Is WFH A Societal Shift?

...or just a Covid-era practice, asks Ajit Balakrishnan.

A friend who is the founder of a several thousand-person tech company in India recently recounted to me an event: "A senior woman executive came to me one recent morning and said: 'Sir, can we stop work from home and insist that everyone come to our office please?'"

He said he was astounded that she should make this request because she was a very senior person, and the recent pattern had been of employees saying that work from home had been a true blessing.

"Why are you suggesting this ... are you finding it difficult to manage your team when they and you are not in office?", he said he asked her.

"No sir," she said, but he added that when she said this, he could see a wistful expression in her face, which gave him a hint that there was something bigger behind her request.

On gentle prodding he found the real reason: She, her husband, and their daughter lived with her in-laws in their flat and that when she worked from home, her mother-in-law would constantly call her with errands to be done, giving her no chance to concentrate on her work.

My friend is still grappling, like perhaps almost every chief executive officer in the world, the merits and demerits of work from home versus work from office, but this dilemma has a bigger meaning.

To start, I couldn't but think of the bright expressions on people's face in the 1970s, when they announced that their child had got 'an office job'. To large numbers of us Indians (and perhaps people in other countries as well), an 'office job' meant a reasonable pay, reasonable working-hours, benefits like medical insurance, good working conditions, and, most of all, a step into the 'middle class'.

I told myself that it's worth researching the historical origins of 'office'.

Our trusted friend Wikipedia, when searched for 'office', gave me this answer: 'An office is a space where the employees of an organisation perform administrative work.'

I also discovered that the first 'office' in the world in the sense we know it, a building with multiple floors, with rooms containing rows of desks where people sit and work more than nine hours a day, came into being at Leadenhall Street, London, in the mid-17th century and was set up by the East India Company to handle the paperwork concerning its vast territorial holdings in India.

The 'office' has also been the triggering force for the creation of our modern large 'cities' like Bombay, New York, London, San Francisco, to name a few. Such cities serve as the gathering place for people, in 'offices', under various institutional names such as 'corporate office', 'income-tax office', 'secretariat', and so on.

And with people gathering in such concentrations, it also led to the construction of housing for people occupying such 'offices' as well as 'stores' and 'markets' to make it convenient for such people to shop for things.

Never mind that this also meant the creation of vast 'slums' for those unfortunate brethren of ours whose wages were not big enough to afford real homes.

In other words, for the last two centuries people have all been flocking to those places where they could benefit from the jobs created by offices even though that has meant 1- or 2-hour daily commuting from home to office and back every day.

Broadly this we describe as 'urbanisation' and use it as a metric to signal 'progress'. And 'progressive' governments now spend astronomical amounts of money to build highways and train tracks to make sure that people can get to their 'office' every day to do the 'work' that earns them the money to live.

Such spending for homes and offices has come to be called 'real estate' and such real estate spending is now 7 per cent of India's GDP and, according to some real estate enthusiasts, it may rise to 20 per cent ($1 trillion) in the next few years.

Now comes some puzzling statistics which have not yet achieved headline status but are worth thinking deeply about: According to the official state data, the Bay Area in California, which, as you know, is the centre of America's technology world, has lost a quarter million residents between 2020 and 2022, or a 7.5 per cent decline.

New York in the same period has seen a decline of 5.8 per cent. As a recent headline in an American news site said, 'Two million people fled America's big cities from 2020 to 2022.'

According to the reputed American journal The Atlantic, 'The great metro shrinkage also appears to be part of a broader cultural story: The rise of remote work has snipped the tether between home and office, allowing many white-collar workers to move out of high-cost cities.'

In India as well, there are stray reports about major IT companies increasingly shifting their focus to Tier-II and smaller cities to cut real-estate cost, stabilise attrition, and give employees a better work-life balance.

Are these just stray headlines or is there a larger societal change under way: A reversal of what 'industrialisation' and 'urbanisation' brought on by the technologies that the Digital Revolution has now brought us: Web sites of information that can be accessed from anywhere (as distinct from centralised libraries and files), making payments using our mobile devices (as distinct from paying cash at counters or sending cheques), video conferencing apps that allow us to have meetings not just within cities by also across countries (as distinct from commuting/ flying to meetings).

Maybe these technologies, as well as cultural benefits (like women workers being freed from cultural pressures as in the example above) and saving multi-hour daily commutes, will make work from home the norm in a few years?

And if that is the trend, what implications does this have for our classical economic thinking where government spending on roads and bridges and railways and airports was supposed to drive economic growth and prosperity?

Is there a societal shift under way?

Ajit Balakrishnan (ajitb@rediffmail.com), founder and CEO, Rediff.com, is an Internet entrepreneur.