Tech Giants Plant Flags in Established and Emerging Talent Hubs

Tech Giants Plant Flags in Established and Emerging Talent Hubs

After a yearlong search that saw cities compete for its favor, Amazon announced in November that it had picked two locations rather than one for its second headquarters (“HQ2”) project: the Long Island City neighborhood of Queens, New York, and the Crystal City area in Arlington, Virginia, a major suburb of Washington, DC. The choices proved controversial, as the tech giant had made a spectacle of courting many bidders that may never have had a chance, while both New York and Virginia are giving Amazon generous subsidies to set up shop in their states, despite the fact that these locales are strategically desirable locations for tech companies anyway.

While some observers had speculated that Amazon would pick an up-and-coming city in the US heartland, where the introduction of such a huge employer would transform the local economy, in the end, the choice came down to talent, and the New York and DC areas simply offered better access to talent than any other city Amazon was considering. (It’s also setting up a smaller operations center in Nashville, Tennessee — more on that later.) It’s no coincidence, Recode’s Jason Del Rey observed at the time, that the winning bidders were among the country’s leading tech talent hubs:

[W]hat do you see when you look at rankings of the top technology talent pools in the U.S.? Only two metro areas rank above the Washington, D.C., metro area: The San Francisco Bay Area, which Amazon never considered, and Seattle, the home of Amazon’s original headquarters. At No. 3, Washington, D.C., makes a lot of sense. Fourth is Toronto — but despite its booming tech scene, Amazon never gave any hints that it would seriously consider a big move across the border. Which brings us to No. 5 on the tech talent list: New York City.

Ultimately, Amazon decided it needed two cities — whether it always knew this or not is up for debate — to meet its hiring demands and to reduce some of the potential downsides that Seattle has experienced as a result of Amazon’s 45,000-employee footprint there.

Establishing these new headquarters will take years, the Wall Street Journal added this month, perhaps as much as a decade, because Amazon plans to do most of its hiring for them locally rather than relocate workers from its home base in Seattle. By the end of next year, the company plans to add 400 employees in Crystal City and 700 in Queens — out of an expected total of 25,000 in each city by 2028, assuming the e-commerce giant continues its trajectory of rapid growth.

Amazon’s decision underscores the importance of talent communities for major companies making strategic planning decisions with regard to location. While many workers in tech and other digitally-enabled professions can work remotely today, most organizations still prefer to recruit and base the bulk of their workforce in centrally located offices, so it pays to set up shop in a place where the talent you need already lives or would be willing to move.

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Glassdoor Study Examines Where US Talent Is Moving to and From

Glassdoor Study Examines Where US Talent Is Moving to and From

A recent study from Glassdoor uses the site’s job search data to track how many candidates are looking for jobs outside their home cities and figure out which of the 40 largest American metro areas are the biggest talent magnets. Using a sample of more than 668,000 online applications on Glassdoor during the week of January 8-14, 2018, the study looks at where Americans are looking to move for work, who is moving, and why, Glassdoor’s chief economist Andrew Chamberlain elaborates in his introduction to the report.

One key finding is that while the prospect of a higher salary might seem like the most likely reason for a candidate to skip town (our research at CEB, now Gartner, shows that salary is consistently the most powerful attractor of talent), Glassdoor finds that it’s not the strongest driver of these moves:

  • Salary drives candidates to move. But the effect is small. An extra $10,000 higher base salary predicts candidates are about a half percentage point (0.41 percentage points) more likely to be a metro mover — a statistically significant, but small effect.
  • Better company culture is more attractive. Having a 1-star higher overall Glassdoor rating predicts candidates will be 2.5 percentage points more likely to move metros for a job. That’s statistically significant, and roughly six times larger than the impact of offering $10,000 higher pay.

Metro movers tend to be younger, better educated, and earn higher pay than candidates who stay put. This makes sense, insofar as moving cities is expensive and more likely to be worth the trouble for a high-paying job. The most mobile jobs, Glassdoor’s study found, include chemical and industrial engineers, software developers, and data scientists (and of course, flight attendants). All of these jobs pay enough to be worth moving for, but also aren’t available everywhere: A software engineer in rural Idaho, for example, has a much better chance of getting a job if they are willing to move to a tech hub like the San Francisco Bay Area. By comparison, the least mobile job title—bartender—is available anywhere.

San Francisco is indeed the most common destination for metro movers, Glassdoor notes in a press release, along with New York:

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Amazon Is Expanding its Presence in Boston and Vancouver With New Offices

Amazon Is Expanding its Presence in Boston and Vancouver With New Offices

Amazon announced this week that it was opening new offices and expanding its footprints in the North American tech hubs of Boston and Vancouver. While neither of these announcements represents the highly anticipated selection of a site for the e-commerce giant’s second headquarters (Boston is on the list of 20 finalists; Vancouver is not), both plans envision creating several thousand jobs and stand to have an appreciable impact on the local talent and housing markets in these cities.

The Boston Globe‘s Tim Logan reported on Tuesday’s announcement of a new facility in Seaport Square, a major new development in the South Boston Waterfront neighborhood, which will be primarily dedicated to developing its voice-activated Alexa technology, along with cloud computing and robotics—already focal points of Amazon’s existing offices in the highly-educated city:

The company has long based much of its Alexa and Audible teams at a growing office in Kendall Square, and has beefed up its Amazon Web Services and robotics development teams here in recent years. Its new building, set to begin construction later this year and open in 2021, would mark the company’s biggest presence to date, and comes as Amazon opens a new office in nearby Fort Point.

