Facebook announced on Friday that it will allow its employees to work remotely until the end of the year. A number of other tech companies have similarly bleak forecasts for when it will be safe to get workers back into the office, with companies like Amazon and Microsoft allowing workers to stay at home until October. Pampered Googlers are no doubt mourning their free gourmet in-house cafeterias and coffee bars.
Rather than ask workers to telecommute from their expensive rentals in San Francisco’s Mission District or in Palo Alto — while HR finds ways to sanitize the snacks — what if Silicon Valley companies encouraged them to live and work from the myriad of affordable, livable cities desperate to attract and retain tech talent?
From the Tenderloin to … Tulsa?
At the same time that global tech capital has concentrated in a handful of North American cities (think San Francisco, New York, Seattle, Austin, or Toronto), these same cities have suffered unprecedented crises in housing affordability, traffic congestion, and cost of living increases.
Trying to keep up, other cities have become increasingly desperate to staunch their brain drain and attract the talent and tax base necessary to keep their economies competitive. So why do the companies and investors whose platforms facilitate virtual socializing, virtual working, and virtual everything insist on limiting their pool of talent to those living in America’s biggest, most expensive cities?
Tulsa, Oklahoma recently renewed a $10,000 per-person grant to attract remote workers willing to relocate for at least a year. Vermont launched a similar program in 2019, and other governments around the country from Baltimore to rural Colorado have set up tax credit and mortgage relief programs to provide similar assistance to newcomers willing to take a chance on a move.
And many other cities have launched expensive taxpayer and philanthropy-funded bids to foster something resembling the “next Silicon Valley.” Yet California still captures the lion’s share of global venture capital funding, and founders still shell out large amounts of that venture money to keep the rent paid in Bay Area offices and apartments.
The Amazon HQ2 rat race proved how seriously cities across the country were willing to kowtow to office-based job creation under the ancien regime. Philadelphia, as an extreme example, spent more than $500,000 on municipal efforts to attract the Seattle behemoth. But after the dog-and-pony show was over, Amazon still chose finalists (Northern Virginia and New York) that already concentrated significant amounts of human capital to the detriment of smaller metropolitan areas. In effect, the cities that had the least room for maneuver spent heavily to fight those with the biggest war chests, and still lost the battle.
Beyond the unicorns, major cities across North America have struggled to keep homegrown tech talent anchored once they begin to grow. Cities like Raleigh-Durham or Pittsburgh invest heavily through universities to train students that inevitably leave for better prospects or bigger paydays elsewhere, but they also offer these recent graduates the prospect of buying a house, or affording that latte habit while saving for retirement. That is something only in reach of a rare few in the Bay Area in 2020.
Tech can revolutionize the office again
Silicon Valley companies, from behemoths like Google to Series A startups, have the infrastructure to decentralize their home base operations. By allowing employees to work from lower-cost locations, companies can keep explosive Silicon Valley wage inflation in check, allow workers to build families and lives free from San Francisco or New York rent or state income tax payments, and lead the way for other industries that could reap similar benefits from decentralization. At the same time, they are doing their HR teams and finance teams a major favor by opening up their hiring to a national pool of candidates.
Tech company employees have spent months holed up at home, with little hope for a swift return to the office. It’s an important moment for the current esprit de corps to prevail, and to defeat any conservative nostalgia about the collaborative nature of the old office.
Instead of spending millions to update offices for a health threat that may fade by the time renovations are complete, tech companies could save millions, while mending inequalities and doing a serious service for the American economy, by making remote work a thing of the future rather than the past. Besides, it’s going to be a long time before anyone is wooed back to the office with the promise of those free communal snacks.
James Stranko is a communications advisor specializing in cybersecurity, tech, and PE/VC. He previously worked as a client experience lead at McKinsey New Ventures.