“In the next 2 to 3 years, we’re going to see the largest career migration in history.”Steve Cadigan, LinkedIn’s 1st Chief HR Officer
The Great Resignation
We have all seen and heard about the coming tsunami of career migration, as Steve Cadigan so eloquently put it. Some call it The Great Quitting, others The Great Resignation.
Whatever you call it, everyone of us can feel the earth moving beneath our feet.
Something’s about to happen, and if you’ve somehow been stuck under a rock for the last 18 months, then you could do worse than to take a look out to see the coming stampede.
Whether you’re going to get trampled on, or have the popcorn seats with the best view, is really up to you. And in particular how your company views remote work.
I’m not here to preach to the converted. Or to pitch myself as some future of work guru. I don’t know where this is going as much as the next person.
But I do have some trends to share which point to where the tsunami might be heading next.
Hint: It’s less about the 1st order effects and much more so about the 2nd and 3rd order effects.
From The Career Migration To The Geographic Migration
“A third say they would quit if their employer didn’t allow it [remote working]….We’re already seeing in our clients, people quitting because their organizations haven’t declared what they’re going to do.”
Kate Lister, President of Global Workplace Analytics
Kate Lister brilliantly summarizes where the world is at in this CNN interview here. What becomes clear is that there is a deep inertia to remote work in many companies and that this is going to end up worse than a bad horror movie.
But when we talk about the Great Migration, there are actually two dimensions to this, not just one:
- The Great Professional Migration: Employees are leaving their jobs because employers are forcing them to come back to the office and not allowing them to work from home. In some cases, employees are leaving because they don’t offer work from anywhere perks (especially if competitors do offer work from anywhere).
- The Great Geographic Migration: Work from anywhere is becoming a reality where employees are migrating physically to other countries, be it temporarily (e.g. a few months abroad) or permanently (e.g. to be back closer to family).
Second And Third Order Effects Of The Great Geographic Migration
If we accept that the Great Migration is not just a professional one, but also a geographical one, then this has mind-boggling implications.
On the one hand, it’s going to transform the workforce more structurally than the invention of the mass production assembly lines that Ford introduced in 1913. At least Ford’s assembly lines were in one physical place. If work from anywhere becomes a reality, then the biggest assets of the future (i.e. your people) could be based just as easily in Bali as New York. This will undoubtedly have enormous implications for the commercial real estate industry.
But beyond that, what will it mean for marginal tax rates for payroll taxes? Leo Varadkar, the Tánaiste or deputy prime minister of Ireland, touched on this when he recently said that Ireland’s tax rates are a “major disincentive” for remote workers.
But how would a country like Ireland respond to this? By lowering the marginal tax rate for high earners? What if other countries respond likewise and this leads to a “race to the bottom”?
We’ve all seen this show before, especially around corporation tax.
Remote Workers Not What You Think
The Great Migration also causes us to challenge our internal biases around what we define as remote workers.
Especially when it comes to work from anywhere, many people tend to bring up the image of someone from North America or Europe heading off to a beach in Thailand.
But that is only part of the story.
A potentially much greater force in this respect is the millions of expats/diaspora from countries in Eastern Europe or Asia who are working in Europe or North America and who want to return home a few months of the year to spend quality time with their families. This is especially true for collectivistic cultures where family is a core value for many people.
For these people, being able to spend time with a sick relative would be much more than an employee benefit, it would be the key difference between accepting a job or not.
Meet The New Era Of Work From Anywhere
To finish, I’d like to ask you to close your eyes and imagine you’re a remote worker who is left with a decision to make. You’ve got to choose between two jobs below. Which one would you choose?
Job Offer 1
- It’s a great company based in Silicon Valley.
- They spent a few billion dollars on the most incredible office, the coffee is amazing.
- You’ll be paid $150,000 but between Federal and State taxes you’ll be taxed at 40% (so ~$90,000 after tax).
- You also have to be in the office at least 3 days a week and your team manager doesn’t allow working from home on Mondays or Fridays.
- The monthly rent is really expensive locally at around $3,000 a month. The cost of living is also very high.
Job Offer 2
- It’s a great company which is remote first. They don’t even have a headquarters.
- They allow everyone to work from anywhere (up to 20 countries around the world including Thailand, Indonesia and Portugal).
- They also bring the whole team on an annual retreat for a week to some exotic place.
- You’ll be paid $120,000 but because you’ve smartly planned your taxes and where you’ll base yourself, you’ll be taxed at 20% (so $96,000 after tax).
- The monthly rent is really inexpensive locally and you can rent a really luxurious house at around $1,500 a month. The cost of living is also quite low.
So, which one will you choose?
John Lee is Co-founder of the Work From Anywhere team, a platform to help companies execute a hire or work from anywhere strategy. John is a Chartered Accountant who speaks 6 languages and was previously the senior finance leader of a €4 billion division of FTSE-listed CRH Plc. John and his family are passionate about travelling and his eldest daughter, Rosa, while only 5 years old has already travelled to 25 different countries.
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