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Peak bay area? - BostonCard - 05-22-2020

With Twitter announcing that their employees will be able to work from home forever, even after the reopening, and facebook telling employees more or less the same thing (with the caveat that they will be paid less if they don't live in the Bay Area), I thought this article was interesting:

https://www.sfgate.com/living-in-sf/article/2-out-of-3-tech-workers-would-leave-SF-15289316.php

Two out of three tech workers would leave San Francisco if they could work remotely.  Now, not all will be able to, and even among those that will be able to, I'm sure some people appreciate the local area.  But if you had a young family, and were given the option of working remotely, why wouldn't you go somewhere where you could get a much larger house (with a home office for you to actually work from home) with a larger yard, for much less money?

The Bay Area has survived the dot.com bust and the financial crisis, so I expect it will survive the coronavirus pandemic just fine.  But I think that one of the biggest sources of fuel for the area: young, well paid, well educated, tech workers may provide less fuel to the area than before.

BC


RE: Peak bay area? - 2006alum - 05-22-2020

I would bet most of those polled are exhibiting a recency bias. What happens when you lose your job, or want to change jobs? Do you network from Salt Lake City on zoom to find out about other opportunities? If you work in venture or startups, are you doing all your pitches by zoom and worrying that those who can meet face to face will provide a more compelling pitch or be able to have better access to the latest 20-year-old founders? When Facebook makes you take a 30% pay cut and you're responsible for all your meals, dry cleaning, etc., do you envy your office-based colleagues who are enjoying the considerable perks of onsite work?

At the present moment, the value add of SF is at a nadir (because everything is closed) and the ease of WFH is at a peak (everyone's doing it, no one's looking for a new job, and most funds and funding rounds, etc. are minimally active at the moment). When things start to go back to normal, I think the over-under from WFH outside of the Bay Area on a permanent basis will not seem as attractive as jobs where you can WFH 30-50% of the time but still benefit from relatively easy face-to-face work as well as the networking.


RE: Peak bay area? - Snorlax94 - 05-22-2020

My wife and I work in tech, and we were discussing this very thing last night.

We looked at each other and said, we could work and live in Hawaii? The example companies we've seen will adjust salaries based on the cost of living, which may deter some from moving to low-cost areas or India, but I think in Hawaii has an even higher cost of living.

But we decided not to look at it for now for a few reasons:
1) I think it puts employees a little bit at risk, depending on how unique their skill set is. When there are layoffs, remote employees may be less protected. Also, one of the things that makes sure you get treated well as an employee in the Bay Area is the ease with which you can hop companies. If you're living out in a forest in Oregon, maybe your employer *knows* you're harder to discover for competing recruiters, and that could impact which projects you are assigned and how much you're paid. On the flipside, if you're the #1 data scientist in the world and you always wanted to live next to a beach, good news for you!

#2) I think we're in the euphoric, honeymoon phase of work from home and I think it's not going to work nearly as well as people think. Let's say you have 20 people working on a new offering prototype. Normally, whenever you need feedback, you could just swing by a co-workers office and get input. You'd have weekly face-to-face review meetings to make sure you're on the right track. I've seen multiple instances during the Shelter-In-Place where millions of dollars were wasted because teams ran off on their own for 4-8 weeks without enough feedback, and their work had to be tossed after their plan belatedly received a broader review.

Also, it's usually already difficult to interview and train new employees with the staff on hand, and it'll be even harder without on-site employees. I think it'd be weird and risky to hire people without having a whole team of people meet them on-site and could increase the risk of fraud. And it'll be hard to get up-to-speed and build teamwork and good relations without face-to-face time. Companies can run for a while with their current teams that have already been recruited and trained, but eventually, they'll need more people on-site.

Greedy tech companies already tried this during the giant Outsource to India/China/Ireland/Eastern Europe/The Midwest  Campaigns -- when they could've gotten away with paying a fraction of Bay Area salaries -- and it didn't work.

Many people in tech are hopeful that this could lead to people getting to spend more days a week working from home -- maybe 2-3 instead of 1. But my prediction is that there are intrinsic, substantial drawbacks to having everyone work from home that will become more apparent over time.


RE: Peak bay area? - Mick - 05-22-2020

(05-22-2020, 03:30 PM)BostonCard Wrote:  With Twitter announcing that their employees will be able to work from home forever, even after the reopening, and facebook telling employees more or less the same thing (with the caveat that they will be paid less if they don't live in the Bay Area), I thought this article was interesting:

https://www.sfgate.com/living-in-sf/article/2-out-of-3-tech-workers-would-leave-SF-15289316.php

Two out of three tech workers would leave San Francisco if they could work remotely.  Now, not all will be able to, and even among those that will be able to, I'm sure some people appreciate the local area.  But if you had a young family, and were given the option of working remotely, why wouldn't you go somewhere where you could get a much larger house (with a home office for you to actually work from home) with a larger yard, for much less money?

The Bay Area has survived the dot.com bust and the financial crisis, so I expect it will survive the coronavirus pandemic just fine.  But I think that one of the biggest sources of fuel for the area: young, well paid, well educated, tech workers may provide less fuel to the area than before.

BC

Could very well be.  My 24 year old lives in an apartment in the East Cut (Rincon Hill, by the SalesForce HQ), chiefly because he can walk quickly to the train.  It looks like he'll only have to go to the office two days a week, so he and his roommate (Lazard Freres) want to move further north.  They're thinking Marina, Nob Hill, North Beach.  My older son lived in Sea Cliff for six years before he moved to Santa Monica, but both my sons prefer SF.


RE: Peak bay area? - stupac2 - 05-23-2020

(05-22-2020, 03:50 PM)Snorlax94 Wrote:  Many people in tech are hopeful that this could lead to people getting to spend more days a week working from home -- maybe 2-3 instead of 1. But my prediction is that there are intrinsic, substantial drawbacks to having everyone work from home that will become more apparent over time.

I think it depends on the job. My job is virtually impossible to do from home fully because I interface with hardware, but my wife's seems to be easy enough (PM for an environmental remediation firm). I think that a lot of the software development done by junior staff at these big companies falls more toward the latter, but the actual innovation is the former. So you could end up with a system where the people taking permanent WFH essentially slot themselves as "code monkeys" forever, even if it's with a nice salary.

But agglomeration effects exist for a reason and you can't just wave a magic wand and make them go away. The Bay Area could certainly decline in importance, but it would be due to housing policies restricting growth and a new cluster forming in a better location, not massive amounts of WFH. (And I'm skeptical that would happen within 20 years, it's hard to make new clusters.)