Fishing to Catch People Part 3: Buying the Fish
In the first part of this series, I looked at the theory of rural places beginning to recruit people instead of companies. In the second part I looked at what communities needed to do to be ready. This third part tries to assess the success to date of efforts to recruit remote workers.
Let’s say you’re 30 years old, working from home in a fully-remote job. What would it take to get you to move to a small town in another state you had no connection to?
There’s a big experiment underway right now in the US to try to answer that question. Dozens of towns, mostly small, mostly midwestern, mostly struggling, are trying to make their case to adventurous, disgruntled or just tired-of-the-city young people with work from anywhere (WFA) jobs: you should move yourself (and your spouse and kids if you have them) HERE. And bring your WFA job with you.
The places are leading with a pitch about money – cash. If you move here for a year we will pay you.
But the money is really just an ante to get your attention. Each town is then adding its own kitchen sink’s worth of perks and hospitality designed to make the new residents feel part of their new home. They’re betting that remote workers will come, start spending money and fall so in love with their new home that they will not only stay after the first year, they’ll want to help rejuvenate the town.
It's a radically new take on economic development, and it’s being launched almost simultaneously in towns and counties from southeast Alaska to northwest Alabama; North Platte, Nebraska to Natchez, Mississippi; French Lick, Indiana to Farmington, New Mexico.
The traditional approach
The traditional approach to economic development was often called “the buffalo hunt.” Towns and counties and regions would search for footloose manufacturing companies, offering cheap land, cheap labor and low taxes if the company would move there. If the economic developers were very lucky (by the early 2000’s, there were more than 15,000 economic development agencies in the US and just 1500 major plant expansions or relocations a year), they could bring home the “buffalo” and “feed the village.”
As globalization and automation have decimated US manufacturing (over the past 30 years in North Carolina, where I live, employment in apparel has declined by 94%; textile jobs have decreased by 85%; and furniture jobs are down 59%).
Old buffaloes have died and new buffaloes have become an endangered species.
Many rural communities and small towns have struggled to hold on to their young people, and have watched as they grow older, poorer and sicker.
The idea of recruiting people instead of companies got its first serious try in 2018, when the state of Vermont (using state dollars) and the city of Tulsa Oklahoma (using funding from the George Kaiser Family Foundation) announced programs to pay cash incentives ($10,000 in both places, though Vermont later lowered theirs to $7500 before narrowing the program last year to recruit teachers) to people with remote jobs. They found surprising interest: many more people applied than were accepted. The programs then selected the people they thought were most likely to stay and contribute to their new communities. If the movers agreed to stay at least a year, they got paid.
Stan Kraphak and his wife Morgan Creekmore moved to Tulsa from Denver in 2019, when they were among the 3% of applicants accepted by the Tulsa Remote program. They purchased their home with the help of the $10,000 bonus.
Then came the pandemic, demonstrating that large percentages of jobs could be done remotely. The percentage of fully remote jobs today is 12.7%, up from 6% in 2019, with some analysts projecting that by the end of 2025, as many as one quarter of all jobs could be WFA.
People recruitment takes off
Seeing that trend, the number of struggling communities offering “people recruitment” programs has exploded.
The growth has gotten a big assist from an Indianapolis-based company called MakeMyMove, which has positioned itself as a middleman, providing online matching for remote workers and the various towns, cities and more-rural regions interested in recruiting them (some communities also use the site to recruit for hard-to-fill jobs in town, including teachers, nurses and public safety workers).
Currently 67 participating communities pay the company for monthly subscriptions that give them the opportunity to market themselves to interested remote workers; a smaller number of places pay additional fees for more hands-on assistance in developing programs and managing the recruitment process.
The online connections seem to be working: so far, more than 55,000 workers have submitted applications through the site.
Who’s making the move?
