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I’m pretty sure employers are paying a lot more for workers to be in office than for them to work from home. The commute would be a tiny fraction of the electri

I’m pretty sure employers are paying a lot more for workers to be in office than for them to work from home. The commute would be a tiny fraction of the electricity office space and other costs they pay for workers to be in office.

bluefishinit 3y ago
I think paying for a car + insurance + gas is pretty substantial.
- deleted 3y ago
  [deleted]
Terr_ 3y ago
Hmm, just to prime the pump with some quick napkin-math... If it's an average of 200 ft²/employee [0] and $45/ft²/month [1] that gives a cost $108k/employee/year. In comparison, lets imagine someone already making $80k/yr, a 40-mile heavy-traffic roundtrip commute taking 2 hours (1.25x time) and adds $10 in daily gas... That's about +22.5k in costs. So yes, in direct math it's probably not as big, but having a physical office probably satisfies other hard-to-quantify priorities of corporate executives, such as personal prestige, sense of control, and how things look to investors. [0] https://blog.naiop.org/2018/05/top-trends-and-metrics-to-watch-in-u-s-office-space/ https://blog.naiop.org/2018/05/top-trends-and-metrics-to-wat... [1] https://www.commercialcafe.com/office-market-trends/us/wa/seattle/ https://www.commercialcafe.com/office-market-trends/us/wa/se...
- oarabbus_ 3y ago
  This doesn't add up to me. The priorities of corporate executives are to please the board of directors. BoD priorities are to please shareholders/investors. Shareholders/investors are pleased by growth/profits. That is, the investors care not about "how things look" but instead how they actually are, as in quarterly reports, share price, etc. If employees are happier and more efficient working from home, it satisfies the priorities of all the above parties. If RTO makes people unhappy and either less productive OR makes them not want to work for that employer, it goes against the incentives and priorities of all the above parties.
  - Terr_ 3y ago
    > This doesn't add up to me. I agree, I added a correction because I think it's off by a factor of 12 due to month-vs-year price quotes.
- Terr_ 3y ago
  CORRECTION: That figure from [1] doesn't actually specify the time period, but other sources [3] imply it is per year rather than per month. This means I overstated the cost of office-space by a factor of 12, and it should probably be more like $9k/employee/year. That also means the office-rent cost is significantly less than if the employer began paying for employee commutes. [3] https://www.squarefoot.com/leasopedia/dollars-cents-much-cost-rent-office-space/ https://www.squarefoot.com/leasopedia/dollars-cents-much-cos...
- quickthrowman 3y ago
  That’s $45/sqft per year, not per month. A 20,000 sqft office tower floor does not generate $10.8M a year in rents. All CRE listed as price per square foot are per year prices.

bluefishinit 3y ago

I think paying for a car + insurance + gas is pretty substantial.

deleted 3y ago
[deleted]

Terr_ 3y ago

Hmm, just to prime the pump with some quick napkin-math... If it's an average of 200 ft²/employee [0] and $45/ft²/month [1] that gives a cost $108k/employee/year. In comparison, lets imagine someone already making $80k/yr, a 40-mile heavy-traffic roundtrip commute taking 2 hours (1.25x time) and adds $10 in daily gas... That's about +22.5k in costs. So yes, in direct math it's probably not as big, but having a physical office probably satisfies other hard-to-quantify priorities of corporate executives, such as personal prestige, sense of control, and how things look to investors. [0] https://blog.naiop.org/2018/05/top-trends-and-metrics-to-watch-in-u-s-office-space/ https://blog.naiop.org/2018/05/top-trends-and-metrics-to-wat... [1] https://www.commercialcafe.com/office-market-trends/us/wa/seattle/ https://www.commercialcafe.com/office-market-trends/us/wa/se...

oarabbus_ 3y ago
This doesn't add up to me. The priorities of corporate executives are to please the board of directors. BoD priorities are to please shareholders/investors. Shareholders/investors are pleased by growth/profits. That is, the investors care not about "how things look" but instead how they actually are, as in quarterly reports, share price, etc. If employees are happier and more efficient working from home, it satisfies the priorities of all the above parties. If RTO makes people unhappy and either less productive OR makes them not want to work for that employer, it goes against the incentives and priorities of all the above parties.
- Terr_ 3y ago
  > This doesn't add up to me. I agree, I added a correction because I think it's off by a factor of 12 due to month-vs-year price quotes.
Terr_ 3y ago
CORRECTION: That figure from [1] doesn't actually specify the time period, but other sources [3] imply it is per year rather than per month. This means I overstated the cost of office-space by a factor of 12, and it should probably be more like $9k/employee/year. That also means the office-rent cost is significantly less than if the employer began paying for employee commutes. [3] https://www.squarefoot.com/leasopedia/dollars-cents-much-cost-rent-office-space/ https://www.squarefoot.com/leasopedia/dollars-cents-much-cos...
quickthrowman 3y ago
That’s $45/sqft per year, not per month. A 20,000 sqft office tower floor does not generate $10.8M a year in rents. All CRE listed as price per square foot are per year prices.