THE DEATH OF THE OFFICE AND THE GREAT RESIGNATION

The office-as-factory model is dying. The advantages of remote-first work—its decreased overhead and increased access to talent—are key to the New Paradigm. This style of work is not simply an interesting, if slightly esoteric, alternative for those looking to try something different from the office-as-factory model; it’s inevitably going to replace the office model completely—a transformative process that is, in fact, already underway. Furthermore, more people are quitting their job to start something new. Before the pandemic, the office served for many as the last physical community left, especially as church attendance and association membership declined. But now even our office relationships are being dispersed. The Great Resignation is speeding up, and it’s created a centrifugal moment in economic history.

BY CARL NEWPORT FOR THE NEW YORKER AND DEREK THOMPSON FOR THE ATLANTIC
A conversation with Chris Herd, who foresees a future in which most companies are remote-first. By Carl Newport for The New Yorker

In early autumn 20201, a technology entrepreneur named Chris Herd posted a thread on Twitter. “I spoke to 10 x Billion $ companies who canceled return to the office due to the delta variant,” he began. “A few predictions on what else is going to happen.” His first salvo was titled “Office Death,” and claimed that “by the time people can return to the office a lot of companies will no longer have space to return to.” His next prediction was about “City Flight.” He stated that workers would continue to flee cities and would quit if their employers forced them back into urban offices. The thread continued with sixteen more tweets.

In 2018, Herd, who is thirty-one, started a financial technology company based in northern Scotland. He soon realized the difficulty of attracting talent to his location and organized his business to operate without a physical headquarters. Impressed by the benefits of his office-free operation, Herd pivoted into a new company, Firstbase, which supports a remote-work infrastructure. In 2019, he began tweeting strident objections to office work, with loud claims about the superiority of alternatives. When the pandemic hit, the audience interested in these discussions exploded in size. In early 2020, Herd posted a long thread of predictions about remote work’s rise during the next decade, and it hit a nerve in a way that his earlier tweets had not. His follower count grew from about a thousand to over forty-five thousand, and his threads became must-reads for anyone who closely followed these topics. Many commentators have been discussing the need for a more flexible approach to when and where work happens in a post-pandemic world. Herd, it turns out, is proposing something altogether more radical.

When knowledge work became a major economic sector in the twentieth century, the necessity to have employees work together around stationary machinery, as in the classic factory model, was curtailed. There remained, however, secondary forces that preserved co-location. Knowledge work requires collaboration and access to information, both of which are conveniently served when individuals are physically near shared conference rooms and filing cabinets. Meanwhile, during this point of transition, companies had already become familiar with the industrial idea of managers monitoring employees as they toiled in the same space, going so far as to adapt the standardized nine-to-five work shift into the white-collar world. The result was the rise of what we might call the office-as-factory model: the idea that, whether the work is physical or cognitive, we should gather in the same building to work together under close supervision during the same hours.

The arrival of personal computers in the nineteen-nineties, followed by the spread of high-speed Internet in the two-thousands, upended this status quo by obviating the need for individuals to be in the same building to collaborate or access information. These technological innovations led to an incipient telecommuting revolution that began to pick up speed in the first decade of the twenty-first century. This revolution, however, eventually lost its momentum as managers experimenting with remote-working arrangements realized that dispersing the efforts that used to take place in the office was more complicated than simply giving employees video-conferencing software and an e-mail address. The resulting frictions led large companies such as Yahoo and Best Buy, which had introduced more flexible work arrangements in the first decade of the two-thousands, to pull workers back into their cubicles by the beginning of the second. It’s also why now, after seventeen months of pandemic-induced building closures in the United States, so many large companies are looking to return their workers to the office just as soon as coronavirus infection rates make it feasible. It seems that even in our current moment of disruption, the office-as-factory model remains entrenched. It’s here that we return to Chris Herd, who has a decidedly different take.

As Herd told me when we spoke, people are sometimes surprised to learn that he’s against the idea of remote-only companies, in which employees never collaborate in person. “The quality of your work is increased by having time together,” he said, “because you have a better sense of shared empathy and coördination.” The problem, he clarifies, is the belief that the best way to support these interactions is by signing a long-term lease on an office building that you force your employees to use every week.

