The COVID-19 pandemic accelerated the adoption of remote work, fundamentally changing how we work. This shift has significant implications for government incentives. In this article, we explore the impact of remote work and discuss adaptations to incentive programs to ensure economic and fiscal returns.

The Rise of Remote Work

Remote work has seen unprecedented growth, with a significant increase during the pandemic. This shift has transformed workforce dynamics, as employees now prefer flexible work arrangements. The change in work patterns has resulted in population shifts and altered economic activity and revenue patterns for local governments. It is crucial to understand these changes to effectively align incentives with the evolving needs of businesses and workers.

Adapting Incentive Programs

In response to the remote work trend, governments are revisiting incentive program rules and offers. Adjustments include addressing remote workers specifically in program guidelines, determining how they are counted for job requirements, and defining on-site presence for location-specific incentives. State residency requirements for remote workers have become common, and states typically strive to maintain existing job quality metrics. 

Worker Incentives and Attraction Policies

To attract skilled workers in a competitive labor market, governments are also turning to worker incentives. Remote worker attraction policies have gained popularity, as demonstrated by successful programs in Vermont and Tulsa, Oklahoma. However, it is essential to recognize that incentives alone may not guarantee success. Communities that provide additional amenities and support, including affordable housing, childcare, broadband access, and cultural/recreational offerings, are better positioned to take advantage of remote work trends. A holistic approach that considers the overall quality of life and sense of community is crucial to attract and retain remote workers effectively.


The rise of remote work has transformed the work environment, requiring governments to adapt their incentive programs. By understanding the impact of remote work on local economies, governments can adjust incentive policies to align with the changing landscape. It is imperative to consider fiscal and strategic impacts to ensure economic development incentives are effective and support vibrant communities in the era of remote work.

This blog was adapted from an article that first appeared in the May 5 online edition of PATimes. It was written by Ellen Harpel, Founder of Smart Incentives, and Randall Bauer, Director, PFM Group Consulting.