If you’re a knowledge worker (i.e. you work in Tech, Consulting, Finance, Sales, Design, Media, Content Creation, Law etc.), pay close attention to what's happening around you.

Now is the time to invest in yourself, because the market value for your labour is about to go through the roof.

This is because of what I call the dispersal of human capital.

 

If you have a comment, leave it on the Reddit post for this essay on r/tomiwa.

 

Let’s start with a quick story. I studied software engineering and business in University in Canada. After graduating, a lot of my ambitious engineering friends went to California to work in tech and my ambitious business friends went to New York to work in finance. Then two things happened:

The lucky ones ended up making 2-3X more than those of us who stayed in Canada even though we all did the same work. The unlucky ones got their visas denied (some of them found out at the airport!).

In this new world of remote work, neither of these two things will happen again.

The last 12 months have shown us that we can work remotely from anywhere in the world and still be productive. The next 12 months will show us the implications of what this really means.

Currently, the labour market is hugely arbitraged by location. I’ve written before about how your salary as a new grad software engineer at Google can be 40% more simply by living in NYC or Silicon Valley instead of Waterloo, even though they are in the same time zone, have the same level of experience and are doing the same work.

Prediction: companies will stop “rewarding” employees for living in high-wage cities and “punishing” employees that live in low-wage cities. Everyone will get compensated based on value-added not location and it will be up to employees to decide where they want to live. 

See Remote Employees Shouldn’t Be Paid Less Based on Geography and Paying Remote Employees Fairly for more on this.

 

What Fully Remote Really Means

 

The Labor Market goes Hyper-Efficient

One of the reasons we collectively pretend that the “hybrid model” is a good idea is because it avoids the elephant in the room on the implications of fully remote companies. So let's address it.

Once most companies go fully remote, it means that the labour market will become global and hyper-efficient.

For those of you who studied economics, you know that efficient markets are better collectively, but not necessarily better individually.

In layman's terms, those who are good at what they do will make a lot of money and those who are overpriced will see their compensation go down or given to someone else altogether.

People will complain to their governments and some form of protectionism will slow this down. However, you can’t stop the train of progress, you can only temporarily slow it down.

Also, there's the whole taxes thing but I see these as logistical details that will get sorted out.

To see how this plays out in the long term, I strongly recommend reading The Sovereign Individual.

 

Who has more Leverage?

Ultimately the return to in-office comes down to leverage. Who has more leverage? Employees or management?

I think that high-skilled knowledge workers who can easily find other jobs, have enough leverage and can ask for remote-friendliness the same way people negotiate salary or vacation time.

Companies will realize that to retain the top talent they will have to become more remote-friendly or pay people more to come into the office.

Ironically, although a lot of people ask for remote-friendly work, a remote-first society will not necessarily be in everyone’s best interests.

A lot of people in high-wage countries are overpaid but are protected by the fact that companies had to hire employees based on physical proximity.

 

Outsourcing is the past, the future is Upsourcing

I think people are too worried about their jobs being outsourced to low-wage countries and are not worried enough about their jobs being upsourced to high-impact people.

Upsourcing is a term I made up and it’s when your job is outsourced to a MORE expensive or equally expensive person in a different country, but that person is more productive/better than you for an equal amount of money. So they generate more output per dollar paid.

The same way people used to stereotype that made in China was just for cheap products and services, then companies like OnePlus, Huawei, TikTok etc showed that you can get high-quality products in China. It’s simply a case of you get what you pay for, just like every other country.

Similarly, people think that outsourcing is merely for cost-cutting and people overseas can’t do high-quality work, speak good English or understand “Western cultural norms”. But that’s a myth perpetuated by companies only looking overseas when they want to cut costs. You get what you pay for.

Things get very interesting when companies start to look overseas not to optimize for costs, but to optimize for talent.

Once companies start offering San Francisco, NYC or even Boston salaries to engineers, bankers, consultants, designers, content creators and even senior management and executives in Lagos, Bangalore, Moscow, São Paulo, Toronto, etc. I'm sure they will be impressed by the results.

Once companies go fully remote (or even mostly remote), the physical location of a company no longer has any correlation to the physical location of the workforce.

The only thing that MAYBE matters is timezone and that can be handled with async work.