In Herd’s vision, which he calls a remote-first strategy, relevant teams gather less frequently—he suggests once a month as a good interval—in varying locations that suit the work that’s being done. Because these meetings are relatively infrequent, there’s no need for employees to live in the same region. He used his own company as an example to illustrate this point. “We are all over the place: we have people in Belgium and the U.K., in the U.S. from the East Coast to the West,” he said. “Our tech team is meeting in New York next week. Our sales team is meeting in London the week after.” He even imagines a future in which specialized resorts will arise in locations conducive to brainstorming or strategy formation, where teams will work with the help of professional on-site facilitators. These semi-frequent off-site gatherings might sound expensive to those steeped in the office-as-factory mindset, but, Herd suggested, they’re cheaper than maintaining a permanent space for everyone, and such meetings would support much of what’s lost in a purely virtual strategy.

The bigger advantage of Herd’s approach, however, is that it significantly increases the size of the pool of potential hires. “A remote-first company can access the best talent in the world,” he said. “An office-first company can only access those who live within a certain radius of their building.” Again and again, in our conversation, Herd emphasized the power of this factor. “In a knowledge-based economy, your value is the talent you employ. If other companies employ better talent, they are better than you.”

It’s these two features of remote-first work—its decreased overhead and increased access to talent—that lead to the most striking element of Herd’s theory. This style of work, he claims, is not simply an interesting, if slightly esoteric, alternative for those looking to try something different from the office-as-factory model; it’s inevitably going to replace the office model completely—a transformative process that is, in fact, already underway.

In Herd’s explanation, a Darwinian business dynamic has come into play. If you and I run companies competing in the same space, and I have better talent and lower staffing costs, I’ll put you out of business. Repeat this enough times, with enough competitors, and the remote-first model will rise to dominate our market niche. Herd pointed to technology startups, a sector already known for its intense competition and survival-induced innovation, as an arena in which this evolution is currently occurring with particular intensity. He highlighted Hopin, a virtual-events startup founded in the summer of 2019, whose founder and C.E.O., Johnny Boufarhat, is an investor in Firstbase. When the pandemic hit, in March 2020, Hopin had eight employees. Recognizing that conditions had suddenly become quite favorable for a company supporting virtual events, Hopin quickly grew to eight hundred employees and a valuation of over seven billion dollars, all the while keeping the company remote. “If you talked to their C.E.O., he would tell you they couldn’t have built the company the way they did, from eight to eight hundred employees in months, if they were in an office,” Herd said.

Because startups build their organizational cultures from scratch, they can sidestep the need to rework existing management structures and habits that depend on an office. This is an important advantage, as it’s exactly this difficulty that has consistently impeded widespread adoption of stronger remote policies in larger companies. Herd argues, however, that the knowledge forged in the startup crucible about how to make these arrangements work will inevitably migrate to larger corporations. “The innovation happens at startups operating at the periphery,” Herd said. “But what you are going to see are remote-working experts emerge who transition from the startups to bigger companies, and then from there to even bigger companies, passing on that knowledge as they go.”

Herd thinks that, within the technology sector, the big monopolies will be the last to make this change, as the competitive advantages of the remote-first model mean less when you have few competitors. But even these giants are vulnerable to the pressure of losing talent. This might even partly explain why Apple, which announced this past summer that employees would have to return to the office this fall, has delayed its reopening to January or later. The company cites the Delta variant as the reason for this shift, but when you consider the muted covid rates in the ultra-vaccinated Bay Area—on the mid-September day that I’m writing this, there are only seventeen covid patients in I.C.U.s in all of San Francisco—it’s reasonable to suspect that the widespread employee pushback against the original declaration may also be playing a role.

