The home-working boom means anyone can work anywhere, hugely widening the talent pool 

“There is one fish in the pond, and ten anglers on the bank,” goes a Vietnamese proverb. As the current working-from-home debate gathers momentum, the discussion in large part revolves around the required rethink of management practices and technological enhancements. 

However, an even more impactful element is often overlooked: the significantly enhanced talent pool available to organisations thanks to the decoupling of ‘place to work’ from ‘place to live’. Let’s start by looking at a few specific such enhancements and considering their impact.

Prior to covid-induced widespread WFH policies, desk workers had to be physically present for at least eight hours a day. The two-hour daily round-trip commute in major big cities made it impossible to choose a place to live too far away from the office, with the side effect of creating a captive audience for increasingly unaffordable big-city residential property markets. 

Those two hours daily translate into roughly 40 hours monthly – or 11 working weeks of annual commute time. Apart from the associated costs and family impacts, having your employees spend (largely unproductive) 11 working weeks a year travelling just to sit at a desk doesn’t sound like a smart investment, especially given the widely used corporate slogan ‘employees are our biggest asset’. 

So, what can be done about it? How about meeting fortnightly in the office to reconnect and the rest of the time working from home (or a shared office space nearby)? This would allow employees to live pretty much anywhere within the UK, Continental Europe and beyond. It would also allow employers to fish in a much bigger pond when recruiting.

Martin Schwarzburg: Tim, how is the opportunity to recruit from a much wider geographical talent pool perceived among your clients?

Tim Green: In a word, mixed. The pandemic has changed the way many businesses are operating, and it could impact the way employees are hired from a geographical perspective. Broadly speaking, the overall trend may be more distributed teams, and a lot of people assume that more remote working means the talent pool is now global. But that very much depends on the sector and size of the business, and the job function or skillset a business is looking to attract. 

Most of the clients I have been speaking with (who are embracing hybrid working for employees) are more interested in the prospect of fishing from a national rather than global talent pool. They are more comfortable with people being UK-based and being able to meet at short notice when required. While technology allows some people to perform their roles without geographical restrictions, there are legal pitfalls and implications that need to be considered. These include employment rights, impact on the employees’ tax status, employers’ tax reporting and collection obligations, social security contributions, corporation tax and VAT, data protection and security, and health and safety. Employees who work remotely from overseas may be entitled to the employment rights of local workers in the host country simply by being present in that country while conducting their work. There’s a lot to consider, and most of the clients I speak to think that there is enough talent in the UK for most roles. 

My business specialises entirely in recruiting finance professionals to the commercial real estate sector. Clients of mine that are embracing WFH/hybrid working are now going to be able to fish from a national talent pool (depending on the job function, of course). London-based clients can now attract talent from other UK cities. That’s really good news for candidates who would like to work for a leading property business but don’t necessarily want to live in London. The majority of these people would, however, be more than happy to travel to London for a day or two a week. The positive implications for companies are many. 

MS: The discussion about an increased need to multi-task when working from home puts a spotlight on some demographic groups which had to juggle multiple responsibilities way before covid came along: parents. I believe the added flexibility for desk workers going forward should start a debate in companies to act on a large untapped (and sometimes marginalised) talent pool out there, in particular women who took a career break to care for children or elderly family members. It would also be a logical extension of the current diversity discussion in the real estate industry. 

What are you hearing from your client base in terms of broadening the demographic talent pool, Tim?

TG: WFH and hybrid working could now allow businesses to recruit and retain a workforce representative of the country’s demographics. Within the real estate sector, men still make up over two-thirds of leadership roles. While many organisations are challenged by attracting, retaining and promoting talented people, they under-utilise one major source of available talent: women. One of the reasons women may have had a harder time advancing professionally is that they have often had to choose family responsibilities over their careers. I have met countless female professionals who are eager to continue their career but simply can’t commit to five days in the office. Giving employees more flexibility in choosing when and where they can work could really increase gender equality. And that would be very good news for the real estate sector.

Preconceptions of how work is done, and where it is done from, have been proven malleable by the rapid shift to WFH. Hybrid working opens up opportunities for people who may have been geographically disadvantaged by being distant from a place of work or sector. And it may also allow businesses to hire and keep older employees. Seasoned professionals can be invaluable for employers in retaining institutional knowledge and skills transfer, increasing age diversity and contributing to improved productivity.

MS: There are a couple of related thoughts and opportunities for both employees and organisations to keep in mind when thinking about talent pool enhancements. Let’s start by looking at the upside from an employee’s perspective.

Cost and quality of life arbitrage: Cost of living comparisons, quantifiable quality of life indicators on empirical websites such as Numbeo, and qualitative observations such as those by Rev Campbell Paget in his recent article for the Property Chronicle provide valuable evidence.

Purchasing power arbitrage: This is probably the major monetary impact on (partial) telecommuters. Looking at a purchasing power density map of Europe, for instance, quite a few interesting combinations emerge, both nationally and cross-border.

Tax arbitrage: Depending on an individual’s tax residency status and personal income tax status (including social security contributions), arbitrage opportunities present themselves. According to a heat map published by NGO the Tax Foundation, marginal personal income tax rates in European OECD countries vary widely, from more than 60% in Sweden to a little over 31% in Czechia.

In addition to quantifiable factors, qualitative ones are also emerging, such as better choices for employees with respect to their individual living environments, healthcare access, safety and pollution levels.

So, what’s in it for companies? Let’s start with cost savings. According to Cushman & Wakefield’s 2017 edition of its research report on office space across the world, annual costs per workstation in major gateway cities have reached significant levels, ranging from $27,650 in Hong Kong to $22,600 in London and a still hefty $16,000 in New York City.

Let’s assume you’re running a global company with central business district offices in New York, London, Hong Kong and Singapore, employing 200 staff at each location. Cutting the number of workstations by, say, 40% through a hybrid WFH approach would add almost US$6m a year to your bottom line.

Another major cost benefit for organisations is compensation differentiation depending on an individual’s residence and related costs of living, as indicated by some of the global tech companies implementing permanent hybrid WFH policies.

Last but not least, enhanced talent pools in combination with a partially distributed workforce will become a significant business continuity tool. The world is getting increasingly volatile, with disruptions easily spilling over from a seemingly localised crisis on to the world stage in no time, as indicated by the recent and more frequent occurrences of pandemics or extreme weather. 

Accessing wider talent pools and hybrid WFH solutions will obviously require the necessary digital and transport 

infrastructure investments, especially outside large metropolitan areas. The high-speed intercity rail network developed in China over the last couple of decades is one example to be considered by infrastructure planners.

As the current pandemic is forcefully challenging labour market dynamics, it will be interesting to see how much flexibility and willingness to change there really is in organisations. As Winston Churchill once said: “To improve is to change; to be perfect is to change often.”