Real reasons why tech giants are hugging “Remote Work” | Hacker News Reader

Real reasons why tech giants are hugging “Remote Work”

om.co

64 points5ep58 comments

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.

> 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.

> 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.

The 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?

It'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.

The lunch is comp for having to be on-site.

The full WFH also means your talent pool to hire from is more global, and, on average, cheaper

Why 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.

Isn’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

“why didn’t they just hire the employees in their own country”

- now much more of that will come. Obviously not an on/off switch.

But what was stopping them from doing that before?

The 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.

Large software companies already do this and have offices internationally.

Time 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.

Effective time zone is somewhat more personal, though. As a night owl, working with local early risers sucks a lot.

Why 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.

What stops them from doing that already?

Facebook has offices in Brazil: https://www.facebook.com/careers/locations/saopaulo/?p[offic...

Why didn’t they close down the Palo Alto office already?

Brazil 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.

Yes, remote work has always been a thing. The claim is that COVID will accelerate the trend toward a global and remote workforce.

Companies have been forced into large-scale WFH experiments. If the experiments show that productivity is totally fine without open office plans and in-person collaboration over lunch break, then they will inevitably ask why they shouldn't save a ton of money by hiring a greater proportion of engineers outside of the Bay Area.

I 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.

Shopify is planning to do this on a permanent basis.

https://twitter.com/tobi/status/1263483496087064579

Planning is never on a permanent basis. That’s what “plan” means.

Narrator's voice: "No. It doesn't."

Sure, 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.

It'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).

> So, you want to work remotely for Facebook? Great! All you have to do is figure out your own office space (much like how an Uber driver is responsible for the upkeep of their vehicle)

This 100%. But also - my own economic ideology position is that employees should be as self-empowered as possible. If your employer owns all your tools, your workspace, your IP, etc. then they completely control your access to the labour market. The means of production should be as widely distributed as possible to prevent huge power imbalance in favour of employers. Remote Work will mean that people can move companies easily (which means putting up with less shit since you can just move), be setup for freelance work already if they need extra income or want a break from working for somebody else, can learn more about their toolset due to being responsible for setting up an environment to work from home, etc. While there are some downsides, I think this is an overall positive.

The real reason may just be the failure of a legitimate second hub after the Bay Area: Facebook needs to hire 10k more people this year and maybe tens of thousands more over the next decade. There is no single place they can do that, and by the time they tally up all the possible other offices it might just make more sense to shrug your shoulders and make it officially and literally “anywhere.” In this version, it’s likely the emerging technology hubs which lose to cities with simply great quality of life or low costs, and the Bay Area continues relatively unaffected.

Working remote just makes so much more sense. My old routine was - get up, have some coffee, start dreading the one hour commute, then do the one hour commute, then get to work and spend an hour decompressing from the one hour commute... now it’s get up, pour a cup of coffee, start enjoying working on stuff in my bathrobe. And the coffee is way better than what the office was paying for :-)

I'm sure we'll all come to love the new routine — get up, have some coffee, work until you go to sleep.

Even if you personally are capable of enforcing work/life separation there's zero chance an entire company will when so many people already fear the Performance Review looming over their head.

That's just not gonna happen. I currently work remotely as a software engineer at a BigCo (not a tech company) and the company policy has consistently been to great weekend work & long hours as a team & company failure.

I just don't see an every-waking-hour workday dystopia ever happening if the industry goes more remote.

> not a tech company

I think this may be the key. I work in-person in a Tech BigCo main office, and emails/chat/posts/pings are already a constant on any night or weekend. I don't know how it would be possible to avoid when we work with teams on every continent — some external so their working hours are non-negotiable. It's cool if you can be a good enough performer to disconnect at 5PM and never contribute to the problem by reading or responding. Some people have to—or think they have to—do that show of "putting in extra effort" to make it by their next performance review.

And even if someone consistently cannot separate work from home life - 'traditional' employment will not vanish. Many companies will have zero WFH (or very little), while others will have a gradient between full-office worker and full-WFH.

I'm a "WFH Apologist", really, but I'll readily admit it's not for everyone. Many people genuinely like in-person socialisation at the office, others can't separate 'work' from 'home life', and we could go on forever on potential issues. Which is why no one will ever see me advocate for all tech companies to go as remote as possible normally - that would exclude a pretty wide pool of potential candidates.

