Global Work and How Jobs are Changing: Policy Summit Insights

Speakers

• Francis deSouza, Former CEO, Illumia; Former Board of Directors, The Walt Disney Company; Deel Board of Directors
• Nick Bloom, Professor of Economics, Stanford University
• Moderated by Isabelle Leliaert, World Economic Forum

Curious about how the job landscape will look in 2030? Watch Deel’s Future of Policy Summit on-demand here, or read on for the full panel recap.

In this panel discussion, moderated by Isabelle Leliaert from the World Economic Forum, speakers Nick Bloom, Professor of Economics, Stanford University, and Francis deSouza, Former CEO of Illumia, Former Board of Directors of The Walt Disney Company, and Deel Board of Directors, discussed the following topics:

• Reskilling to meet emerging skill gaps
• Talent as a competitive advantage
• Remote work benefits and long-term adoption

The need to reskill to bridge skill gaps

Isabelle Leliaert kicked off the panel discussion by highlighting the significant impact of technology on the job market. She shared that over a quarter of jobs will undergo changes and that 44% of workers will need reskilling due to increasing skills gaps.

Leliaert then referenced studies showing that many jobs today didn’t exist in the past and predicted that remote work opportunities would increase significantly.

“A study by the Quarterly Journal of Economics showcased that 60% of the jobs done today did not exist in the 1940s. Another research called the promise of global digital jobs shows that 92 million jobs could be done fully remotely by 2030, up from 73 million today, which of course, creates a lot of opportunities in today’s labor market,” Leliaert shared.

Nick Bloom predicted that over the next decade, remote work and work-from-home arrangements will become increasingly prevalent.

“If I were to predict out 10 years from now, it’s clear that work-from-home levels are gonna be higher, remote work can be higher…So, in the long run, if I predict certainly five years out, it would just be easier to do this. We’ll have big screens. 10 years, we may have a Jedi council type thing, whereby, you know, we’ll beam down.”

Talent as a crucial competitive differentiator

Francis deSouza emphasized the essential role of technology across all industries, which has shifted the focus to talent as a crucial competitive differentiator. Companies are now competing for top talent regardless of their traditional asset-led nature.

“…every industry now is sort of fighting for top talent because that is a big, big competitive differentiator. And so that means you have to go where the talent is, and that’s one of the forces driving a more global workforce, a more remote workforce,” deSouza explained.

He also noted that even small companies are becoming multinational from the start due to accessible talent and distribution.

“It used to be that small companies used to serve a local market first, then you got bigger, and you went national, and then you went global. And first from the US, you’d go to Canada and Australia, then go to Europe. But now, whether it’s because you're going for talent or because distribution is so accessible to people, you see even very small companies having to be more global from day one,” deSouza enthused.

The advantages of remote work and global hiring

Nick Bloom elaborated on the advantages of remote work, highlighting that it can significantly reduce costs associated with office space—often about 10% of wage bills—while also providing access to a larger talent pool.

“I’m in the Bay Area. If I want to hire a C++ coder, it’s pretty easy. There are tons of them around. If I have a startup in, I don’t know, northern Nebraska or Hawaii, it’s less obvious. Whether I can go hire someone, particularly with very narrow specialized skills.”

He cited a study by Arpit Gupta from NYU University and others that shows that post-pandemic, fully remote companies tend to grow faster in terms of revenue and employment, primarily due to higher hiring rates and lower quit rates.

“looking at success rates of young companies—those less than 10 years… the ones that are fully remote are actually more successful in the sense that A, they're growing faster in terms of employment, and B, they're growing faster in terms of revenue and output.”

Bloom highlights the growing trend of firms, including larger companies, successfully operating fully remote.

“there’s now a very big sector of firms that are just starting life as fully remote and doing extremely well. The same is true for larger companies. For Stanford, we have 20,000 employees. Mostly people like me are on-site, but roughly 10% are fully remote because it's very effective.”

The importance of experienced leadership teams

Francis deSouza notes that the effectiveness of a company’s leadership team can significantly impact its ability to manage a remote workforce.

“Some leadership teams only know how to manage a primarily in-office workforce, while others have learned how to manage remotely. This also tends to be a generational change. Younger companies, especially in the Bay Area, are often more successful when remote than when going into the office.”

deSouza notes that a clear strategy is essential for succeeding in a fully remote or hybrid work environment.

