A study shows that remote work has made city living less affordable for many workers.

In recent years, there has been a remarkable increase in the number of people working remotely. This change has brought about some unexpected results, particularly in terms of where employees and their managers choose to live.

According to a study conducted by the ADP Research Institute, there has been a noticeable shift in the locations of workgroups before and after the pandemic. The data reveals that individuals in leadership positions are more likely to reside in larger and more expensive cities, while those in support roles tend to migrate to rural areas with lower housing costs.

Interestingly, the study also found that since the onset of the pandemic, pricey cities have become even more specialized in managerial tasks, while more affordable areas have seen an increase in individual contributor and frontline work. This phenomenon, known as "domestic offshoring," allows companies to reduce expenses by relocating support jobs like customer service and administrative roles to regions with a lower cost of living. The rise of remote work has made it easier for these companies to attract and hire employees from rural areas.

However, this trend can have negative implications for companies based in smaller towns. They must now compete with larger corporations that can offer higher salaries and more attractive benefits. As a result, these smaller companies may struggle to retain talent and remain competitive.

The study also suggests that companies benefit from keeping management roles in larger metropolitan areas such as New York and Chicago. Being located in these cities allows leaders to network and exchange ideas with professionals from other large companies, universities, competitors, and media outlets. Despite the convenience of video conferencing, in-person interactions are still preferred for building strong connections.

The shift to remote work has also had a significant impact on the housing market, contributing to a staggering $2 trillion increase. According to a study by Redfin, there has been a rise in workers leaving metropolitan areas in search of more affordable housing options in "secondary cities." These cities, such as Charleston, South Carolina, Camden, New Jersey, and Elgin, Illinois, have all experienced a 10% increase in the value of their homes as a result of this trend.

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