On today’s show we’re looking at a potential backlash to the work form anywhere wave that we’ve experienced as a result of the pandemic.

There are several factors that have been largely ignored in the narrative over the past year. There are numerous businesses predicting a massive reduction in business travel, and traditional office co-location.

I’ve been reflecting on the majority of my career, in the world of real estate investing, and in my prior career in the high tech industry. In the tech industry we had video conferencing readily available from the early 1990’s. We used it frequently. There are lots of people for whom 2020 was the year of zoom meetings. Before zoom we had Webex, and GotoMeeting and a host of other platforms. You could screen share a powerpoint presentation. The audio quality was good and the video quality was also good. But even then, I would travel on average about twice a month for business. I had status on several airlines, and my number one business expense was travel. The question is, why did I travel so much? How did I justify all that travel when seemingly, so much was accomplished in 2020 and in the first half of 2021 with virtually no business travel?

What was it about physical proximity that made business so much more effective? Will we experience a zoom backlash and a return to physical meetings? I believe that the answer is yes. We will rediscover all the reasons why physical meetings are valuable.

  1. Employee training
  2. Mind share
  3. The acceleration that results from physical proximity
  4. Regulatory and tax consequences

Let’s look at all four of these elements.

1) Employee training. When people are physically separated, the time period between touch points can increase. Junior people who have not established the relationships and confidence to interrupt a senior leader have trouble knowing when to ask for help. The result is a tremendous loss of time before a problem is noticed and a course correction is initiated. Active management of people requires frequent check-ins of short duration. It takes a mature organization to learn how to do this well.

2) I find that when I travel and meet someone face to face, I get more attention from the person I’m visiting than if I were attempting to speak by scheduling a phone call. Many people don’t like to spend that long on the phone. They don’t have the mental stamina to spend two hours on the phone. But you can easily imagine having a white board discussion to plan out a project in a face to face setting. Even a two hour zoom meeting can be exhausting for many. You simply get a lot more done by meeting face to face. By meeting in person you get mind share, free of interruptions.

3) Despite the time involved with physical travel, I find that mistakes get uncovered faster, and misunderstandings get resolved when people meet face to face. While it is possible to have zoom meetings and those meetings can be productive, there is much more accomplished in a face to face meeting.

4) Many companies are taking the step to accommodate workers’ desires for more flexibility, but if employers aren’t careful, companies could open themselves up to costly tax headaches. Companies also have to shoulder the compliance burden involved with navigating a complex patchwork of local, state and, potentially, international tax laws.

Someone who resides in one state, but has their place of employment in another state faces multiple tax jurisdictions. But if they’re now working from home, where is their place of employment? If you’re the sole employee in that state, or in that city, did the company just open a new branch office?