Why Tech Leaders Are Bringing Covid-Era Silicon Valley To A More Remote Workforce

As the global talent pool of skilled tech workers grows - and the costs as well as hassles of living in the Bay Area, Seattle and even New York rise - perceptive leaders and their venture capital backers recognize the advantages of encouraging a more remote but connected workforce.

Many people prefer to work in areas where the cost of living is lower and where they have family ties. And as leadership sees the productivity, innovation and financial success possible with remote work, the socio-economic, risk-management and marketing benefits of having a more diverse workforce in a more globally dispersed network could optimize performance for them - and for many other companies, as well. JL

Katharine Bindley reports in the Wall Street Journal:

When it is safe to return, many tech companies (will) allow employees to skip the commute and have workforces scattered beyond Silicon Valley. The shift to remote work (is) accelerating tech companies’ efforts to spread beyond Seattle and San Francisco, hiring people “wherever they are”. Property prices and cost-of-living in those regions have made it harder to find talent. “You can recruit from anywhere because the talent pool is bigger. If you kept salaries the same, your employees would get more out of their dollars if they could work anywhere." (But) the number of people who wish to be remote full-time will be smaller than those who want to split time between home and office.

Four years ago, Aaron Levie moved Box Inc., the fast-growing cloud-computing company he co-founded, into a new, red-brick building with its logo on the facade. Box decked it out with all the trappings of Silicon Valley: a sleek cafeteria, common areas with orange hammocks, and a bar built from a converted Volkswagen van with kombucha and cold-brew coffee on tap.

Mr. Levie and his staff haven’t been in that office for eight weeks, yet the chief executive says work has been plenty smooth without it. His sales team is interacting with more clients, participation is higher in weekly all-hands meetings, and without travel, he devotes more time to work.

“You strip out a commute and you strip out having to get on an airplane for business meetings and you kind of remove a lot of these other things that crept into the work that you had to do,” said Mr. Levie, a longtime proponent of flexible work. Box provides online storage and file-sharing products that can be used for such situations.

Even when it is safe to return, Mr. Levie says he expects many tech companies to allow some employees to skip the commute—and have workforces that are scattered well beyond Silicon Valley.

Companies across the business spectrum are evaluating when and how their employees will return to the office. But few industries have been as closely identified with their workplace as technology.

Silicon Valley, the stretch of small cities and office parks south of San Francisco, is a metonym for the entire tech industry, and the campuses of companies like Facebook Inc., Alphabet Inc.’s Google and Apple Inc. are famous for innovative office layouts, collaboration spaces, ping-pong tables, and upscale cafeterias that mean employees never need to leave to eat—or, in many cases, pay for food.

In recent years, tech giants have invested even more in their offices, among them Apple’s $5 billion spaceship-shaped headquarters, Salesforce.com Inc.’s 61-story tower in the heart of San Francisco, and, Amazon.com Inc.’s giant, tree-filled glass spheres in Seattle. By design the spaces are open so people can easily come in contact with one another—the very opposite of social distancing.

But the industry also has an overwhelmingly white-collar workforce and an ethos of adaptability, and tech companies were among the first to send employees home when the coronavirus outbreak paralyzed the U.S. in March. Two months into that new reality, some tech companies say the changes will have lasting impact on how their industry works and recruits.

Few companies have gone as far as Twitter Inc., whose CEO, Jack Dorsey, said this past week that most employees would be permitted to work from home permanently. Google and Facebook are allowing employees to work from home until at least the end of the year, and Facebook CEO Mark Zuckerberg last month canceled all gatherings of 50 or more people through June 2021.

Tech companies are experimenting with virtual ways to hold the conferences and product launches that are central to their efforts to build loyalty and excitement among developers and customers. Apple plans to conduct its June developer conference entirely online for the first time.

