5 ms·
It is a huge bet that productivity in the long run is equal to or greater than the savings in rent. When you do the math on the occupancy cost per square foot r
by voisin 6y ago
It is a huge bet that productivity in the long run is equal to or greater than the savings in rent. When you do the math on the occupancy cost per square foot relative to the labour cost on a per square foot basis (using a company’s occupancy numbers divided by square footage of the office), it works out to 4 - 7%. If you increase employee turnover slightly or decrease productivity in the long run by a small amount, you’ve erased the gains and destroyed your company culture in the long run. Oh, and if you give your employees a bunch of money to fit out their home offices and start paying for their internet at home and give them money for lunches and whatnot, you’ve just erased a portion of the savings in rent and further reduced the odds against you as employer will be net positive.
It is a hugely levered bet and to see all of these companies making this bet on the basis of a 3 month experiment with, to say the least, confounding factors, seems irresponsible.
- slavapestov 6y ago> It is a huge bet that productivity in the long run is equal to or greater than the savings in rent. And also, that not every potential employee who can add value to the organization wants to relocate to the same place. I think that’s a more important bet in the long run. > Oh, and if you give your employees a bunch of money to fit out their home offices and start paying for their internet at home and give them money for lunches and whatnot, Isn’t this called “salary”? I don’t expect my employer to cook and feed me lunch and I don’t really need a special lunch stipend either.
- staticassertion 6y ago> Isn’t this called “salary”? I don’t expect my employer to cook and feed me lunch You might not, but many tech companies in SF do exactly that, and it is a legitimate part of your compensation.
- slavapestov 6y agoThe cost of my lunch is a trivial fraction of my family's grocery bill though. Are remote workers going to ask for a clothing stipend in lieu of company-branded T-shirts as well?
- staticassertion 6y agoIt's definitely thousands of dollars to go eat lunch in SF, a year. Plus companies often serve breakfast/dinner. And, in the case of my last company (Dropbox), the food was absurdly good. I considered my Dropbox food to be like 50k in value to me.
- edoceo 6y agoThe lunch is comp for having to be on-site.
- deleted 6y ago[deleted]
- option 6y agoThe full WFH also means your talent pool to hire from is more global, and, on average, cheaper
- voisin 6y agoWhy do you need to institute any new WFH policies as applicable at the domestic level to do this? They’ve already been doing this presumably to the extent they wanted.
- foogazi 6y agoIsn’t there a global talent pool already? All these companies already have had international offices for a while They are still filing for visas, why didn’t they just hire the employees in their own country
- highfrequency 6y agoThe main potential savings is not from avoiding office leases, it's from hiring engineers for 1/3 of the cost or less from places like Europe, India, and Brazil.
- whichquestion 6y agoLarge software companies already do this and have offices internationally.
- nicksergeant 6y agoTime zone sensitivity is a very real thing for companies who hire remotely, so I don’t think this is necessarily going to change. Much of the “<current employee> can now work remotely” is likely predicated on the fact that those employees are in the same time zone.
- owl57 6y agoEffective time zone is somewhat more personal, though. As a night owl, working with local early risers sucks a lot.
- voisin 6y agoWhy do you need to institute any new WFH policies as applicable at the domestic level to do this? They’ve already been doing this presumably to the extent they wanted.
- foogazi 6y agoWhat stops them from doing that already? Facebook has offices in Brazil: https://www.facebook.com/careers/locations/saopaulo/?p[offices][0]=São%20Paulo%2C%20Brazil&offices[0]=São%20Paulo%2C%20Brazil https://www.facebook.com/careers/locations/saopaulo/?p[offic... Why didn’t they close down the Palo Alto office already?
- moises_silva 6y agoBrazil is a big country, not everyone lives in São Paulo. Why would they close Palo Alto in any case? they want to add to the talent pool, not exchange it. Also, not everywhere you see offices they have engineering teams. The same narrow-minded policies of having teams co-located prevents them from hiring engineers there even if they have offices there. As a data point, I turned down an offer for FB Palo Alto, one of the main reasons being having to relocate from Toronto. They have offices in Toronto, but no engineering. Bottom line, they might have some presence in some major cities, but if they're serious about remote work the talent pool definitely grows significantly.
- lukeschlather 6y agoI don't see any companies planning to definitely do this forever but the reality is that this situation is probably going to persist for at least 12 months and at that point it's better to just treat it as a permanent transition from the employees' perspective. However even with Facebook you can see they're making a lot of decisions that would make the decision easy to reverse. They're still paying rent on all their existing buildings, they're still encouraging people to live in tech hubs via higher salaries.
- rhencke 6y agoShopify is planning to do this on a permanent basis. https://twitter.com/tobi/status/1263483496087064579 https://twitter.com/tobi/status/1263483496087064579
- staticassertion 6y agoSure, but there's a lot more than just the savings on the office space. What about savings on employee sick leave? At my last company there was always an 'office plague' at least once a year, around winter. What about employees no longer commuting? What about being able to hire talent when they don't want to move to wherever you're located - how much will that save you on recruiting? There are so many other wins. And losses.
- codyswann 6y agoIt's not just about saving money on rent. You reduce your labor needs a ton. (Bye, bye, HR). And you also expand your hiring pool (Bye, bye, high salaries).