Going to work ain’t what it used to be. The office, the job, and the work itself are no longer tied to a single location for a growing segment of U.S. workers. Millions of talented people are choosing where they want to live, and either bringing their job with them, or creating their own career path through entrepreneurial ventures or “gig economy” work. The rise of remote workers is one of the biggest changes hitting our labor market – arguably more significant than automation or the retirement of Baby Boomers – and it’s gone largely unnoticed until recently. How did this paradigm shift happen? And what does it mean for the economic development profession?
The First Shift: Companies More Focused on Talent
Once upon a time, the migration of talent was driven almost exclusively by company location decisions. A new manufacturing plant opened, and workers followed to fill the jobs. A natural resource was discovered, and workers came from far and wide to capitalize on the work opportunities. A new city was founded and a pool of labor moved in to fuel the growth. Then, there was a shift in the dynamic relationship between companies and workers. Instead of making corporate location decisions based primarily on business factors (market access, natural resource availability, infrastructure, tax and regulatory environment), the availability of skilled workers rose to the top of the list. Companies started making location decisions based on where they could access available (or trainable) workers. We first saw this with automotive manufacturing (Toyota in Kentucky and Mississippi) and aerospace manufacturing (Boeing in Charleston) growth in the South. More recently, we’ve seen it with tech firms (Amazon in Northern Virginia and Apple in Austin) and even in the financial sector (AllianceBernstein in Nashville).
The Second Shift: Remote Workers
We’re starting to see another shift: The emergence of a distributed workforce of remote workers. The share of remote workers in the U.S. labor market has grown from about 3% in 2000 to more than 5% as of 2017. In some major metros – Austin, Denver, Raleigh – remote workers make up nearly 10% of the labor pool. In a few smaller metros like Boulder, Bend, and Asheville, remote workers account for more than 10% of the regional workforce.
What is a remote worker? We define a remote worker as someone who primarily does not commute to a single job location. In other words, someone who has the flexibility of doing their work (and living) any place where they can access the technology and resources needed to successfully collaborate with their company, their coworkers, and their clients.
Many smaller tech firms, like Basecamp, have operated this way from the outset. Larger firms and companies in diverse industries have recently opened up to the idea of remote work as a core part of their workforce.
Why Should Economic Developers Pay Attention to Remote Workers?
How can communities and economic development professionals respond to the rise of remote workers? One strategy is to attract them. Vermont and Tulsa have developed incentive programs specifically targeting remote workers. Another strategy is to create a local environment that is appealing to them, offering the right mix of amenities, real estate options, and supportive networks to help this rapidly growing group of workers stay and thrive in your community. The real estate industry is responding with the rapidly expanding product category of coworking spaces (WeWork and similar business models have all but replaced the need for publicly supported incubators).
What is the Value of Having Remote Workers in Your Community?
At first blush, it’s easy to write off the benefit of having a concentration of remote workers in your community. You could dismiss them altogether as an isolated phenomenon unique to a handful of creative communities and tech hubs. That would be a mistake, since their ranks are growing nationwide in large metros, small cities, and rural areas. You could also dismiss them because their economic impact is less visible. That would also be a mistake. A 100-person company you recruit into your community provides a measurable economic impact. Whereas 100 new remote workers moving into your city may spur new spending on housing, retail, and services, but the impact is less immediately measurable. But don’t ignore the potential benefits! Not all of those 100 remote workers will remain “remote.” Some of them will hire workers to create a local office, perhaps even leasing space or investing in a new building. Others will bring part of their company with them from the out-of-market HQ. Others will leave their current companies/jobs, but stay in your city to work at one of your existing companies. Perhaps the most important thing for economic developers to remember is this: Remote workers are choosing to live in your city (or to leave your city and move someplace else).
When I left my job at Austin-based TIP Strategies to join Denver-based Atlas Integrated, I instantly became a remote worker by choosing to remain in Austin. Why? Lots of reasons… I have strong family ties in Austin-San Antonio, a large network of friends and professional contacts in Austin and across Texas, and I like it in Austin. Of course, I like Denver too, so who knows where I’ll end up down the road! The point is, there are literally millions of people like me who are working remotely. If you want to succeed in economic development, you’d better start paying attention to them!
I will be speaking on the topic of remote workers as part of a panel session on The Future of Work at the IEDC Economic Future Forum June 9-11 in Salt Lake City alongside co-speakers Debra Lyons of Lyons Workforce and Garner Economics and Josh Wright of Emsi. I will also be speaking on The Rise of Remote Workers on June 13 at the Texas Economic Development Council Mid-Year Conference in Rockwall, TX (in the Dallas-Fort Worth area).