If Amazon Comes to Town …

Other companies in whichever city is selected by online retailing's 800-lb gorilla for its second headquarters should brace for a talent war.
By: | February 1, 2018 • 6 min read

Here in Philadelphia, the talk is all Eagles all the time … with the exception of one other looming question: Will Amazon select us for its second headquarters, bringing with it up to 50,000 well-paying jobs? I’m admittedly biased here, but I wasn’t terribly surprised to see that Philadelphia made the cut of the 20 finalist cities announced by Amazon a couple weeks ago.

I’m also optimistic we stand a very good chance of being the winner: After all, we’ve got the lowest housing costs of any major metropolitan center on the East Coast, a large number of colleges and universities within the city and throughout the region to supply a steady stream of eager-to-work graduates, a well-developed mass-transit system, and tons of cultural and recreational offerings (plus, Alexa favors us to win the Super Bowl, which could mean absolutely nothing, or everything).

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And, while Philadelphia is not a major tech center, we have a sizable number of pharmaceutical and healthcare organizations from which to poach skilled talent, which is why many companies may not be so enthusiastic about Amazon joining the neighborhood.

As a recent story in the Wall Street Journal underscores, the coming of Amazon will most likely pose a big talent headache for local companies. With tons of jobs to fill and money to burn, Amazon will be a formidable competitor for high-performing employees at a time when the U.S. unemployment rate is at a low 4.1 percent.

“We’re nervous,” Steven Kosakow, director of talent acquisition at Boston-based Lionbridge, told the WSJ. His company’s recruiters are worried that hiring salespeople will become “nearly impossible” if Amazon selects Boston, another of the finalists. In Toronto, another city on the shortlist, executives have expressed concern that Amazon’s arrival could exacerbate a shortage of engineers in addition to driving up already-exorbitant housing costs.

The thriving economy is already pushing up salaries for many occupations but that trend will only accelerate in whichever region Amazon decides to locate HQ2.

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“There’s no way to get into a spending contest with Amazon and win,” tech entrepreneur Rob Daley told the WSJ. “Salaries will go up whether you’re competing with them or not.”

There’s also the possibility that Amazon’s arrival will expand, rather than tighten, the talent pool. The story notes that the company’s hometown of Seattle has seen its pool of educated and ambitious talent greatly expand (housing prices are also sky-high in Seattle too, however), thanks in part to people attracted to the region by the job opportunities represented by Amazon and nearby Microsoft.

The good news for HR is that Amazon’s arrival could give it the chance to shine. After all, a talent rival like Amazon in one’s backyard means being an employer of choice is more critical then ever. In other words, ideas and proposals for, say, replacing annual reviews with more employee-friendly continuous feedback, upgrading the candidate experience, investing in more-attractive employee benefits and other talent initiatives will have fresh urgency and underscore the importance of you and your department.

Andrew R. McIlvaine is senior editor for talent acquisition at Human Resource Executive®. He oversees coverage of talent acquisition and recruiting and also edits the weekly Recruiting Trends Bulletin e-newsletter and its associated website, RecruitingTrends.com. A Penn State graduate, Andy also spent two years in the U.S. Army prior to attending college and attained the rank of sergeant while serving in the Army Reserves. He can be reached at [email protected]

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