Simon South

News about the rise of the virtual workplace continues to crop up in the media. Last week the Globe and Mail published an article describing the trend of startup companies forgoing office space and relying instead on online collaboration tools to bring together a group of remote co-workers. The author profiles a number of startups that successfully followed this model and notes:

Going “officeless”—or nearly so—is a sea change in business attitudes. It’s driven by technological and cultural shifts as the Web-literate Generations X and Y become the driving force behind entrepreneurship. The trend is so advanced that architectural experts think it will even alter the way future corporate spaces are designed, as office-free companies vault into the ranks of the Fortune 500.

The article covers the generational angle well, citing research that suggests office buildings are gradually becoming obsolete as Generation-Y workers hate the idea of commuting and don’t place the same importance on having a physical office as previous generations did. (This makes sense to me. When your entire social life already exists online, the idea of shutting down the computer and driving to an office building to speak with co-workers must seem faintly absurd.) It’s not just about building a better business by lowering costs and raising productivity; the shift to a virtual workplace is occurring in part simply because this is how younger people naturally get things done.

Elsewhere, Seth Godin argued on his blog that it’s time to finally say goodbye to the office. In his words: “I think in ten years the TV show ‘the Office’ will be seen as a quaint antique.”

It’s probably safe to say the main force right now driving the shift away from full-time, permanent employment towards virtual work is the employers themselves. Here are some of the reasons I see why we can expect companies to rely more on virtual workers in the future.

• It’ll cost them less. Like contract workers today, virtual workers aren’t paid benefits, so even when they demand a higher rate it can still be more cost-effective to use them for a project than an existing employee. And of course, a virtual worker doesn’t demand the overhead of office space, parking, or free coffee to do their job.

• They’ll have more flexibility. Since virtual workers aren’t employees, there’s no expectation they’ll be around past the end of a project or as a business enters its quiet season. This gives a company the flexibility to grow or shrink its labour force as it needs to in order to match market demand, without the risk of lawsuits or other kinds of retribution from laid-off employees.

• They’ll gain access to better talent. One of the effects of making full-time employment less desirable is that the most talented and in-demand workers will be less inclined to stick with it. Virtual work offers a better lifestyle for many and will, I believe, increasingly be the norm for those who are good enough at what they do to be able to choose it. How long will it be until those looking for regular employment are also those with the least-marketable skills?

• They won’t have a choice. Maybe. This isn’t true yet, but the incoming generation of workers, the so-called Generation Y, has seen the state of employment today and many are deciding they want nothing to do with it—they’re running their own businesses instead. Even those that aren’t are vowing to rewrite the rules of the workplace and have already started to win concessions from employers. Companies that want to stay relevant may soon have no option but to adapt to the more flexible, more independent work arrangements young workers are demanding.