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Will Remote Work Cost the US Jobs?

October 24, 2022 Digital Workplace
Kaya Ismail
By Kaya Ismail

Thought it's only now become mainstream, remote work has been around for as long as there has been technology to enable it. Despite its advantages, few companies utilized the work model as the norm before the COVID-19 pandemic.

According to Statista, about half of US employees (47%) had never worked from home before the pandemic. That proportion has since fallen to 33% — with the proportion of those working from home full time (i.e., five or more days per week) growing from 17% pre-COVID to 44%.

There's no doubt that remote work is becoming the norm — and not just in the US. Thanks to the adoption of new work models around the world, employers now have access to talent pools they didn't have or consider before: workers who aren't local to the company headquarters. Companies that have the remote infrastructure to support it can now expand their recruiting to different cities, states and even countries.

With ongoing claims of a talent shortage in the US and the rising cost of labor, some claim the trend will come to the detriment of US white-collar jobs. The idea behind this forecast is that skills gaps are growing in the US as new roles and technologies emerge, and employers can now bring in non-US workers who can connect these missing dots at a fraction of the cost.

But is there any truth to this? Is remote work costing US jobs?

Advantages to Hiring Outside of the US

There are numerous advantages to hiring outside of the US; the most important for most employers being cost. And there are substantial savings to be made by looking across borders to fill certain positions.

For instance, the average salary of an Indian employee is $422 per month. Meanwhile, the median salary for a US employee is $1,041 — and wages are still rising around the country. With record-high inflation and a looming recession, US employers are looking at different options to keep costs low. Labor is certainly at the top of the list.

Beyond the issue of costs is customer experience. Hiring across different time zones means companies can offer a more balanced, round-the-clock customer experience.

It is also becoming easier for employers to hire abroad. Some consulting firms now provide support to employers looking to find and hire personnel worldwide. And with some skills being highly replicable, it is possible for employers to find cheaper labor solutions.

Related Article: Why Other Countries Aren't as Bullish on Remote Work

Disadvantages of Hiring Outside of the US

There are, of course, challenges involved when hiring in other countries.

One of them is communications. Because of the various schedules that come with having team members dispersed around the globe, companies need to build a communications system that allows for efficient collaboration. Anticipate delays and basic communications barriers.

Another risk to hiring overseas is the potential impact on the company's reputation. Some brands suffer when they hire remote workers abroad at the expense of local employees. Local unemployment can cause some customers to move away from a brand because they feel jobs should stay local.

Another disadvantage is that there can skills misalignments. The way we conduct business differs from country to country (and even state to state for that matter), and the very definition of a skill may differ. Unless managers have a way to assess skills properly, a lot of waste in recruitment can happen.

By the same logic, there might also be cultural barriers, though many of those can be overcome with effective communications and training programs.

Related Article: National Techies Day Underlines Demand for Data-Related Job Skills

Remote Work Trends in the US

Though the brunt of the pandemic is mostly behind us in the US, experts continue to disagree as to what the future of work will look like. Some say an increasing number of US workers will work remotely, while others call for more hybrid patterns, with about 30% of employees working remotely all the time.

But there are lots of different factors that might affect how we work going forward — and no one really knows for sure what this will look like once we find that "new normal."

Chris M. Walker, founder and CEO of Myrtle Beach, South Carolina-based Legiit, said in the end, remote work is helping to create new opportunities for businesses as well as for employees. And in his view, jobs aren't going anywhere. "Remote work is actually helping to create more jobs in the US,” he said.

That doesn’t mean some work won’t move outside the US. Tech and sales jobs, for instance, may be more prone to moving overseas, but this has little to do with the cost of labor. Research has found that these positions have just become very difficult to fill in the US, with limited skilled talent availability.

Talent shortages are indeed preventing local recruitment for many companies, and this trend is even more pronounced in certain states, like Alaska and Georgia, where companies are being forced to search outside their own locale to find the employees they need.

And accounting for the complexity of tax reporting, many companies may be reluctant to hire outside of the nation's borders. In fact, some now offer remote work to employees, as long as they comply with certain location requirements.

“Most remote roles incorporate some form of geographical restriction, typically to within the same country, state or even city," said Amit Bhatia, co-founder and CEO of New York City-based Datapeople.

Therefore, while some jobs might need to move outside of the country, it is unlikely that remote work, by its nature, will be costing US employees their jobs.

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