We recognize that many complex and competing considerations need to be weighed in evaluating how the evolving, and now accelerated, work-from-home trend should be treated under various forms of incentives programs.
Clearly, programs that entail local funding participation present different challenges versus fully state-funded programs, and the concerns of local EDOs over the impact the pandemic is having on their downtown's are serious and require a public response equal to the challenge. However, the macro trends toward an increase in work-from-home and other distributive workforce arrangements may be both inevitable and, at some level, permanent.
We were pleased to recently meet with Virginia Governor Ralph Northam and his economic development leadership, including Secretary Brian Ball and Virginia Economic Development Partnership (VEDP) CEO Steve Moret, to get an update on the Commonwealth’s innovations in economic development during these strangely challenging times. Of particular note was Virginia’s decision to allow work-from-home employees who are Virginia residents to be counted as eligible under all of the Commonwealth’s incentives programs. This required a legislative amendment which was enacted pre-pandemic to address already emerging market trends, now amplified and accelerated by COVID.
States that want to be sure to remain competitive in complex and rapidly changing markets for the siting of major new projects will need to address the same realities that the companies they are trying to recruit are facing. Many states, such as New Jersey, have effectively allowed expanded work-from-home arrangements on a temporary basis, while others have simply “pushed” incentives-based employment commitments out one year to bridge over the impacts of the pandemic. Virginia may well turn out to be leading the way with the most the flexible and durable approach to this challenging issue, both for companies and their employees. Most other states are studying alternative strategies as the facts rapidly unfold around them, and companies are awaiting guidance.
We will continue to keep clients and colleagues up to date on developments.
Jay Biggins is the Executive Managing Director at Biggins Lacy Shapiro & Co., one of the largest, most highly regarded site selection and incentives advisory firms in North America. BLS & Co. helps manage the complexities associated with finding optimal locations and securing incentives to support new ventures.
Follow Jay here on LinkedIn or contact him at lmoody@BLSstrategies.com.