Sunday, March 21, 2021

The future of remote work and what it means for Houston

This week I want to focus on a single CSM story, because it's the most insightful I've seen on what post-pandemic work might look like: Remote work is here to stay – and it’s changing our lives. There are so many great nuggets, insights, and excerpts in it, which I'll follow with what I think it all means for Houston:

An IBM poll found that 54% wanted to keep working from home post-pandemic, and 75% wanted the option of working from home occasionally. 

“What the pandemic made blazingly obvious,” says a Manhattan entertainment lawyer, “is that there is no need for a physical office.” Only a complete lack of imagination, he says, kept the realization from dawning sooner. “Before the pandemic, we wouldn’t have taken the question [of going virtual] seriously. It wouldn’t have seemed possible.” ... 

It’s hard to find a management expert who doesn’t judge the work-from-home experiment a resounding – and somewhat unexpected – success. A survey by the recruiting firm Robert Walters found that 77% of professionals believe they’ve been equally or more effective when remote, and that 86% of employers plan to continue remote work “in some form” after the pandemic ends. A January survey by the consulting firm PwC revealed that employer satisfaction had risen even as the year dragged on, with 83% now assessing remote work successful for their company, up from 73% last June. 

Wrote one top manager in an email posted by economist Tyler Cowen: “Speaking from personal experience as a white-collar Exec, the productivity gains for our highest value workers has been immense. The typical time-sucks and distractions of in-office work have been eliminated.... Mental focus on productive efforts is near constant. Perhaps most importantly, work travel is not happening.” ... 

Among venture capitalists and venture-backed entrepreneurs, 74% now expect their companies to be majority or fully remote. ... 

“Even before the pandemic,” he says, “big cities like New York, Los Angeles, and Chicago were losing population to suburbs, lower-cost metro areas, and less expensive states in what Zillow called ‘a great reshuffling.’” 

The trend has accelerated, Mr. Kotkin says. “In just the past six months, New York City lost almost as many residents as it gained since 1950.” He notes that a recent report by Upwork, a freelancing platform, suggests that 14 million to 23 million Americans are seeking to move to a less expensive and less crowded place. Welcome to the “Zoom towns.” ... 

The market research firm Forrester predicts a 60-30-10 split among organizations: post-pandemic, 60% will be hybrid, 30% will be all-in-the-office, and 10% will be all-remote. ... 

Experts can point to only one other work style “experiment” like the one caused by COVID-19, though its sample size in comparison was minuscule. When a 2011 earthquake demolished Christchurch, New Zealand, the entire community turned immediately to telework. Then the city rebuilt, renewing its stock of office space. Yet years later a study revealed that Christchurch’s workers continued to operate remotely, away from their freshly available workplaces. “When [the crisis] was over,” said a researcher, “they didn’t go back.” 

If the expert consensus proves right, Americans won’t go back, either. 

“As remote working has boomed during COVID-19,” summarizes a study by the University of Utah, “the rise in the number of people working from home has prompted many to reconsider where they wish to live.” Which means, as the survey data already indicate, that as many as 40% of office workers could scatter outward from the name-brand cities to places more spacious and affordable. ... 

“As life at work [when remote] will be less social, people will have to get more of their socializing from elsewhere. So people will choose where they live more based on family, friends, leisure activities, and non-work social connections. Churches, clubs, and shared interest socializing will increase in importance. People will also pick where to live more based on climate, price, and views. Beach towns will boom, and the largest cities will lose.” 

So workers will be more dispersed, and more of their working hours will be spent where they live instead of elsewhere in an office. The question is: Could all this lead to a “reset” of the locus of community in America? 

Might the center of gravity shift at least somewhat from the office to the neighborhood – back, in a sense, to something closer to a pre-industrial model? What might it mean for our culture if the human contact that offices used to provide is replaced by closer-to-home human connections? And how might that affect the health of local communities and even levels of societal trust? ... 

Here Mr. Kotkin quotes Lenin: “There are decades when nothing happens; and there are weeks when decades happen.” 