Along with an office in the Back Bay, a robotics facility in North Reading and a massive distribution center in Fall River, the company has added 3,500 jobs in Massachusetts since 2011, with these 2,000 more to come. They have an option for a second building — with room for 2,000 more jobs — at Seaport Square should they want to expand further.

Amazon is also opening a new office in Vancouver, one of Canada’s primary tech hubs and a short hop from the company’s Seattle headquarters. Taylor Soper covered the news for GeekWire:

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Housing Shortage Threatens Toronto’s Ability to Attract Talent

Housing Shortage Threatens Toronto’s Ability to Attract Talent

Toronto is the crown jewel of Canada’s growing tech sector and a centerpiece of Prime Minister Justin Trudeau’s ambitions to make the country a leader in emerging technologies like artificial intelligence. The city boasts a high-quality research university and a highly educated talent pool. Unfortunately, it’s also starting to experience the same problem faced by other major cities in North America: a shortage of housing, leading to high living costs for young professionals.

The Toronto Region Board of Trade has warned that rising housing costs and a short supply of decent apartments in the greater Toronto area risks harming the city’s ability to attract and retain talent, according to the Star’s real estate reporter Tess Kalinowski:

A survey by the business group last year shows 42 per cent of young professionals would consider leaving the region because of the high cost of housing. That has prompted the board to publish a Housing Policy Playbook in advance of the June provincial election with five recommendations for how the next government should tackle the housing crunch. The proposals range from building condos over transit stations to expediting construction permits. …

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Search for HQ2 Site Yields Valuable Intel for Amazon and Cities

Search for HQ2 Site Yields Valuable Intel for Amazon and Cities

Amazon’s announcement that it would be opening a second headquarters in North America kicked off a process that saw 238 cities apply for the opportunity to gain a projected 50,000 jobs and billions in construction projects for their economy. The Seattle-based tech giant has whittled the list of proposals down to 20 and will certainly have advantageous terms wherever HQ2 ends up being built, but Amazon is also benefitting from this process in some unseen ways—as are the cities that didn’t make the cut.

Nick Wingfield of the New York Times reports that a few of the submissions passed over for the recent list of finalists, including those of Kansas City, Montreal, and Detroit, earned favorable opinions from Amazon’s leadership even if they won’t be the site of the company’s second headquarters. For example, Montreal’s plan for attracting foreign talent impressed them, Kansas City outlined programs for teaching technical skills in schools and veteran hiring strategies that aligned with the company’s values and priorities, and Detroit impressed in a number of ways despite missing the cut, in part due to a lack of regional talent. As a result of putting their best foot forward, those cities could end up as future locations for an Amazon warehouse or satellite office.

“Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation,” Amazon’s head of economic development Holly Sullivan said in a statement.

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Barclays Provides Support to Job Seekers to Turn Them Into Customers

Barclays Provides Support to Job Seekers to Turn Them Into Customers

The jobs search costs for new graduates can be enormous, and not everyone who wants to work in a major city can afford to travel there for job interviews. In the UK, where socioeconomic diversity is becoming an ever-greater focal point of companies’ diversity and inclusion practices, Barclays’s is doing something to help candidates manage that cost. People Management’s Emily Burt has the details on their initiative, which is meant to improve economic diversity by helping graduates who can’t afford to stay in cities while interviewing:

The month-long ‘Barclays Graduate Rooms’ scheme will allow graduates to apply on a first-come, first-served basis for two nights of free accommodation in studio apartments close to their interview locations, regardless of whether their interview is with Barclays or another organisation.

“We hope that by offering free accommodation in some of the most popular cities for graduate jobs, we’ll go some way to helping those who would otherwise struggle,” said Sue Hayes, managing director of personal banking at Barclays.

Barclays here is acknowledging how much of a barrier to entry these costs can be to candidates from outside major urban areas and less affluent backgrounds:

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Over 200 Cities Bid to Host Amazon’s ‘HQ2’

Over 200 Cities Bid to Host Amazon’s ‘HQ2’

When Amazon announced that it was soliciting bids for a venue for its second North American headquarters last month, cities across the continent immediately began lining up to court the e-tail giant with offers of tax credits, expedited permitting, public transit projects, and even cash grants. The deadline for bids was last Thursday, October 19, and Amazon revealed on Monday that 238 cities had submitted proposals, representing 54 states, provinces, and territories across the US, Canada, and Mexico. Monica Nickelsburg has the story at GeekWire:

In the U.S., there are only seven states where no cities are bidding on HQ2: Montana, Wyoming, North and South Dakota, Arkansas, Vermont, and Hawaii. … Even Amazon’s hometown, Seattle, made a hail mary attempt to get the tech titan to keep HQ2 close to home. …

Amazon did include some glimpses into the criteria it will use to judge proposals; the company is looking for a metro area with more than 1 million people, quality transit options, and incentives from local governments. Those could come in the form of tax credits and exemptions, relocation and workforce grants, utility incentives, and fee reductions, Amazon says. The company is also encouraging communities to “think big and creatively” in their proposals. With so many hats in the ring, creativity may be the criterion that puts one city over the top.

It’s no wonder so many cities are desperate to win Amazon’s favor here, as Amazon expects “HQ2” to create 50,000 jobs and $5 billion in investments in the winning metropolis. Recode’s Jason Del Rey takes note of who participated in the bidding war, as well as who didn’t:

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