A significant workforce impact due to the COVID-19 pandemic is the shift to work-from-home. For many companies, work-from-home was offered as a temporary solution until office restrictions were lifted and employees could safely return to the physical office.

However, the success many companies found by having a work-from-home workforce allowed employers to consider a permanent transition to this model. Although many companies will maintain the same employee base but just transition from the physical office to workers’ homes, other companies have future growth plans that may require the identification of new labor markets outside of their current footprint to support future work-from-home initiatives.

Work-from-home model ranks metro areas

To better understand the metro areas with demographics most aligned to a work-from-home model, Site Selection Group created a weighted model to rank metro areas based on their internal infrastructure of both labor and internet capabilities. Site Selection Group used the following variables in their model: percentage of the workforce currently working remotely, segmentation data based on current work-from-home employees, job postings specific to work-from-home employees, internet download and upload speed, percentage of households with average or better internet connectivity, and number of internet providers available in a market. 

Although the model was based on all 925 metro areas in the United States, this blog only focuses on the 225 metro areas with a population over 200,000. To further dissect any possible trends, Site Selection Group created three groupings based on population size.   Large metros have a population greater than 1 million.  Mid-size have a population of 500,000 to 999,999, and small metros have a population of 200,000 to 499,999. Site Selection Group has provided a summary of the key rankings and scoring to help you navigate the metro areas most aligned to a work-from-home model.

Work-from-home favors larger metro areas

The index score for each metro area is calculated against national average metrics. An index score of 100represents the national average. Therefore, anything above 100 scores above the national average and is a more favorable score; below 100 is below the national average and less favorable. Of the 225 metro areas with a population above 200,000, approximately 70% had an index score above 100.  If we included all 925 metro areas across the country (which includes 700 metros below a 200,000 population) only 43% have an index score above 100. The larger metro areas are the locations most aligned to supporting work-from-home characteristics.      

Work-From-Home Rankings by Metro Area

 

10 Metro Areas with Highest Work-From-Home Index Score

Rank Metro Area State Work-From-Home Index Population
1 Lebanon NH 165.57 220,964
2 Provo-Orem UT 157.14 646,268
3 Portland OR 155.94 2,493,696
4 Burlington VT 155.87 222,850
5 Eugene OR 155.70 375,595
6 Prescott Valley AZ 155.50 232,381
7 Hilo HI 154.16 201,031
8 Charlottesville VA 153.21 219,142
9 Phoenix AZ 152.03 4,760,705
10 Atlanta GA 147.65 5,914,288

Work-from-home rankings based on metro area population

Overall, the large metro areas have high work-from-home index scores. Of the 55 large metro areas, 50 of them scored above the national average of 100. The five metro areas with scores below the national average are Detroit, Grand Rapids, St. Louis, San Antonio and Buffalo. This isn’t to say these five metro areas cannot support a work-from-home model, but their overall scoring is not as high as other locations. One explanation for 90% of the larger metro areas scoring above the national average may be the correlation of a more developed internet infrastructure in these larger metro areas. These large markets can support a work-from-home model, but the question now becomes which type of work-from-home skill sets are most aligned to the larger markets? A lot of these larger metro areas may be more aligned to a professional type employee base and less supportive of an hourly based work-from-home employee such as call center/back office. 

Collectively, the mid-size metros fare slightly less favorably compared to the large metro areas. There are 55 total mid-size metros with a population between 500,000 to 999,999. Of the total mid-size metros, approximately 78% had a work-from-home index above the national average.  Provo-Orem, Utah, scored the highest of this population size and scored second nationally. Interestingly, five of the top 10 metros are in the West (Provo-Orem, Utah; Santa Rosa, California; Boise, Idaho; Colorado Springs, Colorado; and Spokane, Washington.

Small metros have the greatest number of markets represented. There are 115 total metros with a population of 200,000 to 499,999. The split of high and low scoring metros is more even than the other market sizes with 60% scoring above the national average and 40% below. But those that score high, score very high on a national perspective. The highest scoring metro nationally is Lebanon, New Hampshire, with a population of 220,964. Six of the top 10 highest scoring metros have populations classifying them as small metros. Burlington, Vermont; Eugene, Oregon; Prescott Valley, Arizona; Hilo, Hawaii; and Charlottesville, Virgina; are the other small metros that round out the top 10 national ranked metros.

The following tables provide a summary of the top 10 highest ranking metro areas within large, mid-size and small metros based on their work-from-home index scores:

Large Metro Areas with Highest Work-From-Home Index Score

Metro Area State Region National Rank Work-From-Home Index Population
Portland OR West 3 155.94 2,493,696
Phoenix AZ Southwest 9 152.03 4,760,705
Atlanta GA Southeast 10 147.65 5,914,288
Denver CO West 12 145.30 2,920,302
Raleigh-Durham NC Southeast 21 141.59 2,035,284
Nashville TN Southeast 22 140.55 1,929,949
Los Angeles CA West 24 139.29 13,463,558
Miami-Ft. Lauderdale FL Southeast 25 139.25 6,064,211
Tucson AZ Southwest 26 138.91 1,038,039
Tulsa OK Southwest 27 138.57 1,003,215

Mid-Size Metro Areas with Highest Work-From-Home Index Score

Metro Area State Region National Rank Work-From-Home Index Population
Provo-Orem UT West 2 157.14 646,268
Santa Rosa CA West 13 145.13 500,186
Portland ME Northeast 14 144.62 540,289
Columbia SC Southeast 16 142.99 843,140
Boise ID West 17 142.38 739,063
Bridgeport-Stamford CT Northeast 31 137.20 956,779
Colorado Springs CO West 34 135.54 729,879
Des Moines IA Midwest 35 135.54 701,697
Spokane WA West 39 132.56 563,634
Omaha NE Midwest 42 131.55 944,117

Small Metro Areas with Highest Work-From-Home Index Score

Metro Area State Region National Rank Work-From-Home Index Population
Lebanon NH Northeast 1 165.57 220,964
Burlington VT Northeast 4 155.87 222,850
Eugene OR West 5 155.70 375,595
Prescott Valley AZ Southwest 6 155.50 232,381
Hilo HI Outside 7 154.16 201,031
Charlottesville VA Southeast 8 153.21 219,142
Santa Barbara CA West 11 145.35 446,049
Salem OR West 15 144.41 426,087
Medford OR West 18 142.38 220,174
Anchorage AK Outside 19 142.18 402,424

Conclusions

Although it is too early to conclude if work-from-home will be a permanent solution for many companies, it is currently a major trend due to the COVID-19 pandemic. Many companies are now looking to hire employees to work-from-home to satisfy their growth needs. It is critical to understand the metro areas that not only have a talent pool to support work-from-home, but also the technical infrastructure such as internet capabilities to allow for a successful work-from-home location decision. Site Selection Group will continue to monitor the latest work-from-home trends by metro areas to help you make more informed location decisions. 

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