What are the Long Term Implications of Work From Home with Laurel Farrer

Laurel Farrer, the brains behind Distribute Consulting, joins Wayne to discuss the long-term effects of working from home, the impact this has had on communities all over the country, and even how some of the current tax laws don't support a "work from anywhere" concept. Distribute Consulting is an internationally renowned management consulting form that specializes in workplace mobility. 

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Wayne Turmel: Hi everybody. Welcome to another episode of the Long-Distance Worklife, where we take a look at remote work, technology, leadership and generally just surviving the virtual and hybrid workplace. My name is Wayne Turmel. I'm with The Kevin Eikenberry Group and Marisa is not with us today because we have another interview episode and I'm really looking forward to this one. 

Things have changed in the last two years, certainly when it comes to remote work. We've moved across the Rubicon and one of the questions that we get asked most often is what do we do now and what's next?

And the truth of the matter is, nobody knows. There are short term things that we know we have to figure out, like what's the return to office policy? But there are long term effects of both the pandemic and just the kind of critical mass around remote work that we've hit that we can't begin to really understand what the long term effects of this are going to be for a while. But somebody whose job it is to keep an eye on this stuff and who I've known for a very long time and she's a very smart lady, is Laurel Farrer from Distribute Consulting.

Without further ado, here's my conversation with her. I think you'll find it very, very thought provoking.

Everybody, I am really, really lucky today. We are going to have some good conversation with Laurel Farrer. She is the brains behind Distribute Consulting.

She is a well-known entity in the remote work space, particularly in government interactions with planning and thinking about this stuff and I'm going to be completely honest. We started a conversation, started a bunch of conversations, but we started a conversation on LinkedIn that I thought would be worthy of recording.

So we're going to talk about the good news. What's going on with remote work? What is the good news? What's the rosy picture? And you'll be shocked to discover I have some concerns that it's not all rosy as we think.

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Wayne: And this is the best human that I know of to talk to about this. So how are you?

Laurel Farrer: I'm so good. And I don't think anybody is going to be surprised about you having a controversial opinion, right?

Wayne: Maybe not. I'm trying to shake this whole grumpy old man thing, and it's not working really well at the moment, to tell you the truth. So you'll give us a really quick what have you been working on that started this particular LinkedIn post and we'll link to the post in the show notes.

Laurel: Yeah, well, what we're talking about here is the impact of workplace flexibility in virtual jobs, on economic development, specifically on rural economic development. So it doesn't really take a rocket scientist to figure out that many, many, many people are moving out of urban centers or the decentralization of urban centers and then moving to various scenic destinations in order to work. That was a trend of the pandemic. And now that people are out there, they're tending to stay. And so we have seen this as a really exciting trend for the idea of stimulating dying economies in Midwestern United States and in national parks areas.

So this is actually what we were trying to do before the pandemic. We were working very closely with lots of governments and grants and nonprofit organizations to try to do this, and now it's just happening organically. So ultimately, the conversation is about how virtual jobs can positively or negatively impact economic development.

Wayne: So let's start with the kind of why do we want to do this? Give us the short version. What are the benefits? We'll start with the humans and then we'll go to the communities and the broader conversations. I mean, other than you can be somewhere nice.

What are the human needs that are driving this migration?

Laurel: Yeah. I mean, let's actually look at it from the the community side. So traditional economic development is a very expensive investment for a company or I should say a municipality. So first they have to attract companies, so they have to invest in their infrastructure, in their community programs in order to make it a place that a community
would want to offer to employees.

And then the company comes and they build the building and they bring the jobs, and then the people come. So there's billions of dollars that need to go into even preparing for a company to attract higher income tax.

So what this does is it turns the entire economic development cycle around and attracts the individuals first, and then the individuals bring their jobs with them and then eventually the companies come. So what it does is it really lowers that threshold of of investment that is required for a municipality, a city or a state or a county in order to attract new income taxes.

So what they really want to showcase and that's this is the indirect answer to your question, what people are going towards are opportunities like low cost of living, more affordable housing, outdoor recreation, community opportunities to be involved in city councils and Little League and stuff like that.

They're just looking for more involvement in that small town lifestyle.

Wayne: Well, and so there's a couple of things that I want to come back to. There's another reason that you haven't mentioned, which surprises me a little bit, which is the traditional brain drain that in North America at least has been the story of the last hundred years.

You grow up in a small town, you graduate high school, you've got about a three year window where you're either there forever or you go away to school and never come back. And so a lot of particularly rural towns are, as we used to say, the newlywed and the nearly dead.

And families are separated. One of the things that happened during the pandemic. My daughter manages a bar in Chicago and she's saying we can't find people because everybody went home to be with Mom and Dad. And so there are all these positive impacts and the on the family dynamic and in possibly saving small towns.

