Work-from-anywhere revolution has changed the job market dynamic in smaller cities like Spokane

Staff and wire reports

The widespread adoption of remote work across the country has left Spokane-area employers learning to compete with out-of-state companies offering big-city salaries.

The magnitude of the change over the past two years is staggering. In January 2020, fewer than 3% of applications for U.S. job postings on LinkedIn were for remote work. Now, small and mid-sized cities such as Wilmington, North Carolina, and Sarasota, Florida, have seen that share rise to over half, according to a Bloomberg News report.

Spokane has also seen a significant increase in remote work postings, according to the Spokane Workforce Council.

It’s been a boon for white-collar workers who live in these cities. They can now apply to offers nationwide and often get higher pay.

But it has strained firms that could once count on local professionals to fill open positions in fields like technology, accounting or marketing without having to worry about corporate giants like Meta, the company formerly known as Facebook, or Airbnb Inc. Remote work is affecting all sorts of industries: Regional grid operators from Arkansas to Indiana report that engineers are being poached by rivals amid the rush to electrify everything.

“There’s more competition for workers in local markets and in ways that local employers have not had to deal with before,” Daniel Zhao, senior economist at Glassdoor, a website that collects pay information submitted by employees, told Bloomberg. “This absolutely puts upward pressure on wages for these local markets.”

The Spokane Workforce Council monitors monthly job postings to determine labor demand via Emsi Burning Glass, a tool that tracks thousands of job-posting websites and companies’ internal web portals, said Michael McBride, business and industry analyst for the Spokane Workforce Council.

“Job postings in Spokane have really rocketed upward since the pandemic,” said McBride, adding there has also been an increase in job postings specifically for remote work.

Prior to the pandemic, 20 to 60 job postings per month advertised remote work in the Spokane area. In May, there was 621 remote work job postings in Spokane County, McBride said.

“Every month since December 2021, we’ve had over 500 monthly job postings that are specifically for remote work jobs,” McBride said.

Some of those job postings are from companies headquartered outside of Spokane, he said.

The increase in remote work postings is a bit of a double-edged sword in the sense that it gives local workers more opportunity to apply for jobs, but some of those positions may be for out-of-state companies that are paying higher wages than companies in Spokane, McBride said.

“It is good for workers to be making a great wage, but it puts additional pressure on local businesses in terms of wages, McBride said.

LinkedIn showed more than 700 job postings advertising remote work within a 25-mile radius of Spokane in the past week.

More than 500 were from New York-based nonprofit Catchafire, which makes skill-based connections between professional volunteers and other organizations, followed by 21 listings from St. Louis, Missouri-based Varsity Tutors, which offers private and group tutoring classes and test preparation.

LinkedIn had more than 2,500 listings for nonremote jobs in the Spokane area in the past week.

In the past year, the most in-demand industry sectors for remote workers in Spokane were in professional, scientific and technical services, health care and social assistance and finance and insurance, McBride said.

Overall, the top in-demand industry sectors in Spokane are health care and social assistance, administrative and support services, retail trade, professional, scientific and technical services and manufacturing.

Companies in the Spokane area are grappling with finding employees amid a nationwide labor shortage. During the pandemic, baby boomers retired sooner than intended during what has come to be known as the Great Resignation. That created a significant number of job openings, some of which are in management roles, while other workers are sidelined due to lack of child care, McBride said.

“Virtually every employer we talk with say it’s the toughest it has ever been to recruit employees,” McBride said. “It doesn’t matter what industry they are in.”

Companies are advertising substantial referral and hiring bonuses in an effort to attract workers. Some are also raising wages to remain competitive.

“We had a job fair not too long ago and every employer that signed up was itching to hire as many people as they could and had very specific roles to fill,” McBride said.

In Madison, Wisconsin, where the networking platform LinkedIn found about 42% of applications were for remote jobs, Planet Propaganda has been feeling the effects of that competition.

Before the pandemic, the advertising firm would receive as many as 50 applications for new positions and could typically fill them within six weeks. Now, even with the help of recruiters, higher pay and perks, it’s taking months, said Emily Steele, a managing director at the company.

“When you take standard of living into account, the salary that we’re giving is comparable to New York,” Steele told Bloomberg News. “But it’s different if someone is living here and gets to pay Madison costs of goods, costs of services – but then has a New York salary.”

For perspective, the average hourly wage in Madison is roughly 16% below the New York City area, and home values are about half.

