Amid boom, signs of exodus from bustling Bay Area

Richard Enlow came to the Bay Area for a tech job a dozen years ago.

Enlow's career as a product designer advanced, and he found a partner and domestic stability. Meanwhile, his Bay Area world became more crowded, more expensive and filled with daily anxiety.

So early this year, he started to explore remote tech jobs.

Software startup Zapier was looking to exploit and ease the angst of Bay Area techies by offering $10,000 bonuses just for leaving. It joined a handful of small and midsize firms — unable to offer the highest salaries or dangle the most generous stock grants and bonuses — turning Bay Area dissatisfaction into a recruiting tool.

Enlow immediately applied for a senior design position. "That was like, 'Done!' " said the 38-year-old Central Valley native. He landed the job and moved to Palm Springs, Calif.

Climbing housing costs and intense competition for tech talent have smaller firms looking for incentives to make life easier, better and perhaps more productive for their workers. That means remote working — like the "de-location" bonus Zapier offers new employees to leave the Bay Area.

Other Bay Area companies, including Automattic, Buffer and GitLab, among others, are building remote workforces as dissatisfaction with the region grows. San Jose-based startup Mainstreet, a recruiting company, is offering a limited-time, $10,000 payment to tech workers willing to leave.

And the remote-worker solution may hold rewards for a company's bottom line and worker satisfaction and productivity. A two-year study of remote workers at a Chinese company by Stanford economist Nicholas Bloom found home-workers were 13% more productive than their office-bound counterparts. The 2015 study looked at Ctrip, a 20,000-employee travel company based in Shanghai where, much like the Bay Area, workers face high housing prices and maddening traffic.

Bloom told a Stanford audience that remote work cuts costs for companies, saves time for employees, and reduces traffic congestion and pollution. "There are massive benefits," he said.

A Zillow survey found a little more than half of recent home buyers nationally work remotely at least one day a week. Millennial homeowners are the most likely to work away from the office, with four in 10 saying they're toiling from home or a coffee shop.

Software company GitLab initially grew from business incubator Y Combinator in San Francisco. But the three co-founders came from different countries, and a traditional office in the city was expensive and didn't get as much use as expected, said Darren Murph, the company's head of remote work.

The company has nearly tripled in size to more than 1,000 employees since January. Murph said the rapid expansion would have been difficult with the burdens of recruiting and hiring in the Bay Area.

It encourages workers to meet colleagues, paying $150 in travel expenses for meeting each Gitlab employee. A round-table with a half-dozen co-workers can make a trip to San Francisco or elsewhere worthwhile, he said.

High Bay Area prices and discouraging commutes for employees make it difficult for some smaller tech firms to keep a big presence in the region. "We want more companies to embrace this," said Murph, who lives in rural North Carolina.

Buffer, a social media software marketing company founded in San Francisco, has always had a decentralized workforce. The ability for workers to live anywhere around the world has given the company a recruiting advantage, said spokeswoman Hailley Griffis. They've drawn talent from Singapore, Sri Lanka, Columbia and Poland without the need for a visa or a central office.

The company offers salaries based on a median San Francisco tech wage, adjusted for the cost of living in an employee's home city. For example, a Buffer engineer living in Ozark, Mo., makes about $100,000 — 85% of the median San Francisco software engineer's salary — and lives in a low-cost region. "We've had a lot of people start in the Bay Area and then leave," Griffis said.

Automattic, owner of publishing software company WordPress, shut its San Francisco office in 2017 because few workers used it. Although the company remains headquartered in the city, just a few dozen employees remain in the Bay Area, a spokesman said.

Zapier CEO Wade Foster said the 8-year-old startup began with a scattered workforce by design. It started the bonus plan in March 2017 while trying to grow and compete for top talent, he said.

"Let's do a twist on the relocation package," Foster told other company executives. "Let's turn it on its head. We'll pay you to 'de-locate.' "

Applications grew 50% after Zapier announced the bonuses, he said. About five employees have taken the perk, which requires an employee to move within 90 days. The company evens out compensation by paying a rate roughly equivalent to the salary of a tech worker living in Austin, Texas.

Margaret Hellstrom, 25, a human resources staffer, known as a "people ops analyst" for Zapier, moved to the Bay Area in September 2016, shortly after graduating from college. She found a room on Craigslist in West Oakland for $850 a month and later moved in with her boyfriend in a cozy one-bedroom in Oakland's Rockridge neighborhood renting for $2,200.

The relationship soured, and she asked herself, "Can I afford the basic quality of life here?"

Many of her friends felt the same way: "Everyone was just worrying about money all the time."

Hellstrom landed a job at Zapier and learned from a recruiter that the company would pay her $10,000 to move somewhere else. She picked San Diego.

A childhood friend moved from Virginia, and they rent a three-bedroom home with another roommate in a lively neighborhood. "I have more room to breathe here — psychologically and financially," she said.

Enlow and his partner, Spencer Liolios, found too many days stalled in traffic, having a late dinner, then spending an hour together before going to bed. They searched for Bay Area homes to fit an $850,000 budget but saw little hope.

"We just started coming to terms," Enlow said. "This dream of owning a home in the Bay Area became out of reach."