventually offshored some basic functions but left much of the thinking/front-line customer roles in US/UK.

This is true.
However its important to remember there that the goal is purely about lowering costs and offloading shit work on India, the Philippines, etc....
The way it tends to work is that anyone halfway competent in those jobs leverages the big name western company on their CV to go off to do something better.  This ensures the quality remains permanently crap and savings are a false economy with the constant need to train new people and redo sub-par work.
What isn't noticed so much is that above the outsourcing level dross there are plenty of talented people in poorer countries who are easily capable of working at the same level as talented people in the west. Its definitely the case with these people that they won't work for peanuts- but they will accept a substantially lower wage than their equivalents in the west and get a better quality of life from it.
I think these quality workers available around the world are potentially a real untapped resource.

Visas, taxes, et al are indeed a big problem. The system as it works now just isn't setup for cross-border working, which really needs to change.
I do wonder whether we might see the birth of a visa for working in country x but without the right to actually live in country x.

[Tamas]

What isn't noticed so much is that above the outsourcing level dross there are plenty of talented people in poorer countries who are easily capable of working at the same level as talented people in the west. Its definitely the case with these people that they won't work for peanuts- but they will accept a substantially lower wage than their equivalents in the west and get a better quality of life from it.
I think these quality workers available around the world are potentially a real untapped resource.

Visas, taxes, et al are indeed a big problem. The system as it works now just isn't setup for cross-border working, which really needs to change.
I do wonder whether we might see the birth of a visa for working in country x but without the right to actually live in country x.

Yes and I had some excellent, highly skilled and motivated colleagues working in India back 2010-ish, while I was in Hungary, both of us answerable to a boss in the US.

Perhaps even more relevantly, a big part of my job was working on a process to turn a relatively skill-intensive IT task into an assembly-line style process so most of it could be done by low-skilled workers in India.

Heck, my first full time job was thanks to my big corporation liquidating jobs in Germany and hiring far cheaper Hungarian workforce in the early 00s since their job of remote server support could be done from wherever.

No doubt there'll be more appetite for that sort of thing but I don't think it'll be a major and dramatic change, simply because it's nothing new and it has been happening for quite a while now, and I think it has already reached or near-reached it's practical limits.

[The Larch]

An issue regarding WFH is that I don't think it suits every kind of role. It might be workable with people with some experience and in a mid level or senior position, but for people starting out in their careers or with little or no work experience in the particular area in which they're working I don't think it's workable.

It also depends if a job is 100% remote/WFH or just partially, and you're still meant to be present at the office for like periodical meetings or events, or for X amount of time per week or month.

[Tamas]

An issue regarding WFH is that I don't think it suits every kind of role. It might be workable with people with some experience and in a mid level or senior position, but for people starting out in their careers or with little or no work experience in the particular area in which they're working I don't think it's workable.

It also depends if a job is 100% remote/WFH or just partially, and you're still meant to be present at the office for like periodical meetings or events, or for X amount of time per week or month.

Indeed. Some jobs will benefit from this greatly, most will benefit to some degree (better life-work balance with partial WFH) a lot won't be affected.

[The Larch]

An issue regarding WFH is that I don't think it suits every kind of role. It might be workable with people with some experience and in a mid level or senior position, but for people starting out in their careers or with little or no work experience in the particular area in which they're working I don't think it's workable.

It also depends if a job is 100% remote/WFH or just partially, and you're still meant to be present at the office for like periodical meetings or events, or for X amount of time per week or month.

Indeed. Some jobs will benefit from this greatly, most will benefit to some degree (better life-work balance with partial WFH) a lot won't be affected.

Even in a sector in which it could be easily applicable, I think the level of experience of the employee could be key. I don't really see abunch of kids in starting positions working remotely, they'd be much better suited to a position at an office where they could be more easily supervised and mentored, and only when they have some experience in their roles then do some WFH, and only work 100% remotely when they have a certain level of experience or seniority.

[Sheilbh]

If working from home persists and becomes a major thing (I most certainly hope for that but not 100% convinced it's going to happen now) then I am sure it will have the effect of liberating talented people from having to move to major urban centres to get a career. That's bound to be a major boost for regions with reasonable infrastructure but cheaper living.

Except that I think many talented young people don't just move to urban centres for a career. That's part of it but a large part of it is being around and with other talented young people, being exposed to lots of cultural options etc. I think that side of urban life is likely to continue and be more attractive - and maybe if all the people who are only here for their career are able to move out it'll mean city's will become affordable again for more creative areas to be cultural spaces and where young people go to meet up and pair off - which I think would be a good thing for everyone.

