Workforce Development and Remote Work: A Quick Look at the Opportunities and Risks

My LinkedIn feed is full of friends, colleagues, and partners discussing the impact of the COVID-induced move toward remote work, whether temporary or permanent. This trend clearly has the ability to have a profound impact on our cities and neighborhoods, not to mention individual lives. 

In that spirit, I was listening to a webinar last week where a national training provider indicated that the pandemic has encouraged it to rethink the need for students to be attending classes to learn technical skills in person, particularly if there was demand from students in parts of the country where the training provider didn’t have a physical location and employers were open to remote workers for those roles. 

This reminded me of one of the storylines I’ve been following closely since the beginning of the pandemic and, to some degree, even before: what might more remote work mean for rural areas and small towns that have experienced decreases in economic activity even as the U.S. approached record levels of unemployment pre-pandemic? The story essentially says that now that many workers, especially those in tech, can work from anywhere, many will choose a simpler lifestyle with more affordable housing outside of cities, as long as they have a reliable broadband connection. 

Anecdotally, this trend is playing out at least temporarily as many tech workers are choosing to get additional space as they ride out the pandemic during which time their offices are closed. Time will tell the extent to which this trend will stick.

An element of this same story is what might the shift toward remote work mean for unemployment or underemployed workers in the rural communities and small towns who may not have had local economic opportunities. Remote work doesn’t only mean tech workers moving to their towns, it could also provide more opportunities for them to make a job or career shift as well. This has brought up an interesting policy question in my mind: should the U.S. workforce development system take a broader geographic view of labor demand to support rural communities in filling remote jobs? 

The context: the U.S. has 550 workforce boards tasked with administering federal funds to help unemployed and underemployed individuals, particularly those facing barriers to employment, access job training and career counseling services. Every workforce board is required to orient its programs around the in-demand jobs within its region. In many regions, such as the San Francisco Bay Area, Seattle/King County, Chicago, Boston, and San Diego, the economies have growing and each region has many thousands of in-demand job. Likewise, there are small towns and rural communities that have not experienced the same kind of economic growth. Rather than having a multitude of industries and companies with in-demand jobs, these regions rely on an increasingly small number of employers, with many of the jobs in retail and logistics, with occasional demand for advanced manufacturing. 

What if those companies in the major urban centers grow their remote work programs, particularly for some of the most in-demand roles? From the companies’ perspectives, this can increase the pool of candidates and help them fill those crucial positions. If they are willing to fulfill their demand in multiple regions, workforce boards outside their main office locations may be able to help fill those openings. 

Here’s how it could work. A workforce board in North Dakota is trying to help former oil & gas industry workers who were laid off due to the decreased price for oil. Rather than help them get jobs at nearby Amazon warehouse, the workforce board gets in touch with large companies based in Silicon Valley, New York, and Seattle because those companies have attainable positions that could be done remotely. The workforce board then works with a local North Dakota community college or an online provider to cover the training costs for 50 former oil & gas workers to learn basic IT skills and the foundational skills necessary to succeed at working remotely. It then facilitates each of the program participants who complete the program getting at least two interviews for remote positions at the partner companies. 

In many ways, this can be a win-win opportunity to create economic activity in otherwise struggling regions while helping companies fill jobs that they otherwise struggle to fill, even with local workforce organizations trying to meet their needs. On the flip side, this model may introduce significant risks to how workforce development works in the U.S. 

Opportunities:

A new view on the geographic element of labor market demand could present great opportunities, particularly for regions that have not experienced the same economic dynamism as superstart metros, particularly those with bustling tech industries. 

• More jobs for rural areas and struggling towns. Many of these communities didn’t have a lot of local options forcing workforce boards to prepare workers for roles that often paid less or had less generous benefits then prior jobs. Adding remote job opportunities to the roles for which they prepare job seekers opens news doors for workers and gives these regions an economic lifeline. 
• More jobs for American residents. Some number of the jobs that could be accessible to remote workers in rural regions may otherwise be sent abroad given the high cost of filling those jobs in urban areas. This could lead to more of these jobs from large global companies, especially roles that may not require a college degree, staying in the U.S.
• Better jobs for jobseekers who wouldn’t otherwise have those opportunities. The in-demand jobs at large companies, especially in tech, offer solid middle-class incomes and healthcare, retirement, and related benefits. Local jobs, especially those in retail and logistics, may not offer the same income and benefits. Not only would remote jobs themselves be better in terms of wages and benefits, but they could also put upward pressure on the wages and benefits provided by the local employers as well.
• Remote workers can lead to further economic development. Economic development comes down to bringing money from outside the region to the region and then that money circulating within the local economy. Better job opportunities through remote work can bring much-needed income to communities, and much of that income will be spent locally. This can help rejuvenate commercial corridors and main streets that have been decimated by big box retail and online shopping. We’re already seeing this to some degree with folks who’ve moved out to these places temporarily. Also, in my experience with business attraction and expansion work, a company with an existing employee footprint of remote workers is more likely to add a physical footprint in that location as well. The benefits of consumer spending and company location activities will hopefully lead to better connections between the economic and workforce development agencies in these regions, which too often are not working together despite their related objectives. 
• Shift startup/tech ecosystem to new geographies. Many remote workers will want to remain remote workers. At some point, a portion of those remote workers will want to once again collaborate with colleagues who all go into the same local office. This can lead to these workers starting new companies based outside of the superstar tech hubs, bringing more jobs and capital to previously overlooked regional and local economies. 

