New survey shows companies are open to moving to cheaper locales
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.