And I don't know how much we'll move to full WFH. I think it will persist but I think the norm will be 2-3 days in home/office. It'll be a split type of working rather than wholly one or the other for most office companies - tech companies may move ahead on this. But in media where I am now there is a big push to have most people in the office most of the week by the end of the year because they do feel that some of the creative/serendipity stuff has gone and they do worry about training juniors coming up (this is something I also worried about in a law firm). I rent a flat on my own - I can WFH fine. You'd have Zoom calls and partners were clearly loving it - sat in their gardens in St Albans etc. But for trainees and paralegals they were normally flatsharing and stuck in their bedroom or having to negotiate when they could have the kitchen for a call with their flatmate who also needed it. The upside of WFH is not equally distributed.

And I'm not convinced it was better for work-life balance because - especially when pubs and night-life and restaurants and cinemas etc were closed - you could be nowhere else. If you leave the building it is generally difficult for someone to call you with something for work because they know you've left and it's a bit of an ask. If you're just at home and you might still be online - I think they risk their chance more. I had more sort of 8pm calls during the first lockdown than ever before - the flipside of that is I don't know if I would've been in the office at 8 anyway.

So I think it'll vary by sector but I don't think most people will be able to move from, say, London to Cornwall because 2-3 days a week they'll need to be in the office. I think it's more likely to boost the numbers living in suburbs, surrounding towns and villages in the countryside so it might reverse the last 20-30 years of inner urban centres booming.

I think this is already starting to happen in London where my understanding is demand for properties is climbing more in the outer boroughs while stalling at best in inner London.

The thing I'm unsure about is what happens with commercial real estate/all those office blocks and towers.

What's a bit more interesting question is what the possible effects are within the EU - but there the language barriers mean the options for living abroad within the EU without a fall in life quality is a limited option at best. Brits lose out majorly here of course - taking your decent London pay and work from some remote Spanish town e.g. would be nice. Not to mention the financial advantages if you are from Eastern Europe and could earn your British wages from there.

But, again, it's not going to be a major thing, of that I am quite certain.

Yes but it still raises tax issues. So I looked at this with my former employer and I was possibly going digital nomad-y (and I have an EU passport) and the issue they had was the tax implications for them. The only way it would be possible would be if I was a contractor then I'm just billing a UK company and the tax complications/where I'm resident etc is on me. This applies within the EU - there are special rules for posted workers and border workers but in general most countries just tax you if you're resident for 183+ days. I don't know how that works in this future - also in European law an "establishment" is a really low bar.

A single employee can make a company established in x jurisdiction within the EU so it raises tax and regulatory implications even if it's a European company operating within the EU. At this stage I think it only really works for contractors/free-lancers and they probably need to pay for tax advice. It'd be easier within the EU but tax and company law aren't harmonised so there'd be big risks for companies just letting employees move where they want.

[The Larch]

The thing I'm unsure about is what happens with commercial real estate/all those office blocks and towers.

I mentioned that many times when discussing a post-covid business world with my mates, I for sure wouldn't want to work in the office rental business, as that's bound to crash hard. I think in many places they're already converting some office spaces to residential.

What's a bit more interesting question is what the possible effects are within the EU - but there the language barriers mean the options for living abroad within the EU without a fall in life quality is a limited option at best. Brits lose out majorly here of course - taking your decent London pay and work from some remote Spanish town e.g. would be nice. Not to mention the financial advantages if you are from Eastern Europe and could earn your British wages from there.

But, again, it's not going to be a major thing, of that I am quite certain.

Yes but it still raises tax issues. So I looked at this with my former employer and I was possibly going digital nomad-y (and I have an EU passport) and the issue they had was the tax implications for them. The only way it would be possible would be if I was a contractor then I'm just billing a UK company and the tax complications/where I'm resident etc is on me. This applies within the EU - there are special rules for posted workers and border workers but in general most countries just tax you if you're resident for 183+ days. I don't know how that works in this future - also in European law an "establishment" is a really low bar.

A single employee can make a company established in x jurisdiction within the EU so it raises tax and regulatory implications even if it's a European company operating within the EU. At this stage I think it only really works for contractors/free-lancers and they probably need to pay for tax advice. It'd be easier within the EU but tax and company law aren't harmonised so there'd be big risks for companies just letting employees move where they want.