Where I work there are one or two people that are online outside of normal hours (usually managers who already didn’t have great work life balance) most people seem to be pretty good.

Also, as someone who’s worked remotely before: working longer does not mean more work done!!! in fact I think I can safely say you’ll get less done if you start working more than ~7 hours a day because then your workspace and relaxing space start mixing together (and your brain will force you to relax sometimes.)

I totally agree that working longer does not mean more work gets done. The people I'd need to convince are the hundreds of scared lower-level engineers who have a to earn a promotion within two years or probably get fired.

All these analyses are forgetting one big reason: culture (and yes, cost too of course). The first office I built (out of 6 or so) was open plan, specifically because I was starting up a tech company in a conservative culture where the 'boss' was behind a close door (often a solid, non-glass door). Open plan meant not just more people per sq.mt. and cheaper construction (which it does, by an order of magnitude); it also meant that the boss was available for any question no matter how trivial by just calling out his name.

That was a huge step back then. I know it's almost expected now (which is probably why we're ready to move to remote/open cultures) but you gotta remember why open plans were revolutionary when they appeared and what cubicle farms meant for the company values, not just its lease payments.

Cynical but in a dumb way. A moment of thought will tell you that lost productivity by being all remote outweighs the benefits money that the FAANGs are saving. If they could just shovel that money they're saving to the employees to get that productivity back, they would.

A smarter cynical take would be that it's more likely that 1) they know their employees don't want to risk COVID-19, 2) they don't want to risk their employees getting COVID-19, but not for the reason he states but instead because that people worried about getting sick at the office are less productive, and 3) they want their precious little cash cow employees back producing milk at full speed as soon as they can.

> A moment of thought will tell you that lost productivity by being all remote outweighs the benefits money that the FAANGs are saving.

Really? Three years working remote and I'm still more productive.

N = 1. The fact is no one knows how it shakes out across teams and organizations and whether it heightens the learning curve for new employees who do not benefit from the informal chatter around them, or whether it increases employee turnover in the long run.

Seems irresponsible to make organization wide bets like this without proper testing. “Move fast and break things” applies to culture too I suppose.

Even if it makes some people more productive, it also doesn't necessarily apply to everyone, and wasn't a core complaint of remote workers that remote work policy was too one-size-fits-all?

I would imagine you would see more flexibility afforded by employers but full remote is probably a fantasy.

Individual flexibility can have detrimental impacts to team performance. So then shouldn’t the flexibility be awarded to whomever’s P&L is hit by a decrease to productivity? How else do you internalize the negative externalities? How would this differ from the pre-Covid status quo?

Personally I don't know how much of a problem this is. Where I work, the preexisting policy was "feel free to work whenever so long as you are still available during work hours and doing what you're expected to do". So for me flexibility was already the status quo.

There are some who are adapting well to remote work, like yourself, there are some who would be adapting well to work but other disruptions from COVID-19 reduce their effectiveness when remote, and there are quite a few who are just not effective when remote. At my employer, for example, effectiveness reduction estimates by department range from -20% to over -50% for particularly hardware dependent teams.

I think we hoped for "work from anywhere", but many got "try to work while minding your kids at home, also webcams and stuff are out of stock".

It’s also a matter of culture. For remote employees to be fully productive, the company’s culture needs to be heavily geared towards remote. You can’t have 50% of the employees in the office having impromptu hallway conversations and whiteboard discussions while the rest of the team that is remote is half-isolated, separated from the in-office idea generation, and only gets to hear about what was decided by email. You’ll effectively end up creating two classes of employees: the in-office superstars and leaders who are highly paid, and the cheaper remote workers who have a glass ceiling on their career progression and are mostly relegated to the execution of the in-office team’s vision.

> the in-office superstars and leaders who are highly paid, and the cheaper remote workers who have a glass ceiling on their career progression and are mostly relegated to the execution of the in-office team’s vision.

I went remote a few years ago, and last year, without even asking permission, I dropped the lease on my overpriced DC tiny condo and moved a few hours away where rent is half the price, and eventually I'll buy a real home for half the cost of DC.

