Telework Disrupts Location Strategy for Investment Promotion Agencies
Are you tired of hearing about “the new normal” yet? It is already starting to annoy me the way “paradigm shift” did back in the early 1990s. Well let me pile on anyway. The new normal is that for many positions, especially knowledge work, the job function is either completely uncoupled or only loosely coupled to a geographic site. Large BPO firms like Ibex Global for example, operate huge traditional contact centers but their leadership is very distributed.
If we take this one step further, we have now moved thousands of employees lower down on the org chart to telework. There are challenges, but this Coronavirus COVID-19 pandemic has shown that it can be done successfully. Workers searching for a new dwelling previously looked for homes convenient to their office or workplace. Now they will look for homes with good space for a home office. I spent a decade in real estate with Jones Lang LaSalle and Century 21 in Ohio, Indiana & Florida. I can tell you that this trend will be very good for Century 21 and residential real estate, and awful for Jones Lang LaSalle and their peers in commercial real estate.
I work with a lot of investment promotion agencies internationally. Traditionally, they seek ways to attract large employers so they can then say “We landed BigCo who is opening a contact center with 2,000 new jobs!” That’s fine, but it may be time to rethink that model.
These new work-from-home modalities mean knowledge workers can now work from anywhere. What do people from the US and Europe say? “When I retire I am going to move to (insert tropical paradise here)” because tethered to the office, they can’t go yet. On Crooked Island in the Bahamas where my grandfather was born over 100 years ago, today there are less than 500 people. It’s beautiful, but (maybe until now) there has been almost zero opportunity for a career.
Now with this permanent move to telework and social distancing, high income earners have no reason not to go wherever they would really rather be—bringing and spending a lot of money to the local economy as they do it. This will require investment promotion agencies to have a paradigm shift (hahaha): “We signed this deal with such and such call center and they are hiring 50 people.” That’s good, but if you have 50 working (and spending more as opposed to retirees) expatriates that have chosen a specific destination, each making over $100,000 USD annually, how many jobs are they creating by dumping all that into the local economy? You have to be able to count that and demonstrate the benefit, meaning that investment promotion agencies will need to rethink how they demonstrate their results to stakeholders.
Does your geography have any efforts to attract this segment or to make your jurisdiction attractive to this new modality?
I have a friend from Kazakhstan who writes legal agreements for Europeans while she is at a Buddhist retreat in Indonesia (no, really! I didn’t just make that up). Now with this pandemic, there are millions more not just free to work from home, but ordered to. Companies are not going back to the old way, tethering their people to an office, either; at least not the high-income knowledge workers able to pour millions into your economy. To say “we want to attract a 100 seat call center” doesn’t make much sense anymore. Why would an operator go rent a facility when it can contract workers wherever they are, across borders? itelBPO just announced their expansion into Canada with a 100% telework modality. Now rather than the various provinces needing to compete for itelBPO’s site selection, they need to focus on being the most attractive place for those Canadian citizens to live…or maybe those Canadians can live where YOU are, and still work for itelBPO?
I have been employing bilingual transcriptionists in Venezuela for years. I don’t have any company there, I just pay them via PayPal and they are thrilled. What if your investment promotion agency and location can attract these people who can work literally anywhere—and I don’t mean only contact center workers from the next island over—but high income, mobile professionals who will use little government resources while dumping a lot of money into the local economy creating the kinds of jobs that cannot be moved (construction, hospitality, telecom engineering, infrastructure services, entertainment, professional services, etc.)? Here is a way forward even though we are in a recession. Investment promotion agencies can really move the needle on Foreign Direct Investment, but you have to measure it differently than “Acme Company is setting up a widget factory here employing 200.”