Cholera in a time of WFH

To avoid a Broad Street pump situation at the water cooler, companies are telling people not to come in. WFH tool renaissance, normalization, you know the drill. I’m not the only one writing about this.

Physical goods companies are discovering that they are powerless over their addiction to complex and opaque supply chains.

Services companies are in theory in the same boat – they’re suffering a shortage of the sweet on-site labor to which they’ve become addicted. In practice, they’ll learn they don’t need to be helped any longer, they’ve always had the power to go back to Kansas (where offices are cheap), and in fact can survive with fewer germy handshakes, fewer greasy lunches, and fewer pricey square feet of CBD real estate.

Shocks interrupt old trends and make room for new ones, almost by definition. Coronavirus is a shock and could trigger a mini recession which, like every recession, would see full-time jobs converted to part-time. This time is different in that many of those new part-time jobs will be remote, allowing companies to reduce their space footprint and hire outside big cities. Etc. I’m not the only person writing about remote work.

Yes this all will normalize WFH, but it will have a downstream effect that’s more important – it will denormalize full-time jobs as the way white collar work gets done.

California’s anti-gig law is a blip

CA MA NY and other states have come down hard on ride-hailing companies for using contract labor instead of employees. California’s AB5 is modeled on an LA case, Dynamex v Superior Court, where some trucking company got in trouble for turning their employees into contractors. Uber and Lyft have unsuccessfully appealed and are probably still lobbying to change it.

Look, the stuff you get as an employee is great. Healthcare, lower employment taxes, amazing. As someone who’s been 1099 as often as not for the last few years, I don’t like the idea that these things are only available to employees, and would prefer a system that priced stuff equally for temps as for the elect.

But contractors are the future. The communication tools to operate your workforce as WFH during a quarantine are not that different from tools to rapidly onboard skilled strangers to broadly-defined projects. And while slack and jira suck for this, the next generation of async work tools will legitimately encourage async rather than interruptibility and help to capture knowledge that speeds onboarding. Once these tools are normalized, smart operators will use them to leverage external labor.

In a recession, better be a cockroach than a unicorn. Non-mythical, glitter-free, survival-oriented business models with belt-tightening in their DNA will use white-collar gig labor and advanced communication tools to scale as needed while maintaining a tiny footprint. Same model as AWS, but for knowledge work instead of consistent / available / partition-tolerant VCPU cores (pick any 2).

Outsourcing knowledge work is hard but

Outsourcing / offshoring knowledge work is hard for like four reasons I think. I ask people about this all the time because I suspect I’m a cadillac in a kia world, and therefore my category of technical work is doomed. Answers I get:

  • Downward communication: Async / written communication is a rare skill and when managers lack it, remote / temporary people won’t do the right work
  • Quality: Offshore tech skills aren’t always as good as high-rent, and / or the fresh skills cost pretty much the same everywhere – the market for good work isn’t totally inefficient
  • Duplex communication: Even with good communication skills, in-house people self-manage way more than most managers think, and remotes / temps can’t do that as well because they’re out of the loop
  • Recruiting: Hiring is expensive and error-prone. When you have to go through a hiring process for smaller units of work, it’s a net loser

On the hiring side, LNKD and upwork are a lot better for the buyer than monster.com was 15 years ago (though good luck keeping your hires for more than 2 years). Also monster.com had a leak and now I get these bitcoin threat emails with my monster.com password in the subject line.

Increasing the efficiency of hiring won’t just mean faster full-time hires, it means that short-term or lower-value work becomes more feasible.

Our current run of low unemployment is economically weird in that salaries haven’t gone up that much. More efficient hiring / onboarding is potentially a factor here, but I suspect this trend is only beginning – ‘interchangeable knowledge labor’ is an area where we’re still dipping our toes.

As companies standardize on more complex tools, that also has an impact on hiring. 15 years ago this was ‘proficient in microsoft office’ for white collar; now there are a lot more things – salesforce, for example, lets you come in and know how to do a bunch of organizationally-relevant things just from knowing salesforce.

I’m sort of conflating temp work, remote work, offshore work, and outsourcing, which are all subtly different and unfair to compare. I really liked the USV post about scaling with cheap(er) remote teams. I’ve heard a lot of different narratives for how people use remote offices: some begin remote and re-center around NY/SF when their product gathers steam, others do it to get through a supply or demand shock for a totally-local team, others try it and ditch it because they can’t get good quality (for one of the four reasons above).

Offshore is here to stay, but my point is that remote work tools inherently also enable temping, in whatever zip code.

Health insurance, home ownership & jobs

Are all things that governments use policy to give to people. And when laws / regulations create high demand, lax controls, or artificial prices, you get bubbles or other problems.

Home ownership was a bubble that popped in 08. Health insurance is a bubble that may pop when AMZN gets in the market.

I don’t expect governments to allow the end of full-time jobs to happen easily, but it’s coming and hopefully we’ll find a way to make our lives better from the transition.

Appendix

I’m collecting observations / claims about the downstream effects of quarantine on other parts of work.