Threats:

This new approach inserts competition into the labor market for urban workers and that competition would extend to workforce boards as well:

• Reinforcement of upcredentialing tendencies. Employers already have a tendency to upcredential roles during a recession when they have more choice or labor (and as a way to weed out applicants). Pre-pandemic there seemed to be real momentum building around skill-based hiring practices and a focus on skill rather than degree. Time will tell if that momentum holds, but what is clear is that remote work opens a much larger pool of potential candidates up to employers. In that large pool, employers are likely to find jobseekers with college degrees who live in inexpensive regions and are willing to work for the same or even lower pay than an urban peer without a college degree. Given the increased number of applicants, employers may default to using degree attainment as a way to weed through the applicant pool, even if the job doesn’t require one and there’s no evidence that a college graduate would perform more effectively in the role. 
• More competition for job seekers facing barriers to employment. It’s already hard enough in a tight labor market for someone with barriers to employment (i.e. formerly incarcerated, person of color, poor credit score, etc.) to land a job. Many workforce development programs are designed to specifically serve these groups. Employers tend to be hesitant to hire these workers when other options exist. The introduction of remote workers into their hiring pipelines may make them less open to hiring job seekers with barriers to employment, threatening to exacerbate already existing inequalities.  
• Urban workforce boards face competition. For workforce boards, their clients face enough competition from other applicants. As organizations, they more or less have a monopoly on serving the employers within their region. If additional workforce boards can begin serving those employers by creating pathways for remote workers in their own communities, the urban workforce boards who’ve been working with these employers for years will face competition to fill available vacancies. This could make achieving state-mandated performance metrics more difficult, which could in turn put urban workforce boards at greater risk of losing their workforce board designation.
• Depresses wages for these jobs. Because job seekers in less expensive markets will be competing for the same jobs, employers will have less incentive to keep raising wages, especially for workers in more expensive markets. With the job paying less everywhere, workers will receive less income and workforce boards will have to work harder to achieve their wage targets. 
• Rural employers go unserved. If workforce boards began to focus increasingly on helping workers land remote jobs, they would do so at the risk of spending less time serving local employers, particularly those in manufacturing, who may not have other options to turn to when it comes to finding workers for in-demand roles. 
• Small businesses go unserved. It’s hard enough already for workforce boards to work with small businesses that may hire only a handful of individuals sporadically across the year. Opening up new large employers to workforce boards could make it even more unlikely for them to invest in relationships with local small businesses who are not hiring large cohorts of new employees regularly throughout the year. 

Possible path forward:

The public workforce development system in the U.S. can become more effective and equitable in many ways, and perhaps a measured expansion of the geographic component of labor market demand could be one of them. I can think of a few characteristics of what a fair approach to this would include:

• Limited geographic range. We don’t want every workforce board trying to fill remote jobs for Silicon Valley-based companies. Expanding the demand side of the labor market for any local or regional workforce board to include an entire state or a large section of state with at least one larger metro would provide more options for job seekers and employers while managing the amount of competition. The workforce system should also consider regions that cross state lines, especially where there are metro areas that cross state borders (i.e. Portland, St. Louis, Kansas City, New York, Washington, D.C.). 
• New performance metrics. Changes to performance metrics will also help ensure balance in this system, particularly as to how much effort and resources workforce boards put toward local vs. remote openings. We do not want workforce boards to forsake local employers in favor of potentially higher-paying remote jobs with larger, recognized employer brands, but we do want them to help job seekers get the best jobs possible and help employers fill chronically open positions. Given the structure of our workforce system, performance metrics and compliance requirements can be an effective tool to incentivize the impact. 
• Streamlined employer engagement. Employer engagement is one of the most challenging elements of the work for workforce boards. Few have executed successful strategies for building long-term relationships with employers, and too often employers are unaware of the resources available in their own communities. New models and tools should be brought to bear that allows for a centralized approach to working with large businesses while making it less resource intensive to engage with local small businesses. 
• Workforce board consolidation. America's 550 workforce boards cover every part of the country, and we need to ensure that every region has access to publicly-funded job training and career services. In many cases, there are multiple workforce boards in one regional labor market. Consolidating workforce boards to focus on a regional labor market rather than an individual city or county could reduce potentially harmful competition while helping to connect jobseekers and employers within a reasonable commute distance even when that crosses jurisdictional boundaries.  

The new nature of work requires that we rethink how we prepare people for jobs and help workers transition to new lines of work, especially those that are growing in relative demand. It could present opportunities for regions that economic trends of the last half century have left behind in favor of often coastal superstar metros. Taking a deliberate and equity-minded approach to serving the evolving needs of workers and employers in this changed environment, particularly around location, could create opportunities for both to benefit.