In the era of Instagram fame and lifestyle celebrities, it’s no wonder remote work is going viral: For many, the chance to build a career from anywhere on the planet is what dreams are made of. For some, it promises a fast track to mastering the influencer lifestyle. For business builders, remote teams seem like a cheat code for expanding a talented workforce with limited resources.
By now, more than half of all jobs are remote on at least a weekly basis. And in a low-unemployment environment that makes available talent scarce, worker flexibility is becoming an expectation for job seekers.
In other words, the stage is set for more and more established companies and startups alike to join the remote-first work phenomenon.
But a menacing possibility lurks in the background: The remote work revolution could have a hand in ushering in the next great depression.
Let me get something out of the way before I go any further: I am very much a proponent of the remote-first workforce for an abundance of reasons. Research shows that people are happiest and most productive when they have the freedom to be where they want and organize their time in a way that suits them.
But we need to take into account the unintended consequences of remote work.
And we need to prepare ourselves for what would happen if a critical mass of companies were to become remote-first without being properly prepared.
As I’ve puzzled over this question, I’ve gone back and taken a look at history to see if there’s a precedent for what’s unfolding now. And I keep getting stuck reading about the same time period: the Roaring Twenties.
In the 1920s, the United States enjoyed one of the greatest economic expansions the world has ever known. The post-World War I economy delivered low unemployment and an expanding middle class, as America saw the rise of its first true consumer generation. Technology was being mass produced like never before, which meant that luxury items like the automobile and the radio could be owned by just about anyone.
The 1920s were also a time of unprecedented opportunities for working class people to become upwardly mobile. The stock market became a game anyone could play, especially thanks to the practice of letting people buy stocks on margin—essentially deferring payment of the stock by doing so on credit.
Many analysts believed that the stock market had reached a plateau it simply could never come down from, ultimately encouraging risky practices like buying on margin and seemingly eradicating the notion that anything bad could happen.
We all know what happened next: At the end of the decade, the period of easy money and equity on credit created a vastly overvalued stock market that began to sell off. Share prices came crashing down, companies went bankrupt, and many lost their life savings, as the most devastating economic downturn of modern civilization took hold.
Fluctuations between growth and recession are inevitable, as has been the case for virtually all of recorded economic history. When we consider our present environment—the longest economic expansion in US history— many are beginning to question when the next recession will hit.
The current period of economic recovery has paralleled a period of technological innovation that has opened up the door for new practices, like remote work.
On its surface, the remote work trend seems almost too good to be true in the benefits it brings to both businesses and employees. With advantages like reduced overhead, lack of a need for office space, satisfied and productive workers, why wouldn’t we dive feet first into this trend?
What organizations considering going remote need to realize is that jumping on the remote work bandwagon without a proper game plan and without understanding its multifaceted nature might not only find themselves facing the challenges remote work can bring. They could also end up forming part of the straw that breaks the camel’s back, and could trigger the next great depression.
This argument may seem a little dramatic, but fundamentally, companies should not blindly follow the remote work trend without fully understanding the effects that hasty and irresponsible corporate practices can bring to entire economies.
We saw this with the trend of margin buying in the 1920s, and with the real estate bubble that caused the 2008 financial crash. Irresponsible corporate behavior has grave consequences on markets, not least loss of revenue, surges in unemployment, and collapses in productivity.
So, while remote work brings with it a number of positives that have what seems like endless potential for businesses’ bottom line and worker productivity and satisfaction, it also brings risks. Such transformation of the nature of work as a whole shouldn’t be treated lightly, as the remote work trend has the power to seriously disrupt “business as usual.”
It will facilitate easy relocation of companies and workers, reduce the need for the mass urbanization that we have seen over the last decades, and potentially take millions of dollars out of the US economy due to geographical fluidity. Not to mention, the cost of a failing business that hadn’t anticipated the challenges of a remote-first team is steep, and delivers a blow to the economy around it as well as those inside it. With these effects come the need for responsible practices and forward planning—not the short-sightedness we saw in previous times of economic stability.
In order to see success as a remote-first company, it’s crucial that businesses first assess whether their business is actually a good fit for remote work. While generally best suited to digital businesses and companies that have adopted a performance-based approach, remote teams can thrive while working collaboratively when given the right tools and infrastructure. Communication is key to foster unity within remote teams, and its importance should be built into the very core of a remote-first organization.
Remote work is all the rage. Employers see benefits for staffing with remote workers. Workers see it as a path to self-employment and entrepreneurship. Yet that’s not to say we shouldn’t proceed with caution. The reality is, few people really understand what they’re getting themselves into, and what the challenges are. It creates chaos, disorder, resentment, and in the worst case, insolvency.