if you’re working on Wall Street, how far from the physical Wall Street can you actually be? According to an article in Business Insider today, Goldman Sachs reckons that the definition of the financial district can stretch as much as 2,200 miles (32 hours by Uber, if the traffic is good), to Salt Lake City and that’s about to get stretched further still. Goldman’s also begun hiring in Richardson Texas (24 hours cab ride to NYC) and Utah (33 hours). 30% of Goldman Sachs’ headcount already works in these kinds of ‘high value’ locations and it’s about to get even higher still.
The impetus behind the push into ever more widely dispersed offices is of course costs, and cutting them. Goldman’s high value locations are anything from 45% to 75% cheaper than places like New York City or London. Utah has lower local taxes than New York, and a combination of low living costs and cheap real estate make it an attractive option for a number of financial services firms. “Near-shoring” is in many ways the new “offshoring” and considerably less politically sensitive. Alliance Bernstein have a large centre in Nashville, Tennessee, while Deutsche Bank, for example, carries out a considerable amount of both back office and front office business in the UK from its “Brumsourcing” location in Birmingham. Even the Canadian banks have got in on the act by transferring treasury and back office functions to Nova Scotia and Newfoundland.