We know a good amount about those working fully remotely as a whole. Remote workers:
· Are more likely to be college-educated;
· Earn, on average, $19,000 more than their in-office counterparts (studies show that each remote worker saves its company $11,000 in work-space-related costs);
· Are more likely to be young (age 25-39) and male;
· Are disproportionately represented in jobs like marketing, accounting, finance, medical records, all of which pay above average wages.
We know less about the subset of remote workers who are applying to relocate. There are some things we can guess would make for a strong market – one set of studies show that spending power for college graduates moving to urban centers is declining, and pollsters find that more people would prefer to live in rural areas than are actually living there. But it is harder to find public data on the demographics of those who are actually making the move.
· Survey data from the Tulsa Remote program’s first five years shows that the movers were more diverse than their population as a whole, with 48% of those accepting the offers non-white. Overall participants were more likely to be Black and Asian than the current population of the city, and less likely to be Hispanic.
· Tulsa Remote participants come from 44 different states, with Texas and California accounting for 1/3 of the total. About 11% of them later recruit friends and family to join them, with no incentives.
· MakeMyMove says that those placed through their service make an average of $108,000 a year. Eighty percent have a college degree and 50% bring with them at least one other person (spouse or child).
What kinds of incentives are places offering?
“Places can think of this as a marketing exercise. They’ve seen people leave them to find economic opportunity, but now (remote workers) can bring that opportunity with them wherever they move. The towns that win are going to be those that really market themselves.”
Places are offering a wide variety of incentives.
Cash: Cash bonuses, some paid up front and others over the course of the year, are an element of all the programs I have seen, but there is a considerable range, from $500 in Farmington, New Mexico to $12,000 in three different rural West Virginia programs.
Cash equivalents: Hard cash offerings are just the start of the incentives. Some offer near-cash equivalents like assistance with student loans, free high-speed Internet, coworking space and Chamber memberships, business startup funds, home downpayment assistance, savings accounts or travel funds to support out-of-town visitors to your new home. And in Lincoln, Kansas, Mannilla, Iowa and Claremont, Minnesota relocators can get free residential plots of land if they agree to certain design requirements.
Ketchikan, Alaska promotes outdoor activities and bills itself as “the salmon capital of the world.”
Quality of life: Once potential movers start looking, the central pitch they’ll see from participating communities is that they offer a higher quality of life. In his 2019 doctoral dissertation, Ryan Wallace of UMass Amherst surveyed remote workers who relocated and found that “quality of life” issues were either “highly important” or “very important” for 86% relocating remote workers; “natural amenities” for 75%; and cultural and “social and cultural amenities” for 54%. His conclusion: “Places with higher stocks of natural, cultural and recreational amenities are, in fact, a draw for remote workers.”
That explains in part the rich array of offerings by towns emphasizing the natural features of towns. Among other things, I saw towns offering free mountain bikes and fishing licenses, tickets to water parks, ziplining venues and athletic events.
The interest in activities may also explain why more than half of the communities reviewed in a Cleveland State study were home to a college or university: “For someone who’s been priced out of a larger city, is looking for a change but doesn’t want to give up all the amenities, the university can be a powerful ally for a town,” says MakeMyMove’s Hock.
Hugs: Since the new residents are moving from out of state, they seldom have any existing friends in town. Participating communities do everything they can to make the moves “sticky” for new residents, offering meetings with the mayor, coffee klatches, boat rides and bonding with local volunteers, even “adopt a grandparent” programs to help newcomers feel part of the “family.”
Cost of living: Smaller towns offer significant cost savings over urban centers. And the survey from Ryan Wallace at Mass found that “cost of living” was an “important” consideration for relocates. MakeMyMove’s website emphasizes this, enabling each potential applicant to compare the cost of living in their current residence to towns they are considering.
Could another approach work better?
What’s the best path forward for struggling towns? They’re making their best guess. (Photo Jens Lelie for Unsplash)
With the rapid growth of talent recruitment, some people have declared that the era of recruiting companies is over. That’s unlikely. Places have sunk too much money into hiring economic recruiters to easily abandon it, and smaller towns and rural communities still maintain a cost advantage over urban areas – land and local workers cost less.
