When Allstate Insurance reneged on its promise to generate more than 2,200 jobs in Charlotte, it became ineligible for one of the largest incentive packages ever offered by the state of North Carolina. The insurance company claimed that the need for on-site employment was unrealistic due to the prevalence of remote workers.
According to the Associated Press, The News & Observer of Raleigh, and other outlets, the state’s Economic Investment Committee agreed this week to terminate an incentives agreement with Allstate that was signed in 2017. If Allstate had completed its job creation targets, the company would have received up to $17.8 million in cash.
Allstate announced in 2017 that they planned to hire 2,250 more people by 2020 to work in its operations center. At the time, it was one of the major initiatives undertaken by the state to increase employment opportunities within its borders.
An Allstate executive wrote to the committee earlier this month that the firm was unable to reach its hiring goals due in part to the increasing prevalence of remote labor, notably during the COVID-19 pandemic. According to Eric Steffe, Allstate’s director of global corporate real estate, only 213 of the company’s North Carolina workers would be physically present at the Charlotte location by the end of 2022.
Steffe told the newspaper that the vast majority of Allstate’s North Carolina staff do not work in an office and are hence not eligible to be recognized as project site personnel for the rewards programs.
According to the newspaper, local governments have paid cash awards of $1.4 million to Allstate under the Job Development Investment Grant program, while North Carolina has paid nothing to Allstate from the initial incentives arrangement.
Steffe stated that North Carolina is still seen “as a strategic market to attract talent, and an excellent place for our employees to reside.”
An examination of North Carolina’s Job Development Investment Grant incentive program over the past two decades found that premature terminations outweighed successful completions by a ratio of more than three to one.
