OpinionWork from Home

Misaligned incentives

Remote work offers advantages – for companies and employees alike. But for the industrial base, and society as a whole, it is creating problems.

Misaligned incentives

Few topics are as divisive as the question of whether the hybrid work models that have become ubiquitous since the Covid-19 pandemic are a blessing or a curse. Johannes Koch, head of HR at DZ Bank, recently described the option to work from home as a blessing in a LinkedIn post. Many German financial institutions now even offer temporary work from vacation homes. Meanwhile, numerous US banks are calling employees back to the office. Both sides of the debate have valid arguments. And because demographic challenges are hitting German companies harder than their US counterparts, greater flexibility is likely the more viable option in Germany.

Yet it’s precisely these demographic challenges that are being exacerbated elsewhere. When discussing the feared deindustrialisation of the country, high electricity costs and high taxes are often cited. But the shortage of young skilled workers is just as pressing an issue. According to a study by the German Electro and Digital Industry Association (ZVEI), there was an 86% shortfall in adequately trained applicants for open positions in mechatronics. Many other professions in the electrical industry face similar gaps. And only in rare cases – such as consulting or remote maintenance – are hybrid workplace models applicable. In industry, work still typically requires physical presence. And in training, that goes without saying.

The dividing power of remote work

Many other socially essential professions – police, fire services, air traffic control, logistics, education and childcare, and virtually the entire healthcare sector – almost always require physical presence at the workplace. The excessive expansion of remote work in eligible sectors risks dividing society: into a privileged class of flexible office workers, and the many people who don’t have that option in their professions.

The argument that these jobs should simply be paid more is superficial. After all, even at the height of the Covid crisis, the healthcare worker received little more than applause from the balcony – that is, from the home office. From a societal perspective, the expansion of remote work is therefore a clear misaligned incentive that risks worsening existing demographic problems. Currently, hybrid work is even incentivised through tax benefits. In truth, the opposite approach would likely make more sense.