 

My advice

When a market becomes more efficient, it means price discovery sets in quicker so you want to make sure you're fairly valued or undervalued, not overvalued. Here's my advice:

Upskill

Whatever field you work in, now is the time to make sure you’re good at it. Level up your skills invest in your education, credentialing, signalling and networking. Develop your soft skills, develop your technical skills. Like I said earlier, the labour market is about to get super-efficient. This means that people will start getting paid something closer to their true worth. Make sure you deserve what you want to be worth.

Network

Now is the time to start building relationships with people in your career. Think beyond just people in the same country as you. Think of people in different countries as well. Send people cold emails and DMs. Leverage the internet and social media to engage with people that you want to work for and with. Send them a one-pager, slide deck, infographic, anything about something you think is both impressive to them and relevant to your work.

More advice on this here: How I got interviews at Google, Facebook and Bridgewater. 

Test the Market 

You don’t have to limit your job search to companies in your region or even in your country. Like I said, even if you don’t want to move or you are worried about not getting a Visa, both of those issues might turn out not to be relevant. See what options are out there, you might be surprised by what you find.

Income Inequality

This means that people will no longer have to leave their city or country to make high incomes.

This also has interesting implications for income inequality. 

In the past, a group of consulting friends in NYC made more than an equivalent group of consulting friends in Toronto or Bengaluru. But, that was okay, because both groups of people in each location were the same relative to each other.

Now, amongst a group of consulting friends in Toronto, one of them might be working for an NYC office, one might be working for a London office and only one of them might be working for a Toronto office. The salary ranges between people living in the same city working the exact same job will widen.

The Hybrid Model Pump Fake

Prediction: Claims of companies adopting a hybrid model will prove to be greatly exaggerated.

Working fully remote for 12 months then switching to hybrid is like switching from listening to CDs to streaming Spotify because your neighbourhood HMV closed then switching back to listening to CDs. If a new HMV opens up 12 months later, are you going to start listening to CDs 3 days a week?

The New Watercooler

Some people claim they want to return to the office because they miss the social aspect. But social isolation wasn’t caused by remote work, it was caused by the pandemic restrictions.

Once things start opening up again, you will no longer need work to get your socializing. Gyms, daycare, community organizations, restaurants, sports, bars etc. everything will be open again. Also, because we are working remotely you will be able to quickly go with your friends to an afternoon spin class at 12 pm instead of the 6 PM slot that is always booked. Remote work will allow people to socialize more, not less. 

For people who want a change of scenery but without a long commute, we will see the rise of neighbourhood and suburban co-working spaces. 

Coworking spaces will be the new way that we network and get to know people in our neighbourhood. I predict that coworking spaces are going to become very popular. Not just for tech-savvy digital nomads in exotic locations like Bali and Thailand. Coworking spaces will be popular in suburbs and in local communities as well for people who just want to leave their house and meet people.

Bonus prediction: Clubs and dating apps have proven to be underwhelming options for meeting people. I’m predicting that in the near future a lot of relationships (platonic and romantic) will be formed in coworking spaces.

Ironically, this would have been a perfect opportunity for WeWork, but we’ll get to the real estate implications in part 2).

For a great article about the future of WeWork in a remote work world, read Dror Poleg and Packy McCormick’s fascinating conversation: We Good Now?

The Future is Distributed

This is not mutually exclusive and universal. Yes, some companies and people truly do prefer working from the office. There will be a mix of both. For example, here’s an interesting article on someone who seems to prefer working from the office: ‘Am I the Only One Who Hates Working From Home?’. 

Whether this person represents a majority or minority of people, I don’t know. Anecdotally, I think most people prefer remote work. Quite frankly, even some of the people claiming they “can’t wait” to be back in the office, I don’t believe them. I think it’s a case of stated vs revealed preferences. Although they might “say” they want to be back in the office, they are underestimating how much they’ve gotten used to the convenience and productivity of working from home. Especially once other parts of society start to open up as well.

The internet didn’t completely kill the newspaper industry, it dealt it a fatal blow. Similarly, remote work doesn’t mean the absolute end of the work from the office. But the days of working from the office being mainstream is behind us.

The writing is on the wall, the future is here and it’s distributed.

 

Next, I will talk about the Dispersal of Human Education, in part two I will talk about the Dispersal of Human Living in terms of Real Estate and why most people think real estate is a safe investment but I think it’s the riskiest investment you can make.

Part 1.5: The Dispersal of Human Education

I accidentally realized that I had already written all my thoughts on the dispersal of human education here: Open The Gates of Education Freedom: How to Make University Higher Quality and More Affordable.

 

Image Credits: NicoElNino / Getty Images