Freedom is the new raise: Working from home

I have recently seen a video of Meet Kevin about home-office which I found very interesting and I would like to discuss it from a perspective of employer and employee. Kevin usually discusses real estate economics but I found his comment intriguing on why he thinks house prices in cities will be dropping. The new freedom of working from home.

Employee side of working from home

In your life you have earnings and spendings. Your earnings are based on your job(s) and probably some other income streames. Your employer will try to pay as little as necessary. Ok, so you might help him with the offer of the next few sentences while helping yourself.

Offer some fixed day working from home instead of a raise. Think about it: The employer can help to reduce the employee’s spendings while keeping his paycheck on the same level. It is a great way of going into negotation and it is especially intriguing for people that have to travel far. They are probably not saving too much on gas, but – and this is very important – they can save time. 

Let’s take Sara who has to commute for example everyday 60 mins in sum through the suburban districts by car driving around 20 km (or 13 miles) oneway. If she can work 20% from home now, she can save 20% of her commuting costs but also 20% of her time. And this is quite much. Consider she works as an engineer – that could be already equivalent to +150$ each month in “time money” without the gas costs. 

The employee can save money while working from home. Ok, but think about also how it helps the employee to relieve stress: The extra time can be used to ease the pain of household work or just to nap.

And the benefits for the employer

 I see some potential for improving on many points. That is on the moneyside but (!) there are indirect improvements for the employer, too. They are not so easy to measure and you have to think a bit around the corner to see a benefit. Here are some examples:

  1. You can save infrastructure: Less people in office, less seats to offer. You wanted to expand to a new, bigger building? Save this action for now and send your workers to work from home. Suddenly you got a lot more cash by liquidating this reserve.
  2. People are more efficient: Documentation writing at home without disturbtion. How beneficial can it be to work without a brake on one single document?
  3. People are less stressed: Noise in office will be down. 

Of course, this is just an example but I hope that some of these points might light up your interest.

A round-up of the idea

Some politians are now intrigued by introducing a obligation by law to offer home-office. It would help them to reduce the stress in the public infrastructure. For example, reduce traffic density and thus reduce traffic jams and probably crashes. This is a beneficial step for the public well-being because everyone would save a bit of time commuting.

The extreme case of having a 100% possibility to work from home is interesting as well and this is what Kevin discusses and it might influence the house market. You can choose your living spot anywhere and move out of the cramped cities to a much cheaper place to help remove living costs. This would very much lead to a shift in house pricing infrastructure and to a rural exodus as presented by Meet Kevin.

But this blog is not about economics, it is about leading and business. So next time you discuss a salary raise, both sides could discuss a working from home package instead of a raise. Might be a win-win for both parties!



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