Search
Close this search box.

Time to Rethink Your Shared Services Location Strategy

Author

Fabiana Corredor

https://www.linkedin.com/in/fabiana-corredor-8aa6b93a/
Fabiana.Corredor@auxis.com

Vice President of Marketing, Auxis

Related Topics

The same way COVID has profoundly impacted the way we conduct business, it has also caused many executives in Corporate America to rethink their current Back Office & Shared Services Location Strategy.

As Forbes clearly explains in its recent article, there continues to be a steady exodus of businesses moving out of high-cost states like New York and California. “Now that working from home has taken its hold, the trend offers CEOs options. No longer do they have to pay for expensive real estate in New York City or San Francisco. They can have people working remotely or relocate jobs to less costly locations,” said Jack Kelly, Senior Contributor at Forbes.

According to the 2020 US Migration Trends Report issued every year by United Van Lines, the top 10 states people moved from last year were:

Graphics CASE STUDIE-12-12

These percentages are based on total moves for that state. For example, 68.45% of moves in New Jersey were outbound, so 31.5% were inbound to total 100%.

Reasons for moving go beyond business-related drivers. However, “new job opportunity or company transfer” (47.98%) was cited as the top reason across the country, followed by “being closer to family” (23.66%), “retirement” (20.15%), and “lifestyle change” (13.08%).

Job migration trends are not only happening internally in the US but also across the Americas (and in some cases across the world). While Goldman Sachs, for instance, is eyeing a move from New York to Florida for one of its key divisions, other organizations are looking into nearshoring to countries like Costa Rica, Mexico, and Colombia to support portions of their North American operations while still maintaining the same time zone.

Costa Rica alone reached a record number of foreign investment initiatives in 2020. The Costa Rican Investment Promotion Agency (CINDE) reported a record of 81 confirmed projects during 2020, including a combination of brand-new multinationals going to the country as well as expansion and diversification of current operations.

The more than 330 multinationals located in Costa Rica generated a total of 134,026 jobs, (a 12% increase over 2019). Some examples of multinationals that expanded their Shared Services Operations in the country in 2020 included IntelAutoDeskBacardiBritish American TobaccoEquifax and SmileDirec