The final phase of the transition, according to Herd’s theory, is the further migration of this remote-first methodology from tech to other economic sectors. We’ve seen workplace trends spread from tech outward before (think: open offices), but Herd argues that this particular shift will be accelerated by the involvement of private equity. These firms, he predicts, will begin hiring away remote-first experts from big technology companies. They will then buy up companies in other sectors, deploy this expertise to help them successfully abandon long-term office leases, and hire better talent, allowing them to reap the rewards of the immediate profitability boosts that these moves generate. To return to our natural-selection metaphor, the vision prophesied by Herd is not one of a glacially slow incremental evolution toward a new species of work but, rather, an instance of punctuated equilibrium, in which the leap from startups like Hopin to blue-chip giants will occur seemingly all at once.

It’s important, of course, to receive this vision with healthy skepticism. Beyond Herd’s obvious vested interest in the future trending toward the remote, it struck me that the need to jet to locations each month to meet with your worldwide team seems to introduce its own burdens. There are also clear and long-understood advantages to gathering pools of similarly skilled talent in the same city—be it tech-boom San Francisco or Renaissance Florence—as a catalyst for innovation. And the capital infusion into technology companies in recent years is so astronomical that staffing overhead can hardly be identified as a critical factor in predicting corporate survival. (Hopin recently received a four-hundred-and-fifty-million-dollar investment. The operation could likely lease a half-dozen office buildings without seriously denting its burn rate.)

All this being said, however, there’s an insistent economic logic to Herd’s prognostications that separate them from much of the existing advocacy for remote work, which tends to focus myopically on the benefits to the employee and to sweep aside the challenges of making these arrangements work. Even if some of the details of Herd’s predictions aren’t accurate, his broad points demand to be taken seriously. The office-as-factory model is not fundamental but was instead a temporary solution to support collaboration and information access in a pre-digital world dominated by management ideas from industrial manufacturing. The remote-first alternative has been technologically possible for a while now but has been held back by the difficulties of reorienting organizational culture away from the office. Once expertise in these new kinds of arrangements emerges in the world of tech startups, it might spark the spread of this model with sudden speed across the knowledge economy.

All of this was on my mind recently when my family gathered with some friends at a brewpub that had set up seats in the courtyard of a classic high-end office park, built next to a metro station in suburban Washington, D.C. All around us were empty windows plastered with “Space for Lease” signs. That same day, Herd had tweeted a simple declaration: “Remote resets broken ways of living.” As I surveyed the empty offices, evidence perhaps that Herd’s vision was already unfolding, I was struck by an urgent thought: I really hope that’s right.

The Great Resignation Is Accelerating in America, and a lasting effect of this pandemic will be a revolution in worker expectations. By Derek Thompson for The Atlantic

I first noticed that something weird was happening this past spring.

In April, the number of workers who quit their job in a single month broke an all-time U.S. record. Economists called it the “Great Resignation.” But America’s quittin’ spirit was just getting started. In July, even more people left their job. In August, quitters set yet another record. That Great Resignation? It just keeps getting greater.

“Quits,” as the Bureau of Labor Statistics calls them, are rising in almost every industry. For those in leisure and hospitality, especially, the workplace must feel like one giant revolving door. Nearly 7 percent of employees in the “accommodations and food services” sector left their job in August. That means one in 14 hotel clerks, restaurant servers, and barbacks said sayonara in a single month. Thanks to several pandemic-relief checks, a rent moratorium, and student-loan forgiveness, everybody, particularly if they are young and have a low income, has more freedom to quit jobs they hate and hop to something else.

As I wrote in the spring, quitting is a concept typically associated with losers and loafers. But this level of quitting is really an expression of optimism that says, We can do better. You may have heard the story that in the golden age of American labor, 20th-century workers stayed in one job for 40 years and retired with a gold watch. But that’s a total myth. The truth is people in the 1960s and ’70s quit their jobs more often than they have in the past 20 years, and the economy was better off for it. Since the 1980s, Americans have quit less, and many have clung to crappy jobs for fear that the safety net wouldn’t support them while they looked for a new one. But Americans seem to be done with sticking it out. And they’re being rewarded for their lack of patience: Wages for low-income workers are rising at their fastest rate since the Great Recession. The Great Resignation is, literally, great.

