Work from anywhere? CEOs like the option too
Ken Griffin’s exit from Chicago had to do with crime, but many more factors are at play in the spate of corporate decisions about where to set up shop.
If you’ve been out of town a few weeks and just got back, you’ll find Chicago business feeling a little different. A lot of comings and goings around here.
Let’s see. Boeing ended its two-decade sojourn as a Chicago-based company, bound for Arlington, Virginia. Big headline loss for the city but with limited real impact, as many people will remain here — for now.
Caterpillar is vacating Deerfield, bringing everybody to Texas, right on top of a key operation but further from its largest concentration of employees, still in Illinois. Still, it hurts to lose a global name like Cat.
Kellogg blessed Chicago by making it the home of the largest company of the three it is dividing itself into and the one with solid growth prospects.
Abbott, so big in Lake County that it has its own town, Abbott Park, for postal purposes, said it will open a satellite office in Willis Tower for the convenience of up to 450 people who want a shorter commute. Bragging rights for the mayor’s office on this one.
Alas, Yelp, the online review outfit said it is closing its large office in the Merchandise Mart and in two other cities because everybody there wanted to be remote anyway. CEO Jeremy Stoppleman told the Washington Post going hybrid — working in the office part time — was “the hell of half measures.”
And then there’s Ken Griffin, founder of the Citadel hedge fund and stock trading firms, delivering the biggest blow to Chicago and arguably getting satisfaction from it. Bound for Miami are the two headquarters and many employees who Griffin said liked the idea of relocation, and Griffin himself with all his philanthropy.
He didn’t even wait on the announcement to see how his $50 million investment, Richard Irvin, fares in Tuesday’s gubernatorial primary. Trader that he is, Griffin may have felt it’s past time to cut his losses.
Griffin’s conservative views are well-known. In this instance, the man put crime front and center in his decision, cataloging incidents that he and his employees have experienced and talking about its effect on recruitment.
Sure, he said Citadel is investing in New York and, at last check, there’s a crime problem there, too. Sure, he’s partial to oceanfront property anyway. But he spoke out on a topic everyone talks about and many confront daily. Griffin’s not like CEOs in this town afraid to say anything to furrow a mayor’s brow. He had gilded courage to just go.
The problem is he’s so visible on political matters that his departure threatens to dominate the whole issue of corporate moves involving Chicago, as if every one is a verdict on state and local tax and regulatory policies.
Other things are going on here. It may be that the era of the hopscotching corporation is upon us.
The pandemic has affected a lot of things, including whether white-collar workers feel the need to come back. Many have been slow to do so, depending on their industry and the demands of their boss.
But just as everyday workers have newfound freedom over where to open their laptops, so do CEOs. As they reconsider real estate, some will opt for a new home base or satellite locations. Loyalties to legacy cities are declining.
Analysts in this field saw it coming: A 2021 survey of corporate leaders by the firm Knight Frank found that 38% expected to move their headquarters within three years. Real estate firm CBRE also surveyed corporate tenants and this spring reported that more than 90% planned significant space changes, expansion or contraction, to adapt to remote work.
Changing cities will be an option. It can be for many reasons. Lower taxes. Crime. Better weather. Diverse labor pool. The CEO likes the opera company.
It would help, as this jobs competition persists, for crime not to be Chicago’s storyline. Those nervous corporate executives here say privately they’d like to see less finger pointing, less defensiveness and more action from public agencies to get ahead of the problem.
They could help by convening everybody to talk action. It sounds like an assignment for the Civic Committee, the conscience of the CEO community, but so far it has not spoken up.
Chicago still has much going for it. It’s tops in the country for corporate investment. Housing demand, which tends to track job growth, remains strong. But without progress on public safety, Griffin could have the last laugh on the place.