But as evidence supporting talent recruitment efforts comes in, the balance of investment might shift, says MakeMyMove’s Hock: “We don’t see it as so much a replacement for traditional economic recruitment, but as another solution for communities shut out of the recruitment game.” Talent recruitment has another advantage over corporate recruitment, he notes: “There’s… no lag time: people show up and they start spending.”
Brent Lane, the Ohio University economist (see this post) wonders if the money might be better spent on infrastructure or education improvements that would attract people to town, or on more targeted investments in current residents or on specific outreach to former residents who have moved away: “I worry programs like this will succeed too small,” he says, meaning that limited success recruiting strangers might discourage communities from other people-focused strategies that might be more successful. That argument makes logical sense, but is hard to prove.
What’s exciting to me is to see the number of small communities that are taking a chance, looking at data, examining their assets, then sticking their necks out to change what they see as an unsustainable downward trend line. As for Hock and MakeMyMove, they are bullish for a future that sees more and more programs across the country and, with time, across the world: “We view this as a global phenomenon,” he says. “All across the world there are communities that need to grow. Some of the same challenges you see in Indiana plague small towns in Italy.”
Ireland’s “Our Living Islands” policy pays young people up to $86,000 US to move to remote Irish islands.
He’s right. About the same time as Vermont and Tulsa were starting their programs, small towns in Italy started offering cash incentives too. To date, more than 30 small towns in Italy are all in on incentives, with offers ranging from deeding over abandoned houses for €1 to €10,000-€40,000 cash bonuses for moving there — more if you bring children, buy a hotel or start a business. And now towns in Spain, Switzerland and Ireland have joined them (citizenship and length of stay requirements vary), with incentives as high as €80.000 (about $86,000 these days). Who else is going to jump in?
So now imagine you’re 30 years old with a WFA job. Where in the WORLD could you go and what would it take to get you there?
Notes:
Change in NC manufacturing employment: https://www.commerce.nc.gov/news/the-lead-feed/not-your-grandfathers-manufacturing
Older, poorer, sicker: https://www.nihcm.org/publications/rural-health-in-america-how-shifting-populations-leave-people-behind
Work from home prepandemic: https://www.ncci.com/SecureDocuments/QEB/QEB_Q4_2020_RemoteWork.html
Fully-remote work peaked at 37% in late 2021. This article looks at fully-remote work trends: https://www.forbes.com/advisor/business/remote-work-statistics/
MakeMyMove website: https://www.makemymove.com
Decline of real wages for college graduates moving to urban centers: https://www.aeaweb.org/articles?id=10.1257/aer.100.2.373
Early study of Tulsa Remote program from Brookings: https://www.brookings.edu/articles/work-from-anywhere-as-a-public-policy-three-findings-from-the-tulsa-remote-program/
Survey data from Tulsa Remote program: https://23811891.fs1.hubspotusercontent-na1.net/hubfs/23811891/Tulsa%20Remote%20Economic%20Impact%20Report.pdf
Factors influencing relocation of remote workers: https://scholarworks.umass.edu/dissertations_2/1774/
Cleveland State partial summary of current incentive programs: https://engagedscholarship.csuohio.edu/urban_facpub/1779/?utm_source=engagedscholarship.csuohio.edu%2Furban_facpub%2F1779&utm_medium=PDF&utm_campaign=PDFCoverPages
Recommendations for maximizing the effectiveness of recruitment: https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=7276&context=open_access_etds
Italian cash offers: https://www.forbes.com/sites/laurabegleybloom/2021/07/15/these-beautiful-villages-in-italy-will-pay-you-33000-to-move-there/?sh=62702cffeff9
Other countries with relocation offers: https://www.euronews.com/travel/2023/11/03/want-to-get-paid-to-move-to-spain-or-italy-here-are-the-towns-in-need-of-new-residents#:~:text=In%20Calabria%2C%20Italy's%20southwestern,of%20their%20application%20being%20accepted.