While I definitely had more opportunities to network and hobnob with management while in the office, the reality is it didn't matter in the long run. My salary hasn't gone down since moving, and I save money on tolls, lunches, gas, and now especially rent which is pretty significant.

As a developer, I've never once been offered any sort of 'path' to anything other than continued code grinding and JIRA tasks. At best, I'm often give pseudo-promotions to 'team-lead' which includes more work on my end for no extra compensation, respect, or authority.

There are so many people who CANNOT code, I've never seen any company I worked for helping their developers move towards the business or management teams. In fact, it's almost as if they actively oppose it and gatekeep any knowledge that's related to sales, customers, revenue, etc. After all, what would they be needed for, if we could do their jobs, too? And if we knew what value we provided, we might get a bit more uppity when it came time for raises and bonuses.

Furthermore, most jobs of mine last less than 4 years or so, and if you don't move on you're not getting raises, nor are you accumulating more required buzzwords for the resume.

I kind of gave up on moving up the corporate ranks into a management or more respected, higher paid position years ago, and now I play for myself. That means I continue to accumulate money in investments, and hopefully, by about 45, I won't depend on any company's promises or continued raises, and instead can opt out of the corporate system, go live on a beach, and start my own small business. The odds that the stock market will continue paying 8% are far more likely than any company I end up working for will provide opportunities for more pay, authority, and respect, especially for engineers, regardless of how good of friends I am with management or happy hours I attend with them.

"While I definitely had more opportunities to network and hobnob with management while in the office, the reality is it didn't matter in the long run. My salary hasn't gone down since moving, and I save money on tolls, lunches, gas, and now especially rent which is pretty significant."

I think being in the office can be very beneficial if you have the ability to talk to management and be viewed as some with potential for promotions. I have tried this but somehow I don't have the ability. My path was always to deliver stuff without needing much guidance. So now I am remote. I will probably not move up much but I have carved out nice niche for myself.

I think there's truth both in the incentives listed in the article and in this explanation, and there is a complex and varied set of cynical reasons that explain any large move across many employers like this. The real lesson is not to be a vulgar cynic.

> A moment of thought will tell you that lost productivity by being all remote outweighs the benefits money that the FAANGs are saving.

I don’t think any productivity differences between distributed and co-located teams have been conclusively demonstrated one way or another.

Besides, even if your claim were true, a company that hired outside of a single metro area (in most cases, the SFBA) stands to gain more from drawing upon a much larger talent pool in the long run.

Since seven out of ten times the alternative to remote work is a fucking open-plan circle of hell, how does lost productivity due to remote compare to lost productivity due to needless distraction and germs propagating like a crowd wave at a football game through open-plan spaces leading to more sick days? (Forget COVID-19, colds and flu can cause significant reductions in work output.)

My guess is remote workers are more productive.

At least in Amazon's case they used their massive hiring power to force everyone into a small region of the city owned by Paul Allen, developed by Vulcan Inc. Then Amazon payed four times the market rate for the properties from Allen.

> each employee in the San Francisco Bay Area costs an extra $20,000 to $35,000 per year

This is where they lost me. I can make $140k working remotely for a job that is a minimum $200k in San Francisco. And that is just salary. It doesn’t count rent, lunches, and other office costs.

Its the new companies that build on a "remote first" / "work from anywhere" foundation that have a tremendous advantage here.

With a few more "cultural shifts", there will be little overlap left between 20th and 21st century work structure(s).

“ok, no more dorms, everyone just go study at those cool, full of freedom off campus apartments!”

I'm saying this for years now.

Companies burning billions for real estate alone, while all their teams are working remote in respect to each other anyway.

My hopes are, this will relieve cities from the huge burden these companies were...

How are cities hurting? The cities are the ones refusing to build. The landlords are profiting from this and so is the city. (Higher land value => higher tax revenue)

Do you really think this will "relieve" anything except push the problem onto other cities that also refuse to build? (And will inevitably push out people who already had to leave the big city due to the cost)

Massive tax cuts and other packages, look at what cities were offering Amazon to put another office in their city.

- companies that settle in a city require office buildings

- people working in these companies require living space

If fewer companies where in the cities, the space for offices and the space their employees need to live would be free.

The prices would go down.

TLDR cost savings for the company

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