Financial Fix

Adding an experienced and talented California outmigrant to your staff could benefit your business in many ways.

Sponsored by Vantage West.
                   

Arizona is a preferred location for the growing number of Californians who are leaving the state, and Arizona businesses are reaping the benefits. Between 2007 and 2016, a million more people from California than from other states have moved to Arizona. High housing costs and long commutes, in addition to a recent 12-cent-per-gallon gas tax increase (designed to raise $50 billion over 10 years for road repair) have proven to be too much for some California residents.

According to a report issued by the California Legislative Analyst’s Office, “Faced with expensive housing options, workers in California’s coastal communities commute 10 percent further each day than commuters elsewhere. This is largely because of limited housing options near major job centers. Californians are also more likely to live in crowded housing. And, finally, the state’s high housing costs make California a less attractive place to call home, making it more difficult to hire and retain qualified employees, also preventing the state’s economy from meeting its full potential.”

These Californians are moving to states offering affordable housing, but with the cultural and lifestyle amenities to which they’ve grown accustomed, such as warm weather, good restaurants, live theater and music venues, night clubs, sports, and outdoor activities. The top three destinations for Californians seeking new opportunities are Texas, Arizona, and Nevada. 

Disenchantment with California could prove beneficial to Arizona businesses. While many lower income workers are leaving, there is another segment of the departing population that may be of particular interest to Arizona employers. Joel Kotkin, the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism, alongside Wendell Cox, owner of Demographia, a St. Louis-based public policy firm, wrote an article in the Orange County Register singling out this demographic. “A dive into Internal Revenue Service data shows distinctly that the largest group of outmigrants tends to be middle-aged people making between $100,000 and $200,000 annually.”

Now is the time to consider recruiting experienced talent from California for your business. The Golden State has long been at the vanguard of disruptive and emerging technologies. California workers come from a highly competitive environment and are used to outmaneuvering the competition. In fact, it must be noted that those with graduate degrees or higher continue to move to California, along with high earners making $110,000 or more. The discrepancy between those making more than $100,000 who are moving out, and those with identical earnings who are moving in, is, for the most part, age-related. Younger people at the beginning of their careers are willing to tolerate cramped living spaces while getting ahead, whereas older workers with established careers want more space and less reliance on mass transit.

The middle-aged worker in California looking to outmigrate may already be motivated to take advantage of current real estate prices. “People who have owned their house for quite a while can cash out with quite a bit of money in their hands,” Steve Feldman, a Keller-Williams real estate agent in the San Fernando Valley region of L.A. told CNBC. “They can go to another state and buy a house for a fraction of what they have here and tuck away a lot of money and retire, work, or bring their cost of living and overhead down.”

Middle-aged workers are looking for new opportunities and challenges. According to AARP research conducted in 2013, more than 80 percent of respondents between the ages of 45 and 64 said that learning something new was a fundamental element of their ideal job. Finding these workers means using well-established platforms. Jeff Zinser, founder of Right Recruiting, told Fast Company that workers in their 50s, 60s, and 70s may have become comfortable using boards like Monster and CareerBuilder earlier in their careers and may default to searching there first. 

Adding a California mentor worker with your current Arizona staff could be a good way to expand your business network, energize younger staff, and challenge an established career professional with a new environment in which to apply a lifetime of expertise. I hope this perspective has given you some ideas on how your business might benefit from Californians’ migrating to Arizona. 

Rene Almazan is a senior vice president for Vantage West Credit Union, a $1.9-billion financial institution in Arizona, which serves a growing membership of nearly 150,000 via branches across Arizona and online channels, as well. Vantage West offers consumer and business banking services, and is federally insured by NCUA. VantageWest.org