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Remote Work & the Suburbanization of Tech

Covid-19 led to a massive overhaul in the way we work. Seemingly overnight, our homes had turned into our offices, and we embarked on a mass experiment in remote work. At the time, there may have been a sense that things would quickly return to normal, that we’d be back in the employee break room within a few months. But we soon realized that would not be the case.

Over a year later, much of America is still working from home, and it’s clear that 2020 is going to have far-reaching implications. One significant dynamic unfolding is the way companies hire talent, and some have predicted this could lead to a mass suburbanization of the tech industry. 

But before we go further, let’s take a look at how we got here. 

A Brief History Lesson

The tech market experienced steady growth following the recession of 2008 and 09.  Companies like Apple, Amazon and Netflix saw their stock prices increase dramatically over the last decade. This massive growth in the industry led to the founding of thousands of new start-up software companies, creating an aggressive demand to hire engineers and developers. Throughout the decade, these roles became increasingly urbanized and concentrated in city centers like Boston, New York, Chicago, Seattle and San Francisco. Collaboration amongst technology companies, networking events, and even the way in which software was being built, all lent themselves towards companies congregating in these tech hubs. Speaking to Boston specifically, we saw companies and tech roles migrating from the suburbs to the urban center in droves.  Software engineers had to adapt, and many moved into urban areas to be closer to opportunity.  Others had to find ways to manage their commutes accordingly.

As we neared 2020, though, we were starting to see this trend slow and even reverse. There was a shortage of office space and rents skyrocketed. Steady growth combined with a shortage of students graduating with computer science degrees led to a tough labor market.  If companies struggled to hire, they needed to be creative.  These two facts led many tech companies to rethink their policies on working from home to attract more candidates.  Some moved to hybrid models where some work from home was accepted.  Others moved to the full “hoteling” of desks where employees came and went as they needed. Increasingly, a subset of companies began to employ fully remote employees as a way of expanding their candidate pool geographically.

How the Pandemic Changed It All

The pandemic turned this once sought-after benefit into a workplace necessity. One resounding take-away from the past year is that the software industry has been incredibly resilient. A fully remote work force has not been the disaster that many felt it would be.  Most software companies continue to work 100% remotely, pushing back the timeline for reopening. Some have even made the decision to vacate their offices and be fully remote indefinitely. There are, however, companies eager to get back in-person and some have even started to introduce return plans for the office.

In my view, though, companies that promote a full remote model will be most successful when it comes to future talent acquisition. We haven’t exactly seen a mass exodus from urban areas, but the trend is certainly gaining traction. A new report shows that Madison, Wisconsin, a relatively small city, saw a 10% inflow of workers last year. Cities like Jacksonville, Salt Lake and Sacramento saw similar gains as well. This is compared to mega tech hubs like San Francisco, which saw workers leave by almost 25%, according to the same report. Some states are even looking to capitalize on the trend, as Hawaii has created a formal program to entice remote workers to relocate there. 

I’ve observed this in greater Boston Metro as well, and the dynamic seems even more pronounced in places like New York, as people relocate to nearby suburbs. This is starting to affect the staffing market as well. Nowadays, when we approach an engineer about an opportunity, the first thing they ask is if they can do the position remotely. Candidates want to know the general sentiment surrounding this question. They are significantly less interested in organizations that are still on the fence.  

Looking Ahead

There is no doubt in my mind that the remote work force will remain popular in 2021 and beyond. Workers certainly want it, and in an effort to secure talent companies are falling in line. But it’s important to keep in mind that we’re in a transition phase. If the past year has taught us anything, it’s that we can’t predict the future. Where we’ll be 6 or 12 months from now is anyone’s guess.

With this in mind, I am actively counseling my clients on how to position themselves for success down the road. If you want to stay ahead, or even keep pace with your competitors, some amount of remote work has to be on the table. The specifics (whether it’s a hybrid model or a completely remote role) can be negotiated. But regardless, the tech workforce enjoys the flexibility and freedom to choose where they live. Employers have to understand the benefits of these new models as well. Flexibility in work from home attitudes will increase access to a top talent. Additionally, there are numerous studies showing that people who work from home tend to get more done than their in-office counterparts. 

What’s perhaps most interesting about this move to the suburbs is that we were already heading down this road; the pandemic simply accelerated the trend. The decade-long growth of tech jobs in urban centers had reached a turning point. High rents and deep concentration of the industry had already begun to drive both candidates and businesses to the suburban areas. What remains to be seen is if this suburbanization is just a blip or a long-term trend. In my opinion, this trend will continue for a while, and it is a win for both employers and employees. Organizations will increase their access to talented engineers, and candidates will have more choice as to where they live and work with many opting for that suburban lifestyle.

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