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Economic effects of WFH
April 2, 2022
5:40 am
savemoresaveoften
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I am debating the ultimate cost to the economy if WFH becomes permanent for a good portion of the white collars. My gut feel is it is a net negative to the economy, based on consumption will simply be less if there is less commute, more time at home, etc. Travel industry will prosper tho, as that becomes one of the main venue to get out of the house 🙂

As for ecommerce boom due to covid, that trend is not reversing. Ecommerce will continue to become a bigger part of the retail economy going forward, while physical stores will still exist for sure but not expanding footprint like it used to be.

And I have the same thought as the IBM study linked. I don't believe WFH benefits the company overall in the long run, the only benefit is reduced leasing space cost, at the expense of lower "real" productivity. Majority are just NOT disciplined enuf when asked to work without some form of supervision (direct or indirect from peers), its human nature.

April 2, 2022
6:15 am
cgouimet
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That IBM study is kinda dated. Much has changed technology-wise since then and much has been learned on remote-work processes.

Continued remote-work will mean many changes for commercial real estate; like fewer offices, more shared offices, more conference rooms and less office space overall. It could be great for suburban hospitality and retail, less great for downtown hospitality and retail. It could be great for the home-reno busineses.

I'm sure the list of pluses and minuses is quite long.

I worked remotely for many years before retiring in 2015. I loved it although it required a lot of discipline. For me, the issue was making sure I took time off as I routinely had conference calls anytime between 3AM and 12AM with partners in NA, SA, EU and AP. One thing everyone should be aware of is that if you can do your job without ever going to the office, so could someone from anywhere ...

CGO
April 2, 2022
7:05 am
COIN
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"One thing everyone should be aware of is that if you can do your job without ever going to the office, so could someone from anywhere ..."

At least one Toronto law firm outsourced much of their legal research to a foreign country.

A Canadian bank basically outsourced much of their accounting department to a foreign country.

Of course, we all know about call centres.

April 2, 2022
8:33 am
savemoresaveoften
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That’s the thing. When Canadian office workers all cheer for permanent WFH, they don’t really think of it may become no work at all, as being replaced by another person in another country in another home.

April 2, 2022
9:43 am
Bill
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I agree that WFH ends up less productive, in the long run. And outsourcing overseas is nothing new, e.g. many large engineering firms have used Asian engineers to do stuff overnight (and much cheaper!) while we're sleeping for years now. And so on.

But what's recent is that workers are calling the shots, it's hard to even get a warm body for many types of work these days, worker shortage gives power to workers. Plus unions have elected USA & Canadian govt's that are bringing work "back home" so not so much worry about business going offshore for cheaper labour. Even Amazon workers in USA are unionizing, not afraid of Amazon going offshore, because they know USA gov't says work has to be done here for access to USA market. Same in Canada.

So for those reasons power now is in domestic workers' hands, if they want WFH so it'll be. Does not bode well for office space.

April 2, 2022
10:26 am
HermanH
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savemoresaveoften said
I am debating the ultimate cost to the economy if WFH becomes permanent for a good portion of the white collars. My gut feel is it is a net negative to the economy, based on consumption will simply be less if there is less commute, more time at home, etc. Travel industry will prosper tho, as that becomes one of the main venue to get out of the house 🙂

I disagree that there would be any negative effect on the economy. I remember an old saying, "No one makes more money, just more expenses."

Anytime someone makes more money or finds a way to save, those savings are rarely ever taken and actually saved. Instead, people establish a certain comfortable spending level and will always spend towards it. Any money saved from dry cleaning, lunch, commute costs will simply be re-directed to something else, such as entertainment, holidays, or toys.

You said so yourself: "Travel industry will prosper"

April 2, 2022
10:29 am
Norman1
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Bill said
…
So for those reasons power now is in domestic workers' hands, if they want WFH so it'll be. Does not bode well for office space.

It's domestic competitors and not just the offshore competitors one needs to worry about.

Once a company is outmanoeuvered a few times by a more efficient local competitor, there will be a post mortem and an epiphany.

Lots of high value work requires people to work as a cohesive team instead of a bunch of yahoos doing their own thing whenever they feel like it. Communication is best and less effort when everyone is in the same room. Technology has not changed that. Not even close! Lots of non-verbal communication is lost through phone and Zoom calls.

April 2, 2022
2:42 pm
Loonie
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I think that some people will do better working from home and others will do worse. It depends on their personality, their home arrangements, the nature of the work, the nature of the supervision, etc.

Extroverts will have a need to get out and be with their co-workers as a stimulus. Introverts not so much. Extroverts get hired more often than introverts from what I've seen as they are good at looking perky and babbling happily through interviews with enthusiasm and they seem to enjoy the interview process.

Employers, managers, and HR staff will have a job on their hands to sort out what is best for their company and the jobs they offer. It will take a while to sort this out - years. I do believe all employees need to come into work on some sort of regular basis and to have something to do there. It's best for everyone - employers get to know their employees, and employees get to have better working relationships and to showcase their achievements to help them get promotions.

I read recently that at the Gore company, the one that makes those waterproof breathable fabrics, each unit of the firm has no more than 100 (or was it 120 or 150 - memory is fading, but one of those anyway) employees. They all know each other within the unit to some extent and know who to turn to instantly when they have a issue. Each unit is limited to a particular product line. Hierarchy is not emphasized and it's not obvious who is above whom. They work more on a model of cooperation than of chain-of-command. Apparently this works very well for them and the company remains privately held or did when the info I read was published. all of this is harder at home. At Gore, the parking lots are built so that there are only enough parking spaces for the staff required for one unit of optimum size. If they feel the need to exceed that they know it[s time to subdivide, start a new unit, and specialize further in the units involved.

This anecdote brings to mind the fact that a huge number of employees dislike their bosses and even their co-workers, and that there is a lot of psychopathology and incompetence in a lot of work environments. To the extent that people want to work at home in order to avoid these problems, it may not work too well as the problem will not really have been fixed and the enterprise will continue to be negatively impacted. A healthy work environment , should there be any(!), will be a good place to work together, where people will be happy to be together, and where there is high retention.

I think it's all rather complicated, and we don't know the answers yet. As for retail, I think we will see a boom IF retail stores can ever get their act together and provide what people want to see and experience. I think the interest is definitely there. "Retail therapy" used to be a fond pursuit, and still could be but they lost their creativity and just cut everything to the bone, not a recipe for success. You could spend hours in some stores and never have an employee talk to you, let alone be helpful.
We are all aware of the issues of dealing with online everything, be it shopping or banking. There is lots of room to provide a more attractive experience, online or in person.

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