It made perfect sense to then allow employees to work from a home office. Not only could employees save money by living in lower cost areas, but the company could get rid of expensive real estate. Everyone wins.
The situation with high cost housing is now pretty much standard in the largest cities. Boston, San Francisco, Vancouver, and many others have housing costs 5 to 10 times higher than small cities. Living in Boston, I watch real estate shows where people buy houses for 1/20th of what they would cost in my town and drool. Apparently in Waco I could get a house for about half of what a down payment in Boston would cost. Holy cow!
So if the cost of living is so much cheaper across the US, why don't companies just hire people in smaller towns at half the cost and allow them to work remotely? If we can outsource call centers and coding jobs to India, then surely we could outsource finance, audit and operations to Boise or Buffalo.
But we are not. Sure, some companies have opened offices in low cost centers. Fidelity Investments has shifted some departments to Dallas, Albuquerque and Charlotte. But it still has a large workforce in Boston. Why isn't everyone shifting to the remote work paradigm.
One of a few things must be true. Either working remotely does not actually work, or companies are incapable of making this change in spite of wanting to. Of course, it is possible that they could, and sort of want to, but still cling to the belief that people have to work face to face.
If it were possible to have much of the workforce work from a distance, someone would be doing it and undercutting the market. The marketplace has a tendency to reward low cost providers. In a service economy, the #1 cost is people, so this would be the primary method of cutting costs.
That this is not happen would indicate that having workers spread out, working from home simply is not a workable solution.
Or possibly the opportunity for someone to start doing this and destroy their competition is just hanging out there.