Remote work is here to stay. What does that mean?

Shopify. Facebook. Rogers. Twitter. These are just a handful of the many companies who have announced since the pandemic that they will be allowing some or all employees to work from home permanently.

I’ve been working from home since mid-March. There are things I enjoy about it — no crowded commute on packed public transit, more sleep, and the ease of doing chores. There are things I like less about it, such as missing the human contact and collaboration with my colleagues, the poor ergonomics of my home office setup, and the difficulty in mentally separating home life from work life. For my friends with kids, working from home presents even more challenges.

But, love it or hate it, this is our reality now. In March, 3.4 million Canadians suddenly started working from home. By August, nearly 75% of those were still working from home. And a recent survey in August found that nearly 60% of them would like to keep it that way at least some of the time. Many (myself included) are legitimately concerned about the health risks of going back to the office while the pandemic still rages. But still others are viewing this arrangement as permanent, far beyond the pandemic. After all, says the reasoning, if we’re just as productive or even more so from home, why not?

In this post-office world of ours, there will be a lot of things that will change. Here are just a few that we marketers need to take into account:

1. The fashion industry will take a hit.

Pants? What are those? With so many people no longer going into the office every day, getting dressed from the waist up for video calls has gone from being a cliché to a reality. Clothing, beauty and fashion retailers have accordingly taken a hit.

And we’re changing what we wear to work, too. Namely, style is out; comfort is in. Early on in the pandemic, Walmart reported that its sale of work shirts were up, but its sale of pants were down. In April, Adobe Analytics reported that pants sales dropped 13%, bras by 12% and jackets by 33%, while online pyjama sales increased by a whopping 143%.

Overall retail apparel sales are expected to be down 28 to 32% in 2020, reports Trendex, which forecasts that sales won’t return to 2019 levels until 2023. That’s a disaster for any industry, but especially for one already struggling pre-pandemic with store closures and bankruptcies of major chains.

Ultimately, people won’t need as many clothes if they work from home long term. But some casualwear brands may buck the trend if they focus on comfortable items that people can wear for home office work.

2. It will be a buyer’s market for talent.

When every position is remote, companies can hire from literally anywhere in the world. Therefore, they have access to a huge pool of talent that isn’t limited by geography.

This means that job seekers are literally competing with the entire planet for every posted job. And while that may seem like great news to companies, it’s not necessarily a good thing for talented people who are already struggling to find work in a global recession.

What we’re probably seeing is the dawn of globalization for creative class or tech sector jobs. It will force employees to increase their skills to compete with the worldwide market of talent. It will mean that geography no longer determines success. And it will provide opportunity for some, while costing others.

The good news is that this will probably help drive more diversity in the workplace. After all, if companies can recruit from anywhere, they will recruit from everywhere.

On the other hand, recruiting globally is a bigger challenge than many companies realize. There are language and time zone barriers, culture and etiquette issues, legal and statutory concerns. Smart companies will get ahead of this by providing ample training and collaboration tools, but we can expect some growing pains and bumps in the road as companies adjust to having sudden access to a worldwide talent pool to fill almost any job.

3. Cities (and real estate) will change forever.

When your home and your workplace are one and the same, your priorities for living space change. This is already having a big effect on the real estate sector, and it will forever change cities and how we live in them.

No longer will people have to actually live in Silicon Valley (and pay correspondingly high housing costs) in order to work for a Silicon Valley tech company. When you can work from anywhere, you can live anywhere. And it turns out that where people most want to live is anywhere with space. Lots of space. Green space. Backyard space. Space for their kids to play, for their dog to run around, for every person to have a home office with a door.

Here in Montreal, the flight to the off-island suburbs can be seen with the surge in home sales in the 450 regions and in chalet sales in the countryside. Meanwhile, those loft-style open-concept condominiums downtown have almost completely lost their appeal. Rent prices haven’t come down much yet — we’re still in a housing crunch — but that’s sure to follow.