For workers, that is. For the far smaller number of employers and bosses—who in pre-pandemic times were much more comfortable—this economy must feel like leaping from the frying pan of economic chaos, only to land in the fires of Manager Hell. Job openings are sky-high. Many positions are going unfilled for months. Meanwhile, supply chains are breaking down because of a hydra of bottlenecks. Running a company requires people and parts. With people quitting and parts missing, it must kinda suck to be a boss right now. (Oh, well!)

The great resignation is not the only Great R-word overhauling the labor force.

Leisure and hospitality workers might be saying “to hell with this” on account of Americans deciding to behave like a pack of escaped zoo animals. Call it the Great Rudeness. Airlines in the United States reported that, by June 2021, the number of unruly passengers had already broken records—doubling the previous all-time pace of orneriness. The Atlantic writer Amanda Mull has chronicled America’s epidemic of bad behavior, from Trader Joe’s tirades to a poor Cape Cod restaurant that had to close briefly in the hope that its clientele would calm down after a few days in the time-out box. Cabin-fevered and filled with rage, American customers have poured into the late-pandemic economy with abandon, like the unfurling of so many angry pinched hoses. I don’t blame thousands of servers and clerks for deciding that suffering nonstop rudeness should never be a job requirement.

Meanwhile, the basic terms of employment are undergoing a Great Reset. The pandemic thrust many families into a homebound lifestyle reminiscent of the 19th-century agrarian economy—but this time with screens galore and online delivery. More families today work at home, cook at home, care for kids at home, entertain themselves at home, and even school their kids at home. The writer Aaron M. Renn has called this the rise of the DIY family, and it represents a new vision of work-life balance that is still coming into focus. By eliminating the office as a physical presence in many (but not all!) families’ lives, the pandemic may have downgraded work as the centerpiece of their identity. In fact, the share of Americans who say they plan to work beyond the age of 62 has fallen to its lowest number since the Federal Reserve Bank of New York started asking the question, in 2014. Workism isn’t going away; for many, remote work will collapse the boundary between work and life that was once delineated by the daily commute. But this is a time of broad reconsideration.

Finally, there is a Great Reshuffling of people and businesses around the country. For decades, many measures of U.S. entrepreneurship declined. But business formation has surged since the beginning of the pandemic, and the largest category by far is e-commerce. This has coincided with an uptick in moves, especially to the suburbs of large metropolitan areas. Several major companies, such as Twitter, have announced permanent work-from-home policies, while others, such as Tesla, have moved their headquarters. Several years ago, I wrote that America had lost its “mojo,” because its citizens were less likely to switch jobs, move to another state, or create new companies than they were 30 (or 100) years ago. Well, so much for all that. America’s mojo is back, baby (yeah), and it may lead to a better-job revolution that outlasts the temporary measures, such as unemployment super-benefits and rent protection, that have nourished it.

As a general rule, crises leave an unpredictable mark on history. It didn’t seem obvious that the Great Chicago Fire of 1871 would lead to a revolution in architecture, and yet, it without a doubt contributed directly to the invention of the skyscraper in Chicago. You might be equally surprised that one of the most important scientific legacies of World War II had nothing to do with bombs, weapons, or manufacturing; the conflict also accelerated the development of penicillin and flu vaccines. If you asked me to predict the most salutary long-term effects of the pandemic last year, I might have muttered something about urban redesign and office filtration. But we may instead look back to the pandemic as a crucial inflection point in something more fundamental: Americans’ attitudes toward work. Since early last year, many workers have had to reconsider the boundaries between boss and worker, family time and work time, home and office.

One way to capture the meaning of any set of events is to consider what it would mean if they all happened in reverse. Imagine if quits fell to nearly zero. Business formation declined. In lieu of an urban exodus, everybody moved to a dense downtown. It would be, in other words, a movement of extraordinary consolidation and centralization: everybody working in urban areas for old companies that they never leave.

Look at what we have instead: a great pushing-outward. Migration to the suburbs accelerated. More people are quitting their job to start something new. Before the pandemic, the office served for many as the last physical community left, especially as church attendance and association membership declined. But now even our office relationships are being dispersed. The Great Resignation is speeding up, and it’s created a centrifugal moment in American economic history.

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