Yup, the taxes issue is very real. I have a couple of friends from my hometown who used to work in Dublin, and when Covid hit they came back here to spend lockdown closer to family, as both could work remotely. While they always assumed that they'd eventually go back to Dublin, the truth is that they've already been here for longer than a year, and the company that employs one of them started to get cold feet about the situation tax-wise and social security-wise, and ended up formally transferring my friend to their Spanish branch (they're an international engineering firm), in a bit of a bespoke arrangement, as she continues to work in practice for the Irish branch of the company in their projects there, and receiving the same salary AFAIK.

[Tamas]

And I'm not convinced it was better for work-life balance because - especially when pubs and night-life and restaurants and cinemas etc were closed - you could be nowhere else.

I cut this out because I really hope discussion on WFH can finally move away from discussion of lockdown. I have seen this happen a lot over the last 1.5 years - people looking at their life during lockdown and concluding WFH sucks.

[Sheilbh]

And I'm not convinced it was better for work-life balance because - especially when pubs and night-life and restaurants and cinemas etc were closed - you could be nowhere else.

I cut this out because I really hope discussion on WFH can finally move away from discussion of lockdown. I have seen this happen a lot over the last 1.5 years - people looking at their life during lockdown and concluding WFH sucks.

For sure - but I do think any move to widespread WFH needs accompanying thought around sort of digital labour rights I suppose.

I don't know the answer - but one of the big fights of the early 20th century labour movement was around working hours. I think that may need to look different when we're WFH with multiple devices from which we can work. I think we need to look at things like the right to unplug, to marking fixed working hours/available hours/unavailable hours to reflect the fact that it is more difficult to argue we are unavailable/unable to work when we are sat at home (our normal place of work) with the tools to do our work (laptop and phone).

As I say I'm not fully sure what that looks like in total but I don't think it's as simple as WFH = better work/life balance.

[The Larch]

Spain recently passed a remote working law, which regulates that kind of stuff, such as the right to be unavailable for the company after the end of the work day, and also allows companies to watch over employees in order to monitor their work and obligations. AFAIK it also forbids companies from changing the salary of remote workers, either up or down, and makes companies responsible for providing the employees with the means to work remotely, including having them pay for electricity or internet for their employees, as well as having them provide the computers.

[Josquius]

Except that I think many talented young people don't just move to urban centres for a career. That's part of it but a large part of it is being around and with other talented young people, being exposed to lots of cultural options etc. I think that side of urban life is likely to continue and be more attractive - and maybe if all the people who are only here for their career are able to move out it'll mean city's will become affordable again for more creative areas to be cultural spaces and where young people go to meet up and pair off - which I think would be a good thing for everyone.

Your gay is showing :p

I'm not sure this is so much the case in the UK. London is just so expensive and unpleasant if you're not rich that I don't think so many willingly go there given the choice as they did historically. At least assuming self-awareness which a lot of kids don't have.
Thinking of Berlin, London in the 80s, etc... however yes I know what you mean. And yeah. Good potential gains in London reclaiming its old place of buzzing alternative culture spot if those who are miserably forced to be there can now go home.

An issue regarding WFH is that I don't think it suits every kind of role. It might be workable with people with some experience and in a mid level or senior position, but for people starting out in their careers or with little or no work experience in the particular area in which they're working I don't think it's workable.

Yes, this is a problem.
Whilst I mentioned WFH potentially meaning big wins for equality in allowing people anywhere to get good professional level jobs, I've also heard it mooted that its a disaster for equality as it does really empower those with existing networks.
Another problem I hear mentioned a lot is what it means for all those minimum wage workers in business district sandwich shops et al- though I think these losses should be countered by new jobs being created in small towns that people otherwise fled for the city.
There really is a great opportunity for shared work spaces, cafes, etc... in some small towns.
But...then you've the problem of network effects being eliminated when you've 20 small towns with a pub each rather than a thriving pub area of a major city.

Then there's a bit of a problem with the whole remote working vs. in office thing.
For some people being remote works brilliantly. For others its a disaster and they want to be in the office.
Where before it was the extroverts who shined now the introverts can shine a lot more, which you will argue is good or bad depending on which side of that you fall on.
The problem with this is though... the positives of everyone being in the office don't really work so well when everyone isn't in the office. I've had experience in the past of being amongst the team in the office working with some remote people and...it has a huge number of draw backs that can be much better accounted for when everyone is remote.
For instance having one guy dialling in to a in-person workshop is just horrid.