Jan 19, 2021 - Economy & Business

New survey shows companies are open to moving to cheaper locales

Photo of the Phoenix Tower in Houston

The Phoenix office tower in Houston, Texas. The Lone Star State was the top stated destination for executives considering moving their operations. Photo: Loren Elliott/Getty Images

A survey of C-suite executives found more than a quarter are considering moving their operations to another state or country.

Why it matters: The forced march to remote work during the pandemic has shaken loose the bonds that tie large businesses to their home territory — and that could be bad news for high-cost cities and states.

By the numbers: In a poll of 150 C-suite executives released today and conducted by the consulting firm West Monroe, 29% of companies reported they were considering moving major operations or headquarters to another state or country.

  • The biggest reason was the cost of talent and living in their current location, followed by the burden of taxes.
  • Not surprisingly, the No. 1 destination under consideration was Texas, followed by Florida — two states with generally low costs of living and low tax burdens.

Of note: West Monroe's chief strategy officer Tom Bolger tells Axios the West Coast "had by far more companies looking to relocate than any other geographical area in the survey."

  • That dovetails with recent reporting about tech companies and founders looking to relocate out of the Bay Area, which has some of the highest housing prices in the country.
  • That includes Tesla and SpaceX CEO Elon Musk, who said in December that he was moving from California to Texas.

Be smart: Companies complaining about the high cost of living and working in states like California or New York is hardly new, but the embrace of remote work — accelerated by the pandemic — has given workers and CEOs more options.

  • Nearly half of the executives polled by West Monroe said they had plans to split their workforces between remote and onsite, though only 1% said they would go fully remote.
"If I'm paying major city taxes in a place like New York City and it doesn't really matter for me if I'm in New York, why not go somewhere that's less expensive?"
— Tom Bolger

The bottom line: Mayors of high-cost cities may need to fight to keep their businesses.

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