Remote Work Increases Hiring in Southern & Midwestern Cities

Tom BowenEconomist


Jobs shifting from major coastal cities to small and medium-sized cities across the country started as a result of remote work’s expansion. But as it started to stabilize in 2022 and 2023, we see the trend holding strong and not reversing.  

  • Losses stabilize for major coastal cities.
  • Major cities in Florida and Texas continue to pick up hiring share
  • Small cities that grew hiring share during the pandemic have maintained an elevated share. 


In early 2020, the world of work changed overnight when the pandemic sent millions of American workers into remote work arrangements, weakening the link between where Americans lived and where they worked. In 2022, we found that hiring trends were shifting from populous coastal economic hubs toward smaller and medium-sized cities throughout the country.

This follow-up analysis looks at a sample of companies on the Gusto platform from March 2019 to December 2023 – companies with primarily in-person work practices before the pandemic – to see whether the increase in RTO mandates has shifted hiring patterns back to the coast and away from small and mid-sized cities that benefited from the pandemic-induced shift.

We broke the analysis into three periods. 

  • Pre-COVID (1/1/2018 – 3/1/2020): During this period, remote work was relatively uncommon. 
  • Remote work expansion (3/1/2020 – 4/1/2022): This was the period when remote work was rapidly expanding, and companies began to experiment with longer-distance hiring. During this time, the share of fully remote workers on the Gusto platform grew from 7% in March 2020 to 16% in April 2022. 
  • Remote work stabilization (4/1/2022 – 12/31/2023): During this period, growth in remote work began to stabilize, and companies started to become more intentional about their remote work policies. The share of remote workers has remained relatively stable at around 16%. 


Losses stabilize for major coastal cities

In general, a disproportionate amount of economic activity is concentrated in just a few major coastal cities. This was especially true before the pandemic. Yet, these cities also tend to have more white-collar jobs that can be done remotely, and the pandemic shift to remote work helped to lower the share of hiring that happens in these cities. 

Our analysis shows that, in our sample, these cities experienced a sharp decline in the share of hiring as remote work expanded between March 2020 and April 2022. Major coastal cities accounted for 35% of hiring before March 2020 – this number fell to 30% between March 2020 and April 2022 and now sits at around 29%. 

However, not every city continued to experience a decline in hiring share during the remote work stabilization period from April 2022 to December 2023. In fact, Washington, DC, gained back all the share that it lost, possibly due to the government workers returning to more in-person work, and supporting services and businesses following suit. Boston gained back about half of the share it lost. 

However, it’s a different story for San Francisco and San Jose – both cities continued to lose hiring share even as remote work stabilized in 2022. The share of hiring in these cities is down nearly 33% since before the pandemic. This could be, in part, due in part to changing demographic trends.

During the height of the pandemic, many workers left major cities, relocating to smaller cities and towns across the country. This left major cities with relatively less available talent while at the same time increasing the talent availability in the cities where workers moved. This trend was especially pronounced in the cities of San Francisco and San Jose, both of which experienced significant population outflows, more so than any other major city. The acceleration of remote work allowed for hiring trends to more quickly follow these demographic shifts. 

Major cities in Florida and Texas continue to pick up hiring share 

Texas and Florida have emerged as clear winners in terms of picking up hiring share. Nearly every major city in Texas and Florida had a substantial increase in hiring share during the remote work expansion period. While growth has slowed in some cities, including Austin and Miami, both are significantly ahead of where they were in 2019. Other cities, such as Dallas, Houston, and San Antonio, all gained a significant share of hiring as remote work expanded from March 2020 to April 2022 and continued to pick up share even as remote work stabilized. 

However, it was Austin and Maimi that dominated headlines in recent years as remote work hubs. Both cities were emerging as tech hubs before the pandemic and had been attracting top talent for many years. This made them an excellent choice for companies looking to expand their hiring searches remotely. The combination of these factors led to significant growth in both cities. However, as remote work levels stabilized in 2022, so did the share of hiring in these cities. 

One potential reason for the slowdown in these cities could be the increased cost of living. The rapid job growth in both cities has led to significant increases in housing costs, as well as other increases in living expenses for residents. Although both these cities are still far more affordable than cities like New York or San Francisco, a steep increase in the cost of living could put upward pressure on wages and make these cities less attractive to companies looking to hire remotely. 

Small cities that grew hiring share during the pandemic have maintained an elevated share 

Another winner of the geographic shift in hiring is smaller, often more affordable, cities. We see significant growth in the share of hiring for many smaller cities.

As remote work started to expand in 2020, we heard many stories of workers fleeing expensive big cities in hopes of affording a better quality of life in lower-cost cities. Cities like Boise, Colorado Springs, Salt Lake City, and Virginia Beach all saw increases in hiring share, likely in part due to the influx of new talent able to work remotely. 

However, even as remote work growth has leveled off, these cities still have a significantly higher share of hiring compared to 2019, suggesting that companies that shifted their hiring toward their cities have not pulled back in any meaningful way. Additionally, while many smaller cities grew quickly during the remote work expansion period and have now stabilized, a few cities continue to gain significant hiring share, including Richmond, Las Vegas, and St. Louis. 


The analysis emphasizes the lasting influence the pandemic-induced shift to remote work had on the hiring habits of small businesses across the U.S. As remote work began to stabilize in 2022, we did not see a corresponding reversal of hiring share shift back to the big cities that initially lost share when remote work started to expand in 2020. 

Our analysis indicates that the shift to remote work may have permanently weakened the relationship between geography and work, and understanding these dynamics is essential for policymakers, employers, and workers navigating the post-pandemic labor market.


To isolate the effect of remote work adoption on hiring trends, we use a sample of 30,045 companies active on the Gusto Platform between March 2019 and December 2023. Additionally, companies must have had at least 3 employees as of March 1, 2019.

Tom Bowen is an Economist at Gusto, researching work and business trends in the modern economy. He received his Master’s of Economics from UC Santa Cruz. Tom currently lives in San Francisco, CA.
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