The Capitalist Investor - Episode 129

Where are you most productive –– at home or in the office? As the labor market tightens, businesses are scrambling to raise productivity rates; many of them are calling for employees to ditch their makeshift work from home setups and go back to the office. On this week’s episode of “The Capitalist Investor,” Derek, Luke, and Tony discuss Elon Musk’s latest remarks about employee productivity and working from home. The guys also review Salesforce’s latest earnings, how they reflect the labor environment, and the decisions businesses are making. Episode #129 is all about productivity –– it introduces the possibility that if you don’t do your job, someday a robot could be programmed to do it for you.

Outline of this Episode:

  • [1:50] Elon Musk says 40 hours in the office, or else 
  • [7:35] Salesforce earnings reflect an efficiency demand
  • [14:15] Robot sales skyrocket as productivity tightens 

Elon Musk gives Tesla execs two choices: show up or be fired

The world’s richest man is done with employees working from home. Bloomberg reported Musk sent an email to Tesla and SpaceX workers declaring they show up in the office, and if they wish to work from home for Musk, they must spend at least 40 hours in the office before they can do so. His ultimatum is extremely clear: go back to the office or if you want to work from home, you will have to find a new employer. 

“Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don’t show up, we will assume you have resigned,” his email read. 

Musk’s latest remarks all tie back to the productivity issues the labor market is currently facing. Last month, the U.S. saw its lowest ever productivity reading; employers are hurrying to raise levels again. Musk simply wants employees to stop “phoning it in” because their efficiency is declining the company’s overall performance. 

At the beginning of the Covid-19 pandemic, so many offices and factories had to shut down. If people could do their jobs from home, they would. But where did everyone go now that workplaces are operating in-person again? 

Working from home will never offer the same advantages that working in an office does. It lends room for more distractions, it lacks the team comradery, the social aspect of having coworkers, idea sharing, collaboration, and efficiency. 

Business is meant to take place face-to-face. Zoom has been helpful, but people can really only be visible, strengthen relationships, and collaborate efficiently when they are doing it together at the same place, not miles apart on a video screen or in a makeshift home office. 

Companies are finding new ways to be productive, latest Salesforce earnings show that

Client relationship managers (CRMs) and these softwares are here to stay. Despite today’s rough economic environment, Salesforce published higher-than-expected quarterly results and increased its full-year profit forecast. People are confident in the cloud-based software group’s ability to endure inflation, labor shortages, and whatever macro obstacles there are to come. 

Salesforce is the kind of business that makes other businesses more efficient. It’s a tool that would be the last thing businesses would depart with. CRMs act like an electronic rolodex, they sort out and tell businesses who their clients and prospects are, they help them take notes, remain diligent, connect with partners, customers, and potential clients. 

When people aren’t as productive, businesses look to technology to be productive. 

As an investor: CRMs, software systems, and this field of tech isn’t a bad place to be

From an investment standpoint, there’s lots of talk lately about staying out of the technology sector. But people don’t always realize that each sector has its own divisions –– the software division isn’t necessarily a bad place to be and own in.

CRMs and these software spaces are a defensive type of tech orchestrated to withstand and help companies combat recessionary scenarios. Companies are clearly not abandoning them; they need it for times like these where technology can be used to spark up productivity. 

Businesses are always looking for efficiency. To survive, they will need to adapt and find new ways or strategies to raise productivity and strengthen their channels. Since CRMs will always serve a purpose, it’s a strong space where people can look to park their money. 

U.S. robot orders skyrocket as employers combat labor shortages

It all ties back to the productivity issues we’ve been discussing but if people aren’t willing to work, companies may start to rely on artificial intelligence systems that will. It sounds like a nightmare at first glance but someday, A.I. robots may replace someone’s job –– or multiple people’s jobs. 

Robot sales have recently increased year-over-year –– inflation and the tightening labor market are probably the cause. Just like CRMs, when human productivity falls short, businesses are going to turn to technology to make up for the loss. 

Frankly, if people don’t want to work or won’t come into the office, then this A.I. movement deserves to happen. Robots would clearly eliminate jobs, but they would also fulfill the ones people don’t want to show up and work at. 

While it doesn’t seem like a sustainable solution, the trend of robot sales is reflecting that companies are considering it an option. It all comes down to efficiency and people are confronted with a choice: would you rather go to work or be replaced by a robot? 

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