Remote work became a more important part of the economic landscape in 2020. As of late last year, 22% of employed persons teleworked because of the coronavirus pandemic. It is not clear how many individuals will continue to work remotely post-pandemic, but companies and workers alike are re-thinking the geography of their relationships. 

States are considering adjustments to incentive policies to acknowledge the shift to remote work. The pandemic prompted many to address remote work in existing incentive performance agreements as companies strive to remain compliant with the terms of their contracts in a changing health and work environment. In some states, changes are intended to be temporary and limited to certain incentive programs in response to current circumstances. Other states are making permanent changes to their incentive policies as a strategic response to the expectation that remote work will become more widespread among the companies they wish to support. Many more states are still sorting through the implications of remote work for their companies and communities before instituting incentive program revisions. 

In this fluid environment, what issues should state economic development organizations consider as they determine whether or how to adjust their incentive programs to accommodate remote work?  

To help state EDOs through this process, Smart Incentives recently collaborated with the Center for Regional Economic Competitiveness (CREC) and the State Economic Development Executives (SEDE) Network to create a guide for addressing remote work in state business incentive programs. The guide offers a set of principles or ground rules that apply to all states. A checklist of questions helps states consider options and tradeoffs appropriate to their unique contexts. The guide concludes with a set of examples of how several states have handled this issue to date.  

With all the uncertainties surrounding the future scale and scope of remote work, states are learning as they go to adjust to a landscape in transition. CREC and Smart Incentives will continue to work with state economic development leaders to analyze remote work trends and provide technical assistance on this topic in the coming year. Our first program will be an Incentives Roundtable addressing the impact of remote workers on compliance procedures. We hope you will Join CREC and Roundtable leaders Ellen Harpel, Founder, Smart Incentives and Jane Vancil, CEO, IncentiLock on March 16 for a 60-minute presentation and discussion

For more information, we invite you to download the full paper, Addressing Remote Work in State Business Incentive Programs.

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