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” …