How ‘work from anywhere’ changes things
Before the pandemic, software engineer Allen Dantes commuted 4 miles every day from his apartment to the headquarters of Chow Now in Los Angeles.
The online food ordering platform sent employees home in March until further notice, leaving Dantes, 27, to work from the small twobedroom apartment he shared with his girlfriend. A few weeks ago, they moved into a 1,500-square-foot, three-bedroom, two-bathroom Craftsman they bought for $415,000.
Dantes’ new commute: 390 miles or zero, depending on how you look at it.
The house is in Sacramento, Calif. Both have kept their jobs, though neither of their companies has offices there.
Working from home was intended to be a temporary measure for millions of workers in the early days of COVID-19. With no clear end in sight eight months later, employers are offering a perk that would have been unthinkable at the start of the year: Live and work from wherever you want — permanently.
It is a monumental shift for corporate America, one that’s forcing companies to rethink the ways they conduct business, manage employees and shape their corporate cultures. And it has major implications for workers, who are now free to untether themselves from city centers and move to places better suited for their budgets and personal situations. But there is often a catch.
Many employers are reducing pay when workers decide to move to less-expensive cities, a move that has sparked discussion about what it means to be fairly compensated. In some cases, employees have seen their salaries cut more than 10 percent.
Tech companies are leading the way, reversing years of heavy investment in lavish Silicon Valley campuses designed to lure workers and keep them there well beyond the usual 9-to-5 workday. Facebook, Twitter, VMware, Stripe and ChowNow are among those that have rolled out permanent work-from-anywhere policies and salary adjustments and are preparing for a wave of employees to distance themselves from headquarters and other main offices. In May, CEO Mark Zuckerberg predicted that up to half of Facebook’s employees would work from home within five to 10 years.
“Opening offices will be our decision,” Jennifer Christie, Twitter’s chief human resources officer, said inaMaymemo, “when and if our employees come back will be theirs.”
Tech companies have often been at the forefront of
trailblazing workplace trends, helping popularize open-plan office layouts, standing desks and casual dress codes. But its leading companies for years resisted allowing people to work remotely, insisting that being physically in the office was key to creative collaboration.
In 2013, then-CEO Marissa Mayer famously banned telecommuting at Yahoo. That same year, Patrick Pichette, who was Google’s chief financial officer, said the company wanted “as few as possible” to work from home: “There is something magical about spending the time together.”
Facebook, founded in 2004, resisted opening an office in nearby San Francisco until 2017, preferring to make all its Bay Area employees commute to its campus in Menlo Park.
But when COVID-19 hit the U.S., tech companies were among the first large employers to send their workforces home. Many found the transition surprisingly smooth.
Employers say forced work-from-home helped them see that their workers could be just as productive, or even more so, outside a traditional office setting, aided by better communication tools and other technologies that have made it easier to get work done from wherever.
The benefits for workers are clear: less time stuck in traffic, more time at home, greater freedom to set and manage one’s own schedule, and the possibility of relocating to a more affordable city or to be closer to extended family.
For employers, that means happier workforces, higher retention rates and reduced real estate and office expenses. But they say the greatest upside is the ability to attract new em
ployees who live in places they would not have hired from in the past, giving them a competitive edge over rivals who insist on inoffice workers.
“All of a sudden, the entire U.S. is open to us hiring people,” said Rich Lang, senior vice president of human resources at VMware. “It opens up a whole X factor.”
Before the COVID-19 pandemic, VMware’s U.S. recruiting efforts centered arounditshalf adozen large offices in regions such as the Bay Area; Bellevue, Wash.; and Colorado Springs, Colo. Now, the software company said it will consider applicants regardless of location.
Tomake things fair, existing employees can move wherever they want, an offer that the company expects many will take: In a survey sent to VMware’s 32,000 employees, half of respondents said they would like to continue working from home long term; only 10 percent said they wanted to be in the office the majority of the time.
But that new freedom can come at a price. VMware is adjusting pay based on factors including the cost of labor and income tax rates in an employee’s new location. Workers have access to an internal tool they can use to compare how their salaries would change.
So far, two-thirds of VMware employees who permanently relocated since the flexible-work initiativewas rolled out in September saw their pay decrease, some by asmuch as 18 percent; the rest saw their pay increase, a spokeswoman said.
Companies including Reddit and Veeva Systems say they are not adjusting salaries. Reddit went a step further, saying in a blog
post that it is “eliminating geographic compensation zones in the U.S.,” putting all employees on the same footing regardless of where they live and work. “It means that our U.S. compensation will be tied to pay ranges of high-cost areas such as SF and NY.”
Some say any pay cuts are unfair. If companies are already saving money by not having to maintain physical offices, the thinking goes, shouldn’t those savings be passed on to employees? And if an employee’s work is unchanged, shouldn’t they be compensated just as they were before?
“You’re a beta or not valued if you take a pay cut and bow to HR or dumb corporate rules,” said Adam Singer, chief marketing officer at enterprise tech company Think3. Singer moved to Austin in December from the Bay Area, where he had worked at Google and other tech companies for a decade.
Since then, “I’ve helped probably about 10 of my friends who are leaving San Francisco and New York City negotiate to not let their company adjust their pay,” he said. “I understand this is a first-world problem. But the margins of these software companies are so good I think employees should stand up for themselves.”
Dantes, the software engineer, had originally wanted to relocate to the Bay Area, where he has family, but settled on Sacramento because it was more affordable. And there was a welcome surprise: After crunching the numbers, ChowNow decided to keep his pay the same.
“I fall in the category of work is work,” Dantes said. But if the company had cut his salary, “Iwould have understood.”
If industries beyond tech
follow its lead and adopt work-from-anywhere policies, it could have ripple effects well beyond how far programmers can stretch their paychecks. Without the need to follow the most desirable jobs, U.S. knowledge workers could allow other factors to determine where they move and how often.
U.S. mobility rates have been falling for years as people stay put and move less, said Greg Lindsay, director of applied research at NewCities, a think tank focused on urbanization. “It’ll be significant if the pandemic reverses that,” he said.
Lindsay predicts millennials will move to less-expensive metro areas from
New York, Los Angeles and other job hubs.
But those who flee high housing prices and taxes may find they’re sacrificing more than a percentage of their salaries. Professional advancement in a distributed company could look very different, and distant employees could find themselves at a disadvantage relative to their office-bound colleagues.
“If you’re working remotely, career prospects are going to be fewer,” said Teresa Lee, a career coach in Los Angeles. “There’s decreased visibility, so you won’t be top of mind when it comes to promotions and these sorts of things.”
Then there’s the question of how a distributed workforce will affect corporate culture. At tech companies in particular, the office environment is carefully cultivated — and paid for, with perks such as free food, laundromats, car washes, child care, bicycles and state-of-the-art gyms.
Twitter began shifting toward a decentralized office model two years ago. Since last year, the San Francisco company’s permanent work-from-home requests have more than quadrupled, a spokesman said; before the pandemic, just 3 percent of Twitter’s workforce took advantage of its Flexible Work Program.
For employers and employees, it’s a moment of “cascading uncertainty,” said Sherveen Mashayekhi, co-founder and CEO of tech recruiting company Free Agency.
“The percentage of remote jobs is going to increase permanently. The question is how much,” he said. “We’re reconsidering what work looks like.”