Musk bets on tech workers giving up WFH freedoms

Elon Musk often resembles the unrestrained identity that other business leaders hide in plain sight, a personality unchecked by social conventions and the usual norms of corporate behavior. Others just think so: he’s more than happy to say it out loud and to hell with the consequences.

One example is Musk’s demand this week that all Tesla and SpaceX workers give up the comforts of working from home and return to the office (corporate factory workers have never had a choice). Anyone who doesn’t want to work a 40-hour week should seek employment elsewhere.

Countless business leaders, frustrated with trying to bring their employees back to the office, will once again find themselves secretly envying Musk. There are, however, obvious risks.

Musk’s command amounts to a test of whether employers or employees hold the hand of the whip at a time of rapidly changing business conditions. Companies in all sectors have struggled to find and keep their most valuable employees, but this has been particularly true in the technology sector, where rapid growth and a shortage of people with key skills have combined. to increase worker power.

Yet for the first time since the 2008 financial crisis sent a brief spasm of fear through the business world, tech companies are being forced to abandon their familiar management playbook. And this time, with runaway inflation, central banks are not ready to come to the rescue. An industry that has thrived on abundant cash is finally facing a reckoning.

As always with Musk, the eye-catching statement may not be all it seems. Many of its employees are likely to work well over 40 hours a week, meaning they could get by with four days in the office – not so different from the three days that many tech companies now require.

But Musk’s outburst may also amount to an order for a full-time presence in the office. After all, he joined a discussion on Twitter to say that anyone who thinks coming to the office is an outdated concept should “pretend to work somewhere else”.

For aerospace engineers, battery experts or automotive designers who have had the chance to work on breakthrough products at Musk’s companies, there will be strong incentives to stick around. For software engineers and the many workers who aren’t involved in front-line products and technologies, it’s a different matter. They are likely to feel less tied to the assignment and more inclined to seek opportunities elsewhere, often at companies willing to accept more flexible ways of working.

According to Nick Bloom, an economics professor at Stanford University, research suggests that a company trying to force workers back to full-time will need to raise pay levels by 10% to avoid widespread defections.

For some smaller tech companies that have struggled to compete with much wealthier rivals for recruiting talent, total remoteness has become a source of advantage. Companies like Airbnb also give workers complete freedom to decide for themselves whether they want to return to the office or take time off, only meeting in person for periodic bouts of organized collaboration.

Yet that means betting on an untested hybrid approach to work. It also means moving away from a culture that has served Silicon Valley well. It’s a culture built on showing up to work in person and includes both the famous perks like free food that were designed to keep people in the office longer, and the camaraderie that comes from working from long hours close under intense pressure.

Meanwhile, managers like Musk who try to cajole or bully workers into coming back are counting on a new sense of insecurity within the workforce. It may be true, as many tech entrepreneurs like to say, that a downturn is the best time to hire talent. But when money is scarce, any job can become a luxury.

This isn’t just true for the most badly hurt tech companies that need to save money to survive. With the stock market valuing growth above all else, it made sense to invest money in fringe projects or marketing efforts with increasingly longer payback periods — anything that, in short, fueled the turnover. More work led to a need for more workers.

This is no longer the case. Musk’s ultimatum is a bet that tech workers will see the writing on the wall and be willing to give up some of their freedoms. For now, few tech CEOs are likely to follow him.

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