Some executives see advantages in the shift to remote work, such as accelerating tech companies’ efforts to spread their workforces beyond the West Coast hubs of Seattle and the San Francisco Bay Area. Soaring property prices and cost-of-living in those regions have made it ever harder to find enough talent, and fueled criticism that the tech giants have made the areas unaffordable.

Amazon, Google and Apple have invested heavily in locations outside their home bases, and Mr. Zuckerberg said in October that Facebook was already growing primarily outside of the Bay Area.

The pandemic “is going to be the gasoline on the fire,” said José Cong, a talent-acquisition adviser who previously worked in recruiting roles at Apple and Google.

“Today if we’re looking at the cost of competing for talent in the Bay Area, rents are at an extravagant level,” he said, noting that employee perks are costly, too. “On top of that, if you’re a Google, oh my goodness, how much money are you investing into feeding your employees?”

If workers aren’t required at headquarters, new perks might include per-diem food stipends, or multiday off sites where remote teams can get together, Mr. Cong said.

“You can recruit from anywhere. That’s just great because the talent pool is way bigger,” said Mr. Levie of Box. “Even if you kept salaries the same, your employees would be able to get more out of their salary dollars if they could work anywhere,” he said.

Some are already moving. Heidi Kasemir, 31 years old, who works as a developer for an online-learning startup, long assumed she would leave San Francisco eventually, but coronavirus accelerated those plans. In mid-April, after almost eight years in the Bay Area, she negotiated with her company to take a 25% pay cut and work remotely from Salt Lake City.

“It’s not that hard to do, and I can very much see myself having a higher quality of life living somewhere else,” she said.

Maintaining the level of communication and camaraderie that enables innovation and product development will be a challenge if a significant number of staff remain remote.

“Companies will have to find ways to build culture remotely, which is really tough to do,” said Gene Munster, a longtime tech analyst who is now a managing partner at Loup Ventures, a venture-capital firm.

Twitter recently held its first virtual global hack week, which is usually held in the common rooms of its offices. “Everyone could contribute in the same way and experience it together,” said Jennifer Christie, the company’s chief human-resources officer.

When offices do reopen, she wants to continue bringing on new employees—those not meant to work in San Francisco, who were previously flown to headquarters—virtually. “We just think it’s better for people to be able to onboard in the offices and locations where they are,” she said.

Ms. Christie said the company is now more open to hiring people “wherever they are” and not necessarily requiring them to come into Twitter’s offices, or even live in a city where there is an office. Still, she suspects the number of people who wish to be remote full-time will be smaller than those who want to split their time between home and the office.

“People like to come in and collaborate with and work with their folks. What we have seen is the biggest number of folks that want to take advantage of flexibility,” she said, referring to an employee survey taken during the past few weeks.

Brent Hyder, Salesforce’s chief people officer, anticipates many employees at the business-software giant will be eager to return to the office once it’s possible. They just might not come in every day.

“People are still going to want to be social,” he said. “People are still going to want a whiteboard to brainstorm together to solve problems.”

In part, the future of tech work depends on the function of the teams involved. Those who deal hands-on with hardware, for example, will find remote work harder to pull off. Apple already has begun calling some staff back to its Cupertino, Calif., campus, including a small percentage of its hardware engineers and some industrial designers, according to people close to the company.

Jason Owen-Smith, a professor of sociology at the University of Michigan who has studied the dynamics of high-tech industries, said research has shown there are downsides to employees not sharing space: fleeting and serendipitous interactions help generate new ideas, and new teams. “I would expect starting new things to be harder,” he said.

Facebook will try to offer employees flexibility, while maintaining the kind of innovation that comes from being in the same place, said Brynn Harrington, vice president of people growth and operations.

While the company offered everyone a videoconferencing device, Ms. Harrington says managers are encouraged to avoid back-to-back video calls. “We’re a very meeting-centric company,” she said.

She doesn’t see the office going away permanently, she said. “I don’t think that there are great examples of companies that solved innovation in remote environments.”