Hamilton should target satellite offices to solve jobs problem

Originally published at Urbanicity.com

Every year we learn more about how unhealthy commutes can be for people. Evidence shows that commutes may lead to higher obesity rates, lower cardiorespiratory fitness, and higher blood pressure. Mentally, commutes may lead to increased anxiety, chronic stress and depression, and socially commutes are associated with social isolation and higher divorce rates. Not everyone experiences these negative repercussions, but given that so many do, isn’t it a problem that we’re building communities around increasingly longer commute distances?

Don’t get me wrong, these new GO Stations are great infrastructure; they move people efficiently across the region, which in a knowledge economy is especially important for equality of opportunity, as well as spreading social capital and business opportunities to regions that need them. When someone from Hamilton can access a better job in Mississauga that they couldn’t otherwise that’s a win for them, and it’s also a win when a Hamilton business can get to a morning meeting in downtown Toronto with a big client. But given the negative repercussions of commuting that many people experience, we should be thinking more about how we can increase the number and quality of local jobs.

In the early years of this decade it was more common to talk about Hamilton having a “jobs problem”. As the economy recovered from the recession and residential housing took off, that talk seemed to fade. There’s so many cranes in the sky now, and a new restaurant seems to open every week. I think that talk faded prematurely though, because I still hear from so many people that they wish they could get a better quality job closer to home. We still have a jobs problem that should be solved, especially when it comes to particular industries.

I’ve been involved in the tech and startup community in Hamilton in various capacities over the last decade, and as part of this I’ve been keen to try to sell Hamilton to companies. Hamilton was named the fastest growing Canadian mid-sized city for tech talent by CBRE in 2018 — the talent is here. And you would think that relatively cheaper housing, beautiful nature, and having the Hamilton Tiger-Cats would be enough to do the trick.

But the reality is if you’re opening, say, a software development company in the region, every GO Station has trains pointing towards downtown Toronto in the morning. You’re getting access to a talent pool of millions of people if you’re located in downtown Toronto. If you open in downtown Hamilton, you’ve still got access to a large pool of talent, but the radius just isn’t as big given that the trains aren’t headed this direction in the morning and the highways are jammed at rush hour.

And on top of that, because of the way the infrastructure has been setup to be Toronto-bound, the talent you’re trying to hire is often headed in the opposite direction, and you’re competing against companies for that talent who have the competitive advantage of superior access to talent.

Investing in local startup companies has been a big focus of the last decade, and that’s something that should continue. But one model that I’m seeing work lately in Hamilton is the satellite office. At CoMotion on King there are two companies that have software development focused satellite offices in downtown Hamilton: machine learning startup Preteckt and software consultancy Vehikl. They’re both growing and doing very well in terms of finding talent, and there’s other similar examples across the city.

The model seems to work because satellite offices don’t need to hire for and focus on every possible position (e.g. sales, HR, etc.), and instead focus on a niche. Satellite offices also don’t need to worry about filling hundreds of positions with top candidates in a short period of time as they generally only need a few talented workers to start and can grow as needed. Because satellite offices are attached to resources and capital from outside the community, they can offer a quality and type of career opportunity that differentiates them in the local market and allows them to hire strong talent looking for career growth without the commute.

Toronto is literally bursting at the seams, with the lowest office vacancy rate in North America. Instead of trying to convince these companies to move their entire office here, which is going to be a rare event, we should collectively figure out a strategy to sell them on moving smaller, focused satellite offices to Hamilton to help solve our jobs problem.