By Jon Swartz
MarketWatch photo illustration/iStockphoto
David Toole was thinking of returning to his hometown of Savannah, Ga., to raise his family and work. A pandemic — and the opportunity to have the move paid for — cinched it.
“COVID pushed us over the edge,” Tootle, 35, an account rep at Oracle Corp. /zigman2/quotes/202180826/composite ORCL -0.05% , told MarketWatch, explaining his relocation to Savannah from Washington, D.C., in March. A program in Savannah in part helped finance the move. “I want to create more opportunities for Blacks in the community,” said Tootle, who is married with five kids. “And this is where I want to raise my kids.”
“COVID in a weird way represented an inflection point for us,” Alan Gilchrest, senior vice president of conversational AI at LivePerson, told MarketWatch. Gilchrest, his wife, and daughter moved to the family’s vacation home in Waikoloa Beach, Hawaii, from Bellevue, Wash., in March as COVID ravaged the Pacific Northwest.
Gilchrest, 49, starts his typical workday at 4 a.m. with a meeting and goes until 7 p.m. local time. (He fits in training time blocks during the day for “cathartic breaks.”) “What it means: My bed time is a lot earlier,” he said.
The view is equally grand from the desk of Liz Van Halsema, 29, who works at a lake house near Grand Rapids, Mich. She’s spent the past few months with family members there though her job at CHG Healthcare, based in Salt Lake City and where she once had an apartment. “I’m not sure where I will end up living, but I can work anywhere with the support of my company,” she said.
The trio’s exodus from tech strongholds to the hinterlands is becoming as commonplace during the pandemic as working from home. In fact, the two trends are linked: As Americans hunker down for the long haul at home, many are choosing to relocate while keeping their jobs. An American Community Survey found the fastest-growing commute was no commute, as work-from-home arrangements become more popular everywhere.
This recent phenomenon is borne in tech job listings by city from May to June by Dice, an online hub for technology professionals. The leaders were smaller cities such as Richmond, Va. (33% year-over-year growth), Arlington, Va. (28%), and Austin, Texas (16%). Established, larger tech hubs like New York (-32%) and San Francisco (-32%) experienced the steepest declines, although they still boasted 31,000 and 20,000 job listings, respectively.
Accelerating the movement is fevered competition among America’s second- and third-tier cities for workers in Silicon Valley and other tech hubs. Nothing new about that — it’s been going on for years. But with COVID-19 still raging across the U.S., there’s a new twist to recruiting efforts that makes moving a more compelling offer. Some cities are offering money to move — from $15,000 in Topeka, Kan., to $10,000 in Tulsa, Okla., and $2,000 in Savannah — and inexpensive housing to scoop up remote workers dissatisfied with living in urban areas with no end in sight to the pandemic.
Ottawa is readying a recruitment program to lure tech workers to the Canadian capital. It isn’t offering financial incentives — just an affordable, “family friendly” region with access to plenty of tech companies and resources, according to Jamie Petten, president of Kanata North Business Association in Ottawa.
Meanwhile, exotic locations like Barbados and the bucolic setting of Burlington, Vt., offer tempting vistas and financial incentives to relocate.
“There is more interest now than in previous years. This incentive is a great way for technology workers to think about relocating to Savannah, especially those who are able to work remotely, given the current public health crisis,” Jennifer Bonnett, vice president of innovation and entrepreneurship at the Savannah Economic Development Authority, told MarketWatch.
So far, six people have moved, and they have submitted applications that should quality. In all, 70 have expressed interested in relocating from California, New York, Pennsylvania and Illinois, said Bonnett. The program is budgeted for up to 50 people to relocate this year.
The Greater Topeka Partnership is paying up to $15,000 for tech workers to move into a house, and $10,000 to an apartment, as it tries to lure a coveted workforce that is highly educated and well paid. It has filled roughly a third of the 60 slots it has available, spokesman Bob Ross told MarketWatch.
“It was time to move closer to my family,” Dan Mills, 42, a systems engineer for tech consultancy Premiere One, who bought a house in Topeka this year, told MarketWatch. “It was time for a change.”
Workers’ flight to less-populated areas comes as major employers such as Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER +0.06% , Facebook Inc. , and Google parent Alphabet Inc. /zigman2/quotes/202490156/composite GOOGL +0.33% /zigman2/quotes/205453964/composite GOOG +0.19% announced employees are likely to work from home through at least mid-2021. “There’s currently no end in sight for when our teams here will be able to return to our offices,” Facebook CEO Mark Zuckerberg said during a conference call with analysts following the company’s second-quarter earnings in July.
But he hastily added that their salaries would be commensurate with where they live. “That means if you live in a location where the cost of living is dramatically lower, or the cost of labor is lower, then salaries do tend to be somewhat lower in those places,” Zuckerberg said.
See also: Facebook employees may face pay cut if they move to cheaper areas to work from home
The freedom to work from home indefinitely, in turn, will “change the landscape in how people are working and living for the next decade,” Upwork Inc. /zigman2/quotes/200102859/composite UPWK +3.21% CEO Hayden Brown told MarketWatch in a phone interview last week.
More than half of the American workforce currently works from home. Fifty-six percent of hiring managers say the shift has gone better than expected, and only one in 10 thinks things are worse, according to an Upwork survey released in June. This led 61.9% of hiring managers to say the workforce will increasingly go remote, more than doubling the growth rate of full-time remote workers over the next five years to 65% from 30%.
What a mass relocation will do to the workforce and employers is hard to predict, but it is likely to have lasting impact on the use of commercial real estate and how businesses operate, say academic experts.
One possible outcome is the creation of two types of workers: Those who work in offices with access to all available resources, and those at home without, Columbia University business professor Stephan Meier told MarketWatch. “It could hinder professional development for someone working in Kansas who is employed by a company in California,” he said.