Why Bay Area startup Zapier offers employees $10,000 to 'delocate'

With its mild weather, blend of cultures, and vibrant communities, the Bay Area is a special place to be. Add a community of people who live and breathe tech, and it’s easy to see why programmers, developers, and entrepreneurs from across the US and around the world are eager to call the area home.

As living costs rise, however, more people are moving away every year in search of affordable places to live, work, and raise families. Typically, that means giving up their jobs in Bay Area tech firms. But one startup is flipping the script.

Last week, Zapier, a workflow automation company, announced that it would offer its new hires in the Bay Area $10,000 to help them "delocate": that is, move out of the Bay Area to somewhere more affordable. In exchange, employees commit to working remotely for the company for at least one year. Since the company's 67 existing employees all work from home anyway, Zapier reasons, it doesn't matter where its new hires are located.

For many employees, working remotely for a Bay Area startup is an opportunity to engage with the beating heart of tech while escaping the housing crunch. For the company, meanwhile, "delocation" makes it possible to combine Silicon Valley talent with small-market prices, and set itself apart in an increasingly competitive market. 

“There’s a big war for talent now, so people are trying different things … not just to hire people, but also to raise their profile as a good place to work,” explains Steve King, a partner at Emergent Research in Lafayette, Calif., in a phone interview with The Christian Science Monitor. 

As the value of the tech firms dominating the Bay Area has ballooned, affordable housing has become an increasing challenge. With the highest rents in the US, all but the very rich have found themselves essentially priced out of the market. Last year, Facebook engineers, who earn an average of $126,000, according to Glassdoor, asked the company to subsidize their rent. 

Families, in particular, find themselves struggling to make ends meet in the Bay Area. And opportunities in growing tech hubs across the US – including Austin, Seattle, Portland, and Denver-Boulder – may have made it easier for families to contemplate a move. A study by job site Indeed.com found that 35 percent of job searches within the Bay Area were for opportunities outside it, Quartz reported.

“Those four cities now have really good tech communities and substantially lower costs of living,” Mr. King explains.

Zapier’s initiative may be the first time that a tech company has incentivized prospective employees to move away from the company’s headquarters, but similar approaches – including remote work – have long been used by small tech firms to generate buzz and attract the right kind of applicants.

Emma Plumb, the director of 1 Million for Work Flexibility, a national initiative advocating for broader adoption of work flexibility, tells the Monitor in an email that Zapier’s approach is “perhaps a way to stand out in the crowd of tech companies in that Silicon Valley bubble.”

The freedom of remote work appeals to everyone from parents, military spouses, and older workers, “not to mention folks who just don’t want to spend hours on the road every day,” Ms. Plumb explains. And offering remote work opportunities also opens opportunities to a more diverse applicant pool.

“[You can get] a better quality person at a better price, and they’re happier, too,” King summarizes.

Zapier isn’t planning to pay its new hires any less, the company said, but by encouraging its employees to delocate, the salaries it does pay will go further, perhaps meaning it can pay less than counterparts whose employees are physically located in the Bay Area.

It may be a win-win situation for middle-income workers. But helping a few to 'delocate' will likely do little to relieve the strain on San Francisco’s housing market, King says, comparing it to the situation in New York City 20 or 30 years ago.

For one thing, he explains, the companies aren’t going anywhere. Though Google may have office space in Portland, and Facebook in Austin and Seattle, having a Bay Area presence gives companies “access to the capabilities they need.” And tech giants are willing to pay a premium for it: Facebook offers $10,000 to anyone who moves within 10 miles of the company’s offices. The same goes for higher-income tech workers, who want to network for new jobs and interact with others in their field. 

Peter Cohen, a co-director of the Council of Community Housing Organizations, which advocates for affordable rents in San Francisco, says what the city needs is greater “jobs-housing fit,” providing affordable housing near where people work. Instead of a solution based on a company’s immediate needs, he explains, this would be a “more structural housing policy approach to meeting the needs of the workforce without gentrifying local areas.”

Such policy solutions can be anything from producing more housing, to subsidizing housing, to providing assistance that will help middle-income residents get on the housing ladder. The last option, he says, is the kind of thing that could work in Silicon Valley.

“I don’t think exporting workers to remote locations is necessarily one of those [long-term] solutions,” Mr. Cohen says.