The Work-From-Home Economy Is Changing How Cities Approach the Future

A dude and his beagle on a laptop

Increasingly, companies and corporations alike are realizing remote work is not something to be feared. What started as a necessity during pandemic times has rapidly emerged as a preferred employer-employee dynamic. The vast majority of workers prefer working from home. Major tech companies are now on-board and appreciating the vast economic benefits of remote work. Similarly, many companies are changing how they recruit top talent given that most demand at least part-time working from home. But these developments aren’t only limited to companies and workers. Believe it or not, cities and municipalities are also getting in on the act.

(Yup, Bold Business predicted that work-from-home was here to stay…)

Across the country, small towns and cities are realizing that they too can benefit from the work-from-home movement. In decades past, most municipal efforts were focused on attracting new businesses and corporations into their region. A new office meant more jobs for the region, which in turn generated local tax revenues and economic stability. But a new approach is emerging from these same areas as they increasingly appreciate the economic benefits of remote work. Remote worker recruitment programs are on the rise, and some towns are spending millions in worker incentives. And given their success to date, it’s likely that more and more cities invest in similar strategies in the coming years.

“[Remote worker recruitment] is the new version of smokestack chasing. It’s like what Ohio did when it attracted a microchip factory.” – Roy Bahat, Head of the Bloomberg Beta VC Firm

A Pandemic-Inspired Change in Recruitment

For years now, municipalities sought to attract larger firms to their area through various incentive programs. Municipal tax breaks, land-use allowances, talent pool access, and other strategies were used to attract corporations, which meant more jobs. But many towns and cities, especially smaller ones, were left out from major industries like tech. San Francisco, Austin, and now Toronto were magnets for these big-dollar tech firms. This meant other cities had to spend huge amounts of money to even be considered. Or they had to settle for less-appealing sectors. In either case, cities faced significant risks related to their investments.

Then, the pandemic hit, and working from home became the norm. This changed everything because employees could now work from anywhere, which included any town in the country. Some cities recognized the economic benefits of remote work related to their own situation. For a much smaller investment, they could offer remote worker recruitment incentives. And if successful, they could reap some of the same benefits as if they attracted a new corporation. As a result, remote worker recruitment programs began emerging in 2021 and have continued to grow. In fact, there are now more than 70 of these programs in the country today.

“It’s not about the money, and the gifts and things like that. It’s about the innovation to think that the city is thinking about how to reinvent itself, how to diversify its economy.” -Daniel Barr, Remote Worker, Beckley HUB

Municipal Economic Benefits of Remote Work

At first, it might seem peculiar why any town or city might want to recruit a remote worker. This is especially true considering many such programs offer cash incentives and other perks. But believe it or not, municipalities enjoy some important advantages when it comes to remote worker recruitment. For one, persuading advanced degree talent into an area does increase job opportunities overall. Some launch startups on their own while others get involved in side-hustles. According to some statistics, for every two remote workers recruited, cities see another job opening appear. This is notably less than if cities persuaded a major corporation to relocate to their area. But at the same time, so is their overall investment.

In addition to these economic benefits of remote work, recruitment programs benefit towns in other ways. Remote workers tend to get involved in community projects and organizations. they bring a higher level of expertise and talent to such activities. This makes for a much richer community. Likewise, most cities are targeting high-wage earners in their remote work recruitment efforts. That means these workers have higher disposable incomes that they will likely spent in part in the local economy. Given that the investments are smaller and less risky, the cost-benefit analysis supports these programs. This is why more cities are realizing the perks of remote worker recruitment.

“I’ve felt so loved and known here [in Tulsa] in ways I never have before. What is keeping me here is the opportunity and the people.” – Jason Mathew, IBM Product Manager and Tulsa Remote Worker

Benefits for Remote Workers

Naturally, there are some important advantages for remote workers as well with these city programs. For one, many smaller cities offer cash incentives with some as much as $12,000. Others throw in free gym memberships, assistance with childcare, and free office working space. Interestingly, however, it is not the perks that tend to be the deal-maker in these instances. While incentives may attract attention, it’s actually a town’s charm and personality that convinces remote workers to stay. Naturally, this varies from one person to the next. But it’s clear that economic benefits of remote work programs alone aren’t the only factors.

Some hipster dude working from home
The economic benefits of remote work have succeeded in reshaping business… and life.

In comments from those working from home in a new city, a common theme relates to the sense of connectedness a community offers. Indeed, many seek areas with a lower cost of living and higher quality of life. Similarly, less traffic and congestion can be a favorable thing. But many decide to stay because of the lifestyle the new city offers. This has been one of the greatest benefits that working from home appears to offer. And remote worker recruitment programs are taking full advantage of this opportunity.

A Changing Urban Landscape

In decades past, urbanization and industry consolidation within specific regions became the norm. In-person talent often dictated where specific companies needed to establish themselves in order to compete. But this all changed when working from home became increasingly popular. Today, remote workers can live anywhere while companies no longer have to stay within specialty specific regions. While the real winners are those working from home, smaller towns and cities are reaping the benefits as well. The economic benefits of remote work to cities are why so many are embracing remote worker recruitment efforts. And because these programs offer a win-win for all, there’s no reason to suspect they’ll go away anytime soon.


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