Whether it’s Tesla CEO Elon Musk moving to Austin, Texas or large tech companies like Oracle pulling out of Silicon Valley, news of the great pandemic migration has been on the rise for months.
As much as big names make headlines, the ongoing relocation trend is actually being driven by the so-called rank-and-file remote workforce who have embraced their newfound work-from-home (WFH) status and chosen to seek greener pastures elsewhere. Nowhere is this outbound movement more pronounced than in the high-priced urban markets of California and the Northeast, which is understandable.
What is less clear however, is where — and why — the inbound traffic is choosing to move given that many remote workers can literally set up shop almost anywhere they want to, a fact The Wall Street Journal highlighted in terms of the explosive growth experienced by furnished short-term rental companies, such as Landing.
When Landing launched in 2019, it planned to offer rentals in 30 cities, the Journal explained. Enter COVID and the WFH-boom and Landing’s portfolio suddenly spiked to 75 locations, far exceeding what company executives thought was ever possible.
“Covid has taken a decade of change that I was thinking was going to happen between now and 2030 and kind of compressed it into a year,” said Landing CEO Executive Bill Smith.
Will Short Become Long?
By design, short-term corporate housing is typically a two- to three-month arrangement, often used as an alternative to a hotel that allows tenants to simply walk away at the end of their lease. However, unlike a business project that would bring someone to a new city for a finite period of time, the WFH crowd is often kicking the tires on a new lifestyle to see how they — and their loved ones and families — like their new life.
Only time will tell how many migrants decide to take root and become permanent residents, but the early statistics suggest that the number could be substantial, especially since the hoped-for COVID cure and return to normalcy is not progressing as fast as expected.
In short, like any product adoption cycle, the more time that consumers spend working remotely and/or trying out their new city and lifestyle, the more likely they are to get used to it and stay.
Wall Street South
Hip, sunny, and full of money, “What’s not to like about Miami?” the thinking goes for WFH escape artists who have made the south Florida city their new home. While attracting individuals is one thing, the real whale hunt involves landing companies, and few places are going after it harder than the orange capital of the world.
“Florida’s warm weather, low taxes, affordable space and quick, easy flights back to New York,” are attracting legions of financial workers to head south, a Reuters report last month said, quoting one local expert as saying 30 major firms were mulling the move.
The list of super-wealthy individuals and firms behind the push to create Wall Street South reads like a Who’s Who of the original Wall Street including Blackstone, Goldman Sachs, JPMorgan Chase, Citadel, Moelis, Paul Singer and Carl Icahn to name a few.
Silicon Valley North
If Florida aims to be the new financial hub for the mobile and affluent, then Seattle could be seen as the landing place of choice for tech workers, as Washington State’s largest city and home to Amazon and Microsoft is fast gaining the reputation as Silicon Valley North.
“New employee migration data from LinkedIn shows that Seattle added 2.2 tech workers for every one worker that left, from March to October [last] year,” a Geekwire report on the “inflow-outflow ratio” said.
Compare that to the San Francisco Bay Area’s 35 percent drop last year — its biggest-ever — or the 20 percent dive in New York City’s rate of net new employees and the winners and losers in the re-lo trend start to hit home.
“You know, it’s very troubling news because it’s not unexpected,” said Jim Wunderman, president and CEO of the Bay Area Council. “A lot of companies [and] individuals [are] talking about this, and it’s been on the agenda for a while now, even pre-pandemic. But I think the pandemic really expedited a lot of organizations thinking about their future strategy and remote work. And the wildfires didn’t help.”
Digital Nomads Unite!
What’s curious about this migration trend is the fact that, while it clearly produces winners and losers, the whole WFH shift has not resulted in much net new hiring nationally, since worker migration does not equal job creation.
Still, almost a year into this involuntary workforce experiment and roughly one-third of employees are continuing to work remotely, with no end in sight, and increasingly getting used to their new routine.
For what it’s worth, more than 60,000 people now belong to LinkedIn’s Remote Worker group, sharing war stories and worries beneath the hashtag “DigitalNomads.”