So what does it mean for Houston?...

Working against us:

  • Not a classic lifestyle-destination city (think Austin, Denver, Miami) - no mountains or beaches
  • Big city problems, including traffic and crime
  • Climate: flooding, hurricanes, heat and humidity
Working in our favor:
  • Lots of Houston ex-pats that can come home to be closer to friends and family
  • Industries that are less amenable to remote work: manufacturing, refineries, port, health care, NASA, even energy to a significant extent
  • The most affordable global city in America - big-city amenities at an affordable price
  • Strong community culture for such a large, diverse city
  • High pull among immigrant networks
Overall I'd say we're likely to come out fairly well - not as good as the popular lifestyle cities, but much better than the unaffordable superstar cities like SF and NYC. Would love to hear your own thoughts in the comments...

UPDATE: Houston Innovationmap picked this up!

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At 3:39 AM, March 22, 2021, Anonymous Rich Robins said...

Very interesting article. I would like to share an insight, though, as someone who has lived for years near beaches and for additional years near mountains. Scenery isn't worth the residential location inconvenience. One can get plenty of it from Youtube, using a large screen. Total Recall (1990) foresaw this option 31 years ago...

My point is that Houston's lack of mountains or beaches isn't as disabling as some might think. Meanwhile heat & humidity aren't such a big deal when one gets to work from home... :-)

At 8:19 AM, March 22, 2021, Blogger Tory Gattis said...

Good points! You know, when it comes to scenery, my favorite is a view over a city from a high rise, and Houston makes that quite affordable!

At 8:50 AM, March 23, 2021, Blogger Gaetano Abbondanza said...

You’re seriously comparing BEING near beaches and mountains to WATCHING them on a big screen?

At 4:02 PM, March 24, 2021, Blogger VeracityID said...

Several observations:
1. I help run a totally distributed global software company. And it can be done but there is a price to be paid at the top. It is much harder to foster serendipitous creativity within the company and between companies. Socia-professional relations are far more valuable at certain times than others. The praise of didtributed productivity we're hearing is probably made about existing plans and projects, not new creative stuff. And in any innovation industry that is at least as important.
2. This means places who dominate the leadership, technology and financing of an industry (Houston!) will see less dispersion to other cities by the ambitious and active players. This is particularly true for oil and gas whose staffs risk becoming social paraiahs in many bluer communities.
3. High end healthcare would seem to be much less vulnerable to this trend given the nature of collaboration around a specific body. Routine things can be remotely automated but the innovative and exotic will remain highly concentrated around the lives being saved.
4. Add this to a good (before the power fiasco I would have said excellent) governance environment, low taxes on high earners and a general sense of possibility and excitement in the community without the miserable politicized pessimism common elsewhere and I say (as a 5 year transplant): "Houston for the Win".

I always enjoy your commentary. Bill

At 4:21 PM, March 24, 2021, Blogger Tory Gattis said...

Thanks and I totally agree Bill!

At 4:36 AM, March 25, 2021, Anonymous Rich Robins said...

Basically, yes. Indeed, the viewscreen is less hazardous in most ways. Allergies are a problem when one travels to these exotic locales. Melanomas, too. And let's not forget theft, violence and even kidnapping. Furthermore, what if you suddenly need medical assistance? These remote locales don't tend to have the greatest access to medical services. Telemedicine is improving, yes, but health centers in those locales are lookin' to make a buck and they know you probably won't come back to sue later for being exploited during an emergency. It's happened to me from coast to coast here in the USA. In Mexico, though, no. The police sure weren't helpful down in Mexico City though, but they definitely were in Villahermosa, Tabasco (on the Yucatan peninsula).

Let's also not forget: "sitting is the new smoking". Search engines can provide all sorts of research on that front. How does one drive for hours each way without sitting? One doesn't.

Anyhow I did not mean to suggest that only Youtube can satisfy this need, by the way. There's also Vimeo & Daily Motion, etc.


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