Remote jobs are moving overseas and to smaller U.S. cities: ‘The same skills for 60% of the cost’

 Remote jobs aren’t disappearing — they’re just moving out of expensive coastal metros like New York and San Francisco.

Faced with labor shortages and rising wages, companies are hiring for more remote jobs overseas and in smaller U.S. cities. 

During the pandemic, thanks to jobs that were no longer tied to offices, millions of Americans flocked to cities like Phoenix, Asheville, and Boise, seeking greener pastures and more affordable housing. 

But remote work has opened up new opportunities for employers, too. Companies quickly discovered that their employees could still be productive from afar, often for a third of the cost, if they stretched their location requirements. 

Where remote jobs are going 

Remote hiring is expanding beyond its traditional strongholds, like India, creating new “Zoomtowns” overseas and in pockets of the U.S. Midwest. 

It’s more cost-efficient for companies to move some positions abroad as wages in the U.S. are often “double or triple those of workers in countries like Mexico, India, and the Philippines, and those workers can be just as good as a fully remote employee in the U.S.,” says Nicholas Bloom, a Stanford economics professor, who has studied work-from-home policies for decades.

Latin American countries, in particular, have benefitted from this trend, as they share a time zone with the U.S. The number of North American companies with remote workers in Central America and the Caribbean, for example, has grown 300% between 2020 and 2023, according to new research from Lightcast. 

Employers in higher-paying regions are increasingly hiring remote employees in lower-cost regions
Increase in remote workers from 2020 to 2023
North American employers with workers in Central America + the Caribbean
Southern European employers with workers in Sub-Saharan Africa
East Asian employers with workers in Southeast Asia

Q2, an Austin-based financial firm, has outsourced more than 90 jobs in engineering, marketing, product design, and other fields to Mexico and India in the past year. 

Executives considered the new recruiting strategy in late 2020, says Kim Rutledge, Q2′s executive vice president of people, as competition for talent was fierce and the firm was struggling to fill open positions. 

While leaders were “skeptical and a bit resistant” to having remote employees in different time zones, Rutledge says they were “blown away” and “really excited” about the talent they found in cities like Monterrey, in northern Mexico, and Bengaluru, in southern India.

Q2 has 2,200 employees, about 20% of whom are abroad — but Rutledge expects this percentage to “grow significantly” in the months ahead, as the company plans to hire for more HR and administrative jobs overseas. 

The potential to cut costs and find new talent has also driven companies to recruit more remote candidates in smaller, cheaper cities within the U.S. Midwest. “If your budget to hire a remote software developer in California, for example, is $100,000, that same skill set might be available for 60% of the cost in parts of the central U.S.,” says George Denlinger, president of technology talent solutions at Robert Half.

Illinois, Ohio, and Nebraska have emerged as hot spots for remote job opportunities, according to Rutledge and Denlinger, namely because they’re densely populated, have a lower cost of living, and are home to several top-tier colleges and universities. 

Which jobs and industries could be outsourced to cheaper talent

There’s been “significant growth” in the number of remote job postings in marketing, engineering, and manufacturing open to international candidates and applicants throughout the U.S., according to Layla O’Kane, a senior economist and research director at Lightcast.

Bloom also expects to see more service support roles, including software developers, HR coordinators, and payroll administrators move abroad in the next decade. 

If, and how, a job will be affected by this trend depends on the level of face-to-face interaction the role requires, as well as how senior it is, says Denlinger. 

“If you’re a manager or supervisor, expected to lead a team, mentor young employees, and set the culture, that’s far less likely to be a remote job that can be done from a different time zone,” he adds.

Q2 considers both of these factors when deciding which jobs should be remote, and where. “For a project manager, which is a more hands-off role, it doesn’t matter where they sit,” explains Rutledge. “But I do care where my senior HR business partner, who is expected to have regular check-ins with our executives, is located, because the majority of our leaders are still in Austin.”

How to stand out in a more competitive remote job market 

If you’re hoping to land a remote job, you can improve your chances of getting hired by targeting companies headquartered in expensive regions and honing your soft skills. 

“It depends on your salary expectations and cost of living, but if you’re based in Oklahoma, for example, and applying to a remote job for a company in New York City, you might be more flexible with pay,” says Denlinger. “You can certainly highlight that in your application or job interview because that will be attractive to some employers.” 

But hiring experts say the deciding factor that sways an employer to hire one remote applicant over another is often someone’s soft skills. 

“The best way to stand out is showing sincere excitement about whatever the company’s initiatives are, as well as your willingness to learn and adapt,” says Rutledge. 

Communication, problem-solving, and collaboration are other soft skills companies are increasingly prioritizing in their remote hiring, Denlinger adds. “Hiring managers might start their search emphasizing the importance of finding someone with strong technical expertise,” he says, “but 9 of out 10 times, when I ask them why they hired someone, they always tell me they chose the candidate with the best soft skills.” 

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