What do what do these places need in order to other than. You know, just being pretty. I mean, what do these towns need to do in order to have people come back?

Laurel: Yeah, this is really where we need to see the rise of municipal marketing, which is literally marketing your city and showing off what you have that is different than other cities. So exact same concepts and principles as marketing for a company is now moving into the public sector, which is really exciting.

This is, you know, how company firms are, how cities market themselves to like bring the Olympics to their city. Same concept just on a micro scale. So whatever it is that a company has to offer, they should show it off.

Like, do you have great restaurants? Do you have lots of parks? Do you have a great transportation infrastructure? Are you close to the airport? Are you, you know, whatever. Like every single city has something to brag about. And so it's just a matter of showcasing that.

At a minimum, though, they really need to invest in that digital infrastructure. So we obviously remote workers need Internet and they need strong, fast, consistent, reliable Internet. So that's going to be the one thing that holds any city or county back.

And unfortunately, that's a long and expensive process. So luckily, we've got the U.S. government that's involved in and in impacting that and improving that as much as possible. But that's going to be the biggest barrier to success for any small town.

Wayne: And when people are deciding to go somewhere else and for lots of reasons, I moved and this was not my primary motivation, but I moved from Illinois to Nevada and Nevada has no state income tax. I essentially got a raise.

Laurel: Yeah, exactly.

Wayne: And better weather and that. Means that federally we need to look at, what does it take if you, if the company is in one state and somebody else is in another? There's a lot of paperwork.

Laurel: There are so many laws that don't exist yet. Like, essentially, every company right now is operating illegally. So, like, there's a lot of laws about tourism, about, you know, nexus tax structures, about operational liability for employment laws on a local as well as federal level.

Like there are so many laws that will eventually need to be changed and that will change in order to accommodate more mobility. But right now, they don't exist yet. And so it's kind of a wave for the patterns of migration to help influence those laws before they are formed.

Wayne: Yeah, it's definitely I mean, in its worst case scenario, it's going to be Grapes of Wrath. And people are just loading up trucks and and moving somewhere else, which. It's funny you said people need to market their city.

But I think the cities are the ones that are in trouble. And as we are a increasingly urbanized civilization that is going to be an issue. I mean, one of the things just The New York Times today had an article on how the five biggest cities in America have actually lost population.

And if you are one of those people who's able to pack up and move to Idaho or Nevada or wherever. That's probably nothing you care about. If you are the approximately 3 million people in the city of Chicago who support all the people that come in to work every day.

Laurel: Hmm.

Wayne: And I don't see small town Utah sending Utah U-Hauls to the south side of Chicago saying, come live here.

Laurel: Mm hmm.

Wayne: I think there is a fundamental upheaval that is going to happen that isn't as smooth as just, oh, everybody move where they want to go.

Laurel: Yeah. Well, and we've also seen that as well because like Seattle's mayor just had a big article and called to the community for the major employers in the area to bring their employees back because they're dealing with such a problem of homelessness.

And so the city centers, especially in those hyper urbanized areas, are definitely going to shift because their entire economy has been built, built on the concept of centralized work locations. I mean, that was, you know, commercial districts for the past 200 years have been built on this concept.

So, yes, we are definitely going to have some growing pains and some shock factors. But we also have to think about the pros and cons here of, yes, those those hypergrowth areas are going to decline. However, let's look at the entire Rust Belt that we've been trying to rescue for all of these states and cities for the past hundred years, since since the last major industrial revolution. And now we have a solution that is viable and and inexpensive. So this is a big step in the in the direction of wealth distribution and, you know, disparity between all of our different regions in the country.

Wayne: One of the things that. I ponder is if we look at how businesses have developed, how industries have developed, physical proximity has been a factor, whether it's Silicon Valley, whether it's Detroit at the beginning of the last century, whether it's the financial districts in London and New York, the fact that people are in physical proximity, the fact that they mingle socially, the fact that they interbreed, and they also sit in bars hatching plans and doing things. And you get this critical mass of people with knowledge in a certain industry. What are we seeing or do we have any idea?

How you replace that brain synergy thing that happens in physical locations?

Laurel: Yeah. You know, what's interesting about this is the cities that we've worked with and consulted on projects with are actually coming to us to find a solution to prevent that from happening, because these cycles of similar talent attracting itself and just, you know, becoming more and more and more saturated as a talent pool really affected the diversification of industries in that region.

And so suddenly they only have this very specific demographic and it's very problematic for the sustainability of their economy. So they come to us to say we need to bring other industries towards us so that we can have more diversified industries, a wider range of professional demographics in our in our residents and citizens. And so that's what we try to help them do.

