Several years back, I had the opportunity to work with an organization, on a contractual basis, run by its CEO based in Edinburgh, Scotland, with colleagues in Argentina and India. I worked out of an office near Philadelphia. Time zone differences aside, it felt no different than working with a team down the hall, and we certainly cranked out really compelling work on a timely basis.
That said, the long-distance workplace is a different environment than most of the remote work we’ve become accustomed to in the four years since the workforce was dispersed by the Covid crisis. Many remote workers are in decent commuting distances of their employers — within 50 miles — and have the option of hybrid work, in which they can split their time between working with colleagues in the office or working out of their homes.
The long-distance worker, on the other hand, is likely to be located in another metropolitan area, another state, or even another country. This person may only ever meet their colleagues on Zoom calls. Since the great Covid dispersal of workplaces, some even took to the road as “digital nomads,” either relocating to remote, resort areas across the globe, or even working out of roaming recreational vehicles. Have laptop and internet connection, will travel!
The share of long-distance (or “cross-metro”) workers has been increasing, according to ADP’s latest quarterly report, based on payroll data representing more than 25 million U.S. workers and ongoing surveys of more than 550,000 workers in 29 countries. At the larger employers studied, the share of cross-metro workers rose from about 23% to more than 31% between February 2020 and June 2023.
“This acceleration shows up in almost every industry, from ones that seem remote-friendly, such as information, to others that don’t, such as manufacturing,” the ADP analysts state.
Opportunities in long-distance work are no longer afforded just to experienced and trusted senior employees, the report’s authors add. Younger workers in particular have embraced long-distance work, with more than half of cross-metro workers are 45 or younger.
How are long-distance workers faring, compared to their more localized counterparts? The ADP team looked at the anonymized payroll data of some 1.3 million workers each month, tracking the gross wages of job-stayers who transitioned from local to long-distance work by relocating to communities with cheaper housing. They also looked at workers who stayed put, but took long-distance jobs located elsewhere. (Again, this is data on payrolled employees, versus independent contractors, who also abound in the long-distance work world, and will be the subject of a future article.)
They identified the following trends:
- Greater flexibility for both employers and employees: “In the bigger picture, the widespread acceptance of long-distance labor has improved the odds that workers and jobs will be well-matched, which stands to help the labor market as a whole,” the ADP team says.
- Wage growth is slower for those who relocate: There has been some controversy about continuing to pay premium wages to relocating workers, say from the Bay Area to Omaha, Nebraska. The ADP team compared employees’ earnings in the months before and after the move, and did the same for teammates who didn’t relocate. The finding: “workers who stuck with their current job after relocating to less-expensive communities had slower wage growth than their teammates,” they found. “This discount suggests that those employees shared the cost savings of relocation with their employers.”
- Those who stay put but take a long-distance job saw higher wage growth: The ADP analysts then tracked the gross wages of people hired into long-distance work and compared their wage growth to that of new hires into local jobs. “Unlike job-stayers who transition into long-distance work by relocating, job-switchers can become long-distance workers without changing where they live,” they state. In addition, “over time, people newly hired into long-distance jobs won bigger average pay gains than similar people hired into local jobs. Job-switchers who transitioned to a long-distance position at an employer located in a higher-paying market saw the biggest wage premium. But we also found bigger average pay gains for long-distance workers hired to companies in lower-paying markets, where those gains do not reflect geographic cost savings.”
There are aspects of job satisfaction to such arrangement not explored in this financial-oriented study. Employees in long-distance working arrangements have tremendous flexibility, along with the life-enrichening joy of living where they want to live, be it on a mountainside in Colorado, a beach in Saint Thomas, or a college town in New England.
The main drawback to long-distance working is the potential sense of isolation not being part of a team that sees one another face-to-face on a frequent basis, and the deeper personal relationships that may evolve out such close working environments. This sense of disconnect may be accentuated among people working across different regions of the country or world, and companies may need to address this by facilitating opportunities for meetups.
There are clear advantages all around for long-distance working relationships. The employer gains access to a large, even global, pool of talent that they can quickly hire without associated relocation costs. As illustrated by the ADP survey, there are financial advantages to the remote worker that go along with the ability to work for anyone in the world, from anywhere in the world.
