Boosting the economy: Remote workforce strategy can help
The virtual workforce is tough to quantify, but census data shows that the number of people working out of their homes all or some of the time is growing. Working from home no longer seems to be just for those between “real” jobs. In fact, home-based jobs have become more real than ever.
As employment has been building after the recession, companies of all sizes have realized that working from office space during designated hours is not necessary for every job. The good news for an ascending technology hub like St. Louis is that companies can maintain a local headquarters and increase growth by adding highly skilled workers from other regions without the demands and expense of employee relocation.
Conversely employees can also live in St. Louis, keeping dollars at home, but be employed by a company based somewhere else.
This employment strategy goes by several monikers to include:
- Telework — some employees work remotely all of the time.
- Flextime — working non-traditional hours.
- Results Only Work Environment (ROWE) — working virtually from anywhere, anytime as long as you get the job done.
The financial benefits of remote working are huge for employers. A company with a virtual workforce strategy can be headquartered anywhere and have lower operating costs and access to a much larger pool of talent.
Obviously, the overhead of a building, maintenance and utility costs are saved, but also consider recruiting and relocation costs. If hiring a particular skill set, the job just became much easier to fill if not confined by geography.
For candidates, broadening the pool of job openings to include virtual positions creates more opportunity. With more options, people may find work that is their passion, versus “a job that’s close to home.” Additionally, savings from overhead costs can be invested into higher-levels of training and bonuses for performance — all practices that increase engagement and productivity.
One would assume that job satisfaction would also increase, as several human resource surveys published on job candidate priorities indicate location, commute and flexibility are just as important as salary and benefits.
Many firms, like Gerard Marketing Group, are even transitioning to a 100 percent virtual business model. Those opting for the virtual model are defining a new culture that exudes the values of accountability, respect, trust and clear communication — all essential to any healthy organization.
With clear benefits for both employers and employees, companies that don’t have some form of virtual working options in their workforce strategy in 2016 are going to fall behind those that do.
Susan Gerard is president of Gerard Marketing Group, a St. Louis-based strategic market planning and implementation firm.
Business Daily News Speaks with Missouri Entrepreneurs
Business News Daily spoke with entrepreneurs in Missouri to discuss some of the opportunities and challenges they’ve come across while operating in the state. Overall, they told us that Missouri is a pretty good place to do business.
Opportunities-Low cost of living
Missouri has a remarkably low cost of living, like many states in the Midwest. Sperling’s Best Places cost-of-living index lists Missouri as significantly cheaper than the U.S. average. The U.S. average cost of living is pegged at 100 on the index, and Missouri ranks as a 91.10, according to Sperling’s. Particularly notable is the cost of housing, which Sperling’s lists as a 78 on the index. Cheap housing and rents mean employees demand lower compensation, saving entrepreneurs a bit of money on their overhead costs.
“For startups and entrepreneurs, I think the low cost of living would be an awesome advantage,” said Saeed Darabi, editor of MoneyPantry.com. “If you are just starting out and have not much fund to go by, you don’t want to waste tons of money in buying/renting a warehouse or an office. The prices here are much lower compared to other places, especially compared to the Silicon Valley.”
The U.S. Bureau of Labor Statistics reports that for the Midwest region, which includes Missouri, the cost of living is dramatically lower than the U.S. average. The Consumer Price Index (CPI) — a measure of inflation and, consequently, the level of prices for a set grouping of goods and services — stood at 223.196 for the Midwest in February 2016, while the U.S. as a whole had a CPI of 237.111. In fact, from 2014 to 2015, the CPI for the Midwest region actually decreased by half a point, while the CPI for the U.S. rose by 0.1.
Strong community support
Entrepreneurs unanimously reported that community support, in terms of both customer loyalty and networking opportunities, is strong in Missouri. Between incentive programs like Arch Grants to accelerators and mentoring organizations, small business owners and startup founders said they have ample access to advice, discussions and opportunities to boost their professional network.
“We moved our business to St. Louis this past November after receiving an Arch Grant,” said Samantha Rudolph, co-founder and CEO of startup Babyation. “The entrepreneurial community in St. Louis has been incredible — warm, welcoming and supportive. Thanks to the resources and access, we made more progress in the first three weeks here than we did in 18 months on the East Coast.”
Cooper Mitchell, founder of Dane Financial, said he’s particularly fond of community workspaces and organizations that help bring the state’s entrepreneurs together to collaborate and grow. A few notable organizations he mentioned include the eFactory in Springfield and Exit 11 in the city of Washington.
“There are more networking groups than I ever thought our state could sustain,” Mitchell said. “From groups like 1 Million Cups to Masterminds of Biz, there’s something for everyone. There has also been more and more open/community workspaces … to help entrepreneurs have a place to work and meet other like-minded individuals at a low cost.”
Manageable taxes and regulations
In addition to a personal income tax and property taxes, Missouri maintains a corporate income tax, sales and use taxes, and an employer withholding tax. However, most entrepreneurs said the rates are reasonable compared to those in other states in the region. Some small business owners suggested reduced rates or reforms would be desirable, but nearly all said they don’t feel suffocated by regulations and tax policy at the state level. For assistance with state business taxes, the government created this guide to help entrepreneurs navigate the policy framework.
“No business ever thinks they pay too little in taxes, [but] taxes on small business in Missouri seem to rate fair or a little better than average compared to the rest of the country,” said Tim Davis, sales manager at Workers’ Compensation Shop.
Currently, the corporate income tax rate is 6.25 percent, while the sales tax stands at 4.225 percent. Where things can get dicey, small business owners told Business News Daily, is the local level. Because rates can vary from municipality to municipality, sales taxes can sometimes reach as high as 10 percent. Overall, however, Missouri’s regulatory framework is not seen as extensively burdensome or restrictive.
“Overall, Missouri has a relatively competitive small business climate with respect to regulations,”said Wayne Winegarden, senior fellow in business and economics at the conservative Pacific Research Institute. “In the 50-State Small Business Regulation Index, published by the Pacific Research Institute, Missouri was ranked as having the 10th most competitive regulatory environment for small businesses.”
Challenges-Competitive labor market
Missouri’s unemployment rate has been declining steadily and has hovered around 4.2 percent since the start of 2016. That may be good news for the state’s economy, but it’s a tough pill to swallow for small business owners looking to hire. Because there is less talent available in the labor market, strong candidates may be quickly snapped up by the competition.
“The labor market is becoming more competitive for great talent,” said Susan Gerard, founder of the St. Louis-based Gerard Marketing Group. “We are seeing the people that are fully engaged and good at what they do get hired quickly. If you interview someone that is a strong candidate, if you don’t act quickly, they will be unavailable.”
Meanwhile, the state’s labor force has been growing — evidence that more people are working and the declining unemployment rate is not the result of people giving up the search for a job. From December 2015 to January 2016, the labor force increased by almost 10,000 people. Through February 2016, it increased by an additional 16,500 people. Still, even as the labor force grows, demand for employees remains high, perpetuating the competitive climate.
“Our labor market is really kind of tough right now,” said Jeremy Jacobs, president of Fitness Plus Equipment Services. “St. Charles County has the lowest unemployment in the state, and it makes finding people who fit well with our company culture, as well as skills, difficult.”
Resources for small business
If you’re a small business owner in Missouri looking for resources to help you move forward, here are a few organizations you might want to learn more about.
U.S. Small Business Administration District Offices
Missouri Small Business Development Centers