In a twist, “working from home” benefits big tech in big ways.

Remote work has turned each new hire into a national competition.

Historically, one of the challenges faced by smaller urban markets was their ability to hang on to talent. Younger workers often found it more financially lucrative following their education to relocate to major metropolitan areas in order to snag higher paying positions with the companies based there.

In time, however, the high cost of living in the large metro markets, coupled with the desire to ditch the unbearable congestion in those areas, led to the formation of new businesses outside the major tech centers that found it easier to compete with the major urban areas for talent. 

Established companies found the same dynamics at work, too. The rise of markets like Charlotte, Salt Lake City, Pittsburgh and Boise underscored that the spread of the “new economy” had migrated to places beyond the traditional hubs of Boston, Washington, New York City, San Francisco/Silicon Valley, Los Angeles and others.

Then the COVID pandemic came along. Suddenly, it didn’t matter where employees lived as companies quickly figured out ways to have, in some cases, nearly their entire workforce working remotely. 

It didn’t take long for employees in some of the market hardest-hit by COVID to flee to far-flung regions. New York City residents moved to the Hudson River Valley, South Florida and other locations. For California residents it was off to Nevada, Montana or Idaho. Boston-based workers decamped for Vermont or Maine.

It soon became apparent that for many tech jobs, the need to be clustered together in offices simply wasn’t that critical. And in an ironic twist, smaller-city startups and other firms are now starting to feel the effects of the establishment biggies poaching their own employees.

It’s particularly ironic; whereas before, companies that couldn’t compete with Silicon Valley heavyweights on salary could offer a whole lot of lifestyle to even the playing field.  Now they’re finding that “work from anywhere” policies have nullified whatever advantages they had. 

Those big-city salaries can be used to purchase a lot of house in whatever kind of environment desired — even if it’s a lakeside cabin in the middle of nowhere. 

It also means that, all of a sudden, everyone’s competing with companies all over the country for talent — and hanging on to the existing talent is that much more difficult. When people are being offered 20% higher salary with no requirement to relocate, that’s a proposition many people are going to consider.

Another interesting consequence is that tech labor force is probably geographically more evenly distributed than it’s ever been — and the workers residing outside the traditional tech hubs are benefiting accordingly — At least in the short-term. 

In the longer term, companies based in the smaller markets hope that they’ll have access to those same new tech migrants if work-from-home policies change yet again.  But that’s a big “if” …

2 thoughts on “In a twist, “working from home” benefits big tech in big ways.

  1. Tech invention democratizes first information, now the geography of work, and ultimately the location of prosperity itself. It will be hard to claw back much of this new freedom. People hate commuting.

    As the rest of the country benefits from former urbanites working at home in smaller markets with good salaries, we shouldn’t worry that they will suddenly abandon this new life and go back to sitting twelve hours a day in a San Francisco or New York City office. A more likely worry is that urban dysfunction masquerading as “woke” sophistication will seep out …

  2. Realistically, availability of broadband Internet is the only way a smaller market can permanently attract or retain tech employees who work remotely for big tech firms. Productivity falls off a cliff when Internet connections are slow or unreliable.

    But broadband availability is still rather uneven across the United States. You can see this interactively by heading over to https://broadbandnow.com/national-broadband-map and clicking the Max. Speed radio button. Only the green areas have Internet service capable of up to 1,000 megabits per second (Mbps), which is equivalent to 1 gigabit per second (Gbps).

    As one might expect, most of those service areas cover small, medium as well as large urban areas but it is surprising to see how many gaps there are. For example, most of Upstate New York, and the entire El Paso metropolitan area, are devoid of high-speed broadband Internet service. And you can mostly forget about working in the middle of nowhere, unless you find North Dakota or Northwestern Minnesota attractive (hint: no traffic congestion whatsoever).

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