We may see decades of urbanization and densification efforts reversed by this pandemic, as people opt for country or suburban lifestyles when they’re no longer constrained by a commute.  Meanwhile, office space may sit empty or need to be rezoned. And the corresponding local businesses that thrived on office lunchtime or happy hour crowds will also take a hit. There’s a ripple effect from all of these changes.

For those of us who previously enjoyed city life, this could be a tough pill to swallow. I grew up in the suburbs. I have no desire to return to them. But without the perks of an urban lifestyle — during a pandemic, we can’t go to the pub, to comedy shows, to festivals, to local shops or cafes — then where are the advantages, really, in paying a premium for a smaller space? I loved being able to cycle or use public transit to get to work. But my commute for the past six months has been about twelve steps across my apartment. I can’t deny that more space sounds tempting.

4. Salaries will probably decrease.

When Facebook announced its remote work policy, there was a catch: Employees could move to a lower cost of living area, but they would see their salaries correspondingly adjusted downwards if they chose to do so.

It seems almost inevitable that companies, with such a large pool of talent to choose from, and without the need to pay a premium to recruit people in expensive cities, will reduce their salaries. Globalization did this for manufacturing, after all, as companies learned they could hire someone in China or in Bangladesh for a fraction of what they were paying an American.

In the short term, some companies have asked their employees to take a temporary paycut during the pandemic, with Global News reporting last May that upwards of 20% of Canadians were facing reduced pay.

However, this is just the tip of the iceberg that we’re likely to feel this more in the long term, as companies recruit from lower cost talent pools to fill open jobs.

To be fair, some employees working from home find that they’re also spending less due to the pandemic. But this spending drop is likely temporary — a function of the lack of entertainment, travel and other discretionary activity options available to them due to the pandemic. Many of them are, conversely, seeing correspondingly higher costs for things like home internet, electricity, heating, office supplies, and groceries, as they find themselves home all the time and without access to the many unwritten perks of office work. Coffee is one example; a quick analysis says my partner and I spend about 400% more on coffee since we started working from home.

Since companies will face lower labour costs and lower overhead costs, they might be viewing this as a positive. But there’s a ripple effect to everything. Less discretionary income in the pockets of employees means less money coming into the economy overall. Jeff Bezos and Mark Zuckerberg might get richer, but most companies will ultimately see a bottom line hit as they face reduced consumer demand for their goods and services.

5. Some people will go back to the office.

Apple’s iconic ad, “The Whole Working From Home Thing” received over 25 million YouTube views and was the talk of the industry in July.

The problem? Most people felt it was a little too real. And that’s a problem. Because it turns out that working from home isn’t always all that great.

Video-conference calls with poor audio, kids shouting in the background, household chores, people wearing pyjama pants, all while trying to collaborate on a creative project? There is literally nothing enticing or attractive about any of it. And it’s the harsh reality now for most of us.

This is why I predict that, when it’s once again safe to do so, many of us will choose to return to the office. We humans are social animals. We crave human contact. We want stability. We want the comfort of a desk, the familiar contact with our teams, the convenience of onsite IT support, unlimited coffee, and air conditioning. At least some of the time, that is.

Even now, with the pandemic still in full swing, some companies have waiting lists of employees who want to go back to the office. Given the 25% capacity restrictions currently in place in Quebec, there are workplaces where people are quite literally fighting with one another for the opportunity to go back. And while, due to personal circumstances, I’m not one of them, I can understand it somewhat. Especially for people who live alone, in small apartments, the isolation and discomfort are real. They may be craving the human contact and comfort that come from an office environment. After all, there’s a reason why coffee shops and, later, coworking spaces, became so popular for freelancers. It turns out we humans aren’t very good at aloneness.

I still think that the 9-to-5 butts-in-seats attitude in most creative industries is probably over. Now that employers have evidence that their employees can be productive from home, they really don’t have any more excuses to forbid remote work. Most of the younger generation won’t know any different, and they’ll expect the flexibility to “WFH” at least some of the time.

So the office isn’t dead. It’s just different. It’s a place we will go some of the time, to do some of the things, with some of the people. And maybe that’s okay.

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *