How Far From Headquarters Will Startups Look To Hire Talent Post-Pandemic?
We surveyed hundreds of employees and spoke with executives and HR leaders at emerging tech startups to find out.
The skinny? Across the board, companies still prefer local hires – even if they’re currently hiring nationally. We’ll break down the reasons why and share some creative options that may have you rethinking your growth strategy in 2021.
We crunched the numbers to help you decide if it’s safe to cancel your lease and move to the Bahamas yet. (Hint: no)
So, you’re working from home. You still live near your office, even though you don’t go there anymore. You used to fight traffic on your commute into work every day, and now you do the same job from a laptop at your kitchen table.
So why are you still here? If you’re not in the office, why not be at the beach? If you can do your job from anywhere, is there any reason to stay within commuting distance of your old HQ?
Rent in Manhattan dropped over 15 percent because of remote work, says realtor.com. The resulting mass exodus hit cities in the US Northeast especially hard. Should you join the retreat?
Of course, the answer is that you don’t know if (or when) your boss will expect you back in the office. As convenient as remote work can be, there are potential downsides. Many companies might want you to move back into the office as soon as possible. Some employers might just prefer their remote employees to live nearby.
There’s another reason not to move to the beach quite yet. Even if companies hire remotely, how far away from the office will they look? Will a company based in NYC consider a Brooklyn-based candidate the same as someone from East Cupcake, Illinois?
Hatch I.T. ran several polls and reached out to our database of local tech startup founders. We asked them how the pandemic changed their hiring plans. We wanted to know if, post-pandemic, they planned to hire remote employees globally, nationally, regionally, or locally.
We also wanted to know whether employers’ remote work policies would change depending on the roles they hired for, or the size of the company. The results suggest that many companies won’t return to fully on-site work, but they will continue to hire local and regional employees post-pandemic. Employers will try to get the best of both worlds. They will capitalize on the ways remote work increases productivity. But they will use contract workers and hybrid models to maintain in-office advantages. Results vary by company size, but the trend is clear:
If you’re an employee, there are plenty of reasons to stay close to your office.
If you’re an employer, don’t cancel your lease yet. You may want to hire close to home.
Employees reside within surrounding states of HQ – generally within the same time zone.
Employees reside within the United States.
Employees reside anywhere globally.
Employees come in to work from Company Headquarters or distributed offices.
Employees log-in to work from home or other remote environements.
Employees rotate between working in office and working remote – either on schedule or based on need.
How far out will companies hire remote employees?
In the following series, we break down the different ways companies plan on collaborating and hiring post-pandemic.
Hiring Locally and Going Back to the Office
Hiring Locally with a Hybrid or Office-Optional Model
Hiring Locally but Working Remotely
Hiring Regionally but Working Remotely
Hiring Nationally (or Globally) but Working Remotely
Summary: The Future of Work
Hiring Locally and Going Back to the Office: A Good Idea with Few Takers.
Are companies spooked by college reopening results?
Even with a fully remote office, there are a lot of reasons companies prefer to hire candidates in the same city as their headquarters. For one thing, employment, compliance, and tax laws can change from state to state. For another, hiring locally means that employers won’t have to worry about asking remote employees to move if they ever return to fully onsite work.
There’s another interesting reason for a business to prefer in-office work: it may protect employees. Offices might give businesses a level of control over social distancing, contact tracing, and testing that a hybrid model with lots of coffee meetings and lunches would not. (Check out our articles on health benefits and privacy for more.)
According to Vox,
“At colleges and universities […], the problem so far doesn’t seem to be transmission within classrooms so much as transmission outside of them — in dorms, fraternities, sororities, bars, restaurants, and other indoor spaces used to congregate, party, eat, and drink.”
Vox also found that “for testing and tracing, the early results seem promising, with several of the most aggressive schools reporting few, if any, Covid-19 cases.”
Out of 78 respondents from our poll of DC tech employees on LinkedIn and Slack, only 6 expected to return to fully on-site/in-office work post-pandemic. We reached out directly to 20 software startup HR departments to get more details.
Out of the 20 DC software startup HR departments we spoke with directly, none are fully onsite during the pandemic. Only 1 plans to return to fully on-site work post-pandemic. Our results match a LinkedIn News poll of 2,101 LinkedIn users. It found that only 13% of employees expected to return to fully onsite work post-pandemic.
In other words, the evidence is pretty clear that employers and employees don’t expect to return to full-time, in-office work any time soon. Once companies have started hiring remote workers across the U.S., it’ll be hard to shift back to fully onsite work. You can’t expect a majority of your workforce to relocate to your HQ once you’ve hired them across the US.
The reasons for this are obvious. As long as COVID remains a threat, companies will face legal, safety, and compliance issues with onsite work. In MD, for example, masks are currently required by law. Meanwhile, the Maryland State Government site states that “Marylanders cannot be terminated from their jobs because they have been isolated or quarantined.” These regulations will doubtless present compliance challenges for employers.
Companies can also take their cues from the nation’s colleges. According to the NY Times, universities that reopened too early saw spikes in COVID cases, despite their precautions. If companies take their cues from universities, they’ll stay remote for a long time to come.
Reopening, even in phases, or shifting to a hybrid model, will force employers to decide which employees can return to work and when. Employers may have to reconfigure office layouts, change work hours, alter occupancy limits, mandate training, add signage, and provide PPE.
Leon Fayer is an emerging startup market and technology writer and speaker. When I reached out to him on Slack, he suggested that the big companies are more likely to return to onsite work than small businesses and startups.
“Larger organizations will have to update their processes (sometimes pretty extensively) to truly accommodate remote culture,” he explained, “Everything starting from IT (issuing laptops, remove administration, firewalls, etc) to physical security requirements to maintaining quality/velocity with remote teams. There is also a question of cost – for example, a lot of companies have multi-year commitments for office space, which they can’t easily get out of.”
Hiring Locally with a Hybrid or Office-Optional Model
It Seems Risky, But Startups See Plenty of Upside
Out of the 78 respondents to our poll of DC Tech Employees on LinkedIn and Slack, 13 said they planned to continue to hire candidates locally. However, they did not plan to remain fully in-office. Out of the 20 local software startup HR departments we spoke with directly, only 2 said they offered partial on-site/in-office work during the pandemic. But, 4 said they planned to offer a hybrid model post-pandemic.
A LinkedIn News Poll of 2,101 LinkedIn users found that fully 78% expected their companies to use a hybrid approach post-pandemic. The numbers show that employers and employees are on the same page. A recent survey of DC residents, for example, found they want to work remotely “forever,” but also want to have at least some days per week in the office.
Location intelligence startup Gravy Analytics is one of the companies embracing remote work while allowing local employees to return to the office (with precautions in place). They told us that “At this time, mostly everyone is remote. Some people go into the office occasionally, but we limit it to 10 people. We are working on a future hybrid plan that allows employees to work remotely 2-3 days per week with time in the office being optimized for cross-team collaboration.”
Craig Connell, Chief Technology Office at Baltimore digital media analytics startup STAQ had a similar answer:
“Right now everyone is working from home full time, but people do have the ability to go into our Baltimore office if they need or want to for some reason. Our Baltimore office is open for employees only, no guests. I expect that we continue to work remotely for the rest of the year, after which we might start to do a little in person. We’ll likely have a policy similar to before, where we want people in the office 1 day a week with their team. As far as our hiring plan, given how remote we have become, we have been willing to hire people not from the area, although we have some expectation that remote folks would come to Baltimore for visits and team bonding time when travel is a more feasible option.”
There’s some merit to this idea. “Pandemic bubbles” seem to help reduce the spread of COVID19. For employers who want to ramp up onsite work in the coming year, hybrid models may help provide a layer of protection (as long as companies keep groups small). Science Magazine found that small groups, masks, and social distancing may help make reopening a little safer.
Sani Djaya is currently building a remote work platform Yuzuconnect. I reached out to him to get his take on reopening. He says the size of a company will be a big factor in whether they choose a local, hybrid model. Small businesses and startups that ended their leases won’t want to go back to the office. Fortunately, they won’t need to, because tech products bridge the gap between office and remote worker. Yuzuconnect, for example, will allow for the same level of spontaneous interaction as walking past a coworker’s desk. And, Sani adds, it’s “a lot cheaper” than an office lease.
We also spoke with Eric James, an urban planner and lead UX developer for local tech startup Transitscreen. He says,
“The future of remote work in DC is probably mostly developers working remotely but there will always be a need for business development, sales, and management to collaborate in person. Also, lots of companies are stuck in leases right now so likely there will be some hybrid model moving forward where the space dedicated previously to tech will be re-allocated.”
Just like fully onsite work, there are problems with the hybrid-local model. Besides health and compliance risks, employers will have to coordinate between remote and onsite schedules. Employers may need to provide stipends for home-office needs in addition to commuter benefits for days in office. Both will need additional layers of data security and tech support. Parents will have to juggle childcare issues with having days off and on.
For employees, there’s one other reason to fear the hybrid-local model. According to research by McKinsey, “Two years from now, about 70 percent of the executives in our survey expect to use more temporary workers and contractors on-site at their companies than they did before the crisis.” None of the employers we spoke to about hybrid-local models mentioned planning to replace full-time employees with contract workers. However, some employers utilizing a hybrid model may find it cheaper and easier to hire contract and gig workers for the onsite part of the job.
Hiring Remotely but Staying (Mostly) Local
The Counterintuitive strategy some employers say they will adopt post-pandemic.
Radius Networks uses location data to provide contactless customer experiences. Many brands, like Five Guys, El Pollo Loco, and Nandos use their products to make curbside pickup, drive-thrus, and dining safer and more efficient. Given that contactless interaction is their specialty, it’s no surprise that they are a successful remote company. What may surprise you, however, is that despite being fully remote, they still aim to hire mostly in the DC metro area. They recently told us,
“We are currently all working remotely, and doing so successfully! We do not have a plan in place for returning to the office at this time, but look forward to collaborating in person again in the future. We would still like to build the team out of the DC area headquarters, but are open to remote employees if we find a great fit.”
Out of the 20 DC software startup HR departments we spoke with directly, a quarter said they continue to hire locally, but are fully remote. That number drops to 4 for post-pandemic plans.
“For future full-time hires, we would like someone who’s in the region, who can come in person into the office because there are just some interactions you just can’t replace,” said Pilleve, a DC area tech company at the cutting edge of preventing opioid addiction.
Customer success software-maker ChurnZero had a similar take. They told us that,
“While our office remains open in Washington, DC for anyone who would like a change of scenery from their home office, the majority of our team is still working from home. We are following state guidelines for reopening, and hope to invite our team back in a limited capacity in the upcoming months.”
Other local startups take a more hesitant approach. They’re not sure what their policies will be post-COVID, but until they know for sure, they have a preference for keeping remote work local. For example, video content management company Vbrick had this to say:
“If employees want to come to the office, they are welcome to use the office but they have to follow strict social distancing rules set by the office building and Vbrick. Even before COVID-19, Vbrick allowed employees to work from home at least one day a week. With COVID-19, all employees are working from home and we do not see any drop in productivity or collaboration. We have conducted an employee survey on whether employees want in-person, remote, or hybrid work after COVID-19. We are still analyzing the survey results and other factors to decide what the work situation will look like after COVID-19.”
Mental wellness startup Ladder had a similarly cautious approach:
“We are now fully remote for the time being but we’re just navigating as the environment changes. We’d prefer building our team out locally but remote nationwide is not outside of the question.”
In conclusion, nearly every DC software startup we spoke with plans to remain at least partially remote post-pandemic. But, employees shouldn’t plan to move too far away yet. Many employers still prefer to hire close by, and some will offer appealing hybrid models that will make proximity to the office advantageous.
Regional hiring provides a possible middle-ground for companies unsure about keeping remote work permanent.
Multi-office “hub and spoke” models prove less popular in emerging startup markets.
Eric James is an urban planner, UX developer, and software startup thought leader at Transitscreen. His company focuses on commuter benefits, so he’s very aware of how COVID19 has transformed office spaces.
“The trend before was closing down and consolidating distributed offices,” he tells me over Slack, “and that will continue as real estate is pricey and difficult to manage. I think people will simply get vouchers to have remote coworking space instead.”
I’ve reached out to him because I want to know if it’s safe to move out of the city, and if so – how far? I don’t see a reason to stay so close to the city if the future of work is remote. I could live anywhere! But, I don’t want to move away too soon.
Will my boss need me back at the office once it’s safe to return? Will smaller tech businesses and startups (my niche) hire regionally, or only in one time zone? What if I move to California, but the companies I want to work for only hire on the east coast?
There’s another reason to avoid regional models: employers want to be careful not to hire in a way that could be discriminatory. Hire lots of employees from one zip code but not another, and you could appear biased. For this reason, many employers prefer not to base remote hiring decisions on regionality.
A regional model might make the most sense for companies using a “hub and spoke” model. Offices using this model have one main office and smaller, distributed offices or coworking spaces dotted throughout the region. Given the “pandemic bubble” strategy practices by the NBA, this seems like a distinct possibility for many employers.
When I suggest this to Eric, however, he passes on the idea. He says most small employers won’t want to deal with the hassle and expense of multiple leases. “Hub and spoke” offices won’t be popular post-pandemic.
A regional model might still reduce complexity for employers, however. It could help them avoid the complicated compliance, tax, and employment regulations proscribed separately by each state. Furthermore, a regional hiring policy might make it easy to create a phased return to onsite work post-pandemic.
Research by McKinsey attempted to answer this question. How important will proximity to office spaces be?
“Across all sectors, 15 percent of executives surveyed amid the pandemic said at least one-tenth of their employees could work remotely two or more days a week going forward, almost double the 8 percent of respondents who expressed that intention before COVID-19. […] More than 60 percent of workers in the US economy cannot work remotely. Their jobs require at least some physical presence such as standing on a meat processing line, helping customers in a store, or providing healthcare services.”
Scrolling through LinkedIn, there is a Job Post that says “Location: While ABC staff are currently working remotely, location preferred in the Plains, VA or Washington, DC; remote work also a possibility.”
Out of 78 respondents to a poll of DC tech employees on LinkedIn and Slack, 9 planned to hire regionally. However, out of the DC software startup HR departments we spoke with directly, only 2 said they had any kind of regional, hybrid model, and neither was certain about their post-pandemic plans.
“While our office remains open in Washington, DC for anyone who would like a change of scenery from their home office, the majority of our team is still working from home. We are following state guidelines for reopening, and hope to invite our team back in a limited capacity in the upcoming months,” says DC cloud data tech startup Cloudtamer.
Federated Wireless had a similar response:
“Our answer right now is mostly a dissatisfying “we don’t know”. Most people are still working remotely right now, that we know. And we are guessing that an office reopening or push to what will likely be a hybrid model of physical presence and remote work won’t happen until closer to the spring at the soonest, but we don’t want to commit to anything and rather remain fluid based on the available information. We are continuing to build our permanent team out locally – Arlington and Boston – but are also augmenting with contingent resources (contractors) nationwide.”
Not all companies hiring regionally planned to offer hybrid models, however. Some plan to hire regionally but remain fully remote. Out of the DC software startup HR departments we spoke with directly, 2 were fully remote. But, they still planned to limit hiring all or mostly to certain regions or time zones. That number went up to 3 for post-pandemic plans.
Urgent.ly, a roadside assistance company, for example, said “we are currently fully remote and continue to monitor situation and evaluate when we can return to office next year. We plan to expand our engineering team anywhere within 3 time zones of the US East, which means the USA, Canada, Mexico, Colombia, Argentina, Costa Rica, etc are in the list.”
Whatever companies decide to do, they’ll need to make a decision soon. Ben Foster, Chief Product Officer at Whoop (headquartered in Boston) says companies will pay the price down the road if they’re not transparent now about their plans for returning to the office. At the very least, he believes that any company considering a return to onsite work in the future should bring up the topic during the interview stage.
That’s why he always asks hires if they would be willing to consider relocating to the office in the future. Whoop is growing fast, and as a product manager, he has to hire in anticipation of continued growth. He has to stay ahead of the curve, but believes there’s no reason to hire outside of the Boston area yet.
Some startups in emerging tech hubs expect to go fully remote and hire across the nation.
Others expect to go international, but keep their local offices. The result might mean more gig workers and temp hires.
“People who will try to embrace remote work should expand their talent searches,” Leon tells me when I message him on Slack. He’s is something of a local tech guru and I’ve reached out to him because I want to know:
Does hiring remotely mean companies will expand their hiring searches to the entire US market?
“I’ve always found that being constrained to a geographic location limits your options,” Leon continues. “Around DC a lot of folks are coming out of government and major healthcare organizations… many times I spoke at a conference in CO or met a Postgres contributor in MA that I wanted to hire, but I couldn’t because of location restrictions.”
