LeoGlossary: Remote Work
This is also called work from home or telecommuting.
Remote work is the ability to work from home or a location outside the office. It is done for a variety of reasons such as work-life balance or money savings.
It was stimulated by the advancement of technology which allowed people to be off site yet access company data. This is done via the Internet which is used to access the entities servers. Since most are housing their data on the cloud, this becomes a viable option.
There are many different ways to structure this. Some examples are:
- full time remote (never coming into the office)
- part time remote (in office on certain days)
- flexible time (required to be in office a certain amount of time but the days will vary)
Implementing a remote work programs requires corporations to create policies governing equipment use, network security and performance expectations.
Digital Nomads
The rise of the Internet helped to foster an increase in digital nomads. These are people who have the ability to operate without a permanent location due to the ability to engage in remote work.
Many prefer the lifestyle afforded by this type of arrangement. They can opt to travel, touring the world while performing the required services expected of them by their employer.
This will accelerate in potential as more jobs are tied to the digital world. Elon Musk is looking to provide global Internet coverage through Starlink. It is a move that will remove any connection obstacles in terms of geographic region.
Work is done via:
- temporary housing
- hotels, cafes
- public libraries
- co-working spaces
- recreational vehicles
The tools of a digital nomad are laptops, Wi-Fi, smartphones or mobile hotspots
COVID Lockdowns
Technology always outpaces humans embracing of it. Cloud storage has been around for more than 15 years. Video conferencing dates back more than a decade. It wasn't until the global lockdowns due to the COVID pandemic that many started to embrace this transition.
Not only were individuals leery of adopting it, companies were concerned about losing control. The traditional environments were set up where management was physical able to monitor what was taking place. When people are separated geographically, this is not longer possible.
The abruptness of the lockdowns forced the transition to happen on an accelerated basis. Both employers and employees has to adapt. Fortunately, software developers had written many management tools into their platforms.
After the restrictions were lifted, many questioned about the return to the office. Many employees like not having to commute to and from work. They also found that being home allowed for more family time. It also was a cost savings due to the omitting of lunches and commuting expenses.
Companies also realized that productivity could be maintained even with people off site. This started them to question whether having the space was worth it.
Those entities that tried to call their employees back found they were met with resistance. Some executives such as Musk and Jamie Dimon mandated workers return to the office.
Commercial Real Estate Apocalypse
There is significant fallout from remote work. One of the areas is with commercial real estate.
With a significant part of the workforce working remotely, there was no need for the substantial office footprints that companies had acquired. Since the lifting of the lockdowns, occupancy rates in most major cities is still far below pre-COVID levels.
This is causing many to default on their bonds. Many real estate investors are finding it easier just to walk away from commercial real estate holdings and giving it back to the bond holders. In United States, cities such as San Francisco, New York, and Chicago are finding their downtowns deserted, in large part due to this.
For hedge funds such as Blackrock, this simply becomes a profit and loss assessment.
The situation is projected to get so bad some are calling it a "commercial real estate apocalypse". This is on top of the issues that retail space especially shopping malls have experienced due to the rise in online shopping and the domination of Amazon.
Trillion Dollar Support Services
Remote work has a negative impact upon those businesses that support employees when they are at work. Just using the United States, this more than a trillion dollars in revenue per year.
When people are working remotely, they do not use the copy machine, get their clothes dry cleaned, pay for parking, or need coffee service.
This is also having an effect on downtown areas as surrounding businesses are affected. With their customers working from home, they saw a decline in their incomes. This ended up spreading throughout the local economy, a situation that has yet to reverse itself.
Web 3.0 And Remote Work
The next generation Internet is forecast to expand the ability for remote work.
Web 2.0 is a server based system where both the front ends and storage systems are controlled by the same company.
Here we see all profitability going to these corporations, especially as it applies to social media firms.
Web 3.0 uses blockchain and decentralized databases. This means applications are tied to open source nodes, creating a new structure of control.
Cryptocurrency is a central component to this. Due to the tokenization associated with different DApps, people have the ability to be rewarded as content creators. This means their social media activity can earn then revenues.
Here we can see the ability to generate an income remotely.
The remote work battle will take time to resolve itself. Much of this debate is falling along generational lines. The Baby Boomers are the ones who favor the office. This is true for many within GenX. A shift does start to take place once we reach the Millennials.
All of this is going to shift as the Boomers exit the work place. Each day, more Millennials are moving up the corporate ladder, taking on greater control.
People also got a taste of what life is like outside the office. For many, it was to their liking.
