A tale of externalised costs
Summary
Many decisions execs take for their employees, ignore externalised costs. Mike Hopkins of Amazon claims their RTO policy has “no data” to back it. Lyft CEO, David Risher can only advocate for snacks in the office, while batting for RTO. Meanwhile, employees and other stakeholders pay for such decisions through costs to their health, productivity and happiness.
I woke up this morning to a baffling article on my newsfeed. Amazon executive Mike Hopkins says he has “no data” to support his company’s return-to-office mandate, but that employees should “disagree and commit” to this leadership decision. OK! It’s no secret that I’m a fan of “disagree and commit”, but this has to be a rather strange description of the principle.
If you aren’t familiar with this phrase, it's a short form for saying that while a group is deciding something, they are welcome to disagree and debate; but after this debate, the group must rally behind the decision. I’m not an Amazon employee, but I haven’t heard of a reasonable debate about this RTO decision yet. It was a decision by fiat, so disagreement wasn’t welcome. To invoke “disagree and commit” in such a situation is disingenuous.
This is a classic case of a powerful minority (execs) deciding for the relatively disorganised majority (the employees). The execs can make this decision with “no data” because they bear little or no costs of the decision. They earn heaps, so staying in an expensive city and affording childcare, household help and the costs of commute is no big deal for them. They also retain optionality for when they must come into the office. It's the employees who bear most of the costs.
As it turns out, these costs are externalised. Since they don’t appear on a balance sheet, companies can take them lightly. RTO mandates are not the only way companies externalise costs. Let me tell you about a few more costs that don’t show up on the books.
The cost of health
In the name of career progression, leadership, team spirit, contractual obligations, shift work, or even the entreaties to be part of a family or community, employers keep employees glued to their screens for much longer than is healthy. Employers bear none of these costs but sample the following costs that employees may have to bear through unsustainable work practices.
The WHO classifies night shifts as a probable carcinogen. In the Indian IT industry, several tech workers work till rather late in their evenings and nights, serving North American clients. If even some of these employees develop cancer, who is culpable?
Lack of sleep increases your likelihood of developing type 2 diabetes. In his book, “Why we sleep”, Matthew Walker tells us that the average cost of diabetes treatment is $85,000 per patient. Plus, the disease “lops ten years off an individual’s life expectancy”. Do employers account for these costs when they engage their employees 24x7?
Aside from major ailments, workload stress and burnout can contribute to obesity. Obesity increases our risk for many ailments. Which bean counter accounts for these costs?
The costs I mentioned above are preventable. Asynchronous work practices can preempt the need for shift work. Employers can institute a right-to-disconnect policy; so employees can stop monitoring emails and IM after their workday. Is it impossible? No! Will it take high-empathy leadership? Hell, yes!
The cost of productivity
As I’ve mentioned before, an overreliance on synchronous ways of working is expensive. But those costs aren’t on the balance sheet. From my research, I’ve discovered that the average technologist spends 80 days in meetings each year. They face 18 interruptions at work each day. Over a third of their meetings are a waste of time. This is a colossal waste of productive hours. But of course, no one explains them. They’re an externalised cost.
Either the employee pays, by working extra to make up for lost time.
Or a customer or client pays, by footing the cost of poor productivity, because they don’t know better.
Even if the company pays; when employees and other stakeholders don’t; it’s a cost they don’t associate with poor productivity. It goes into the standard subhead of “salaries”.
I wish companies would start accounting for the costs of poor productivity. Not only will it encourage everyone to explore better ways of working, but it’ll also drive sensible conversations about location independence, and flexible working.
The cost of happiness
That point about flexible working brings me full circle back to the conversation about remote work. The average Indian worker commutes two hours for work every day. That’s 25% of their personal time, that they give their employers. In India, during our monsoons, this time increases by orders of magnitude. Employers ask this time as if they’re entitled to it. But why? Why have we normalised that employees must bear such costs?
It’s not just the cost of time we’re talking about here. Employees often have to choose between a long commute and unaffordable housing, near the office. For the super-rich execs, this is a non-issue. In the United States, for example, the average employee spends close to $8500 each year on commuting. That’s a country where workers spend more time commuting than the annual leave they get! That’s not a trivial cost. Especially considering that the average American works 500 hours each year only to pay for their cars. With the state of public transport in India, it wouldn’t be surprising if the stats are similar for IT workers here.
All this lost time and money affects people’s happiness. The wedge between employees and employers is becoming clearer as the RTO battle wages on. In tech, people matter most. Companies that alienate current and prospective employees, may struggle to retain and attract talent in the future. They can act with “no data” now, but I wonder if it’s prudent to keep externalising costs this way.
I wish that as Amazon claims, their leaders are right - a lot. I don’t work at Amazon, but I know that their principles also speak of being “Earth’s best employer”. Principles may often act in tension with one another. But you surely can’t be “Earth’s best employer”, if you work unilaterally, with “no data”, while externalising all costs to employees. Indeed, don’t invoke “disagree and commit”, while ignoring the voice of 30,000 employees.
By the way, those externalised costs aren’t trivial. If you computed the cost of commuting for three days a week, for Amazon’s US employees, that’s about $500 million each year! To put that number in perspective, it’s about 17% of Amazon’s profits from last year. Add all other costs, and the figure could be exponentially higher. Would the company think so little of this amount if it showed on a balance sheet?
At some point, tech workers will have to realise that “unions” are not a four-letter word. Without collective bargaining, most of us are no better than glorified freelancers, when we relate to big corporations. Only then, can we have a seat at the table, to voice our disagreements, in a “disagree and commit” process. But that’s another day's conversation.