Many DC employers seem to share similar sentiments. Out of 78 respondents to a poll of DC Tech Employees on LinkedIn and Slack, 51 said they planned to hire nationally. The reason seems clear. More access to candidates means better hires. Out of the DC software startup HR departments we spoke with, 3 currently had or expected to have a policy of hiring remote workers nationally while offering a hybrid option for local workers. Most, however, planned to go fully remotely. Out of that 20, 6 are fully remote and hiring nationally during the pandemic, though notably, only 4 plan to continue to do so post-pandemic.
Government procurement startup Procurated told us they have “been 100% remote since March of 2019 and will remain remote into 2021. We hope to give employees in the DC area an option to return to an office as soon as it is safe to do so. That said, we have already hired new team members based outside of the DC area and will continue to consider candidates nationally for our open positions.”
BoodleAI, a DC data company we’ve worked within the past, said, “we will continue to recruit certain functional roles to be in-office but mostly remote anywhere in the US.”
Truebill, the maker of one of the most popular money-saving fin-tech apps in the app store, said, “We are currently working remotely, for the foreseeable future. It’s a fluid situation, but as the situation improves we hope to have our offices open in a limited capacity. Coming in would be voluntary.”
PingThings took one of the strongest stances. “We will never not be remote,” they told us.” We may open an office or two if necessary. We are happy to work with folks from around the US.”
These results make a lot of sense. Hiring nationally creates a big increase in the pool of possible candidates. At the same time, there’s no cost for leasing office space. Tech tools like Slack, Zoom, and Yuzuconnect increasingly give remote workers the best of both worlds.
According to a McKinsey study,
“As nonessential workers shifted to working from home, 85 percent of respondents in the McKinsey survey said their businesses have somewhat or greatly accelerated the implementation of technologies that digitally enable employee interaction and collaboration, such as videoconferencing and filesharing. Roughly half of those surveyed reported increasing digitization of customer channels, for example, via e-commerce, mobile apps, or chatbots.”
Across the board, tech teams see significant productivity increases when they begin working remotely. And of course, many employees love the flexibly. Recently, DC travel tech company Upside Business Travel closed its physical offices because so many employees said they wanted to … no surprise … travel.
This may come as a surprise to many employees. Some surveys show that workers have far more pessimistic expectations. A LinkedIn News Poll of 2,101 LinkedIn users found that only 8% expected their companies to go totally remote post-pandemic.
But many tech startups in growing startup ecosystems see value in hiring across the nation long-term.
In a recent hatchpad interview with Geoff Harcourt, CTO at ed-tech startup Commonlit, he said that hiring nationally had an unexpectedly positive impact on maintenance and deployment of new code. Hiring nationally added several hours in the day where engineers were on deck to solve problems.
There’s an old children’s book that begins “If you give a mouse a cookie.” Turn the page and the story continues “He’s going to ask for a glass of milk.” Forced to shift to remote work, some companies began hiring further and further out from their offices. If you’re hiring remote employees anyway, why not hire nationally?
But, once you’re hiring in a completely different state and timezone, why not take it a step further? Some companies in growing startup markets like DC report planning to doing exactly that. They’re looking to hire globally in the future. That’s not bad news for DC employees, however, because many of these companies intend to keep their local offices.
Out of the DC software startups we spoke with for this piece, 3 said they were now hiring remote workers globally. However, two out of those three said they also had at least a few on-site employees for functional roles during the pandemic. Only 2 companies, however, said they planned to continue to hire globally post-pandemic, and only one planned to offer a hybrid model.
Franchise software company FranConnect is one of the companies grappling with questions about hiring globally. “We’re in a weird space right now,” they told us. They are hiring plenty of employees stateside, but also have some jobs posted in India. “We’re currently remote and expect to be remote until about 2021. Our office is open for a few folks, but they need to confirm with HR before they go in.”
For now, it looks as though a few larger and better established companies in emerging startup hub cities may continue to hire globally, or ramp up global hires during and after the pandemic. However, even in these cases, those companies plan to keep their city offices operational.
Read More About The Future of Work
Ben Foster, CPO at WHOOP, explains how innovation and creativity have been affected by lockdowns.
Allstacks looked at their data to find out the new patterns of how people are working.
Employers are adjusting how to distribute benefits at a time when more employees are enjoying their benefits at home.
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