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Economists say we are headed for a major recession, which means working from home will outlast the coronavirus. Here's how businesses are preparing.
- The shift to a distributed workforce is likely to remain long after the immediate threat of the coronavirus pandemic subsides.
- The $1 trillion debt market has long shown that our economy was very much in bubble mode, and was waiting for a major shock to cause a downturn. This outbreak is that shock.
- Companies have already begun cutting costs by reducing their on-staff workforces, and that means there will be an increased demand for remote and virtual workers to keep business functioning.
- Business Insider spoke with several CEOs and founders of remote workforce businesses who have each seen increased interest from major companies bracing for a recession.
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As businesses and workers scramble to adopt remote-work practices due to the widening coronavirus pandemic, other economic indicators suggest that the move to a distributed workforce will remain long after the immediate threat to public health subsides.
Even if the virus were to magically clear out overnight - which it won't - the decisions and measures taken so far will have severe knock-on effects that will ripple throughout the year, from supply chain problems to cash and liquidity challenges that will expose the gaps that were covered over by a decade of economic growth.
Indicators like corporate and consumer debt have long shown that our economy was very much in bubble mode, and was waiting for a major shock to cause a downturn. This outbreak is that shock.
The pandemic's economic impact is just beginning
Past recessions have been caused by a mere slowing down of growth, but never before have we seen the kind of social and market disruption that comes from bringing so many sectors of the economy grinding to a halt.
The Dow Jones Industrial Average's 20-percent decline this week was the fastest market drop in history - faster even than the crash of 1929 that heralded the Great Depression.
More than half of a panel of 43 of the world's leading economists agree that the COVID-19 pandemic will cause a major recession, even if the mortality of infections is limited.
Now it is a matter of when - not if - companies will begin needing to cut costs by cutting their on-staff workforces, and that means there will be an increased demand for remote and virtual workers to keep business functioning.
"This is not going to dissipate quickly," said Bryan Miles, author of the book Virtual Culture and co-founder of Belay Solutions, a remote professional services agency, in an interview with Business Insider.
Miles said he is seeing increased interest and sales from a wide range of industries who are urgently seeking to adapt to the present challenge and prepare for the future effects.
"Zoom is booming right now, and we're in the same situation," he said.
Stephanie Nadi Olson, the CEO and founder of We Are Rosie, a marketing agency that provides remote talent to major brands, told Business Insider that her business has seen increased interest from many of the biggest companies in the world.
"They recognize that if there's an impending economic downturn coming, how are they going to tap into remote talent to bolster their teams when they may have less full time employee headcount," she said.
Hiring and maintaining full-time, on-site workers is expensive, and companies that are able to work in remote or distributed fashion will turn their fortunes around much more quickly than those whose policies and practices force them to stick with business as usual.
Working from home won't end anytime soon
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The remote workforce has already been growing more than ten times faster than the regular one, and a 2017 survey found that each half-time telecommuter saves employers as much as $11,000 per year. The report estimated that annual employer savings could approach $690 million.
As of a few years ago, large companies were more than twice as likely to offer telecommuting options to their employees than small or mid-sized businesses. Still, mid-sized firms have been adopting the practice, and there are now more solutions than ever for small businesses to work in a flexible fashion.
In spite of that growth, more than a third of employees surveyed by videoconferencing device-maker Owl Labs said that their companies are not prepared to support work-from-home measures in response to COVID-19.
In an interview with Business Insider, Owl Labs CEO Frank Weishaupt says the pandemic is accelerating the adoption of distributed teams, and shifting his longer-term forecasts forward.
"There's an awareness change in peoples' minds that remote work is here to stay," he said.
The abrupt nature of this shift means that things may not go as smoothly as some companies would like, but Bryan Miles of Belay Solutions says that now is not the time for short managerial fuses.
"Give grace to your employees," Miles said. "There are going to be people working from home who have never done it before. Give grace to your team."
Trust, he says, is the most important currency that business leaders have, now more than ever.