To remain competitive, Planet Propaganda offers a tight-knit company culture and more reasonable hours than large companies based on the east and west coasts typically do, Steele said.

The falling dominoes

There’s a domino effect from the work-from-anywhere revolution.

Those able to get a big-city salary spend the extra cash at stores, restaurants and gyms, a windfall for the local economy. But they’re also driving up housing prices, and leaving many local workers struggling to keep up.

“There’s a whole series of ripple effects that occur from this,” said Ross DeVol, president and chief executive officer of Heartland Forward, a nonprofit think tank focused on economic performance in the center of the U.S.

During the pandemic, Spokane has experienced an influx of out-of-area buyers, some of whom are remote workers. Their arrival helped fuel increased demand for housing and a rapid increase in home prices.

Spokane’s median closing price for homes and condos on less than 1 acre exceeded $425,000 for the second consecutive month in April, according to data from the Spokane Association of Realtors.

Because some employees for companies in larger metro areas are able to work remotely, it makes midsize cities like Spokane attractive for its lower cost of living and proximity to outdoor activities.

Spokane-area startups are benefiting from out-of-area residents relocating to the area and the pandemic-driven shift to remote work, said Tom Simpson, CEO of Ignite Northwest, president of the Spokane Angel Alliance and managing member of Kick-Start angel investment funds.

“Now they can attract skilled labor that they might not otherwise have found in Spokane,” Simpson said. “Companies can also draw from a wider labor pool, including people from Seattle and the Bay Area who no longer want to live in those cities.”

In addition, remote workers or those relocating from larger metro areas to the Lilac City are participating in startup events and spending their dollars at local businesses, which, in turn, contributes to Spokane’s economy and community, Simpson said.

Simpson, like McBride, has observed that companies are finding employees hard to come by during the national labor shortage. Some venture-backed companies are scaling back hiring because of uncertainty with the economy, he said.

Switching on the remote

Poonam Kahlon, 36, made the switch to a fully remote role in February. The mother of two young children had moved near Wilmington, North Carolina, in June 2019 to be head of human resources at a local company. Now she works for a firm headquartered in New Jersey.

Pay wasn’t the main driver for her – she wanted a better work-life balance and more time with her kids and husband. Employees like her are pushing local companies to offer hybrid options and higher wages.

“They’re going to miss out on good talent if they are not being flexible with the workforce,” she said.

Lisa Leath, founder of a Wilmington-based HR consulting firm that primarily serves businesses in Southeast North Carolina, said remote work has also helped attract talent from all over the country, lured by the lifestyle and the beaches.

“We’re having to look at compensation basically every month or every other month to make sure that we’re on track with market because it’s hard enough to find folks,” she said. “So when you get your team whole, you want to make sure that you retain them.”

Poaching engineers

Almost 1,000 miles away in Little Rock, Arkansas, nonprofit grid operator Southwest Power Pool is also having a hard time retaining workers lured by remote job offers from far-flung employers.

Southwest Power Pool, which serves almost 19 million people across more than a dozen states, has seen company-wide turnover roughly double to about 8% to 9%, Chief Executive Officer Barbara Sugg said.

At least half of those leaving are engineers, but information-technology employees are also being lured away with salaries that are often 30% to 50% higher than pay at the grid, she said. Most employees who left for other jobs have remained local.

All seven of the state and regional grid operators on the continental U.S. said they faced similar challenges. At Midcontinent Independent System Operator, which serves 42 million people in states including Indiana, Iowa and Michigan, highly trained engineers and other staff are being poached by rival grids, utilities and renewable power developers.

As a result, grid operators are beginning to allow some employees to work from home, raising wages and encouraging people with different experience levels to apply for roles they might not have considered before. Southwest Power Pool has even hired three fully remote employees who live in other parts of the state and country – something that was unheard of for grid operators before the pandemic.

Nationwide, local businesses are getting creative. Paul McDonald, senior executive director at the staffing agency Robert Half, said that many smaller companies are leaning into hiring candidates that may not have all of the technical skills needed and then training them.

Benjamin Jones, chief executive of Mobile reCell, an IT company based in Fishers, Indiana, has employed a similar strategy: “We’ve focused on the philosophy of giving people opportunities from a young age.”

Sugg, the Southwest Power Pool CEO, emphasized the need to adapt to the new world.

“The reality is people in Arkansas can work anywhere now,” she said. “The world around us has just changed on a dime and we need to change with it.”

Spokesman-Review reporter Amy Edelen contributed to this article.