Helping companies address workforce supply and demand challenges with statewide growth initiatives
By Joshua J. Malancuk, CPA
April 23, 2024
The first part of this series of articles highlighted causes and pain points resulting from the U.S. labor shortage and employer responses to address their ongoing growth plans.
In this second part, state strategies for addressing remote workers and other workforce trends will be explored and presented to help you and your clients understand the latest statewide economic initiatives.
State responses to workforce and population trends
Work-from-homers, and others looking for a change of urban scenery, have tapped into newly created state and city relocation incentives. The Census Bureau’s 2021 American Survey indicates that the number of people working from home tripled between 2019 and 2021 thanks to the pandemic, and now accounts for almost one in five (18%) U.S. workers. By 2025 nearly one in four (22%) Americans will be working remotely according to Upwork data.
This suggests a continuous — yet gradual — shift towards remote work arrangements and the pandemic accelerated the migration of remote workers to the nation’s southern and western regions.
In response to these workforce trends, state and local economic development planners have shifted their longstanding strategies for motivating business job creation by coupling their employer incentives with individual relocation incentives to attract qualified workers, including remote worker residency.
Work-from-homers, and others looking for a change of scenery, have tapped into the newly created state and city relocation incentives that typically include cash grants and/or tax moratoriums for relocating. This trend has accelerated since the pandemic, thanks in part to MakeMyMove.com, an online marketplace for remote workers to browse communities willing to provide incentives to relocate.
It may come as no surprise that most U.S. relocation incentive programs are offered by Midwestern states, especially in Indiana.
For example, in partnership with Indiana Economic Development Corporation (IEDC), MakeMyMove.com is incentivizing out-of-state families to move to Indiana communities that participate in the program. Eligible workers could be any individual who moved to Indiana since Jan. 1, 2022, and who is a full-time employee of a business outside Indiana who performs most of his or her employment duties remotely. A remote worker would be eligible for a grant of up to $5,000 per year capped at $15,000 over the incentive term. Local and regional relocation incentives are also available. For instance, the Southern Indiana Employee g
At least two dozen other municipalities across the U.S. will pay workers as much as $20,000 to relocate there.
The future of working from home
Working from home is a trend that states see as opportunities for growing local economies with building residency of these workers. It’s important that you and your clients understand how various states are also competing with other states for residency of remote workers and for other onsite workers by offering material incentive programs that will likely lead to enhanced economic growth.
Supporting company business growth via hiring incentives is another strategy to help you and your clients build local and state economies.
These incentives allow states to compete for business expansion projects by offering employer incentives that help reduce a company’s short-term hiring costs. Further discussion about this important growth tool will be presented in the next part of this article.
Josh Malancuk, CPA, CMI is president of JM Tax Advocates, a service organization who advocates for property tax reductions and maximum level incentives for leading U.S. manufacturers and commercial property owners. He brings 28 years of specialized knowledge and experience to his clients. Josh can be contacted directly at joshua@jmtaxadvocates.com or at 317-674-8390 x 100.
