Work from home: Be careful what you wish for!

I am a big fan of remote working and have been doing it since 2010. I love the flexibility to split my time wherever I want to be and it’s a major reason I started working independently.

So, on a personal level, I am all for it but for bigger businesses it does raise some interesting questions.

The recent announcement from Airbnb https://news.airbnb.com/airbnbs-design-to-live-and-work-anywhere/ around their range of flexible working options has been met with general applause.

What interests me is how all of this will pan out in the long term?

Not just for Airbnb specifically, but for all global businesses who are moving towards a similar model.

With geographic location no longer a fixed factor, how will this impact the location of where employees end up being based?

For sure, there will be benefits for many, however, will some people potentially lose out?

Some of the key points from the Airbnb “Live and Work” anywhere announcement include:

“We’ve designed a way for you to live and work anywhere while collaborating in a highly coordinated way and experiencing the in-person connection that makes Airbnb special.

-You can work from home or the office

Each of us works best in our own ways, and we’re giving you the flexibility to make the right choice based on where you’re most productive. The vast majority of you will have this flexibility. A small number of roles will be required to be in the office or a specific location to perform their core job responsibilities, and those of you who have these roles have already been informed.

You can move anywhere in the country you work in and your compensation won’t change

This means you can move from San Francisco to Nashville, or from Paris to Lyon. You’ll have the flexibility to do what’s best for your life-whether that’s staying put, moving closer to family, or living in a place you’ve always dreamed of.

If you move, your compensation won’t change. Starting in June, we’ll have single pay tiers by country for both salary and equity. If your pay was set using a lower location-based pay tier, you’ll receive an increase in June. Before you move, make sure to talk to your manager about performance and time zone expectations, as well as your availability for team gatherings. Permanent international moves are much more complex, so we won’t be able to support those this year.

You have the flexibility to travel and work around the world. Starting in September, you can live and work in over 170 countries for up to 90 days a year in each location. Everyone will still need a permanent address for tax and payroll purposes, but we’re excited to give you this level of flexibility. Most companies don’t do this because of the mountain of complexities with taxes, payroll, and time zone availability, but I hope we can open-source a solution so other companies can offer this flexibility as well.

While you’ll be responsible for getting proper work authorization, we’re actively partnering with local governments to make it easier for more people to travel and work around the world. Today, 20+ countries offer remote work visas, and more are in the works. While working from different locations isn’t possible for everyone, I hope everyone can benefit from this flexibility when the time is right. “

Full release is available here.

If I worked for Airbnb, then I would be fairly excited by the announcement.

Same money + work where I want. Nice!

Airbnb has clearly addressed one of the key questions around compensation. If the norm is now working from home, how do we work out who gets paid what?

The release mentions that they are moving to country-specific pay scales, with anyone earning less than the new pay scale getting a rise and I assume anyone over the scale staying where they are.

Although they may have to pay some people a bit more in the short term, the ability to reduce the need for high-cost office space in major high-cost cities and get new hires onto the recently created country pay scales makes a lot of commercial sense.

The part that interests me is my assumption that if the majority of people are now working from home, it would also make sense for these global businesses to start looking at which countries it is most efficient to base their support staff.

If you pay a team assistant a premium as they were working in the London office daily, but now all of the team are working from home, you don’t now need to pay this location premium for that person as they can easily be based anywhere, even outside of the UK.

If you are a global business, there are great people all over the world and so if the time zones work and the language proficiency is there then why would you not hire in lower-cost areas where you can?

If we consider the London example, then what it costs you for the above employee, goes a lot further in somewhere reasonably close by like Budapest. You could either get more for your money by employing someone with a higher skill level or simply take the cost-saving.

I’m not necessarily saying that companies will try and get rid of people and then rehire in cheaper areas, however over time when people leave or new hires are needed, it does raise the question as to whether these global businesses will look to avoid locations with higher costs of employment and hire from talent pools where employment costs are lower.

The Institute for Global change has pushed an interesting survey on this issue.

https://institute.global/policy/anywhere-jobs-reshaping-geography-work

They observed that 18% of UK jobs are what they classed as “anywhere jobs”

This means that 18% of jobs by their definition could be performed anywhere.

A great number of these jobs have been protected from offshoring because of the focus on colleague-to-colleague interaction in a physical workplace.

Now that is no longer such a thing, it opens up potential savings for those operating globally.

If all of your team are physically in your London office the majority of the time, then you’d hire your support functions there, as it makes sense to have everyone there together. If they are not, then you can hire these people anywhere you want to.

The Airbnb announcement included some information on their views on talent:

“We want to hire and retain the best people in the world (like you). If we limited our talent pool to a commuting radius around our offices, we would be at a significant disadvantage. The best people live everywhere, not concentrated in one area. And by recruiting from a diverse set of communities, we will become a more diverse company. “

It’s a great thing to create a more diverse company and even better for shareholder value if you can drive down costs whilst doing so.

There are clearly opportunities for some but If you work in an “anywhere job” in a high-cost area then you may need to be careful what you wish for!

Originally published at https://thehrguys.io on May 25, 2022.