Wayne: I get that. And I think that there is still a there is still a value. I mean, I would not want to be a professional violinist 20 years from now when there is no such thing as a city big enough to have a philharmonic orchestra.

What happens to, you know, because people are going to spend their money and their philanthropy in their own community because that's what happens. And so there's a lot of stuff, but and none of which is going to cure the problem.

And if I'm the one who's getting the chance to move. There's a lot of "It's not my problem" involved in that. So let's take a look at kind of going forward.

Laurel: Mm hmm.

Wayne: What if I'm thinking of ditching the city? I'm bailing San Francisco, I'm bailing New York and bailing whatever. How do I go home to Mom and not lose my mind? I'm serious. People that are used to living, I mean people in red states right now, "All these people from California are coming and screwing up our demographic."

Well, guess what? They are going to vote the way they want to vote and there are going to be changes. So what happens? How do if I'm a migrant, if I'm a digital migrant, and that's the term I've been using these days, again, going back to The Grapes of Wrath and the back of grandma's truck.

If I'm a digital migrant, what do I need to do not to lose my darn mind?

Laurel: Yeah, well, I think it's important to say that. I mean, we don't have to go back to our roots. Right. That for me, I also made the same decision about five years ago. Like, hey, we can live anywhere.

And so where do we want to go? Our decisions were based on whether on education for our kids, as well as how do we get as far away from our families as possible. So I think that's what we get to see is like we get to choose whatever is and is not important to us.

So I think what we're going to see more as opposed to like selecting where we want to live based on industry, it's going to be more of a shift on where do we want to live based on culture.

So what we're seeing right now is a big rise in outdoor recreation and artistic communities, right? So we're seeing like Austin and Denver are just exploding because people are like, oh, that's great, I get to be outside and have a great job.

So I think we're going to continue to see a snowballing effect of something like that, that people are going to create these cultural hubs of things that they are all interested in together, like skiing communities and and, you know, beach communities and things that you can't change like the weather.

And then they're going to migrate to those more often and start to build more similarities based on those. That's my projection. I'm not sure about that. But that's that's where I see us headed as people are that it's like the Great Lake relocation and the Great Resignation are marrying each other.

People are going to other employers because of their culture. And I think people are going to go to a different city because of the culture as well.

Wayne: Well, very quickly, because as fully expected, we are out of time. But let's talk about the employers for a minute.

Laurel: Mm hmm.

Wayne: What are some of the structural things inside organizations that they need to think about if they're going to be an employer of choice for these digital nomads?

What are the things they need to think about because we've got time zones and we've got people who aren't really good at guiding their time. And it's really easy to spend all your time glued to your computer and like that.

So what are some of the things the employers need to think about?

Laurel: Yeah, I think asynchronous communication is massive because of the reason that you just said that. We need to make sure that we are able to operate in a way that is not dependent on sharing time and location. So obviously that's a really big first step.

But more on the compliance side, they really need to be aware of the fact that there is not really such thing as work from anywhere. So these companies that are touting like you could be anywhere and, you know, move around as much as you like and that's fine with us.

Like that is going to spin the company into bankruptcy faster than they can blink. Like it is not sustainable, it is not legal and is not scalable. So while that might work for a very small organization of independent contractors only like that's one thing and that's what we hear about in the media.

But for large organizations, over a hundred employees that and that are employees, not independent contractors, it's a much more serious decision. And there needs to be very careful consideration of where they allow their employees to live and whether or not the employer of records in those particular regions are a good match for the company.

Wayne: So much to unpack and well, thank you so much, because there is a lot of things that we need to think about, right? We need to think about our own individual wants and needs as organizations. We need to think about our wants and needs and staying in business and staying out of jail and all of those things.

And there are large scale seismic changes going on that is more than just I get to avoid my commute every day. So these conversations are going to be going on for a very long time, and I am delighted that you are part of this conversation.

Laurel, thank you so much. We will have links to Distribute Consulting and some other stuff in our show notes at longdistanceworklife.com. Thanks for being with us.

Laurel: Thank you for having me. It's been a pleasure.

Wayne: There you have it. I hope you enjoyed the interview with Laurel Farrer. I hope that you have gotten a lot out of it and you're asking the right questions, which at this stage is all we can do. Show notes and links to some of the things that we've talked about are at longdistanceworklife.com.

If you have questions for me and Marisa, we will be taking those. We love audience questions. And of course, if you are a podcast listener of any time span, you know that we'd really love you to like and subscribe and of course tell other people about this.

My name is Wayne Turmel from The Kevin Eikenberry Group and The Remote Leadership Institute. If you have not read The Long-Distance Leader and The Long-Distance Teammate, we recommend that you do. And, you know, we really hope that we're helping you keep the weasels at bay.

Have a good week. We will talk to you next week on The Long-Distance Worklife.

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