“If you’re committing to being fully remote, you need the norms and processes around recruitment, onboarding, establishing a culture for a fully remote company, setting up communication patterns, identifying top performers, and managing promotions.”

deSouza explains that a successful remote strategy can provide a significant competitive edge, but it needs to ensure alignment among strategy, operations, culture, people, and norms.

“There is no point in bringing people in just to have them sit on Zoom. Think carefully about what’s often called ‘return on commute’ because employees are paying for it,” deSouza reminds the audience.

Nick Bloom indicates that remote companies typically have lower turnover and quit rates because employees express their preferences through their choices to stay or leave.

“There's a well-known study from 2002 in Science by Danny Kahneman, the late Nobel Prize winner, and others. It evaluated what people like and dislike per hour, and the second most disliked activity was work. That’s why you have to pay people to work because they wouldn't do it for free. The most disliked activity per hour, however, is commuting. People dislike commuting even more than working. So, there’s a good reason not to force people to commute unless there’s some payoff to it, like group activities.”

Francis deSouza concurs, emphasizing that companies that effectively implement remote work will secure a competitive advantage. This edge will be evident in their revenue growth, increased profits, higher retention rates, and an enhanced capacity to attract top talent.

“…some leadership teams are currently using work-from-home as an excuse for poor performance. Companies able to attract, retain, and develop the best talent will outperform others in the industry, and this will be evident in financial results,” deSouza affirms.

Nick Bloom continued to make the case for remote working, explaining that it’s essential to present data that appeals to CEOs and investors. He cites a study in which a large tech firm allowed employees with even birthdates to work five days in the office and those with odd birthdates to work three days from home. The results showed no difference in performance but a significant 35% reduction in quit rates, leading to substantial cost savings for the company.

“...working from home two days a week was not better, it was not worse. You know, it's quieter, you save on the commute, but maybe it’s a bit less FaceTime, a bit less mentoring, but firstly, no performance effect. Secondly, quit rates fell by a third. That’s massive. And when you talk to the firm, the typical number you hear is each person that quits, the estimated cost is roughly 50% of their annual salary…So this company trip.com said, by cutting our quit rates by 35%, you’re saving us tens of millions of dollars as a company per year.”

Why companies should go global earlier

Francis deSouza urged companies to become global much earlier to tap into necessary talent pools and navigate challenges in hiring remote employees, such as local regulations and pay scales. He highlights the role of platforms like Deel in simplifying this process.

“nearly every company… is going to have to be a global company much earlier in their life to access the talent pools that they need, to create the products, to serve local markets better. And the reality is it's been complicated. It's hard. I remember when I was trying to do it at both big companies and small companies, there are lots of challenges in hiring remote employees. You have to deal with local regulations. You have to create entities in countries. You have to figure out what the right pay scale is.”

deSouza emphasized the critical need to streamline HR processes to reduce the burden on departments. He highlighted that tools like Deel will be invaluable in this regard.

“we are going to see tools like Deel show up to make that whole thing much easier. You also need tools around building the culture and making sure that you are intentional about developing people, knowing who the top performers are, promoting them, and enabling them to be successful."

deSouza asserted that we are entering a golden age of HR, where the function will play a more strategic role in companies and board discussions.

“The reason I joined the Deel board is because companies like Deel address a really important, difficult hurdle that companies face in accessing the global talent pools,” deSouza explained.

Nick Bloom agreed, sharing the significant rise in remote work. He noted that pre-pandemic, only 5% of workdays in the US were remote, which has now surged to about 25%. He predicts a gradual increase over the next decade, potentially reaching 30-35%.

“...we are not going back to the office. The return to office movement died in early 2023,” Bloom assured.

Francis deSouza expressed his excitement about the upcoming policy summit, noting that the conversation will shift away from remote work. Instead, the focus will now be on fostering culture in globally distributed teams.

“When we come back to meet, it’ll be more about the connections between people and culture building. Our colleagues will be global in a way that we have only started to see right now. And that will be fundamentally enabling. I think that’ll create opportunities for people around the world.”

In conclusion, deSouza shared a poignant story that had a significant impact on him.

“One of the stories that really touched me when I was looking at the Deel Board was about a woman developer in Lahore, Pakistan, who is able to work for a top tech company from her house. This is a job she would not have been able to do a few years ago. I think that will unleash a huge amount of talent and productivity in addition to creating opportunities for people around the world,” deSouza shared.

Prepare for the future of work with Deel

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