Home / Blog / 2025 Outlook: Workforce II

2025 Outlook: Workforce II

Some companies are neutral when it comes to working from home in terms of salary. Other apply a pay cut to reflect the lower living cost. No-one is happy, either way. Image credit: USA Link System

As the pandemic is slowing down (at least its worst consequences thanks to massive vaccination) companies are considering the roll back. Many have already asked their employees to go back to work in presence (and, at least in Italy many strongly objected!) others are planning to return to work on premises soon.

Working from remote on such a large scale, has shown that many activities can be performed irrespectively of the location of the person taking care of them. This opens the slate of possibility for a company:

  • having the company in an environment where there is abundance of the skill required may no longer be a requirement. As a company HR I could tap in the needed skills wherever they are. This expands my options and shift from a potential situation of (local skill) shortage to a situation of (global skill) abundance;
  • this shift from scarcity to abundance means more competition, hence lower cost for salary. Additionally, relocating the work force in the cyberspace (that is potentially everywhere on the planet) can lead to lower cost of living for the employees, hence the HR may consider cuts to the salary of those employees that before relocation where forced to work in expensive areas (like Silicon Valley). This is not a hypothetical possibility. A number of companies, including Google, have done/ are planning to do just that. If you choose to work from remote your salary will be adjusted to match the local conditions.
  • if some of your employees are no longer working on your premises they morph into service providers. That means that, like with any service provider the company will evaluate frequently whom to choose, and whom to discontinue. In some areas, like the US, the work contracts are very flexible (in Europe in general that is not the case) so companies can discontinue a contract with an employee on a short notice (fire) but even in this situation an employee working from remote is in a much weaker position in terms of work stability. On the other side of the coin, that employee could very well provide her services to several companies. Much easier to do this as you are working from remote!
    One way or the other, the point is that an employee working from remote becomes a “consultant”. That is a different role, status and this has implications both from the company point of view and from the employee point of view.
  • If you need a service you focus on the quality of the service (that includes all aspects, price/cost as well!). This means that if you used to have an employee that was in charge of (as an example) data entry, once you have that employee working from remote and doing data entry you shift (as HR/company) the focus on the activity results. If a software is able to provide that service you are most likely to consider it and probably adopt it discontinuing the contract with your employee/consultant. Yes, this could be done also if the employee is working on premises but the inertia is greater and the company will most likely include in the cost of shifting to the software the cost of relocating the employee. In other words (and this is true for most consultancy work): the likelihood of an employee being replaced by a software, AI, increases as the ties with the company becomes weaker. Same story if the replacement occurs not through a software but through a different service provider, may be based in India….
  • Truth is, moving to a company based (in part) on services provided from remote requires a company wide process re-engineering and the definition of interfaces. In turns this facilitates the adoption of automatic systems (software) to carry out an activity and deliver a service.
  • The digital transformation is both enabling remote working (because it shifts processes -and activities- to the cyberspace) and foster automation of work activities (much easier to automate what is located in the cyberspace.

This is the stage industry, at least a significant number of companies I spoke with, is now. There is, however, a further step, the automation of knowledge as I’ll discuss in the following post.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.