Amid the seemingly endless pandemic and a dramatic rise in remote work, the ability to work from anywhere is a gamechanger in the tech industry. For job seekers, the market now is wide open and without geographic barriers. For employers seeking to hire, the now worldwide talent pool means more competition to recruit candidates.
With tech workers on the move, smart businesses are adapting accordingly to attract and retain top talent. This is a time for companies to review compensation strategies, but also consider what connects their people: their culture and community.
Tech Talent On The Move
Texas and Florida are among the top target destinations for tech workers, but the highest migration increase of tech workers in the United States occurred in an unexpected place: Madison, Wisconsin. The city is gaining 1.77 tech workers for each one who leaves, according to a new LinkedIn report that tracked tech migration trends from April to October, the months when most people relocated during the pandemic.
Less traditional tech cities on the coasts, like Sacramento, California, and Richmond, Virginia, attracted tech workers at a high rate during the pandemic, while New York City and San Francisco lost workers. Midwest cities, including Minneapolis and Cleveland, have reduced the rates at which tech workers were leaving their cities.
Chicago (McCann Partners’ home base) is experiencing more flux. While the city experienced a steep decline in tech workers during the pandemic, it also attracted people leaving San Francisco, according to moveBuddha, a relocation site that tracks this data.
What’s Driving Tech Talent Migration?
One major reason for the exodus from coastal cities is the difference in cost of living. With pandemic lockdown orders forcing companies to implement work-from-home and work-from-anywhere policies, tech workers see no reason to pay big-city prices. Employees can live more affordably in smaller cities, without high rent, soaring taxes and long commutes.
Compared to the coasts, the Midwest is behind on going all remote permanently, but it’s catching up as a talent bed for coastal companies. Tech companies looking for top talent can find it everywhere now, not just in Silicon Valley or on the East Coast. It goes both ways, though. The ability to work remotely also means employers are competing with a wider range of organizations for top talent.
Destination: Flyover States
For now, tech workers are flocking to flyover states. While states like Texas and Florida have no state income taxes, other states are offering financial incentives to relocate. In Topeka, Kansas, the state’s Choose Topeka program will reimburse new workers up to $10,000 to purchase a home and up to $5,000 for the first year of rent. Tulsa, Oklahoma, reportedly will also pay $10,000 to move there. Other areas offering incentives include Northwest Arkansas; North Platte, Nebraska; Hamilton, Ohio; and Newton, Iowa.
The implications for smaller cities and their workers could be dramatic as tech skills move around the country. The influx of talent may enrich tech and entrepreneurship activity in “brain gain” destinations. For example, Illinois moved up three spots in a technology and innovation ranking, as it gained tech workers from around the country. The state rose to 13th, its highest spot ever, in factors including competitiveness, trade and globalization.
Hiring And Retention Implications
In the midst of this tech talent migration, smart organizations are revisiting the way they recruit workers. There is an opportunity now to increase diversity in your organization by attracting candidates from new locations. While employees can work from anywhere, employers can hire from everywhere.
Companies must also review their compensation strategy to remain competitive. For example, hiring managers need to consider a delicate balancing act between offering what is fair and marketable and where candidates are located geographically. On the flip side, if you’re a candidate, you can’t always have your cake and eat it too. There must be compromise on both sides for the situation to work.
Last year, big tech brands like Twitter and Facebook announced that their employees can work remotely indefinitely, although both companies would cut pay for those choosing to work away from their San Francisco Bay Area headquarters. This may impact their ability to be candidates’ top tech choices while simultaneously making it open season for lower profile organizations who had previously struggled to secure “ungettable” top talent.
For businesses looking to retain talent, some industry leaders are thinking beyond physical locations and focusing on company culture and values, no matter where the work happens. For instance, Reddit will not reduce pay for its employees, citing its company values: “Evolve is one of our company values and we have always challenged ourselves to continuously make our culture and work experience better.” Spotify followed suit in February, announcing its Work From Anywhere Program, which the company views as having hiring and retention benefits. The company believes this approach will expand and diversify its talent pool.
Companies need to reexamine their core values as well as their value proposition. In a time of uncertainty, compensation strategy is important, but so is culture and community. Look for opportunities for your employees to learn and grow together, no matter where they are. Emphasize the importance of connection and collaboration in your employee experience.
As the pandemic tapers, it remains to be seen if talent migration trends will hold up. Amid this changing work landscape, it is essential that businesses be agile, flexible and creative in finding ways to attract and retain talent.
“Tracking Tech Talent Migration And Its Impact On Hiring And Retention” originally appeared on Forbes.com.