As has been widely reported, tensions have erupted over the past two years or so between knowledge workers and their employers regarding expectations regarding office attendance. The tensions are largely economic over what economists call “negative externalities.”

Negative externalities are costs created by organizations as a consequence of their activities that are not directly borne by them but instead by external parties and society at large. A commonly cited example is environmental pollution by industrial activity. Or carbon emissions from commuting.

Post pandemic, knowledge workers have come to view the costs of personal time, transportation and other expenses of commuting to an office as a negative externality borne by them. Moreover, a negative externality that doesn’t make sense for them to incur in order to sit at a computer desk in a cube farm when they can just as easily do the same at home.

The push back has broader implications for employment since as traditionally defined, employers determine when, where and how work by employees is performed. For knowledge work, that has meant in a centralized, commute in office and mandatory attendance during specified hours.

Knowledge workers are effectively renegotiating the terms and conditions of employment. They are willing to do the work but are not as inclined to bear the costs of commuting to an office to accomplish it. For knowledge organizations, the situation may prompt them to reassess employment and question whether the industrial age model based on presence in a centralized office setting continues to make sense. They might instead rely more on contract work with agencies and individuals, seeing more value in paying for project deliverables and outcomes rather retaining large permanent staffs.